Margin of Safety

Margin of Safety

At Rp106, PART trades at roughly 9.6x trailing earnings, 1.6x book and 5.6x EV/EBITDA — a market value near Rp291bn, well below its February 2026 peak. In absolute terms that reads as modest. Measured against the market multiples of its listed Indonesian peers it sits at the top of the range, and roughly 17% of the earnings being capitalised came in FY2025 from a single government-programme customer. The discount that a margin-of-safety buyer is looking for is not clearly on the page.

What Rp106 buys

The share closed at Rp106 on 17 July 2026, essentially back to the Rp105 IPO price of two years earlier. With 2.74 billion shares outstanding [1], that is a market value of about Rp291bn. FY2025 net profit was Rp30.2bn on revenue of Rp369.6bn [2], equity was Rp184.9bn [3], and the company reported an 18.8% EBITDA margin [4] — about Rp69.5bn of EBITDA. Net of Rp96.2bn of net debt, enterprise value is near Rp387bn.

Sources: derived from FY2025 net profit and equity [5][6], share count [7], and the 17 July 2026 close of Rp106 (market data).

The plainest read of those numbers: a buyer at Rp106 earns roughly a 10.4% earnings yield on FY2025 profit, and is paying about 1.6 times a book value that itself earned a 16.3% return on equity in FY2025 [8]. Income is thin: the maiden dividend, declared on FY2024 earnings, was Rp1.71 per share — a total of Rp4.65bn, or 20% of that year's profit [9]. At Rp106 that is a 1.6% yield; a repeat 20% payout on FY2025 profit would lift it to about 2.1%. A company retaining most of its earnings to fund an inventory build (Cash and Solvency) is not, at this price, an income holding.

A price round-trip, not a bargain-basement collapse

The price is back near where the shares listed, but that round-trip mostly unwound a speculative spike rather than opening deep-value territory. Listed at Rp105 in July 2024, the shares drifted through 2025, then ran to an intraday high of Rp214 on 19 February 2026 — more than double the IPO price — before collapsing to an intraday low of Rp67 on 8 June 2026 and recovering to Rp106. On a 25.6% public float, that is the price behaviour of a thinly-traded micro-cap, not a re-rating driven by fundamentals.

Source: month-end closing prices, IDX market data (Yahoo Finance / StockAnalysis); IPO price Rp105 on 5 July 2024. Intraday high Rp214 (19 Feb 2026) and low Rp67 (8 Jun 2026) exceed the month-end range shown.

The distinction matters for a margin-of-safety buyer. A price back at the IPO level is not, by itself, cheap; it is cheap only if the business is worth more than it was at listing and the market has stopped paying for that. Whether that holds depends on the two things the rest of this report has weighed — the durability of the earnings, and the fragility of the balance sheet that supports them.

Against the peer group, it is not cheap

The most useful anchor is the handful of listed Indonesian metal-and-auto-component makers that trade on the same exchange. On a trailing P/E of about 9.6x, PART sits at the top of that range — above Astra Otoparts (AUTO, roughly 5.8x) and its closest analog Dharma Polimetal (DRMA, roughly 7.0x), and level with the highest-quality name, Selamat Sempurna (SMSM, roughly 9.0x).

Sources: PART figures derived from FY2025 filings [10][11]; DRMA revenue and cash conversion from its FY2025 report [12] and 20.9% ROE [13]; peer P/E and dividend yields per current market data (Yahoo Finance / Investing.com, 2026). Blank cells not sourced.

The comparison with DRMA is the sharpest. Both trade at 1.57x book — but DRMA earned a 20.9% return on that book against PART's 16.3% [14][15], converted operating cash at 1.39x net profit against PART's 0.51x (Cash and Solvency), and is sixteen times larger [16]. Paying the same multiple of book for a lower-returning, cash-shorter, sub-scale supplier is the opposite of a discount. On income the gap is wider still: AUTO and SMSM yield 7–8%; PART yields under 2%, because it needs its cash for working capital and its BCA facility (Cash and Solvency).

For an investor whose stated rule is to avoid expensive stocks, PART is fully valued on its own corpus figures (9.6x earnings, 1.6x book) and full-to-premium against the external market multiples of its cheaper listed peers, not a peer discount.

The quality of the earnings being capitalised

A P/E multiplies a number; the number has to be durable for the multiple to mean anything. The FY2025 profit line carries a concentration that the peer comparison does not capture. PART's new metal-household segment (Rp62.1bn, 61% of FY2025 revenue growth) is one government customer, Badan Gizi Nasional, whose FY2025 order matches the segment total to the rupiah and carries no contracted recurrence. [17] That is 16.8% of FY2025 revenue capitalised at 9.6x, from an account with no purchase history before 2025; whether it recurs, and what that would mean for forward earnings, is the question worked through in One Government Customer.

What would change the read

The case is genuinely two-sided, and most sensitive to how durable the FY2025 earnings behind the 9.6x multiple prove to be.

The bull read is that single-digit earnings, 1.6x book, a 16% ROE and genuine 55% two-year revenue growth (Cash and Solvency) are not a demanding price for a founder-controlled company still taking share; at Rp106 the market has already discounted the February enthusiasm, and if the household line recurs and cash conversion normalises, today's price capitalises a growing business cheaply.

The bear read — the one the evidence leans toward — is that the multiple is roughly a peer multiple applied to earnings inflated by a non-recurring, single-customer government order, on a balance sheet with Rp96bn of net debt, a founder guarantee and near-zero spare cash (Cash and Solvency). Strip an aggressive share of the Badan Gizi revenue and the forward multiple is meaningfully higher than 9.6x, on a company whose downside is bounded by covenants rather than net cash.

Three checkable items would settle it. First, the FY2026 disclosure of Badan Gizi Nasional revenue in the next Note 24 — recurrence at or near Rp62bn confirms a franchise; a sharp drop confirms a one-off. Second, operating cash flow against net profit in FY2026: a return toward 1.0x would show the earnings are real cash, not inventory. Third, the multiple itself relative to peers: a de-rating toward DRMA's 7x or AUTO's 5.75x, without a deterioration in the business, is where a margin of safety would actually appear. For an investor who requires a near-zero chance of bankruptcy and a large discount, the price today offers neither the balance-sheet comfort nor the peer discount that would clear that bar.