Relative valuation of mega lifesciences public company limited

Abstract

The purpose of this thematic paper is to estimate Mega Lifesciences Public Company Limited's (MEGA) intrinsic value using the relative valuation method. The expectation of share value should consider the company's fundamentals, expected future performance, and risk. MEGA operates in developing countries or emerging markets with relatively strong nominal GDP growth rates. The growing health awareness, driven by concerns from the COVID-19 pandemic and aging population trends, is expected to significantly boost the demand for dietary supplements. Historically, the company’s sales have shown a strong correlation with disposable income and health awareness. Based on an analysis of multiple valuation bands and peer comparison, MEGA's target price is estimated at 52.98 baht per share, reflecting a potential upside of 39.43% from the market price of 38 baht per share as of July 1, 2024. Therefore, we recommend to BUY the share of MEGA.