Property Issuers' Profits Split: Who is Soaring and Who is Still Struggling?
The publication of full-year 2025 financial reports by property sector issuers shows a divergence in performance within the Indonesian capital market.
Although the industry as a whole still faces challenges from purchasing power and fluctuations in construction costs, there are significant differences in the effectiveness of each entity’s strategies.
Some companies have successfully capitalised on the economic recovery momentum to drive profit growth or even reverse from losses to profits (turnaround).
On the other hand, there is a group of issuers experiencing performance pressure due to the normalisation of income post one-off profit periods or progressive increases in operational expenses throughout 2025.
Issuers with Profit Growth and Recovery
The first group consists of companies that recorded year-on-year (YoY) increases in net profit or successfully exited the loss zone experienced in 2024.
The massive profit growth in this group is generally driven by high numbers of residential unit handovers and improvements in efficiency on the cost of goods sold. The following is a comparison table of net profits for the group of issuers with growing performance:
Positive achievements in net profit have also influenced their stock valuation profiles in the market. Investors tend to give greater appreciation to issuers that demonstrate consistent growth or performance recovery.
Although share prices move fluctuantly, improving fundamentals keep profitability ratios such as Return on Equity (ROE) competitive. The following is an update of valuation and profitability metrics for this growing group of issuers:
Issuers with Pressure and Profit Contraction
The second group includes issuers that reported declines in net profit compared to the previous year. This contraction phenomenon does not always reflect declining sales activity, but is often triggered by high base profit figures in 2024 or increases in interest and administrative expenses.
The deepest declines are seen in issuers that recorded large non-operational profits in the previous year, leading to normalisation in 2025. The following is a breakdown of net profit data for the group of issuers under pressure:
The impact of this profit decline is evident in Price to Earnings (PER) ratios that tend to increase if share prices do not correct more deeply than the net profit decline.
However, in terms of asset value, many issuers in this group are traded at valuations that are historically very cheap, where share prices are far below the book value per share. The following table presents the latest valuation data for the group of issuers with contracting profits:
Solvency Analysis and Future Projections
Overall, the financial balance sheet stability in the property sector remains within a healthy corridor. The majority of companies are able to maintain their leverage levels with controlled debt ratios, keeping default risk low.
Disciplined cash flow management is the main differentiator between issuers able to pursue aggressive expansion and those still focusing on internal restructuring or stabilisation.
Although there is variation in profit performance, the property sector is projected to retain investment appeal, particularly for long-term investors who see potential in the companies’ net asset value.
Movements in benchmark interest rates and government fiscal incentive policies are expected to remain the main catalysts determining the direction of bottom-line performance recovery for this sector in the coming quarters of 2026.