A Fundamental Analysis of PT Voksel Electric Tbk (VOKS)
Fundamental analysis is the process of evaluating a company's true worth by examining its financial statements, business operations, and competitive position. This approach helps investors determine if a stock is a sound investment. This article provides a detailed fundamental analysis of PT Voksel Electric Tbk (VOKS), a leading Indonesian cable manufacturer listed on the Indonesia Stock Exchange.
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| A Fundamental Analysis of PT Voksel Electric Tbk (VOKS) |
1. Company Overview and Business Model
PT Voksel Electric Tbk (VOKS) is a long-standing player in Indonesia's cable manufacturing industry. The company produces a wide range of cables, including power cables, telecommunication cables, and special-purpose cables. Its business model is built on serving various sectors, including the electricity, telecommunications, infrastructure, and oil and gas industries. VOKS's established presence and broad product portfolio provide it with a significant market share and brand recognition.
2. Financial Performance and Key Ratios
To gain a clear picture of VOKS's financial health, it is essential to analyze its performance over time, focusing on profitability, liquidity, and solvency.
A. Profitability
VOKS's profitability has been a mixed bag, with recent results showing challenges.
Net Profit: The company has reported a net loss in recent quarters. For example, VOKS reported a net loss of IDR 80 billion in Q2 2025, an increase from a loss of IDR 50.8 billion in the same period a year earlier. This consistent trend of losses is a major red flag for investors, indicating that the company is not generating profits from its operations.
Profitability Ratios:
Net Profit Margin (NPM): VOKS's NPM is in the negative range, hovering around -1.6%. A negative margin indicates that the company is losing money on every sale, which is a serious concern.
Return on Equity (ROE): The company's ROE is also negative at -5.46%. A negative ROE shows that the company is destroying, not creating, shareholder value. This is a crucial indicator of a company in financial distress.
B. Solvency and Liquidity
VOKS's ability to meet its financial obligations is a critical area of concern due to its history of losses.
Debt-to-Equity Ratio: The company's debt-to-equity ratio is high at 181.76%. This indicates that VOKS is heavily leveraged, relying more on debt than on shareholder equity to finance its operations. A high debt load can make the company vulnerable to interest rate hikes and economic downturns.
Interest Coverage: VOKS's EBIT (Earnings Before Interest and Taxes) is negative, which means it cannot cover its interest payments from its operating profit. This is an extremely dangerous financial position and suggests a high risk of default.
Current Ratio: The current ratio, which measures a company's ability to meet its short-term obligations, is at 1.11. While a ratio above 1 is generally a good sign, this figure is not strong enough to outweigh the significant concerns about profitability and debt.
3. Valuation and Market Performance
Valuation metrics help determine if VOKS's stock is a good value for investors.
Price-to-Earnings (P/E) Ratio: A P/E ratio is not meaningful for a company with negative earnings, as it cannot be calculated. This, in itself, is a negative signal, as it indicates a lack of profitability.
Price-to-Book (P/B) Ratio: VOKS's P/B ratio is approximately 0.67. A P/B ratio below 1 often suggests a stock is undervalued. However, for a company with negative ROE and recurring losses, a low P/B ratio is not a sign of value but rather a reflection of the market's low confidence in the company's ability to recover.
Stock Performance: The company's stock price has performed poorly, with a significant decline over the past year. The stock has been trading in a downward trend, reflecting investor pessimism about its financial prospects. The stock's volatility is also high, making it a risky investment.
4. Risks and Opportunities
An investment in VOKS is not without its risks and, albeit few, potential opportunities.
Opportunities:
Infrastructure Boom: Indonesia's ongoing and planned infrastructure projects, such as electricity grid expansion, smart cities, and telecommunications network development, could create a significant demand for cables. If VOKS can secure major contracts, it could provide a path to profitability.
Market Position: As one of the largest and most established cable manufacturers in Indonesia, VOKS has a strong brand and existing relationships with key clients, which could be a competitive advantage if the company can turn its financials around.
Risks:
Consistent Financial Losses: The primary risk is the company's persistent inability to generate a profit. This trend, if it continues, will erode shareholder value and could threaten the company's long-term survival.
High Debt and Interest Burden: The extremely high debt-to-equity ratio and the inability to cover interest payments from operating profit pose an immediate and severe risk of financial distress.
Raw Material Price Volatility: The cable manufacturing industry is highly dependent on raw materials like copper and aluminum. Volatility in the prices of these commodities can significantly impact the company's cost of goods sold and, consequently, its profit margins.
Intense Competition: The Indonesian cable market is competitive, with both domestic and international players. This intense competition can put pressure on pricing and margins.
Conclusion
Based on a fundamental analysis, PT Voksel Electric Tbk (VOKS) is a highly speculative and high-risk investment. The company's current financial state is precarious, marked by persistent net losses, negative profitability ratios, and a dangerously high level of debt. Its inability to cover interest payments from its operating profit is a major red flag, indicating a high risk of financial distress.
While the company operates in an industry with long-term growth potential due to Indonesia's infrastructure development, its current financial condition suggests it is poorly positioned to capitalize on these opportunities. For a prudent investor, the stock's low P/B ratio is not a sign of undervaluation but rather a reflection of the market's justified pessimism. An investment in VOKS should only be considered by investors with a very high-risk tolerance who are betting on a complete and dramatic financial turnaround.
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