RELATIVE VALUATION OF PRIMA MARINE PUBLIC COMPANY LIMITED

Abstract

The relative valuation assessment on Prima Marine Public Company Limited in this paper is conducted using several multiples-related methods with the intent of finding an appropriate target price for the company by which we could use to determine the undervaluation or overvaluation of the company. The historical multiples method compares the multiples of the firm with that of its own in the past, while the peer group multiples method exhibits the multiples of the company in comparison with comparable peers from similar industries of within reasonable overlap in regards to their business segments. In this thematic paper, the target price we acquired in our investment recommendation comes from using the historical multiples, of which we constructed 6 multiple bands including the trailing and forward figures of P/E, P/BV, and EV/EBITDA. The reason for this is attributed to the difference in firm market capitalization and different nature of the business segment between PRM.BK’s peer, making it more suitable to make use of the target price from our calculation of the historical multiples band instead of peer multiples. We then calculate the average target price using the trailing EPS for the company in order to determine the final target price of 8.27 Baht, which is an upside of the current price (as of 26th of July 2022) of PRM.BK stock of over 35.90%. As such, the investment recommendation we provided here is to BUY the stock.