mppa (stock analysis)

7/29/2019 MPPA (Stock Analysis)

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MM 5009

FINANCE

STOCK ANALYSIS

PT Matahari Putra Prima Tbk (MPPA)

Executive 47 (MBA)

Sufian (29112017)

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND MANAGEMENT

INSTITUT TEKNOLOGI BANDUNG

2013



MM 5009 – FINANCE STOCK ANALYSIS

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TABLE OF CONTENTS General Overview .................................................................................................................................................... 3

Macroeconomic overview........................................................................................................................................ 3

Gross Domestic Product (GDP).............................................................................................................................. 4

Unemployment Rate ................................................................................................................................................ 6

Outlook of Modern Retail Industry ....................................................................................................................... 6

Consumer Spending ................................................................................................................................................ 8

Inflation Rate ........................................................................................................................................................... 8

Company Overview ..................................................................................................................................................... 9

PT Matahari putra prima tbk (MPPA) Company Profile ................................................................................... 9

History of the development of PT. Matahari Putra Prima Tbk. (MPPA) ........................................................ 10

ownership and major holders ............................................................................................................................... 12

business activities and strategies .......................................................................................................................... 13 The core retail business of Matahari Group ................................................................................................... 13

Supported by Nationwide Network .................................................................................................................. 13

Financial Performance Overview............................................................................................................................. 14

Financial Ratios & Margins.................................................................................................................................. 14

Dividend and stock .................................................................................................................................................... 15

Dividend.................................................................................................................................................................. 15

Considerations in the Formulation of Dividend Policy ........................................................................................... 16

Cash Dividend Payment .......................................................................................................................................... 16

growth over prior year .......................................................................................................................................... 18

Stock theory ............................................................................................................................................................... 20

MPPA stock market snapshot .............................................................................................................................. 21

Investment Parameter ........................................................................................................................................... 21

Stock valuation........................................................................................................................................................... 22

Methodology ............................................................................................................................................................ 22

Required Rate on Equity ...................................................................................................................................... 23

Growth ................................................................................................................................................................. 24

Value of Equity .................................................................................................................................................... 24

Value Estimation ......................................................................................................................................................... 25

Exhibit 1 – INCOME STATEMENT .......................................................................................................................... 27

Exhibit 2 – BALANCE SHEET .................................................................................................................................. 28

Exhibit 3 – CASH FLOW............................................................................................................................................ 32




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I NDONESIA MACRO-ECONOMIC OUTLOOK

GENERAL OVERVIEW1

Indonesia lies between latitudes 11°S and 6°N, and longitudes 95°E and 141°E. It

consists of 17,508 islands, about 6,000 of which are inhabited. These are scattered over both

sides of the equator. The largest are Java, Sumatra, Borneo (shared with Brunei and Malaysia),

New Guinea (shared with Papua New Guinea), and Sulawesi. Indonesia shares land borders with

Malaysia on Borneo, Papua New Guinea on the island of New Guinea, and East Timor on the

island of Timor. Indonesia shares maritime borders across narrow straits with Singapore,

Malaysia, the Philippines, and Palau to the north, and with Australia to the south. The capital,

Jakarta, is on Java and is the nation's largest city, followed by Surabaya, Bandung, Medan, and

Semarang.

MACROECONOMIC OVERVIEW2

Indonesia has the largest economy in Southeast Asia and is one of the emerging market

economies of the world. The country is also a member of G-20 major economies and classified

as a newly industrialized country. It has a market economy in which the government plays a

significant role through ownership of state-owned enterprises (the central government owns

more than 160 enterprises) and the administration of prices of a range of basic goods includingfuel, rice, and electricity. In the aftermath of the financial and economic crisis that began in mid-

1997 the government took custody of a significant portion of private sector assets through

acquisition of nonperforming bank loans and corporate assets through the debt restructuring

process. Since 2004 the economy has recovered and growth has accelerated to over 6% in recent

years.

