Stock Valuation and Business Performance of Property Industry Post COVID-19 Era (Case Study of PT B)

Abstract

In 2019 the pandemic Covid-19 caused sharp decline on Indonesian economy, yet in 2021 the economic condition started to recover, indicated by 7% increase in Gross Domestic Product and Consumer Confidence Index. One sector influenced by strong economic recovery is property industry, furthermore government gave stimulus to boost property industry growth. PT B is a leading property developer having various projects and land bank across Indonesia. Post Covid-19 era, the financial performance of PT B showed a good condition, the evidence is the increase in company profitability and decline in the debt. The fundamentals contrast with the stock price as the price declined even in the recovery phase. This condition encourages the writer to do the research on PT B stock valuation and whether the share is classified as overvalued or undervalued. The research will utilize secondary such as financial reports, annual reports, public expose from idx.co.id, and other literature sources. The methodology to process the data is Discounted Cash Flow valuation method to find the actual intrinsic value and value-added intrinsic value, to find the fair value using Net Asset Value valuation method. The added value is a proposal to developing housing projects for Generation Z with goal to increase the company share price. The result is the stock fair value to be IDR 1,312 – 2,554. Finally, the author will determine if the stock of PT B is undervalued or overvalued based on the research results.