Stock Valuation and Business Performances of Indonesia Health Care Provider Company after Post Covid 19 Pandemics (Case Study of PT. Medikaloka Hermina, Tbk.)

Abstract

The Covid-19 pandemic caused a contraction in the Indonesian economy, as evidenced by the large number of layoffs, and several companies had to declare bankruptcy, but this did not occur for companies engaged in health services, including hospitals. The large number of Indonesians infected with the Covid-19 virus caused hospitals to experience an increase in inpatient admissions, which accelerated the hospitals’ financial performance in a very short period of time. PT Mediloka Hermina, Tbk (HEAL) is a private hospital with the greatest number of branches in Indonesia, all of which are impacted by the Covid-19 pandemic. This is also a positive sentiment among stock investors, as they perceive the health industry sector to have very promising future prospects. Several listed hospital company on the IDX have seen their share prices increase significantly over the past year, including PT. Mediloka Hermina, Tbk, whose share price increased by 197 percent between 23 March 2020 and 23 March 2021. This made the author curious about PT Mediloka Hermina, Tbk’s stock valuation and whether its shares are classified as overvalued or undervalued. This study utilizes secondary data obtained from the annual report of PT. Mediloka Hermina, Tbk as well as idx.co.id and stockbit.com, among others. The data was processed with the absolute valuation method (Discounted Cash Flow) and the relative valuation method (Relative Value) in mind (EV EBITDA and Price Earnings to Ratio). Using the Discounted Cash Flow model, the company’s intrinsic value is IDR 452.80 per share. It has a safety margin of -135 percent relative to the per-share market price of IDR 1,065 as of 31 December 2021. The intrinsic value per share is 688 IDR based on the relative price-to-earnings ratio and relative valuation EV EBITDA of 7.21. Following the evaluation procedure. The author may determine the relationship between HEAL’s fundamental company and its stock price growth.