Business analysis and valuation of Bien Hoa sugar jiont stock company ( BHS- HOSE)

Abstract

Background and Problem: The Sugar industry has just passed the most terrible period since the economy crisis in 2009. Inventory has reached a record, and the price of sugar fell to bottom in past five years. Out of which, BHS is one of the most outstanding companies which had the highest total sales among competitors in last 2 years. However, the COGS to sales of BHS are also considered to be too high which contains potential risks for the company. The loss in revenues last year has been the biggest concern for investors up to now. So many investors may wonder whether to invest in BHS in the next period. The research, therefore, has just appeared to propose an adequate answer by estimating the company’s intrinsic value and price of its stock. Purpose: This paper aims to conduct an analysis of BHS financial statement as well as its strategies in order to estimate firm’ stock value and to put into comparison with the company’s current stock price. Method: FCFF (Free Cash Flow to Firm) method is chosen in this research to forecast the intrinsic value of the company and its stock price. The data is collected from financial statement and company’s strategies analysis. Results and Conclusions: BHS’s stock is undervalued. The analysis gives the result that BHS’s intrinsic value of the investment is greater than the market price. Therefore, a “buy” suggestion is offered to investors.