RELATIVE VALUATION OF OSOTSPA LIMITED COMPANY.

Abstract

OSP is a company with almost 130 years of history. It is considered one of the largest Thai companies, listed in the SET50. Its core business is split among three main segments: non-alcoholic beverages, personal care, and others. The purpose of this thematic paper is to provide a financial analysis and valuation of Osotspa Public Company Limited. OSP continues to have positive growth despite the Covid-19 crisis. It is estimated that CAGR of OSP’s free cash flow from 2020 to 2025 would be 3.7%, driven by GDP and beverage industry growth The valuation method applied in this paper is relative valuation methodology. The concept of relative valuation methods is to compare the value of OSP with peers in the same industry. Trailing P/E is suitable for estimating the target price because beverage companies tend to have relatively stable profit. The target price of OSP based on the analysis is 27.51 baht. It shows that the current stock price is overvalued, therefore, I recommend the investors to SELL the stock.