DISCOUNTED CASH FLOW VALUATION OF DYNASTY CERAMIC PUBLIC COMPANY LIMITED.

Abstract

This thematic paper examines to value the stock price of Dynasty Ceramic Public Company Limited (DCC) base on discounted cash flow model (DCF). An entity perspective, the business derives cash payoffs in form of free cash flow. To estimate the entire company value, free cash flow discounted with appropriate weighted average cost of capital commensurate with risk involved are considered. The method can be used to value shareholders’ equity value by deducting debt value from the calculated firm value. With strong performance and large market share including expectation of strong industry growth in following years, we expect the conservatively optimistic future for DCC. The target price shall be around 1.97 Baht per share while the current price is at 1.86 Baht per share. Thus, the recommendation is to BUY. Nevertheless, other external factors which beyond expectation might lead to less effectiveness in valuation of target price.