Selamat Sempurna (SMSM IJ) (Buy) - Solid growth track record

Solid growth track record

Selamat Sempurna (SMSM) posted FY25 revenue of IDR5,339bn (+3.4% y-y), in line with our estimate but ahead of consensus. NPAT reached a record high of IDR1,125bn (+10% y-y), in line with our estimate and consensus. Filter — the core segment — drove growth with revenue rising +5.1% y-y to IDR4,057bn and GP rising +8.1% y-y to IDR1,238bn. GP margin held firm at 37% for FY25, with EBITDA margin expanding to 31% from 29% in FY24. We expect SMSM to declare another record-high dividend for FY25F, sustaining its ~70-80% payout and implying a yield of approximately 7%.

A relatively large market opportunity to tap into

Our analysis suggests that there is still a large filter market for SMSM – especially in the non-auto/heavy equipment segment. Filter currently contributes about 60-70% of revenue, two-thirds of which comes from heavy equipment. We estimate the company’s utilization is at about 70% – and thus there is ample room for it to improve sales without incurring high capex. SMSM is foraying into industrial filters such as Heating, Ventilation, and Air Conditioning (HVAC), or machinery filters – which we view as a good strategy – leveraging its solid engineering and already healthy balance sheet.

Filter business drives earnings

Filter revenue grew +5.1% y-y to IDR 4,057bn in 4Q25, with the segment’s GPM expanding to 37% from 35% in 4Q24 — the highest quarterly reading since 4Q23. The improvement reflects a richer OEM mix and favourable raw material dynamics. Filter gross profit rose +8.1% y-y to IDR 1,238bn in 4Q25, driving much of FY25’s EBIT growth. Radiator contributed positively with revenue rising +8.8% y-y to IDR592bn at stable margins (~40% GPM in 4Q25). Trading revenue grew +4.1% y-y but GPM compressed to 26.6% in 4Q25 (vs. 29.4% in 4Q24), reflecting competitive pricing in the distribution segment.

Maintain Buy – on track to be Indonesia’s dividend aristocrat

Our TP of IDR2,500 is based on a target 12.4x 2026F P/E, in line with its average P/E since 2019. The stock is currently trading at 8.7x FY26F P/E. Downside risks include: a more challenging competitive landscape, sharp IDR appreciation, continued weakness in the body-maker segment, and significant jump in raw material costs.

Fig. 1: SMSM IJ FY25 results

SMSM IJ (IDRbn)	3Q24	4Q24	3Q25	4Q25	q-q%	y-y%	FY24	FY25	y-y%	% Ours	% Cons
Revenue	1,468	1,347	1,363	1,420	4.2%	5.4%	5,165	5,339	3.4%	101%	92%
Filter	1,077	1,027	1,036	1,115	7.6%	8.6%	3,861	4,057	5.1%
Radiator	161	134	165	130	-21%	-2.9%	544	592	8.8%
Trading	434	407	433	423	-2.3%	3.8%	1,594	1,659	4.1%
Body maker	79	68	35	32	-9.1%	-53%	266	144	-46%
Others	63	67	59	56	-4.2%	-16%	227	212	-6.6%
GP	534	554	489	577	18%	4.2%	1,914	1,978	3.4%	100%	93%
Filter	321	355	290	410	42%	16%	1,145	1,238	8.1%
Radiator	56	48	57	52	-9.1%	7.9%	197	212	7.5%
Trading	136	120	138	113	-18%	-6.0%	496	506	2.0%
Body maker	10	11	0.1	(1.7)	na	-115%	29	1.2	-96%
Others	15	19	8.9	14	59%	-24%	51	39	-23%
EBIT	374	410	387	416	7.5%	1.7%	1,375	1,502	9.3%	104%	98%
EBITDA	409	447	428	460	7.5%	2.9%	1,511	1,655	10%	102%	112%
NPAT	274	302	289	305	5.6%	1.0%	1,024	1,125	10%	103%	95%

Margins %	3Q24	4Q24	3Q25	4Q25			FY24	FY25
GP	36%	41%	36%	41%			37%	37%
Filter	30%	35%	28%	37%			30%	31%
Radiator	35%	36%	35%	40%			36%	36%
Trading	31%	29%	32%	27%			31%	30%
Body maker	13%	17%	0.2%	-5.4%			11%	0.9%
Others	24%	28%	15%	25%			22%	18%
EBIT	26%	30%	28%	29%			27%	28%
EBITDA	28%	33%	31%	32%			29%	31%
NP	19%	22%	21%	21%			20%	21%

Bal. sheet Rp bn	3Q24	4Q24	3Q25	4Q25
Cash	966	1,114	1,044	1,080
Debt	148	129	99	97
Net debt (cash)	(818)	(985)	(945)	(983)
Equity	3,831	3,926	4,241	4,307
MI	445	453	489	498

Net gearing (x)	(0.21)	(0.25)	(0.22)	(0.23)
ROE TTM%	29%	29%	30%	30%

Note: The consensus number are from Bloomberg
Source: Company data, Bloomberg Finance L.P., Verdhana estimates

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.

GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by PT Verdhana Sekuritas Indonesia (“PTVSI”) a securities company registered in Indonesia, supervised by Indonesia Financial Services Authority (OJK) and a member of the Indonesia Stock Exchange (IDX).

This report is intended for client of PTVSI only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of PTVSI.

The research set out in this report is based on information obtained from sources believed to be reliable, but PTVSI do not make any representation or warranty as to its accuracy, completeness or correctness. The information in this report is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. Any information, valuations, opinions, estimates, forecasts, ratings or targets herein constitutes a judgment as of the date of this report is published, and there is no assurance that future results or events will be consistent.

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ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this report and certifies that the views about the companies including their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.

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Rating Table

Rating Remains	Buy
Target price Remains	IDR 2,500
Closing price 30 March 2026	IDR 1,755

Research Analysts

Jupriadi Tan (jupriadi.tan@verdhana.id)

David Tjahjadi (david.tjahjadi@verdhana.id)

Gerald Hugo(gerald.hugo@verdhana.id)

Tags: AUTOS AND AUTO PARTS, Selamat Sempurna, SMSM, SMSM JK, SMSM IJ, Jupriadi Tan, David Tjahjadi, Gerald Hugo

Selamat Sempurna (SMSM IJ) (Buy) - Solid growth track record

Solid growth track record

Fig. 1: SMSM IJ FY25 results

Fig. 2: SMSM IJ revenue and NPAT – a decade of compounding

Fig. 3: SMSM IJ – track record of being a consistent dividend compounder

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Selamat Sempurna (SMSM IJ) (Buy) - Solid growth track record

Fig. 1: SMSM IJ FY25 results

Fig. 2: SMSM IJ revenue and NPAT – a decade of compounding

Fig. 3: SMSM IJ – track record of being a consistent dividend compounder

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