Valuation

Valuation

Figures converted from Indonesian rupiah at historical FX rates — see data/company.json.fx_rates for the rate table. Ratios, margins, and multiples are unitless and unchanged.

At $0.0175 the shares trade near 10.9x trailing earnings — under half the multiple of every listed paint peer that reports comparable data, despite Avian earning roughly double their net margin. Net of the $253 million net-cash pile, the operating business changes hands at about 9x. That gap is real; whether it is an opportunity or fair compensation for a thin float, a related-party supply chain, and decelerating growth is what this chapter weighs.

Where the shares trade

Avian's FY2025 net profit was $104.6 million on revenue of $487.4 million [1] [2], or $0.00175 per share [3]. Against the 10 July 2026 close of $0.0175, that is 10.9x trailing earnings, on a market value of roughly $1.08 billion (A De-Rated Leader).

Sources: FY2025 Annual Report — statement of profit or loss [4], financial position [5] and cash flows [6]; market value per A De-Rated Leader; ratios derived.

The balance sheet reshapes the headline multiple. Cash of $99.3 million plus short-term investments of $154.2 million — $253 million, about 21% of the market value — sits against negligible debt [7]. Net of that cash, the operating business is priced at roughly 9x earnings. And it returns cash freely: FY2025 dividends of $79.2 million and buybacks of $38.7 million together came to $117.9 million [8] — a shareholder yield near 10%, of which the dividend alone is about 6.7%. The depth and durability of those returns were the subject of Financials and Estimates; here they matter as the cash the multiple is buying.

The cheapest name, the richest margins

Placed beside the listed paint majors, Avian is the anomaly of the group: the lowest earnings multiple and the highest profitability. Avian's market value fell from ~Rp57 trillion at end-2021 to ~Rp19 trillion by mid-2026 and its P/E compressed from ~40x to ~11x even as net profit rose from Rp1.43 trillion to Rp1.74 trillion, its management-estimated national paint share rose from ~20% (2020) to 26% (2025), and it now trades at about 11x against a 15x-58x listed-peer range while earning a 21.5% net margin — roughly double the peer set. That 21.5% margin rests on an 18.3% return on equity [9] [10].

Sources: Avian — FY2025 Annual Report [11]; peers — market capitalisations and latest reported net income via market data feed, P/E and ratios derived, each in the company's own reporting currency. AkzoNobel Indonesia and TOA Paint are omitted: no comparable feed data. Sherwin-Williams' ROE reflects an equity base shrunk by sustained buybacks.

Source: as above — Avian P/E on FY2025 EPS [12] and the 10 July 2026 price; peers via market data feed, in each company's reporting currency.

The comparison carries two heavy caveats. The peers span four markets, and cross-border multiples embed different sovereign, currency, and interest-rate regimes — India's Asian Paints commands a structural premium the Jakarta market does not extend. And business models differ: Nippon and Kansai are diversified global coatings groups (automotive, industrial, marine) whose thinner margins reflect that mix, while Asian Paints is the closest analog to Avian's decorative-retail model. The two nearest regional comparables management itself names — AkzoNobel's Indonesian arm and Thailand's TOA Paint (The Distribution Moat) — are absent from the numeric feed, so the set understates true comparability. What survives the caveats is the direction and the size of the gap: on every peer reading available, Avian is priced at a fraction of the multiple while leading on margin and matching all but one on return on equity.

What 11x implies

The absolute arithmetic does not depend on any peer. At 10.9x trailing earnings with the company distributing essentially all of its profit as cash, the price embeds an earnings yield of about 9.2%. Treating that as the cash return a buyer collects, and holding the dividend policy roughly constant, the multiple is consistent with a required return minus long-run growth of about 9.2 percentage points. With a required return for an Indonesian equity assumed, the implied perpetual growth follows.

Source: derived from the 10.9x trailing multiple and a near-100% payout (Gordon growth: P/E = payout ÷ (required return − growth)).

Across a plausible 11%–14% cost of equity, the price implies long-run nominal growth of roughly 2%–5% a year. That is below Indonesia's expected inflation-plus-population base, and well under the ~6.5% industry-growth rate the FY2025 report now carries (Industry Tailwinds). In other words, at 11x the market is paying almost nothing for the structural per-capita headroom — it is pricing a mature, low-single-digit compounder. Consensus corroborates the caution: FY2026 EPS is modelled a touch below the FY2025 result even after a strong first quarter (Financials and Estimates).

The all-Buy consensus target of about $0.028 sits at the other end of the same arithmetic. On FY2025 earnings that is roughly 17.6x — a required-return-minus-growth of about 5.7 points, which at a 13% cost of equity implies ~7% durable growth. The target, in short, prices a re-rating toward the industry-tailwind world rather than an earnings surprise; the debate is which growth number is right, not which multiple is fashionable.

The discounts a buyer accepts

A gap this wide invites the assumption that the market is simply wrong. The more useful exercise is to name what a buyer at 11x is being compensated for, and to take each reason as seriously as if the fallen-star framing did not apply.

The float is thin. Public holders own about 16% of the shares, with the Tanoko family controlling roughly 73% (Ownership and Affiliates). A small free float on a single-country small-cap limits index and institutional participation and widens the liquidity discount a global buyer demands — a structural drag on the multiple that has nothing to do with business quality.

The supply chain runs through the family. Avian bought 44.7% of its 2025 cost of goods sold — $122 million — from suppliers under common family control, a share that has risen since the IPO (Ownership and Affiliates). The reported margins are hard to reconcile with heavy value extraction, but the arrangement is a standing governance discount: a related-party channel through which minority value could be thinned is a reason a careful buyer pays less for the same earnings.

Growth has decelerated and disappointed. The ~9.8% market CAGR embedded in the 2021 IPO never arrived; revenue compounded 4.6% in rupiah and close to flat in dollars, and the forward industry assumption has been cut by a third (Industry Tailwinds). Part of the de-rating is a rational repricing of a growth thesis that did not deliver, not only sentiment.

The currency erodes the dollar record. Rupiah revenue growth of 4.6% a year became roughly flat in dollar terms as the rupiah weakened — a dollar-based buyer has watched the earnings base stand still and prices Indonesian risk into the discount rate accordingly.

Reading the discount

On the evidence, the multiple gap is wider than business quality alone explains: Avian is the highest-margin, highest-cash-return name in its peer set, priced at the lowest multiple, with a balance sheet that removes leverage-driven loss risk. But a substantial part of the discount is defensible — the thin float, the related-party supply chain, the failed growth thesis, and the currency drag are real costs a buyer bears, not phantoms. The residual, after those are charged, is the margin of safety a bull is actually buying; it is narrower than the raw peer comparison suggests but not zero.

What would tighten the discount is delivery, not quality, which is already best-in-class: volume growth sustained above the ~6.5% market forecast, and evidence the related-party share of costs has stopped climbing, would argue 11x is too cheap. Continued deceleration toward flat real earnings, or a further rise in affiliate sourcing, would argue it is close to fair. The valuation prices the debate rather than settling it: the market has already marked Avian as a mature compounder, and the return from here turns on whether the business grows faster than that reading assumes.