Metal and Mineral Mining Firm’s Equity Valuation in Indonesia Stock Exchange

Abstract

: The purpose of this research is to estimate the intrinsic values of the shares on the metal and mineral mining companies listed in IDX 2018 using Discounted Cash Flow - Free Cash Flow to Firm method and verifies the results with the relative valuation - PER and PBV methods. The sample of this research is the dominant industry players ANTM, INCO, and TINS. The valuation baseline was the analysis of the financial statements of those companies in the period 2013-2017 which was considered as the reference for the projection years 2018-2022. This research involved three scenarios namely pessimistic, moderate and optimistic, and the reference market price was on January 2, 2018. The analysis concluded that using DCF-FCFF the stock’s price of ANTM was undervalued in all scenarios, while INCO and TINS were overvalued in all scenarios. The PER and PBV analysis found that all evaluated stocks within the industry range that mean the valuation result is correct. Hence, the conclusion of this research is to buy ANTM stocks and to sell INCO and TINS stocks.