RELATIVE VALUATION OF IRPC PUBLIC COMPANY LIMITED.

Abstract

We issue a SELL recommendation on IRPC Public Company Limited with a one-year target price of THB 1.52 determined by the Discounted Free Cash Flow to Firm Method with WACC at 10.83% and terminal growth rate 1.54%. The intrinsic value is lower than the current market price THB 3.62 as at 13 December 2019. In Multiple Band Ranking of relative valuation method; we ranked all 8 factors, noted this will also included share price and Enterprise Value as well. We had 4 Undervalued factors (Share Price, forward P/E, trailing P/BV, forward EV/EBITDA) & 4 Overvalued factors (Enterprise Value, trailing P/E, forward P/BV, trailing EV/EBITDA). So Multiple Band had equally between Undervalued & Overvalued. Next, Selected Peer 5 yrs Median Ranking, relevant data can be applied only to trailing relative valuation method only, it does not work with Share Price, Enterprise Value, nor any type of forward multiple. As it ranked, 1 Undervalued factor & 2 Overvalued factors. Then for Oil & Gas T12M Median Ranking, same idea as Selected Peer 5 yrs Median Ranking, can apply to only trailing relative valuation, which yield all 3 Overvalued factors. All in all, 6 Undervalued indicators vs 10 Overvalued indicators; with relative valuation method, we would recommend SELL on IRPC Public Company Limited