BIRD The Stock Corrected 18% This Quarter - So Why Did the P/E Get More Expensive?

The Rally Reversed, But the Reason It Rallied Never Existed

Q1 2019's report closed on an open question: the stock had rallied 20.9% while profit fell 10.3%, and nothing in that quarter's filing explained why. This quarter answers it, just not the way a bull would want. The stock gave back the entire Q1 rally and then some, falling 18.4% to Rp2,830 - but the business didn't stabilize to meet the price coming down. Net revenue fell YoY for the first time since Q1 2019 (which was itself the first decline since the Q3 2018 recovery began), and both operating income and net income to owners fell faster this quarter than last: operating income -19.85% YoY (versus Q1's -9.05%), net income to owners -23.94% YoY (versus Q1's -10.27%). The gap between price and fundamentals that defined Q1 didn't close - it just swapped which side moved further.

That produces a genuinely strange result on the multiples. A falling stock price and falling earnings should roughly cancel out in a P/E ratio; instead, because earnings collapsed faster than the price did, Blue Bird's P/E actually got more expensive this quarter (~25.4x, up from Q1's ~24.1x) even as the shares fell 18.4%. A reader who only watched the price this quarter would conclude the stock got cheaper. It didn't - the earnings underneath it eroded even faster than the price did. Full detail in Target Valuation Range below.

Both operating segments kept falling together for a second straight quarter - a pattern Q1 2019 first recorded after nine quarters of the two segments frequently offsetting each other - and Non-Taxi's revenue growth (+10.29% YoY) once again came with the steeper operating-income decline (-29.07% YoY, worse than Taxi's -14.94%), extending exactly the divergence Q1 flagged: the segment growing its top line is still the one whose margin is eroding fastest.

The Prescription

Blue Bird needs to stop treating Non-Taxi's revenue growth as self-evidently good news and start explaining why that growth keeps arriving with a faster-eroding margin than the shrinking Taxi segment. Two consecutive quarters of "Non-Taxi grows revenue, loses more operating income than Taxi does" is not a rounding artifact anymore - it's a trend, and a trend this filing still offers zero commentary on (no presentation deck, no transcript, no management discussion exists for this filing, same gap Q1 2019 already flagged). If Non-Taxi's mix (car rental, logistics, the Cititrans shuttle business) is absorbing new customer-acquisition or integration costs that Taxi isn't, management should say so explicitly - otherwise a reader is left assuming the segment simply doesn't have Taxi's pricing power, which is a much worse story for a segment this site has watched gain share of consolidated revenue for three straight years.

What it should stop doing: adding leverage through a single lender while three other banks keep shrinking their balances. Total long-term bank loans rose to Rp790.6 billion from Rp709.7 billion at December 2018 (+11.4%), and every rupiah of that increase and then some came from PT Bank Sumitomo Mitsui Indonesia - see Beyond the Usual below. Concentrating incremental debt in one relationship, on top of Q1's disclosure gap around that same lender, is a counterparty-concentration risk the company has more control over than the ride-hailing competition it's presumably borrowing to fend off.

Key Financial Metrics

Q2 2019 vs. Q2 2018, standalone quarter (derived by subtracting already-reported Q1 2019 figures from this filing's six-month cumulative total - Blue Bird's interim filings report cumulative, not discrete, figures beyond Q1)

FX: IDR 14,141 = USD 1 (Bank Indonesia middle rate, June 30, 2019, as disclosed in this filing).

Metric	Q2 2019 (IDR)	Q2 2019 (USD)	Q2 2018 (IDR)	YoY
Net Revenue	Rp938.1B	~$66.3M	Rp998.0B	⚠️ -6.00%
Adjusted EBITDA» (Operating Income + D&A)	Rp216.7B	~$15.3M	Rp254.4B	⚠️ -14.85%
Operating Income»	Rp89.6B	~$6.3M	Rp111.8B	⚠️ -19.85%
Net Income» (attributable to owners)	Rp69.6B	~$4.9M	Rp91.5B	⚠️ -23.94%
Free Cash Flow» (Op. CF minus capex)	-Rp52.7B	-~$3.7M	Rp46.1B	⚠️ Negative for a third straight quarter
Total Cash (period-end)	Rp436.3B	~$30.9M	Rp511.8B	⚠️ -14.75%
EPS (basic, quarter, derived)	Rp27	~$0.002	Rp38	⚠️ -28.9%