Indonesia regained its investment grade rating from Fitch Rating in late 2011, and from

Moody's Rating in early 2012, after losing its investment grade rating in December 1997 at the

onset of the Asian financial crisis which Indonesia spent more than Rp450 trillion ($50 billion)

to bail out lenders from banks. Fitch raised Indonesia's long-term and local currency debt rating

1 http://en.wikipedia.org/wiki/Indonesia2 http://en.wikipedia.org/wiki/Economy_of_Indonesia

http://en.wikipedia.org/wiki/Indonesia

http://en.wikipedia.org/wiki/Emerging_markets

http://en.wikipedia.org/wiki/G-20_major_economies

http://en.wikipedia.org/wiki/Newly_industrialized_country

http://en.wikipedia.org/wiki/Market_economy

http://en.wikipedia.org/wiki/Fuel

http://en.wikipedia.org/wiki/Rice

http://en.wikipedia.org/wiki/Electricity

http://en.wikipedia.org/wiki/Asian_financial_crisis

http://en.wikipedia.org/wiki/Non-performing_loan

http://en.wikipedia.org/wiki/Debt_restructuring

http://en.wikipedia.org/wiki/Fitch_Group

http://en.wikipedia.org/wiki/Moody%27s_Investors_Service

http://en.wikipedia.org/wiki/Moody%27s_Investors_Service

http://en.wikipedia.org/wiki/Fitch_Group

http://en.wikipedia.org/wiki/Debt_restructuring

http://en.wikipedia.org/wiki/Non-performing_loan

http://en.wikipedia.org/wiki/Asian_financial_crisis

http://en.wikipedia.org/wiki/Electricity

http://en.wikipedia.org/wiki/Rice

http://en.wikipedia.org/wiki/Fuel

http://en.wikipedia.org/wiki/Market_economy

http://en.wikipedia.org/wiki/Newly_industrialized_country

http://en.wikipedia.org/wiki/G-20_major_economies

http://en.wikipedia.org/wiki/Emerging_markets

http://en.wikipedia.org/wiki/Indonesia




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to BBB- from BB+ with both ratings is stable. Fitch also predicted that economy will grow at

least 6.0% on average per year through 2013, despite a less conducive global economic climate.

Moody’s raised Indonesia's foreign and local currency bond ratings to Baa3 from Ba1 with a

stable outlook.

Indonesia, a vast polyglot nation, grew an estimated 6.1% and 6.4% in 2010 and 2011,

respectively. The government made economic advances under the first administration of

President YUDHOYONO (2004-09), introducing significant reforms in the financial sector,

including tax and customs reforms, the use of Treasury bills, and capital market development and

supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and

joined China and India as the only G20 members posting growth in 2009. The government has

promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, afiscal deficit below 3%, and historically low rates of inflation. Fitch and Moody's upgraded

Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with

poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory

environment, and unequal resource distribution among regions. The government in 2013 faces

the ongoing challenge of improving Indonesia's insufficient infrastructure to remove

impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy

program in the face of high oil prices.

GROSS DOMESTIC PRODUCT (GDP)

The GDP in Indonesia was worth US$ 846.832 billion in 2012. It represents 1.37% of

world economic. In the last 10 years, Indonesia GDP has a constant growth each year.




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On the sector basis, the source of growth has started to be more balanced as the tradable sectors

that accounted 46.9% of total GDP, rose by 4.5% YoY in the 2011, while non-tradable sectors

grew by 8.3% YoY in the same period vs. 8.2% YoY last year. The strong pickup in tradable

sector was driven by the manufacturing sector that grew by 6.2% YoY in 2011, the highest

growth since 2004. The strong growth was driven by domestic-based manufacturing, such as

iron, textile, food, and transportation industries. Expansion in manufacturing sector indicates

improvement in the economic capacity, which will help sustain economic growth in the future.




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UNEMPLOYMENT R ATE

With around 240 million people, Indonesia is the fourth most populous country in the

world (after China, India and the United States). Moreover, the country has a young population

as around half of the total population is below the age of 30 years. Combined, these two features

imply that Indonesia currently contains a large labor force; one that will grow larger in the

foreseeable future.

OUTLOOK OF MODERN R ETAIL INDUSTRY

Strong underlying economic growth, large population (the world’s fourth largest and

growing), rising per-capita incomes and the continued development of organized retailinfrastructure are key factors behind the substantial growth forecast in Indonesian retail sales. In

2011 and 2012, modern retail industry is estimated to grow by approximately 20% YoY each.

Retail I ndustry Growth

http://www.indonesia-investments.com/culture/population/item67

http://www.indonesia-investments.com/culture/population/item67




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We are on the view that Indonesian modern retail industry still has large room to grow.

