Discounted Cash Flow Valuation of MK Restaurant Group Public Company Limited

Abstract

This thematic paper applied the principle of discounted cash flow valuation approach to evaluate the intrinsic value of MK Restaurant Group PCL (M)’s share price. MK Restaurant Group PCL (M) and its subsidiaries operate multi-chain restaurant companies under brands MK, Yayoi, Miyazaki, Hakata and Laem Chareon. M also has franchise agreements with partners to operate franchised restaurants in Asia. According to the discounted cash flow analysis, M revenue is expected to recover and increase about 3.0% (CAGR 2021 – 2026) as the resulted of COVID-19 vaccination efficiency and economic recovery. This also consequently drive operating income grow by 6.0% CAGR at the same period. After that M’s growth follows Thailand GDP perpetual growth at 2.89%. The M target price is 60.76 Baht per share as of 31 December 2021. This price is in greater upside about 20% higher than latest stock price at 50.75 Baht as of 9 July 2021. The recommendation on undervalued share price of M is to “BUY”