Proceedings of the International Conference on Sustainable Collaboration in Business, Technology, Information, and Innovation (SCBTII 2023)

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Stock Valuation of Cement Industry in 2019 and 2021 due to COVID-19 using Free Cash Flow to Firm (FCFF) and Relative Valuation (RV)

Authors
Sri Rahayu Fitriani1, *, Brady Rikumahu1
1School of Economy and Business, Bandung, Indonesia
*Corresponding author. Email: ayoe.zahrotussifa@gmail.com
Corresponding Author
Sri Rahayu Fitriani
Available Online 19 November 2023.
DOI
10.2991/978-94-6463-292-7_18How to use a DOI?
Keywords
Stock Valuation; Intrinsic Value; FCFF; Relative Valuation (RV); Cement Industry
Abstract

This research aims to predict the intrinsic value and provide investment decision recommendations for company stocks in the cement industry. COVID-19 has slowed down the economy and caused higher volatility compared to the risk and return of IHSG. This research was carried out in 2019, which was the beginning of COVID-19, and in 2021, when there was an improvement in economic growth. It uses data from 2014–2020 to calculate historical performance and estimates of the company’s financial behavior. the analysis using FCFF and Relative Valuation methods with PER and PBV based on optimistic, moderate, and pessimistic scenarios. The results of the FCFF method showed that in 2019, INTP was overvalued in all scenarios, SMCB was undervalued in all scenarios, and SMGR was overvalued in pessimistic scenarios, while the rest were undervalued. In 2021, INTP was overvalued on all scenarios, SMGR and SMCB were overvalued on pessimistic scenarios, and the rest were undervalued. SMGR PER was undervalued in all scenarios. SMGR PBV was overvalued for all scenarios; INTP and SMCB are undervalued for pessimistic scenarios and overvalued for moderate and optimistic scenarios. In 2021, PERs for SMGR and SMCB were undervalued in pessimistic scenarios and overvalued in moderate and optimistic scenarios. INTP was undervalued for pessimistic scenarios, fair-valued for moderate scenarios, and overvalued in optimistic scenarios. Furthermore, the author recommends investing in SMCB and SMGR, as well as selling INTP.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Sustainable Collaboration in Business, Technology, Information, and Innovation (SCBTII 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
19 November 2023
ISBN
10.2991/978-94-6463-292-7_18
ISSN
2352-5428
DOI
10.2991/978-94-6463-292-7_18How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Sri Rahayu Fitriani
AU  - Brady Rikumahu
PY  - 2023
DA  - 2023/11/19
TI  - Stock Valuation of Cement Industry in 2019 and 2021 due to COVID-19 using Free Cash Flow to Firm (FCFF) and Relative Valuation (RV)
BT  - Proceedings of the International Conference on Sustainable Collaboration in Business, Technology, Information, and Innovation (SCBTII 2023)
PB  - Atlantis Press
SP  - 290
EP  - 303
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-292-7_18
DO  - 10.2991/978-94-6463-292-7_18
ID  - Fitriani2023
ER  -