Discounted cash flow valuation of Sabina public company limited

Abstract

This report seeks to establish the target share price of Sabina Public Company Limited (SABINA) utilizing the discounted cash flow (DCF) valuation approach. SABINA holds a distinguished position as one of Thailand's premier lingerie product companies. The evaluation, carried out on November 27, 2023, aims to ascertain SABINA's target price by employing the DCF methodology for the prospective years from 2022 to 2027, encompassing the present value of the terminal value at the close of 2027. The examination of SABINA's cash flows incorporates projections of Total Revenue, Cost and Expenses, and other pertinent factors. With a cost of capital at 7.7% and a terminal growth rate of 2.09%, the envisioned target price for SABINA by the close of 2023 stands at 38.07 baht, signifying a 42% upside from the prevailing price of 26.75 baht. Considering this valuation, taking into account SABINA's commendable historical performance, the investment advice is a "Buy." However, it's essential to acknowledge inherent limitations and triggers. Investors are urged to meticulously assess their alternatives, factoring in market dynamics, before arriving at any decisions.