Аннотация:
The current diploma research work is intended to assess the financial performance of
leading Kazakhstani airline company, Air Astana JSC amid Initial Public Offering (IPO). The
financial valuation is conducted by implementation of the market-based and income-based
approaches used in valuation of the economic value of an enterprise. Financial valuation of the
company is based on the financial information covering five-year period, 2017-2021.
Market-based valuation was developed by calculation of the market multiplies by financial
evaluation of the publicly listed airlines such as Aeroflot, Turkish Airlines, China Southern
Airlines, American Airlines and Singapore Airlines representing different regional markets. The
results of the market-based valuation approach determined implied share price of Air Astana JSC
at 7.05 USD or 3 149.86 KZT (1 USD= 446.79 KZT) (National Bank Currency, 06.04.2023).
However, the income-based valuation method had been based on the company's predicted
future cash flows being discounted (Sean R. Saari, 2017). In order to obtain more relevant results,
short-term and long-term cash flow forecasts were conducted. Determined discounting interest rate
(WACC) equaled 9.4% given corporate income tax rate of 20% and existing debt-to-equity ratio
of the target company (Air Astana JSC). The implied share price based on short-term cash flow
estimations was equal to 1.92 USD or 857.83 KZT per share, while long-term cash forecast derived
with the implied share price of 22.15 USD or 9 896.39 KZT per share (1 USD= 446.79 KZT)
(National Bank Currency, 06.04.2023).
Based on the outcomes of the valuation methodologies, it is determined that the income based valuation method (based on long-term cash predictions) revealed overvaluation of the
target business stock price, whereas the market-based valuation method demonstrated
undervaluation of the firm
