Discounted cash flow valuation of home product center public company limited

Abstract

This thematic paper aims to determine the stock value of Home Product Center Public Company Limited (HMPRO) using the discounted cash flow valuation model, focusing on Free Cash Flow to Firm. The concept underlying this model suggests that the stock price should reflect the fundamental value of the company in terms of cash flow, growth potential, and associated risks. Considering Thailand’s growing economic stability, with a rising consumer spending trend and demand for home improvement products, HMPRO stands to benefit significantly both domestically and internationally. The target price for the year ending 2025 is projected to be 6.49 Baht per share, offering an approximate 1.4% upside from the current stock price. This valuation suggests a HOLD recommendation. Moreover, HMPRO continues to see strong profit generation from its core operations, and expansion in its e-commerce and retail initiatives further supports its market performance. Despite this, the valuation method has some inherent limitations and assumptions, so the projected value should be approached with caution. Nonetheless, the findings offer valuable insights into HMPRO's intrinsic value for potential investors and stakeholders in the retail sector.