Fundamental Valuation of Construction Stocks: A Content Analysis from Property Developers

The expansion of the Malaysian Construction Companies requires a holistic understanding on the intrinsic values as well as the nature of growth and value features of stocks in order to effectively invest in this sector. The paper aims to assess the intrinsic values of the Malaysia construction compa...

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Bibliographic Details
Published in:IOP Conference Series: Earth and Environmental Science
Main Author: Nordin M.S.A.; Rahim N.A.; Adnan H.
Format: Conference paper
Language:English
Published: Institute of Physics Publishing 2019
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85077715785&doi=10.1088%2f1755-1315%2f385%2f1%2f012072&partnerID=40&md5=86205d589f1e8e1e6b1765181ba70c00
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Summary:The expansion of the Malaysian Construction Companies requires a holistic understanding on the intrinsic values as well as the nature of growth and value features of stocks in order to effectively invest in this sector. The paper aims to assess the intrinsic values of the Malaysia construction companies using fundamental methods of valuation. Content Analysis has been employed to the 10 property developers that has been listed under the top 10 Malaysian property developers in year 2018 identified as Company A to J. Based on the data derived from the companies' annual report, Bursa Malaysia and stock-related websites, intrinsic value of the construction stock is assessed using three fundamental methods of valuation comprising Price Earning Multiple, Relative Price Earning as well as the Dividend Growth Model. The results suggested that there is a huge inconsistencies of intrinsic values across the first two methods of valuation where most of the stocks are in the state of undervalued while valuation derived from the Dividend Growth Model signifies the overvaluation state of all stocks' opening prices. This research is expected to provide a preliminary evidence on the intrinsic values of Malaysian Construction Companies as similar analysis and indicators can be used in reviewing the characteristics as well as fundamentally valuing the construction stock in both small and larger investment portfolios. © Published under licence by IOP Publishing Ltd.
ISSN:17551307
DOI:10.1088/1755-1315/385/1/012072