DISCOUNTED CASH FLOW VALUATION OF ASIANS ALLIANCE INTERNATIONAL (AAI)

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.