| Summary: | This research is aimed to estimate intrinsic value of the equity of PT Kimia
Farma in order to merge with PT Indofarma by using discounted cash flow method
(DCF) and relative valuation method. The research has become interesting to do
because for the event of privatization, PT Kimia Farma Tbk. Has a value that will
be a benchmark value on its share offering process, to avoid decreasing income
because its stock price which is too low, as well as if it is too high to sell to the
public.
The data used in this research consists of its financial report at 2007-2011,
annual report, comparable company�s financial report, comparable company�s
stock price, risk free rate, and other supporting data. The analysis used is DCF
methods which go with the following steps: sales or earnings projection analysis,
financial statement projection, free cash flow projection, discount rate (WACC)
determination and value estimation. Relative valuation method was started by
determining comparable company on the industry, followed by choosing and
determining the multiples wich will be used to converse book value on relevant
variable on PT Kimia Farma Tbk. to be estimation of market value of equity.
The multiples used are: PER (Price Earning Ratio), PBV (Price to Book Value)
and P/S (Price to Sales).
The result of the research shows that its intrinsic value of the equity of
PT Kimia Farma Tbk. is Rp3.193.125.000.000,00. The value was obtained from
reconsiliation process, based on DCF method is Rp3.353.921.406.908,00 and
on relative valuation method is Rp3.085.927.247.000,00.
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