Ram On in 2025: Polyram Still Holds the Value, but the Optionality Is No Longer Free

Introduction to the Company

Ram On is not really an industrial company in the direct sense, and it is not a broadly diversified investment vehicle either. It is a small holding company, with no control block and only two employees at the parent level, whose central asset is a 26.54% stake in Polyram. Around that core sits a layer of real estate leased to Polyram and a small portfolio of private investments. That means the right question here is not how many "assets" Ram On owns, but how much of that value is actually accessible to shareholders, how fast it can move upstream, and how much capital continues to leak on the way.

What is working right now is fairly clear. Polyram still provides the main value anchor. The market value of Ram On's holding in Polyram stood at NIS 289.1 million at the end of 2025. Ram On Mevanim owns the factory property, generated NIS 3.614 million of rent and NIS 3.371 million of NOI in 2025, and the property itself was appraised at NIS 68.385 million on a 100% basis. Even the market is not pricing Ram On as if everything has broken down. On the latest trading day in the prepared market data, April 3, 2026, the share traded at 1,132 agorot, implying a market cap of about NIS 189.4 million, but also with daily turnover of just NIS 3,440.

That is also exactly the problem. Anyone who reads Ram On only through Polyram and the real estate sees a discount. Anyone who reads it through the parent-company layer sees why the discount remains. In 2025 the company moved from a net profit of NIS 17.7 million to a net loss of NIS 18.5 million. That was not because the parent suddenly lost its rental engine or because overhead exploded. It was because Classoos moved from optional upside to an almost full write-off, Kando was marked down sharply, and Ai Theo remained a disputed and partially impaired investment.

The active bottleneck is therefore not the quality of the main asset, but the conversion of visible value into accessible value. Ram On depends on Polyram both as a shareholder and as the owner of property leased to Polyram through Ram On Mevanim. At the same time, the parent carries a bank loan secured by pledged Polyram shares, and at year-end 2025 the collateral ratio stood at just 1.77 versus an action threshold of 1.75. In other words, even when the value is there, it is not free. It is pledged, partly illiquid, and partly eroded by private risk investments.

This matters now for two reasons. First, the gap between Ram On's market cap and the market value of its Polyram stake is already too large to stay a footnote. Second, by early 2026 that gap stopped being just a paper valuation issue and became a governance issue. A meaningful shareholder, Eldav Investments, demanded a special meeting to change the composition of the board. That did not create value by itself, but it did show that the discount is now putting pressure on management and on how capital allocation decisions are made.

Ram On's economic map looks like this:

That chart explains why a superficial read of the stock is tempting. Polyram alone is larger than Ram On's market cap, and the real estate adds another layer of value that looks hidden. But that is only half the picture. What the market is really judging is not just the value anchors, but the quality of the path between those anchors and common shareholders.

Events and Triggers

The board fight says the discount has already become a management issue

On January 6, 2026, Eldav Investments, which holds 10.86% of the company, demanded a special general meeting in order to expand the board and appoint three additional directors. Ram On responded with a meeting notice of its own in which it sought to cap the board at eight directors. In the board position paper, the company framed Eldav's move as an attempt to take over the board, while Eldav effectively argued that the current portfolio and the company's performance justified change.

That matters well beyond governance gossip. It means the Ram On story is no longer just "a cheap holding company." It is also a question of who gets to decide what happens with that value. Does the company stay in its current structure, with Polyram as the anchor and a shrinking private portfolio around it, or does pressure build for monetization and simplification. On March 3, 2026, shareholders approved the appointment of Liron Saliman Yankovitz as an independent director and Yaakov Nimkovski as a director. That was not a full board revolution, but it was clear evidence of governance pressure.

Classoos stopped being optional upside and became a write-off

This is one of the most material changes in the report. As of September 30, 2025, the company had already reduced the carrying value of the Classoos investment by NIS 5.8 million and the related loans by another NIS 2.9 million. After the balance sheet date, on March 28, 2026, Classoos filed under the Israeli Insolvency and Economic Rehabilitation Law in order to convene creditors and pursue a debt arrangement and a sale to a third party. Following that development, Ram On recorded an additional provision against the remaining investment and loans, bringing the total write-down to about NIS 18 million.