Operating margin came in at 9.55% (Q2 2018: 11.20%, Q1 2019: 11.11%) - the lowest quarterly margin this site has recorded for Blue Bird, below even Q2 2017's 10.4%, which had held that distinction since it was first noted in the Q1 2019 post. Net margin followed: 7.42% this quarter versus 9.17% a year ago and 9.09% last quarter - three straight quarters of margin compression on both measures.

Free cash flow stayed negative for a third consecutive quarter - operating cash flow fell to Rp123.3 billion from Rp212.4 billion a year ago (-42.0% YoY), a much steeper drop than Q1's -15.4%, while capex rose to Rp176.0 billion from Rp166.2 billion (+5.9% YoY) - a far smaller increase than Q1's 79.9% jump. This quarter's negative FCF is a demand-and-collections problem more than a spending problem: capex barely grew, but the cash the business actually brought in from operations nearly halved.

Quarter-on-quarter, revenue fell 3.96% from Q1 2019's Rp976.8 billion - a smaller sequential drop than Q1's 12.07% QoQ fall from Q4 2018, but this one isn't the seasonal post-holiday normalization Q1's was; Q2 has no equivalent calendar explanation on this site's record. Operating income fell 17.4% QoQ and net income fell 21.6% QoQ - again considerably steeper than the revenue decline, meaning whatever eroded profitability in Q1 kept eroding it in Q2 rather than bottoming out.

Balance sheet metric	Jun 2019 (IDR)	Jun 2019 (USD)	Mar 2019 (IDR)	Change
Total Assets	Rp7,086.5B	~$501.1M	Rp7,236.5B	⚠️ -2.07%
Total Liabilities	Rp1,825.4B	~$129.1M	Rp1,870.7B	✅ -2.42%
Total Equity	Rp5,261.1B	~$372.1M	Rp5,365.7B	⚠️ -1.95%
Debt-to-Equity Ratio» (total liabilities / total equity)	0.35x	-	0.35x	Flat

Against December 2018 rather than the sequential quarter, total assets are still up 1.89% and total liabilities up 8.01%, while equity is essentially flat (-0.08%) - the DER has held around 0.35x for two straight quarters after Q1's jump from 0.32x, meaning the leverage increase that started at year-end hasn't reversed but also hasn't kept accelerating on a headline basis. See Beyond the Usual for why the flat headline DER still masks a real shift in which lender the debt sits with.

Segment Performance

Blue Bird still reports the same two operating segments - Taxi and Non-Taxi - unchanged since Q1 2016's two-segment collapse.

Taxi

Q2 2019 net revenue Rp737.6B (-9.48% YoY, -5.40% QoQ), operating income Rp61.0B (-14.94% YoY, -7.31% QoQ), operating margin 8.28% - down from Q2 2018's 8.81% and slightly below Q1 2019's 8.45%. This is the segment's second straight YoY revenue decline after Q1 2019 broke the recovery that carried Q3-Q4 2018 - the ride-hailing pressure this site has tracked since 2017 shows no sign of easing.

Non-Taxi

Q2 2019 net revenue Rp202.0B (+10.29% YoY, +1.74% QoQ), operating income Rp28.4B (-29.07% YoY, -33.36% QoQ), operating margin 14.06% - down sharply from Q2 2018's 21.86% and further below Q1 2019's 21.47%, the segment's second consecutive quarter of margin compression accelerating rather than leveling off. Non-Taxi's operating income fell nearly a third YoY on a positive revenue quarter - a top-line-growing, bottom-line-shrinking pattern this site treats as a standing concern in any segment, even though this isn't a gross-metric framing issue so much as a genuine cost-structure problem inside the segment. Nothing in this filing attributes any of Non-Taxi's growth to Go-Jek/Go-Car; the MoU footnote remains absent from the commitments note for a second straight quarter, continuing Q1 2019's finding that it simply stopped appearing.