Enhancing consumption, which contributes as much as 57.5% for Indonesian GDP growth of

6.4% in 1H12, large population of around 257 million, and increasing income per capita to over

USD 4,000 in 2012, support the growth of modern retail industry. Else, demographic factors

suggest scope for strong medium-to-long term growth in retail sales. The population is youthful

– around 28.8% of people are aged fewer than 15, and around 5% are above 65 years. The

population itself also recorded an increasing middle-class society to over 40%, or amounted to

23 million families. Indonesian Retail Merchants Association (“Aprindo”) estimates that the

sales from national modern retail will lift by 15% YoY in 2012, or accounted to Rp 138 trillion,

with 1st and 2nd semester contribution of 40%: 60%.

With such supporting situation, many Indonesia’s major retailers, especially modern

market retailers that focus on food business, are expanding rapidly and the competition remains

fierce in the future. In the minimarts business segment, PT indomarco Prismatama, the owner of

Indomaret mini markets, and PT Sumber Alfaria Trijaya, which operates Alfamart, has dominate

the minimart business, with total of around 10,000 stores of minimarts. Meanwhile, in the

hypermarkets segments, Carrefour and Hypermart dominate with outlets of 85 and 75,

respectively, as of mid of November 2012.




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CONSUMER SPENDING

Consumer spending, also called consumer consumption or expenditure is the amount of

money that households spend on goods and services in order to satisfy their needs. Similar to

GDP, the amount of consumer spending in Indonesia has continuously increased since 2003 to2012. In the last quarter of 2012, it’s stated that consumer spending in 4th quarter has reached

368,212.80 billion. The figure below shows the trend of Indonesia consumer spending since 1 st

quarter of 2003 to 4th quarter of 2012.

From the chart shown in the figure below, it can be indicated that Indonesia economic is

performing well. The consumer expenditure is one of indicator to measure that the economy is in

healthy condition. So household spend more of their money to goods and services to satisfy their

needs

INFLATION R ATE

Indonesian statistic biro (BPS) reported that the inflation rate in Indonesia was recorded

at 5.57% in April 2013. The statistic shows that there’s the variance of inflation rate since 2003

till present (the figure below show the inflation rate from 2013 t0 2012). The average of inflation




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rate is around 7.8 while the highest one was 18.38 around last quarter of 2005 and the lowest was

3.43 around April 2010.

COMPANY OVERVIEW

PT MATAHARI PUTRA PRIMA TBK (MPPA) COMPANY PROFILE

The Company is domiciled at Menara Matahari 20th floor, Boulevard Palem Raya # 7, Lippo

Village - Tangerang, Banten.

Homepage: www.matahari .co.id

Vision: To be consumer’s most preferred

retailer

Mission: To consistently bring value fashion-

right products and services that enhances the consumer’s quality of lifestyle

PT Matahari Putra Prima Tbk, together with its subsidiaries, operates a chain of retail

stores. It sells clothes, accessories, bags, shoes, cosmetics, electrical equipment, toys, stationery,

books, drugs, and daily need products through its chain of stores. The company also operates

family entertainment centers under the name Time Zone. In addition, it involves in financing,

general trading, sale, and marketing of mineral water; operating restaurants and drugstores; and

consumer financing activities. As of November 2nd, 2012, MPPA has operated 75 Hypermart,

26 Foodmart and 75 Boston HBC stores with total operational space of more than 500,000 sqm.

MPPA has received several awards such as Museum Indonesia (“MURI”) records for displaying




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219,860 page views in the internet. MPPA also received Corporate Social Responsibility

(“CSR”) Award from Seputar Indonesia (“Sindo”) Newspaper, 2011 Retail Asia Top 500

Awards from Retail Asia, Euromonitor International and KPMG, and 1st Ranking of SWA 100

Indonesia Best Public Companies in 2011. In line with the growth of modern retail industry in

Indonesia and buyed by its huge customer base, MPPA has a bright prospect ahead.

Listed Since: 21 December 1992 Beta to Composite: 0.94

Industry: TRADE, SERVICES & INVESTMENT Weight to Composite: 0.00%

Sector: Retail Trade Beta to industry: 0.76

Market Cap: Rp. 12,965,471,310,000 Weight to industry: 0.00%

Shares Outstanding: 5,576,546,800

HISTORY OF THE DEVELOPMENT OF PT. MATAHARI PUTRA PRIMA TBK .

(MPPA)4

1958 : First store in Pasar Baru,Jakarta

1972 : Pioneer of Department Store concept in Indonesia

1980 : Open the first store outside Jakarta - Sinar Matahari Bogor

1988 : Core Business Expansion to Supermarket Operation.

