DISCOUNTED CASH FLOW VALUATION OF ANANDA DEVELOPMENT PUBLIC COMPANY LIMITED

Abstract

This thematic paper applied the principle of discounted cash flow valuation approach to evaluate the intrinsic value of Ananda Development Public Company Limited (ANAN)’s share price. Ananda Development Public Company Limited is one of the top real estate development companies in Thailand which focus on improving urban lifestyle. All of their projects will be in Bangkok and the surrounding area whether the condominium, housing, or townhouse projects. They classify the range of price per unit by using the different brand names for each project. Anyway, all of their projects will aim to create convenient and comfortable living.According to the DCF analysis, the total revenue of ANAN increases by 8.35% CAGR. It is quite high because we assume that revenue in 2020 and 2021 is already at the bottom, so in 2022 till 2025 could be a recovery period. And after 2025, we assume the revenue growth of the company will be 1.5% per year (Terminal growth), which is the lower range of the expected inflation rate. The target stock price of Anan is 1.79 baht while the market price on 4 of August 2021 is 1.59 which makes ANAN stock has 12% upside. So based on target price from DCF valuation and relate to the scale of rating which Anan is in the group of “10% or greater upside". We can conclude that our recommendation for ANAN is “BUY"