FAIR VALUE VALUATION ANALYSIS OF PT. KIMIA FARMA TBK USING FREE CASH FLOW TO FIRM (FCFF) METHOD
Muthia Rahmah Delfi

Institut Teknologi Bandung

Abstract

The on-going global pandemic that has been happening since early 2020 has put health as a major concern for Indonesian and global society. Waves of new viruses namely delta and newcomer omicron have put effect on the stock market prices. PT Kimia Farma Tbk, one of the leading pharmaceutical companies in Indonesia is put in the spotlight as the supplier of health products and services. The company launched its stock back in 2001 with 500 million shares and price of Rp200 which continuously grew especially in the era of pandemic. To assess whether the stock price is undervalued or overvalued, the valuation of shares is required to analyse the stock price of PT Kimia Farma Tbk in the market as a basis of information for investors to make investment decisions. The methodology that is used in this valuation is the Discounted Cash Flow method using the model of Free Cash Flow to Firm.

Keywords: Valuation, Free Cash Flow to Firm, Overvalued, Undervalued, PT Kimia Farma Tbk.

Topic: Financial Management and Accounting