1st Rights Issue - IDR 75B

1992 : IPO at Jakarta Stock Exchange and Surabaya Stock Exchange

1996 : Issuance of 5-year US$100 Million Bond & 2nd Rights Issue - Rp 226B

1997 : Multipolar became majority shareholder 3rd Rights Issue Rp 902B

2000 : Launching Of Matahari Club Card (MCC)

2001 : Settlement of 5-year US$ 100 Million Bond

2002 :

o New Management Team

o Core Business Restructuring: Matahari Department Store,

o Matahari Supermarket & TimeZone

3 http://www.tradergods.com/stock/stockdetail.aspx?stock=MPPA4 http://www.mataharigroup.co.id

http://www.mataharigroup.co.id/







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o Independent and transparent Business Units

o Issuance of 5-year Obligasi I - Rp 450 Billion

2003 :

o Consolidation Year

o Closure of Non-profitable storeso Re-focus to internal infrastructure, resources & company’s Foundation

2004 :

o Launch of Hypermart

o Top 500 As-Pac Retail Award: #1- Indonesia

o Issuance of 5-year Obligasi II : Rp 300 B & Syariah I Rp 150 B

2005 : Successful aggressive expansion : 10 Department store,4 Kids2Kids,13

Hypermart,4 Cut Price,1 Matahari Supermarket, First Matahari Dept. Store in China,

Top 500 As-Pac Retail Award:#1- Indonesia

PT Matahari Putra Prima Tbk (MPPA) was established on March 11, 1986. Currently, MPPA

through its Food Business Division (Matahari Food Business- MFB) engaged in FMCG industry

in the form of Hypermarket and Supermarket, as well as Department Store through Matahari

Department Store (20% ownership in joint venture with CVC Capital Partners). In addition,

MPPA also has several supporting business i.e. Timezone family entertainment centers, Times

bookstore, Restaurant Services and FMCG logistic and distribution. MPPA’s hypermarket

known as “Hypermart” is the second largest hypermarket in Indonesia with market share of

34.3% in 2011.

MPPA’s business network:




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OWNERSHIP AND MAJOR HOLDERS

The new structure of BOC & BOD for the period of 2013-2014 is as follow:

Board of Commissioners:

President Commissioner & Chairman : John Bellis

Vice President Commissioner : Theo L. Sambuaga

Independent Commissioner : Travis Saucer

Independent Commissioner : Steve A. Martin

Independent Commissioner : Chua Siang Hwee, Jeffrey

Commissioner : Ali ChendraCommissioner : Gouw ViVen

Board of Directors:

President Director : Benjamin J. Mailool

Vice President Director : Carmelito J. Regalado (non-affiliated)

Director : Richard H. Setiadi

Director : Lina H. Latif

Director : IshakKurniawanDirector : Johanes Jany

Shareholders (per February 2013):

1. DBS Bank Ltd S/A PT. Multipolar Tbk 2,701,386,000 48.44 %

2. Prime Star Pacific Investment Pte. Ltd. 407,307,600 7.30 %

3. PT Star Pacific Tbk 338,419,625 6.07 %

4. PT Ciptadana Securities 319,110,000 5.72 %

5. Public (< 5%) 1,810,323,575 32.46 %




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BUSINESS ACTIVITIES AND STRATEGIES

THE CORE RETAIL BUSINESS OF MATAHARI GROUP

The Company's core key retail business activities include active retail operation within

FMCG (Fast Moving Consumers Goods) industry through hypermarket and supermarket

formats, supported by several other minor smaller businesses such as health and beauty centers,

family entertainment centers, international bookstores, restaurant services and FMCG logistic

and distribution.

In addition, the Company also has a strategic alliance with its strategic international

partner in owning and managing the Indonesia's leading department store chain, Matahari

Department Store.

SUPPORTED BY NATIONWIDE NETWORK

In the past six years, the number of Hypermart outlet has increased 23.0% a year on the

average. In 2005, the number of Hypermart outlet was 17 units and increased to 59 units in 2011.

This retail networks are spread over 32 cities in Indonesia. Besides, Hypermart is backed up with

three distribution centers which have an important role in the distribution of goods to Hypermart

and Foodmart. The warehouses of the three distribution centers are located in Surabaya, Balaraja

and Cibitung. Up to September 2011, MPPA has opened 5 of 15 new stores which will increase

about 102,500 sqm sales area. The new stores are located in North Lippo Karawaci, Ciputra

World Surabaya, Serang, Kediri and Gresik, while the rest is planned to be opened in Kudus,

Batu Malang, Cirebon, Ciputra Sraya (Sumatera), Gorontalo, Sidoarjo and Palembang.

