03 March 2026
Recovery in Motion, Valuation Still Attractive
Market Commentary
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After navigating a challenging period marked by forex volatility, higher financial costs, and softer industrial activity, KIJA is beginning to demonstrate a more convincing recovery profile. A combination of improving operating efficiency, a healthier revenue mix, and better financial management has started to translate into stronger earnings quality. Compared to the previous year, the company now appears to be operating from a more stable and disciplined base.
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In 4Q25, KIJA recorded Rp146bn net profit, reversing from a Rp125bn loss in 4Q24, primarily driven by normalization of forex losses and lower selling expenses. This improvement carried through to the full year, with FY25 net profit reaching Rp423bn (+16% yoy), while revenue grew 12% yoy to Rp5.1tn. A major contributor to this performance was the 54% surge in power plant revenue, which now accounts for 35% of total sales. The growing contribution from recurring power income not only supports margins but also enhances earnings visibility, reducing reliance on more cyclical property sales.
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Operationally, momentum remains constructive. Marketing sales reached a record Rp3.6tn in FY25 (+13% yoy), exceeding the company’s target, with strong contributions from Kendal and Cikarang industrial estates. For 2026, management guides Rp3.75tn presales, suggesting demand remains relatively resilient despite a selective investment environment. At the same time, financial resilience has improved meaningfully, with cash rising 77% yoy to Rp3.6tn. Refinancing initiatives have reduced FX exposure and improved debt structure, allowing leverage to trend down and strengthening balance sheet flexibility going forward.
Despite the turnaround and improving fundamentals, KIJA remains significantly undervalued at current levels, trading at just 0.5x book value and 9.2x 2026F earnings. Based on our SOTP valuation, we derive a fair value of Rp550 per share, excluding potential upside from Tanjung Lesung and cap status. The stock’s underperformance appears more related to its small-cap positioning rather than underlying fundamentals. With a stronger balance sheet, improving profitability, and a stable recurring income stream from its integrated captive power plant, KIJA is increasingly positioned for a potential valuation re-rating as earnings recovery becomes more evident over time.
Despite the turnaround and improving fundamentals, KIJA remains significantly undervalued at current levels, trading at just 0.5x book value and 9.2x 2026F earnings. Based on our SOTP valuation, we derive a fair value of Rp550 per share, excluding potential upside from Tanjung Lesung and cap status. The stock’s underperformance appears more related to its small-cap positioning rather than underlying fundamentals. With a stronger balance sheet, improving profitability, and a stable recurring income stream from its integrated captive power plant, KIJA is increasingly positioned for a potential valuation re-rating as earnings recovery becomes more evident over time.
Written by Boris, the Broker
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