This is not just another fair-value move. It is the point where "optionality" leaves the conversation and is replaced by a real cost. At the level of the Ram On thesis, Classoos is no longer a possible source of discount closure. It is evidence that part of the private portfolio did not just fail to close the gap, it widened it.

Debt came down after the balance sheet date, but the collateral test remains central

After year-end, in January through March 2026, the company made an early repayment of NIS 5.5 million on the bank loan originally taken in January 2023 to buy Polyram shares. By the report date the loan balance had fallen to about NIS 8.3 million. That is an important improvement. But it also highlights where the pressure sits: the parent had to shrink part of its investment portfolio and direct liquidity toward debt reduction on a loan secured by Polyram shares.

The official strategy has narrowed

The company explicitly states that, as of the report date, it does not intend to increase its real investments. That materially changes how the company should be read, even if it is less dramatic than the Classoos collapse. More than that, with respect to Ram On Mevanim, the company says it is examining alternatives for realizing the investment. That is not yet a completed transaction, but it is no longer just an outside analyst's theory. It is embedded in the company's own language.

That chart explains the timing of the pressure. More than 100% of the annual loss was generated in the fourth quarter, when the provisions, valuation losses, and weakness in the private holdings all came together. On one hand, that creates a cleaner comparison base for 2026. On the other hand, it means the annual report no longer allows the company to speak about the risk holdings as if they are simply unresolved upside.

Efficiency, Profitability and Competition

Ram On itself is a very lean parent. Its own revenue was only NIS 3.694 million, almost entirely from rent and management fees. So anyone trying to read its profitability without going deeper into Polyram and the private holdings is missing the center of the story. Ram On's real efficiency is the quality of the capital it owns. And in 2025 that picture was highly split.

Polyram remained the engine, even if one year became less comfortable

The most important data point in the report is that Polyram still represents a real operating business. In 2025 its revenue fell 6.2% to NIS 925.563 million, and operating profit attributable to shareholders fell to NIS 92.291 million from NIS 128.564 million. Gross profit also declined to NIS 180.304 million from NIS 214.085 million, taking gross margin down to 19.5% from 21.4% and operating margin down to 10.0% from 12.8%.

That is a real deterioration, but not a collapse. What still supports Polyram even in a softer year is the structure of the business. No customer accounts for 10% or more of revenue, the company serves about 1,100 customers, and it operates through three activity areas with broad geographic spread. In the engineering thermoplastics segment alone, export sales reached NIS 366.535 million versus NIS 159.350 million in Israel. The company explicitly describes exposure to raw material prices, FX, changes in the auto market, and supply disruptions, including the effect of Houthi attacks on ports. This is a real industrial company with real industrial risks, not a passive financial holding.

The chart shows that the softer year was broad-based, not confined to a single line. All three segments declined, but the basic structure of the business did not change. That is why Polyram remains Ram On's core anchor even if 2025 was clearly weaker than the year before.

Another important point is the dividend policy. During 2025 Polyram distributed three dividends of NIS 10 million each, and Ram On received about NIS 8 million from Polyram during the year. That is not just a cash detail. It explains why, even after a softer operating year, Polyram still provides the ability to push cash upward.

The risk holdings no longer look like free optionality, but like a tax on the discount

Against Polyram stands the private portfolio, and here 2025 looked very different. In Kando, the carrying value dropped from NIS 18.685 million to NIS 7.624 million. Ram On explains that the valuation moved from an OPM-only framework to a DCF combined with OPM, using a 19.3% weighted average cost of capital, 2% long-term growth, and a 28.3% long-term pre-tax operating margin assumption. That means that even after a model change, this remains an investment valued on strong assumptions. It is not surprising that 2025 still produced an NIS 11.061 million decline in value.

