RELATIVE VALUATION OF BANGKOK AIRWAYS PUBIC COMPANY LIMITED.

Abstract

Relative valuation method is one of the most admired enterprise valuation technique by using key financial ratio of its competitors or industry peers to compare and evaluate the target firm’s value. The purpose of this thematic paper is to evaluate the value of Bangkok Airways public company limited using relative valuation method. Five-years median of historical key financial ratio including P/E, P/BV and EV/EBITDA of sixed selected peers (data from 2014 to 2019) are applied to evaluate the firm value. Based on the results, the estimate current price per share of Bangkok Airways is 15.32 baht, as of 15th November 2019, which show that the market price of Bangkok Airway is currently “undervalue”, and the target price of Bangkok Airways during 2020 is between 15.39-15.55 baht per share, if the performance of Bangkok Airways meets the performance as the proforma’s assumption. The most striking point for value of Bangkok Airways is that the current price of the firm mostly come from on a value of shares in Samui Property Fund (SPF) and Bangkok Dusit Medical Service (BDMS) that hold by Bangkok Airways, otherwise the value of Bangkok Airways’ operating assets, without considering non-operating asset, will eventually be zero In conclusion, more than half of value come from Non-Operating Assets. The operating performance and profitability are then still poor and high risk, even though the market price of Bangkok Airways at the moment is undervalue, compared to its intrinsic value. The recommendation based on this situation is to HOLD.