Relative valuation of home product center public company limited.

Abstract

This thematic paper applies the relative valuation approach to derive the expected value of Home Product Center Public Company Limited (HMPRO). The valuation is based on two primary methods: an analysis of the company's historical multiples and a comparison with its industry peers, which yielded conflicting results. The historical multiples method suggests the stock is undervalued, yielding an average expected price of 14.48 Baht. Conversely, the peer group comparison resulted in an average expected price of 4.46 Baht, suggesting the stock is overvalued relative to the industry. The analysis reveals HMPRO’s premium valuation is justified by its superior fundamentals, particularly its Return on Equity (ROE). Considering the current macroeconomic environment, more weight is given to the peer group comparison. Given that HMPRO's strong fundamentals justify its premium over peers, but high future growth is uncertain, a "HOLD" recommendation is issued.