Relatives valuation of carabao group public company limited.

Abstract

The thematic paper is a production of studying valuation and applying in the practical stock. Carabao Group Public Company Limited (CBG) is the stock that I chose for valuation. For the company’s long-term strategy, the company planned to expand its production line and increase the proportion of international market, so the company had highly potential of their sales growth. To forecast cash flows, it was challenge to project financial statements in line with distribution strategy. The expected cash flow would be precise it depended on assumptions. By using the Relative Valuation, it helps to find the intrinsic value of the company. The methodology under relative valuation method is emphasis on three ratio measurement, Price/Earnings Ratio (PER), EV/EBITDA, and Price/Book Value Ratio (PBV), which are calculated based on projection financial statement. As the result, the intrinsic value of CBG stock is 60.1 THB, which is undervalued when compare to the current price as of December 8, 2016 at 76.50 THB. Thus, I recommend to “Hold”.