Segment Comparison

Segment	Revenue (Q2 2019)	YoY Growth	QoQ Growth	Operating Margin
Taxi	Rp737.6B (78.6%)	⚠️ -9.48%	⚠️ -5.40%	⚠️ 8.28%
Non-Taxi	Rp202.0B (21.5%)	✅ +10.29%	✅ +1.74%	⚠️ 14.06%

For a second straight quarter, both segments' operating income fell YoY simultaneously - Q1 2019 was the first time this site recorded that pattern; Q2 confirms it's a trend, not a one-off. Non-Taxi's share of consolidated revenue held roughly flat at 21.5% (from Q1's 20.3% and Q2 2018's 18.5%), continuing the slow mix shift tracked since Q2 2017 - but for two quarters running now, the segment gaining share is also the one whose margin is collapsing faster, which means the mix shift is making the consolidated margin picture worse, not better.

Key Operational Metrics

• Permanent employees (Group): 3,931 (Jun 2019), up 7.6% from 3,653 (Dec 2018) and up 10.2% from Q1 2019's 3,567 - a sharp reversal of Q1's headcount decline, now moving in the opposite direction of revenue.
• Weighted average shares outstanding: 2,502,100,000, unchanged since the IPO - no further dilution at the parent level (see Beyond the Usual for a subsidiary-level exception).
• Geographic revenue split (Jadetabek vs. outside Jadetabek) is not disclosed in this interim filing, matching Q1 2019's omission.
• Still not available: any Go-Jek/Go-Car integration volume or revenue metric, and no presentation deck or transcript exists for this filing to fill either gap.

Beyond the Usual

The Sumitomo Mitsui facility now accounts for more than half of all outstanding bank debt

Q1 2019's report explained what the Sumitomo Mitsui Indonesia facility actually was - a Bridging Loan dated October 2017, not a new relationship. This filing shows the balance kept growing regardless: the outstanding loan for this facility rose to Rp443.8 billion at June 30, 2019 from Rp355.9 billion at March 31, 2019, plus a separate Rp5.0 billion balance transferred in through the Cititrans acquisition - a combined Rp448.8 billion. Against total long-term bank loans of Rp790.6 billion, Sumitomo alone now makes up 56.8% of Blue Bird's entire bank debt, up from roughly a third in Q4 2018 and well over that in Q1. Every other lender in the structure - BCA, OCBC NISP, Mandiri - kept shrinking its balance this quarter, the same pattern Q1 2019 already found: the increase is entirely attributable to one facility, but that facility is now large enough that "one lender" and "the group's leverage" are close to the same statement. Collateral behind it also grew, from 2,851 fleet units (unchanged from Q1) - meaning the loan balance grew this quarter without a matching increase in pledged units, a modestly less conservative posture than the facility has carried before.

The Acer arbitration cassation appeal remains undecided, a second straight filing with no update

Q1 2019's report tracked this Supreme Court cassation appeal, filed October 3, 2018 after Blue Bird lost both the original BANI arbitration ruling and its own petition to set that ruling aside. This filing adds no procedural update whatsoever since the December 13, 2018 counter-memorandum notification already reported last quarter - as of this filing's authorization date, the Supreme Court still has not issued a decision, now well past 20 months since the original dispute began. Neither the claim amount nor the underlying contract's value has been disclosed in any filing to date.

TAN's ownership dropped from 99.90% to 91.66% as a genuine minority partner bought in

Last quarter's filing disclosed PT Trans Antar Nusabird (TAN) as 99.90%-owned. This filing shows TAN's ownership at 91.66%, with a new Rp10.0 billion non-controlling interest recorded against it - a real dilution, not a rounding restatement. The cash flow statement's Rp21.3 billion "receipt of capital stock in subsidiaries" line (up from Rp11.3 billion in Q1) is consistent with an actual minority investor buying into TAN during the quarter, most likely tied to funding the Cititrans integration. TAN's pre-elimination segment assets also fell to Rp164.2 billion from Q1's Rp220.6 billion, while Caready's rose to Rp32.3 billion from Rp23.0 billion - opposite directions for the group's two newest subsidiaries in the same quarter, with no explanation offered for either move.

