Relative Valuation of MK Restaurant Group Public Company Limited

Abstract

The objective of this thematic paper is to evaluate whether the price of MK Restaurant Group Public Company Limited’s stock (M) on 2nd March 2023 (54.75 baht) is undervalued or overvalued. The method used is the Relative Valuation Technique which is comprised of Historical Multiple Bands Approach and Peer Group Multipoles Approach. The multiples that were applied in this research included P/E, Forward P/E, P/BV, Forward PBV, EV/EBITDA, and Forward EV/EBITDA. The peers that were selected for the analysis are consisted of Oishi, ZEN. Hotpot, and Greyhound. The result of the valuation indicates that the sensible target prices (56.58 baht, 61.75 baht and 62.01 baht) are not so different from the current price of 54.75 baht. One of the possible explanations for this is that the market is relatively efficient and is valuing this stock at the price it should be. Consequently, the recommendation is to ‘HOLD’ as the approximate upside potentials of 3 percent and 13 percent are not high enough.