Furthermore, MPPA plans to open 15 new stores in 2012 and about 80 new stores in the next

five years. We believe, thus extensive distribution network will boost MPPA sales in the

subsequent periods




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FINANCIAL PERFORMANCE OVERVIEW

FINANCIAL R ATIOS & MARGINS

The PT Matahari Putra Prima Tbk financial analysis covers the income statement and

ratio trend-charts with balance sheets and cash flows presented on an annual basis (please look at

the Exhibit 1, 2 and 3). The report outlines the main financial ratios pertaining to profitability,

margin analysis, asset turnover, credit ratios, and company’s long-term solvency. This sort of

company's information will assist and strengthen company’s decision-making processes.

MPPA’s distribution




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DIVIDEND AND STOCK

DIVIDEND

Dividend policy refers to the explicit or implicit decision of the board of directors

regarding the amount of residual earnings (past or present) that should be distributed to the

shareholders of the corporation




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CONSIDERATIONS IN THE FORMULATION OF DIVIDEND POLICY

Profitability and Liquidity

Legal Constraints

Contractual constraints

Growth prospects Owner considerations

Market considerations

Industry practice

Shareholder expectation

CASH DIVIDEND PAYMENT

As a public company, it is common that company paid dividends to the investor who put their

money to the company. PT. Matahari Putra Prima Tbk, as one reputable public company from

year to year always pay the dividends to their investor. It was a part of corporate policy to meet

some of investor expectation to the company. Some of them are really expecting gain from their




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investment from the dividends payment. Dividends payment policy in PT. Matahari Putra Prima

Tbk was based on the decision of shareholders meeting agreement which normally held annually

by the investor. The agreement will give guidance to the company to share corporate gain to the

investor as dividends payment.




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PT Matahari Putra Prima Tbk (MPPA) paid cash dividends fiscal year 2012 amounting to

Rp186 per share on May 29, 2013. According to the written statement of the company, on

Thursday, cash dividends were distributed to shareholders whose names are registered in the list

of shareholders (the record date) on May 20, 2013. The schedule for Cum and Ex Dividend in

cash in the regular market and negotiations were conducted on May 15 May 16, 2013, while for

Cum and Ex Dividend in cash in the cash market on 20-21 May 2013. As is known, MPPA

shareholders in the AGM held on 24 April 2013 yesterday has approved a cash dividend

amounting to Rp1 trillion, equivalent to Rp186 per share. In addition, the benefits achieved from

the results of the company, about 2 billion set aside as a reserve fund, and about Rp1, 8 trillion

allocated as accumulated retained earnings.

GROWTH OVER PRIOR YEAR

Year on year, growth in dividends per-share fell 98% while earnings per share excludig

extraordinary items rose109.97%. Additionally when measured on a five year annualized basis,

both dividend per share and earnings per share growth ranked in-line with the industry average

relative to its peers.




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Last Dividend Paid refers to dividend per share (DPS) paid to the shareholder the last

time dividends were issued by a company. It its conventional sense, dividends refer to the

distribution of some of a company's net earnings or capital gains decided by the board of

directors.

Matahari Last Dividend =Last Profit Distribution Amount

Total Shares= 0

Many stable companies today pay out dividends to their shareholders in the form of income

distribution, but high-growth firms almost never offer dividends because all of their earnings are

reinvested back to the business.

Based on recorded statements Matahari Putra Prima Tbk has Last Dividend Paid of 0.0. This

indicator is about the same for average (which is currently at 0.0) sector, and about the same as

Last Dividend Paid (which currently averages 0.0) industry, this indicator is about the same for

all stocks average (which is currently at 0.0).




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STOCK THEORY

Stock is a share in the ownership of a company. Stocks represent a claim on the

company’s assets and earning. As acquire more stock, the ownership stake in the company

becomes greater. Holder of company stock is called shareholder which represented by having a

stock certificate. Stock certificate is a fancy piece of paper that is proof of shareholder

ownership. Importance of being shareholder is that entitlement to a portion of the company’s

profits and has a claim on assets. Shareholders earn a lot if the company is successful, but they

also stand to lose their entire investment if the company isn’t successful. Another important

feature of stock is its limited liability, as an owner of the stocks; shareholders are not personally

liable if the company is not able to pay its debt.

