Fortune Indonesia, Tbk - PT. PEFINDO

TARGET PRICE
“Disclaimer statement in the last page
is an integral part of this report”
www.pefindo.com
VALUATION
Methodology
Fortune Indonesia, Tbk
We applied the Discounted Cash Flow (DCF) method as the main valuation
approach, considering that income growth is a value driver in FORU instead of
asset growth.
We did not combine the DCF method with the Guideline Company Method
(GCM) as there are no similar companies eligible to be compared with FORU
in the IDX.
This valuation is based 100% on FORU’s share price as of March 7, 2013,
using FORU’s financial report as of September 30, 2012, for our fundamental
analysis.
Value Estimation
We use Cost of Capital of 7.9% and Cost of Equity of 7.9% based on the
following assumption:
Table 2: Assumption
Risk free rate [%]* 5.3
Risk premium [%]* 7.2
Beta [x]* 0.4
Cost of Equity [%] 7.9
Marginal tax rate [%] 25.0
Interest Bearing Debt to
Equity Ratio [x] 0.02
WACC [%] 7.9
Source: Bloomberg, Pefindo Equity & Index Valuation Division Estimates
Notes: *As of March 7, 2013
The target price for 12 months based on the valuation as of March 7, 2013
using the DCF method with a 7.9% discount rate assumption ranges between
IDR270 - IDR295 per share.
Table 3: Summary of DCF Method Valuation
Conservative Moderate Aggressive
PV of Free Cash Flows [IDR bn] 20 21 22
PV Terminal Value [IDR bn] 81 86 90
Non-Operating Assets- [IDR bn] 27 27 27
Net Debt [IDR bn] (2) (2) (2)
Total Equity Value [IDR bn] 127 132 137
Number of Share [mn shares] 465 465 465
Fair Value per Share [IDR] 270 285 295
Source: Pefindo Equity & Index Valuation Division Estimates
March 8, 2013 Page 7 of 9