<![CDATA[IntroductionProfitability provides financial information that investors may use to evaluate firm value, yet different profitability measures do not necessarily convey equivalent valuation signals. This issue is particularly relevant to Indonesian state-owned enterprises listed on the Jakarta Islamic Index, where state ownership and Shariah screening define a distinctive institutional setting for interpreting corporate performance and market valuation.ObjectivesThis study examines the associations of Net Profit Margin and Return on Equity with firm value, measured by Price-to-Book Value, and evaluates whether these profitability–valuation relationships remain stable across sub-periods.MethodThe study employs a quantitative explanatory design using 55 firm-year observations from 11 Indonesian state-owned enterprises consistently listed on the Jakarta Islamic Index during 2015–2019. Multiple regression incorporates firm size and leverage as control variables and applies the Cochrane–Orcutt procedure to address potential first-order autocorrelation. Temporal stability is examined through sub-period estimations for 2015–2017 and 2017–2019.ResultsNet Profit Margin is positively but not significantly associated with Price-to-Book Value, whereas Return on Equity has a positive and statistically significant association in the full-period model. Firm size and leverage are not statistically significant in the primary specification. However, the sub-period analysis reveals temporal heterogeneity. Return on Equity remains positive but only marginally significant during 2015–2017 and becomes insignificant during 2017–2019, while Net Profit Margin, firm size, and leverage become significant in the later period.ImplicationsThe findings indicate that profitability measures provide different and time-contingent valuation information. Investors and managers should therefore evaluate equity efficiency together with operating margins, capital structure, firm characteristics, and changing market conditions rather than relying on a single profitability indicator.Originality/NoveltyThis study provides context-specific evidence from state-owned, Shariah-screened Indonesian enterprises and extends signaling theory by demonstrating that the valuation relevance of profitability signals is multidimensional and temporally contingent rather than universally uniform.]]>
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