Basically every company needs to raise money. On doing that, company was able to

choose either borrow or from somebody (issuing debt) or raise it by selling part of the company,

which is known as issuing stock. A company can borrow by taking a loan from a bank or by

issuing bonds. It’s called debt financing. Issuing stock is called equity financing. Issuing stock is

advantageous for the company because it do not require the company to pay back the money or

make interest payment along the way. The first scale of stock which is issued by the private

company is called Initial Public Offering (IPO).

There are two main types of the stock, Common stock and preferred stock. Common

stock represents ownership in a company and a portion of profits (dividends). Investor also have

voting rights (one vote per share) to elect the board members who oversee the major decision

made by management. In the long term, common stock by means of capital growth, yield higher

rewards than other form of investment securities. Common stockholders expect to be

compensated with adequate dividends and, ultimately, capital gains. This higher return comes at

a cost, as common stock entails the most risk. If a company goes bankrupt and liquidities, the

common stockholders will not receive money until the creditors, bondholders and preferred

shareholders are paid.

Preferred stocks give its holder certain privileges that make them senior to common

stockholders. Preferred stockholder are promised a fix periodic dividend, which is stated as




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percentage or as a dollar amount. The dividend is specified on whether the preferred stock has

par-value. Some people consider preferred stock considered as quasi debt, because much like

interest on debt, it specifies a fix periodic payment (dividend).

MPPA STOCK MARKET SNAPSHOT

INVESTMENT PARAMETER

Target price adjustment is based on the following considerations:

- Growing modern retail industry, supported by growing economy which is predicted to

reach 6.2% in 2012, increasing income per capita to over USD 4,000 and large

population of 257 million. In Indonesia, potential increasing income per capita of middle-

class society, which accounted for around 40% of Indonesian people, has become the

main driver of modern retail industry growth, of which MPPA is one of them.

- Hypermart contributes as much of 94.6% of MPPA’s revenue in 2011. Comparing to

MPPA’s gross revenue of 9.3 trillion in 2011 with its gross revenue excluding from

Matahari Department Stores (MDS) in 2010 of IDR 8.05 trillion, MPPA still manage to

grow by 15% YoY. MPPA recorded net revenue of IDR 8.9 trillion in 2011, as MPA’s




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actual gross revenue grew by 15% YoY, but is operating profit was able to grew by

39.1% YoY.

- During January – September 2012 period, MPPA booked 22.1% YoY growth of revenue,

while its operating and net profit margin rose to 1.45% and 1.92% higher than 1.09% and

1.15% in September 2011 period.

- Risk free rate, equity premium, and beta assumption are 5.40%, 7.80%, and 0.94x

respectively.

In 2010, MPPA divested its Matahari Department Store business, to focus on food

business. From such action, MPPA’s net revenue dropped from IDR 10.3 trillion in 2009 to just

IDR 8.6 trillion in 2010. However, afterwards MPPA booked a significant growth of revenue

(without MDS), as proved by 15% YoY growth in 2011, and significant jump of 22.05% YoY

growth in 9M12. In the bottom line, MPPA’s net income experience robust growth in 9M12, as it

rose by 104% YoY. MPPA’s net margin also improved, as it state 1.92% of net profit margin in

9M12, better than 2011 period of 1.18% and 1.15% in 9M11 periods.

STOCK VALUATION

METHODOLOGY

Using assumption from market data in July 15, 2013:

Risk free rate (%) 5.40

Risk premium (%) 7.80

Beta (x) 0.94

Cost of equity (%) 12.73

Marginal tax rate (%) 25.00

Interest bearing debt to equity ratio (%) 41.10

WACC (%) 15.25Source:http://www.miniwebtool.com/wacc-calculator/?n1=12.73&n2=3845724&n3=25.09&n4=2715926&n5=25

The Gordon growth model, named after its inventor Myron Gordon, A model for

determining the intrinsic value of a stock, based on a future series of dividends that grow at a

constant rate. Given a dividend per share that is payable in one year, and the assumption that the




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dividend grows at a constant rate in perpetuity, the model solves for the present value of the

infinite series of future dividends.

