Relative valuation of GFPT public company limited.

Abstract

This thematic paper demonstrates how to value the expected stock price of GFPT Public Company Limited (“GFPT”) in which the concept of the multiple valuation method were applied to find the relative market value of the firm by valuing the relative price of the equity using key financial statistics in relation to the company’s expected growth. In this thematic paper, Price to Earnings Ratio (“P/E Ratio”), Price to Book Ratio (“P/B Ratio”), and Enterprise Value to Earnings before Interest, Taxes, Depreciation and Amortization Ratio (“EV/EBITDA Ratio”) were used to find the value of GFPT by using both trailing and forward multiples, in comparison with domestic peers which are Thaifoods Group Public Company Limited (“TFG”), Charoen Pokphand Foods Public Company Limited (“CPF”), and Bangkok Ranch Public Company Limited (“BR”). After completing the valuations, it is shown that using Forward P/E multiple seems to be the most appropriate relative valuation method to find GFPT’s expected stock price as this multiple the market sentiment. Although the ‘BUY’ is recommended for GFPT based on the Forward P/E multiple method, it would be necessary for investors to consider a discounted cash flow method, as this multiple does not take into account the effect of capital structure and the discrepancy of finding the perfect peers within the same business and industry.