Chapter 2

Financials and Estimates

Avian's five-year record reads as a slow-growing but unusually cash-generative franchise. Revenue compounded at about 4.6% a year to Rp8.12 trillion in 2025 and net profit reached Rp1.74 trillion, while operating cash flow has matched reported earnings almost one-for-one. With effectively no debt and a Rp4.2 trillion liquid cushion, the balance-sheet risk that causes permanent loss is remote. Consensus models a flat 2026; the first quarter is already running ahead of it.

The five-year profit and loss

Sources: FY2025 Annual Report, consolidated statement of profit or loss [1] and EPS note [2].

The top line is steady rather than fast. Net revenue rose from Rp6.78 trillion in 2021 to Rp8.12 trillion in 2025 [3] [4] — a four-year gain of roughly 20%, or about 4.6% compounded. Gross profit and net profit both grew faster than revenue over the window because margins recovered from a cost-inflation trough, not because volume accelerated.

Sources: FY2021 [5], FY2023 [6] and FY2025 [7] Annual Reports.

Margins: a cost-driven recovery, then a modest drift down

The margin path is the more revealing line. Gross margin fell to 40.6% in 2022 as the global raw-material spike — titanium dioxide and other inputs — worked through the cost of goods, then rebounded to 45.4% in 2023 as those costs normalised [8]. Since that 2023 peak, gross margin has eased for two straight years to 44.0% in 2025 [9].

Sources: derived from reported revenue and profit, FY2021–FY2025 Annual Reports [10] [11] [12].

Net margin tells the same story with an added twist. It peaked at 23.4% in 2023 and slipped to 21.5% in 2025 [13]. Two forces drive that: the gross-margin drift above, and a falling contribution from finance income, which declined from Rp286 billion in 2023 to Rp240 billion in 2025 as the company paid its cash out to shareholders [14] [15]. The first is competitive; the second is self-inflicted and reverses if the cash is redeployed. Operating profit, insulated from finance income, actually rose to Rp1.92 trillion in 2025 and its margin held near 23.7% [16]. The read: profitability is easing at the edges, not eroding at the core.

The earnings are backed by cash

For a reader who weighs downside first, the most important test is whether reported profit becomes cash. Here Avian is clean. Operating cash flow has tracked net profit almost exactly for four years running — Rp1.74 trillion of operating cash against Rp1.74 trillion of net profit in 2025 [17] [18].

Sources: cash flow statements FY2021 [19], FY2023 [20], FY2025 [21]; profit as cited above.

Across 2022–2025, cumulative operating cash flow of Rp6.55 trillion slightly exceeded cumulative net profit of Rp6.45 trillion — cash conversion of about 102% [22] [23]. There is no widening gap between accrual earnings and cash, no receivables build outrunning sales, no reliance on adjusted metrics. Capital spending is light — Rp415 billion in 2025, roughly 5% of revenue — so free cash flow ran near Rp1.3 trillion even after four years of rising capex [24]. A paint maker that turns essentially all of its profit into cash and reinvests only a twentieth of sales is, on these numbers, a low-risk cash engine.

Capital returns and a cushion being spent down

The counter-observation sits in the same statements. In 2025 Avian paid Rp1.32 trillion of dividends and bought back Rp645 billion of stock — Rp1.97 trillion returned against Rp1.74 trillion earned, a payout of about 113% [25]. Returning more than it earns is only possible by drawing on the cash pile, and the pile shrank accordingly: cash plus short-term investments fell from Rp5.28 trillion at end-2024 to Rp4.22 trillion at end-2025, down about 20% in a year [26].

Whether this is prudence or slow liquidation depends on the reinvestment runway, which the industry and moat chapters take up. What the cash flow proves is narrower and firmer: shareholders have been paid in full, in cash, every year, and the equity base of Rp9.54 trillion still dwarfs any liability [27]. Return on that equity was 18.3% in 2025 [28] [29].

What consensus expects — and what the first quarter already shows

Five analysts cover the stock, all rating it Buy, with a mean 12-month target of Rp511 against the Rp318 price on 10 July 2026. Their earnings model is the puzzle. Consensus FY2026 EPS of Rp28.51 sits about 2% below the Rp29.11 the company actually earned in 2025, even as they pencil revenue up roughly 7% to Rp8.72 trillion — implying net margin compresses toward 20%. Growth is expected to resume in 2027, with EPS of Rp31.68.

Source: FY2024–FY2025 as reported [30]; FY2026E–FY2027E are consensus analyst estimates, as reported.

That modest forecast looks stale against the actual first quarter. In Q1 2026 revenue rose 16.8% to Rp2.36 trillion, gross profit rose 14.6%, and net profit rose 12.6% to Rp503 billion; earnings per share rose 15.2%, to Rp8.50 from Rp7.38, as buybacks shrank the share count [31] [32] [33]. Q1 has historically been about a quarter of the full year, so holding that seasonal mix would put 2026 net profit near Rp1.9–2.0 trillion — above 2025, not below. Management's own guidance is for 6–10% value growth and 4–8% volume growth for the year [34].

Two caveats keep this from being a clean beat signal. One quarter is not a year, and paint demand softens in the wet second half; and the same Q1 showed gross margin slipping again, to 44.9% from 45.8%, alongside a further drop in finance income [35] [36]. The read: consensus earnings look conservative, but the analyst target rests on a re-rating — its Rp511 implies about 18x forward earnings — rather than on the earnings line itself.

Valuation, in brief

At Rp318 the stock trades at about 10.9x trailing earnings and 11.2x the (low) FY2026 consensus, falling to 10.0x on 2027 [37]. Adjusted for the Rp4.2 trillion of net cash — roughly 22% of market value — the operating business changes hands at closer to 9x earnings and about 12x free cash flow [38] [39].

Source: derived from FY2025 free cash flow and dividends paid [40] [41], the Rp318 close, and consensus EPS.

Both the free-cash-flow yield and the cash dividend yield sit near 6.7% [42] [43]. Whether ~11x is cheap or fair for a business growing mid-single digits is the question the moat, industry, and valuation chapters exist to answer; the point here is narrower. The numbers underneath the price are clean — real cash, negligible debt, a shrinking but still substantial cushion, and near-term results running ahead of a cautious consensus.

The five-year record and the forward view

Sources: FY2021–FY2025 Annual Reports [44] [45] [46]; per-share figures from the EPS notes [47] [48]; cash flow statements [49] [50] [51]; FY2026E–FY2027E consensus estimates, as reported (net profit implied from consensus EPS and shares outstanding).