Where:

D = Expected dividend per share one year from now

k = required rate of return for equity investor

G = Growth rate in dividends (in perpetuity)

R EQUIRED R ATE ON EQUITY

There are two basic inputs to the model - expected dividends and the cost on equity. To

obtain the expected dividends, we make assumptions about expected future growth rates in

earnings and payout ratios. The required rate of return on a stock is determined by its riskiness,

measured differently in different models - the market beta in the CAPM, and the factor betas in

the arbitrage and multi-factor models. The model is flexible enough to allow for time-varying

discount rates, where the time variation is caused by expected changes in interest rates or risk

across time. From the formula, we can calculate the Required Return of MPPA Stock such as:

Source: http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/totalbeta.html

Beta = 0,94

r = Risk - free Rate + Beta (Risk Premium)

r = 5.4% + 0,94 (7.8%) = 12.73 %

http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/totalbeta.html







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GROWTH

Investors pay a price premium when they acquire companies with high growth potential.

This premium takes the form of higher price-earnings or price-book value ratios. While no one

will contest the proposition that growth is valuable, it is possible to pay too much for growth. In

fact, empirical studies that show low price-earnings ratio stocks earning return premiums over

high price-earnings ratio stocks in the long term supports the notion that investors overpay for

growth. Actual prices paid for growth. For the MPPA stock we can calculate the growth by:

VALUE OF EQUITY

Value of equity is one of the tools to calculate the real value of Company stock. Value of

equity consists of dividend per share, cost of equity and expected growth rate. The calculation of

value of Equity of MPPA Stock is:

g = retention ratio x ROE

g = (1 – DPO) x ROE

g = (1 –

0,1247) x 4.65%

= 0.0407 or 4.07 %

http://1.bp.blogspot.com/-nCFBDFDHevI/TeJtsurTaKI/AAAAAAAAACU/CqF06uu8Ijg/s1600/gordon.JPG




25SUFIAN (29112017) MBA X-47

VALUE ESTIMATION

Real Stock pricesStock market prices

15 July 2013Result

Rp. 2,235 Rp. 2,300 – 2,375 Over valued

From the market on July 15, 2013, Matahari Putra Prima Tbk is now traded for IDR 2,300 (low)

up to IDR 2,375 (high) on Jakarta Stock Exchange of Indonesia. So the stock that Telkom offer

is overvalued. If the stock price is undervalued, investor should buy it, but if the company stock

is overvalued means the investor should sell the stock and gain the profit.

Vo = 186 x (1 + 4.07%) = 186 x 1.0407

(12.73% - 4.07%) = 8.66 %

= 193.57

0.0866

= Rp. 2,235




26SUFIAN (29112017) MBA X-47

References:

http://www.tradergods.com/stock/stockdetail.aspx?stock=MPPA

http://en.wikipedia.org/wiki/Economy_of_Indonesia

http://www.indexmundi.com/indonesia/economy_profile.html

http://www.tradingeconomics.com/indonesia

http://www.mataharigroup.co.id

http://www.bi.go.id/sdds/default.asp#FinancialSector

http://markets.ft.com/research/Markets/Tearsheets/Business-profile?s=MPPA:JKT

http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=MPPA:IJ

http://www.ipotnews.com/index.php?level2=&level3=&level4=&id=2165160&popular =

http://finance.yahoo.com/q?s=MPPA.JK

http://www.reuters.com/finance/stocks/overview?symbol=MPPA.JK

http://pages.stern.nyu.edu/~adamodar/

http://quotes.wsj.com/ID/MPPA

http://investing.money.msn.com/investments/stock-price/?symbol=ID%3AMPPA

http://www.bloomberg.com/quote/MPPA:IJ

http://idsaham.com/saham-MPPA-informasi-saham-analisa-saham.html

http://www.macroaxis.com/invest/ratio/MPPA.JK--Last_Dividend_Paid

















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http://www.ipotnews.com/index.php?level2=&level3=&level4=&id=2165160&popular












27SUFIAN (29112017) MBA X-47

EXHIBIT 1 – INCOME STATEMENT

PT MATAHARI PUTRA PRIMA TBK




28SUFIAN (29112017) MBA X-47

EXHIBIT 2 – BALANCE SHEETPT MATAHARI PUTRA PRIMA TBK




29SUFIAN (29112017) MBA X-47




30SUFIAN (29112017) MBA X-47




31SUFIAN (29112017) MBA X-47




32SUFIAN (29112017) MBA X-47

EXHIBIT 3 – CASH FLOWPT MATAHARI PUTRA PRIMA TBK (MPPA)




Financing Activities

mppa (stock analysis)

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