Fundamental Analysis

Stock Valuation for PT Adaro Energy

Iman Santoso Syarif H.

1406533705

Adhityas Ghaniyya Tejo

1406533806

Alvania Safira

1406533913

Veda Sunarsa

1406533983

Faculty Of Economics and Business

Universitas Indonesia, Depok
2016

STATEMENT OF AUTHORSHIP
We the undersigned hereby declare that the papers/assignments attached is purely
our own work. No work of others that we use without citing sources. This material has never
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Name

SID

Iman Santoso Syarif Hidayat

1406533705

Adhityas Ghaniyya Tejo

1406533806

Alvania Safira

1406533913

Veda Sunarsa

1406533983

Sign

Subject:

: Investment and Capital Market

Title

: Fundamental Analysis: Stock Valuation for PT Adaro Energy

Date

: December 2, 2016

Lecturer

: Prof. Sidharta Utama, Ph.D., CFA.

(Made by the whole group)

I.

MACROECONOMIC OVERVIEW
Worse Macroeconomic Outlook Indonesia economy is experiencing a worse

macroeconomic outlook, as shown by slowing real GDP growth, rising unemployment,

depreciating rupiah, and global economic downturn. The declining growth results in a hike in
operating costs - wages, rental and electricity.
If the economy is not going to expand, stock prices may fall. Investors may buy less
stocks thinking they will not see future profits and higher stock prices. This uncertainty in
economic outlook may reduce buying behavior of the investors or start selling.

Graph 1. Decreasing Gross Domestic Products (GDP) in Indonesia for period 2006-2016

Graph 2. Increasing unemployment in Indonesia for year 2006-2016

Many Indonesian companies sell products to buyers in other countries. When the price of
the Indonesian rupiah falls, it makes Indonesian goods cheaper for the foreign countries to buy
our products. This can make stock prices rise.

Graph 3. Increase in exchange rate for Indonesia relative to US$ for period 2006-2016

The Bank of Indonesia has lower interest rates to stabilize or stimulate the Indonesian
economy by the monetary policy. Lower interest rates will affect the cost of its debt. This can
increase company profits and the dividends it pays shareholders. As a result, its share price may
rise. And, in times of lower interest rates, stocks tend to be more attractive to investors than
investment that pay interest (debt).

Source: http://www.global-rates.com/interest-rates/central-banks/central-bank-indonesia/biinterest-rate.aspx
Graph 4. Decreasing BI Rate in Indonesia for period 2006-2016

Since inflation means higher consumer prices. This often slows sales and reduces profits.
In a slowing growth of inflation rates in Indonesia, lower prices will also often lead to lower
interest rates. These changes will tend to bring down stock prices.

8.38

8.36

6.96

4.3
3.79

3.35

2.78

2009

2.59

2010

2011

2012

2013

2014

2015

2016

Series 1

Graph 5. Inflation rate in Indonesia over years

Source: Central Bureau of Statistics (Indonesia)

However, the impact of lower expected inflation will only be temporary due to high
portion of consumer spending to GDP, political stability and favorable demographic profile.
Even though many factors that affect the stocks prices by the economic downturn, Indonesias
macroeconomic outlook is relatively stable over the years, so we still recommend investors to
invest stocks in Indonesia.

II.

INDUSTRY OVERVIEW

III.

COMPANY OVERVIEW

IV.

STOCK VALUATION

V.

RECOMMENDATION
Even though the economy of Indonesia as overall facing a downturn, but it still
relatively stable and growing over the years so the investment in stock will be worth
at the future period.
In the coal mining sector itself, (bagian iman)
PT Adaro Energy has the highest share capital (bener gak?) compared to other
companies in the same industry. (bagian adhya)
By valuating the intrinsic value of ADRO stocks, we conclude that (bagian
veda) So we recommend to buy PT Adaro Energy investment stocks.

DAFTAR PUSTAKA
https://www.bps.go.id/linkTabelStatis/view/id/907
http://www.bi.go.id/en/moneter/bi-rate/data/Default.aspx
http://www.bi.go.id/id/moneter/bi-rate/data/Default.aspx
http://www.global-rates.com/interest-rates/central-banks/central-bank-indonesia/biinterest-rate.aspx
http://www.getsmarteraboutmoney.ca/en/managing-yourmoney/investing/stocks/Pages/Factors-that-can-affect-stock-prices.aspx#.WEA1tYVOJYc
https://www.ecb.europa.eu/pub/pdf/other/mb201210_focus05.en.pdf