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Authors: Donlachon Tanarathchat
Keywords: Corporate Finance
Discounted Cash Flow
Ready to drink tea
Issue Date: 2023
Publisher: Mahidol University
Abstract: In this thematic paper, the intrinsic value of Ichitan Group (ICHI)’s share price was evaluated using the discounted cash flow (DCF) valuation approach. ICHI is a company listed on the stock exchange of Thailand (SET) that produces and sells ready-to-drink tea beverages under various brands such as Ichitan and Yen Yen. The DCF analysis indicated that the company's sales revenue is expected to grow at a compound annual growth rate (CAGR) of 5.43% from 2021 to 2026, driven by the growth of ready-to-drink coffee and tea in Thailand. Beyond 2026, it was assumed that the company's sales growth rate would be 2.96% per annum (perpetual growth), based on a forecast of growth in the ready-to-drink tea and coffee market in Thailand in 2027. The target stock price for ICHI was determined to be 10.99 baht per share, which is 14.83% lower than the current market price of 12.90 baht per share as of 10 March 2023. Based on this assessment, it is recommended to HOLD ICHI shares.
Description: 48 leaves
Appears in Collections:Thematic Paper

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