The land-purchase commitment freeze extends into a seventh consecutive quarter

The purchase-commitment-of-land footnote first tracked in FY2017's report and reconfirmed unchanged through Q1 2019 still shows the identical 125,427 square meters realized as of June 30, 2019 - zero further realization for a seventh straight reporting period. No cancellations of the unexecuted portion are disclosed, matching every prior filing.

Stock Price: The Correction That Made the Stock Look Cheaper Than It Actually Got

Blue Bird's shares closed at Rp2,830 on June 28, 2019, down 18.4% from March's Rp3,470 close - giving back essentially all of Q1's 20.9% rally in a single quarter. Against the Rp6,500 IPO price (November 2014), the stock is now down 56.5%, reversing most of Q1's narrowing of that discount and landing close to Q4 2018's 55.8%.

Over the trailing two years (June 2017 to June 2019), the path stayed volatile: the stock peaked around Rp4,750-4,880 in mid-2017 on initial Go-Jek/Go-Car enthusiasm, fell to an August 2018 trough of Rp2,580, recovered to Q1 2019's Rp3,470 high, and has now given most of that recovery back - Rp2,830 sits just 9.7% above the August 2018 trough and 41.3% below the 2017 peak.

This quarter looks, on the surface, like the market finally correcting Q1's disconnect - the stock falling while profit kept falling too, rather than diverging further. But the correction wasn't proportionate: profit fell faster (net income -23.94% YoY) than the price did (-18.4% QoQ, and price moves are sequential while the profit figure is YoY, so the two aren't even measuring the same base period). The practical result, worked out fully in Target Valuation Range below, is that the stock's earnings-based multiples got more expensive this quarter, not less - the opposite of what a falling share price would suggest to a reader who stopped at the headline number.

Target Valuation Range

Enterprise value ~Rp8,470B (~$599.0M), implying ~25.4x annualized P/E and ~1.37x P/B - still overvalued relative to what the business is currently earning, and more so than last quarter, not less, because Q2's profit collapse outpaced the stock's own decline.

Against Q2 2019 numbers (2,502,100,000 shares outstanding, unchanged), using annualized quarterly figures (Q2 2019 × 4) for comparability with prior non-annual-filing quarters on this site:

Market cap → enterprise value	Q2 2019
Share price (period-end)	Rp2,830
Shares outstanding	2,502,100,000
Market capitalization	~Rp7,080.9B (~$500.7M)
Total liabilities	~Rp1,825.4B
Less: cash and equivalents	~Rp436.3B
Enterprise value	~Rp8,470.0B (~$599.0M)

Market cap is down 18.4% from ~Rp8,682.3B at Q1 2019's close.

Peer-multiple sanity check	Q1 2019 (annualized)	Q2 2019 (annualized)
P/E	~24.1x	~25.4x (Q2 2019 EPS Rp27 × 4 = Rp108)
P/B	~1.65x	~1.37x (book value/share ~Rp2,063)
Annualized ROE	~6.79%	~5.34%
Annualized ROA	~5.00%	~3.89%

P/E and P/B moved in opposite directions this quarter for the first time this site has recorded for Blue Bird - normally a falling price pulls every multiple down together, but P/E rose because earnings fell even faster than the stock did, while P/B fell because equity (the denominator) barely moved. A reader relying on P/B alone would conclude the stock got meaningfully cheaper this quarter; a reader relying on P/E would conclude the opposite - both are technically correct, which is exactly why neither multiple in isolation is the story here. ROE and ROA both kept falling, continuing Q1's reversal of the improving trend recorded through most of 2018. None of this quarter's disclosed developments - the Sumitomo facility's growing share of bank debt, TAN's ownership dilution, the still-unresolved Acer appeal - offer a fundamental case for owning the stock at either multiple; the real story remains that profit is falling faster than almost anything else about this business.

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