CFA Institute Research Challenge Season 5 (2022-23): Presentation
Date
2023-02-08
Journal Title
Journal ISSN
Volume Title
Publisher
CamEd Business School
Abstract
Description
PPSP is the second-largest developer of multi-product SEZs in Cambodia that started operating in 2008 and has more than 80 foreign firms as tenants. The SEZ's land area is over 357 ha. The primary objective of PPSP is to develop industrial land for sale or lease and to offer amenities and services inside the SEZ.
We initiate a SELL recommendation on PPSP based on a one-year target price of KHR 1,783 representing a 26% downside risk from the closing price of KHR 2,400 as of January 18, 2023. Our valuation methodology uses the DCF model in determining the intrinsic value of PPSP based on FCFE. This recommendation is supported by relative valuation, where PPSP is currently trading above its peers based on P/E multiple and dividend yield. The three main rudiments in support of our downside risk are: 1. Volatile growth due to unsustainable business model, 2. Expansion will not deliver immediate results, and 3. Supply-chain bottlenecks might hold back investors.