RELATIVE VALUATION OF ICHITAN GROUP

Abstract

This paper provides a relative valuation analysis of Ichitan Group Public Company Limited (ICHI), a Thai company that produces and sells ready-to-drink tea beverages. Using data on price to earnings (P/E), price to book value (P/BV), and enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiples, the paper compares ICHI's valuation to its peers in the beverage industry. The analysis shows that ICHI's 5-year P/E multiple indicates the company is undervalued compared to historical data, while the 3-year P/E multiple, 5-year P/BV, and 5-year EV/EBITDA multiples suggest that ICHI is slightly overvalued. In comparison to its peers, ICHI has a higher trailing and forward P/E, but a lower trailing and forward P/BV and EV/EBITDA. Furthermore, the analysis of ICHI's fundamentals reveals that the company has a stronger ROE, net profit margin, and EPS growth, and a lower debt ratio than the peer average and median. However, the larger payout ratio may adversely affect the company's growth prospects. Based on the analysis, the paper recommends a "HOLD" rating for ICHI shares, with a suggestion to issue a buy or sell when the target prices have an upside or downside of more than 10%.