DISCOUNTED CASH FLOW VALUATION OF THONBURI HEALTHCARE GROUP PUBLIC COMPANY LIMITED

Abstract

The thematic paper has an objective to determine stock price of Thonburi Healthcare Group Public Company Limited (THG) based on discounted cash flow valuation method (FCFF). Covid-19 breakout profoundly impacts world’s economy including healthcare business, which is considered defensive. THG’s primary target customers are cash-based patients and foreign customers. Both groups are directly affected by economic recession. This fundamentally impacts future revenue forecast and free cash flow to firm. In 2020, THG’s revenue growth recorded a greater decrease than Thailand’s GDP. Plus, Thonburi group suffers from cost control problem prior the COVID-19 pandemics. Therefore, the valuation is derived from a conservative assumption. THG’s target price based on discounted cash flow methods is of 15.92 baht. Almost half it is less than market price of 30 baht. After the input value and assumptions are compared with different financial analysis platform such as Refinitiv Eikon, SET and S&P500 capital IQ. As well as being tested sensitivity analysis. The study indicates that investors should SELL because the market price is overvalued.