2025 Full Year Report

The Omnia Pro Deo (OPD) Portfolio was launched in May 2025. Our timing was fortunate. The IHSG bottomed in early April and climbed steadily through the end of the year. This explains our 38% gross return over six months, significantly outperforming the Indonesia Composite’s (IDX/IHSG) 20.5%.

We do not expect this pace to last. Our long-term target remains a 12% net annual absolute return, which doubles the portfolio every five years. Why? Because historically, value investors underperform in "bull" markets and overperform in "bear" markets. As prices rise, we sell holdings that reach our estimation of intrinsic value, but there is no guarantee that attractive stocks with proper margin of safety will be readily available. Consequently, cash reserves may be undeployed for a certain period of time, resulting in portfolio underperformance, especially during prolonged “bull” markets. With that in mind, consider this year's performance an outlier. We are pleased with the results, but we will not join a "buying spree" that forces us to sacrifice a proper margin of safety. We reiterate these goals so you know exactly what to expect from us.

Performance Highlights

Our strategy is simple: buy a business for less than it is worth and sell it when the market recognizes its value. Ideally, we want to hold high-quality compounders for years, letting them do the hard work of growing our capital. In the Indonesian market, this is difficult. For example, while BCA Bank grew its net profit by 12.8% annually from 2021 to 2025, its stock price returned only about 18% over the same period, meaning it averaged only 3-4% growth annually—far below our target.

Because of this, we occasionally buy "less-than-ideal" businesses at "more-than-ideal" prices and hold them for a “shorter-than-ideal” period. We look for unloved companies with clear catalysts. Our investment in Hartadinata Abadi (HRTA) is a case in point. Hartadinata is an integrated gold jewellery manufacturer and gold bar refinery company. It is an unglamorous business with thin margins and high working capital needs. What’s interesting was how they recently managed to accelerate their already consistent growth rate. From 2016-21, Hartadinata’s revenue grew by a CAGR of 18.98%. From 2021-24, it grew by an astonishing CAGR of 51.54%. This rapid growth rate accelerated even more going into 2025 as gold prices rose significantly throughout the year. What drove the acceleration? It was the company’s decision to shift their focus from jewellery to gold bars. This dropped their net margins from 8% in 2016 to 2% in 2024, but in return, it skyrocketed their growth. When the government regulated bullion banks in February 2025, Hartadinata was perfectly positioned to benefit. Despite this, the market priced them at a meager 4x annualized P/E around mid-year 2025, likely due to concerns over consistently negative operating cash flow and a lack of transparency regarding the gold volume in their inventory. We did our homework. Our surveys confirmed that their negative cash flow issues were standard for the industry. As for the inventory issue, we decided to focus on margin of safety. Considering the annualised net profit of IDR700bn, we believe the market cap of IDR2.7tn was too cheap to ignore, especially with their rapid growth rate. In the end, we decided to buy its shares in June 2025 at IDR 575–630. By October, as gold prices surged, the stock followed. We sold our position at IDR 1,040–1,495, securing more than 100% gain in four months. We exited because the margin of safety had thinned; a 9x P/E is too high for a company with inventory risks.

The second pillar of our strategy is the integration of faith and finance. This faith-driven investing relates to many aspects, as we've explained in our Foundation Course. But one aspect that we would like to highlight here relates to the moral attachment of business profit.

“You must not bring the earnings of a female prostitute or of a male prostitute into the house of the Lord your God to pay any vow, because the Lord your God detests them both.” - Deut. 23:18

As followers of Christ, we believe business profit carries a moral weight. Therefore, we do not simply seek the highest risk-adjusted return; we evaluate a company’s "theological value." We believe God’s purpose for business is to "cultivate and keep" the world (Gen 2:15)—to develop creation's potential and safeguard its goodness. If a company fulfills this, we are interested. If it does not, we abstain, regardless of the price and potential profit. This year, H.M. Sampoerna (HMSP) tested this principle. The tobacco giant has suffered under heavy regulation; its share price has plummeted 90% since 2018. Yet, it remains a cash cow with ROE above 20% and an 8% dividend yield. As the heavy regulation refers to an extreme increase in excise tax (almost 100% increase in 7 years, or a CAGR of 10.89% from 2018-2024), we believe the annual increase will not be indefinite. With the rate of excise tax increase that has also been slowing (from 23% in 2020 to 10% in 2024), plus their new innovation that is trending in the urban market, not only in Indonesia but throughout the South East Asia Region, H.M. Sampoerna looked like a classic turnaround play. The only problem is: the company’s main business is selling cigarettes. We asked ourselves: "Can a Christian smoke?" While that is debated, we rely on Jesus’s saying: "Do to others what you would have them do to you" (Mat 7:12). We do not smoke; we do not want our children to smoke. It would be hypocritical to profit from others doing what we hope our own family avoids. We passed on the opportunity. Financially, this cost us, as the stock rose by more than 50% following the new Minister of Finance. But we have no regrets. On the contrary, we are grateful for the Holy Spirit’s guidance in prioritizing our faith over potential profit.

Portfolio Strategy

The IDX closed 2025 up 45% from its April low. By year-end, the index was expensive (close to +2 standard deviations of forward P/E), and social media was crowded with "influencers" flaunting easy gains and promoting investment classes. This euphoria demonstrates a nuance of over-optimism in the market, and it concerns us. In consequence, we decided to be more cautious and ended the year with 40% of our portfolio in cash.

Of our remaining equity, 47% is in the consumer sector. These companies were ignored in 2025 as investors chased trendy conglomerates stocks. We found bargains like Indofood CBP (ICBP). It owns Indomie—a massive "moat"—yet traded at 9x forward P/E (close to -2x standard deviation of forward P/E). In a rational market, a company with a huge moat like ICBP should trade closer to 20x. In addition, we also invested 36% of our equity in themes aligned with government spending: the "Free Nutritious Meal" program and energy sovereignty. The rest of our holdings are "cigar butts"—cheap companies with limited downside.

The future is uncertain. As Howard Marks says, we cannot predict the future, but we can "predict" the present. Today, we believe the market is overheated. Hence, we have chosen to be defensive, accepting the risk that we may be left behind if the bull market continues. We will see what 2026 brings.

Closing

We will publish these reports twice a year, in January and July. We hope to show that one can serve God in the capital market—to seek His glory without serving Mammon.

Sincerely,

Reyner Berliarang