In Classoos, the picture is sharper. The company says Classoos failed to meet its business plans for the 2025-2026 school year, partly because of the condition of the markets in which it operates and rising competition. Once the company failed to raise third-party capital, the debt-arrangement filing effectively turned the investment into an almost final loss.

Ai Theo is a different kind of problem. The equity investment remained on the books at NIS 1.671 million, but the company also holds shareholder loans which, after provisioning, stood at NIS 1.402 million. At the same time Ai Theo is involved in a business and management dispute with its Italian partner in AB Energy Israel, including legal proceedings and mediation. That does not necessarily mean the investment is worthless. It does mean that, for now, it is not an asset bringing Ram On materially closer to closing the discount.

That chart matters because it breaks down the most common mistake in reading the report. The problem is not that the parent itself stopped generating cash. The problem is that the bottom line was crushed by the private-holdings layer and by the drop in profit contribution from associates. Anyone looking for a fast rerating on the holding-company discount therefore has to decide first whether they believe the risk holdings can stop consuming equity.

Cash Flow, Debt and Capital Structure

Here it is important to define the frame explicitly. In Ram On's case, the relevant frame is all-in cash flexibility at the parent level, meaning how much real liquidity and room for maneuver remain after actual dividends paid, debt service, real capital uses, and obligations already sitting in the structure. There is little value in saying "there is profit" when a large part of that profit sits inside Polyram, inside unrealized real estate value, or inside valuation-based marks.

Cash flexibility has not disappeared, but it is not generous either

At the end of 2025 the company had NIS 3.917 million of cash and another NIS 18.107 million of marketable securities. Against that sat NIS 15.223 million of bank debt and a NIS 2.0 million tax-benefit indemnity obligation toward FIMI. On a working-capital basis the numbers still look decent: positive working capital of NIS 11.820 million and a current ratio of 2.12.

The broader picture is less comfortable. Cash flow from operating activities stood at NIS 6.842 million, while the company paid NIS 7.654 million of dividends and NIS 3.556 million of principal and interest on the bank loan. In other words, even in a year when it received about NIS 8.0 million of dividends from Polyram and NIS 3.613 million of rent from Polyram through Ram On Mevanim, operating cash flow on its own did not fully cover the dividend paid and the debt service. The gap was effectively bridged through the reduction of the investment portfolio.

That is not necessarily an immediate liquidity problem. It is a classic warning sign for a small holding company: cash generation is enough when there is no unusual pressure, but it does not leave much room for mistakes.

The collateral test on the Polyram shares was too close for comfort

The bank loan is probably one of the least flashy points in the report, but one of the most important. It was originally a NIS 25 million loan from January 2023, taken in order to purchase Polyram shares. The loan is secured by a first-ranking pledge on Polyram shares, and it includes a minimum ratio between the value of the pledged shares and the outstanding loan balance of 2.0. If the ratio drops below 1.75, additional shares have to be pledged. If it rises above 2.25, shares are released from the pledge.

As of December 31, 2025 the ratio stood at just 1.77. That means the buffer to the action threshold was only 0.02 points. This was not a breach, but it was also very far from a comfortable covenant position. After the repayments in January and February 2026, the ratio improved to 1.98. That tells us the issue was not theoretical. The company had to act to move itself away from the line.

The real estate looks like a bonus, but gross value is not the same as accessible value

Ram On Mevanim carries the property under a cost model. That is why the asset sits in the books at only NIS 5.290 million. At the same time, the same property was appraised at NIS 68.385 million as of December 31, 2025. That is a gap of NIS 63.095 million on a 100% basis, or about NIS 49.7 million at Ram On's effective share.

That is why the property always looks like hidden value. But the report and the attached appraisal also provide two warnings that need to be respected. First, the appraisal explicitly incorporates the new plan G 27960, approved in September 2025, which increases building rights, site coverage, and permitted uses. Second, the appraisal states explicitly that betterment levy and Israel Land Authority permit fees were not deducted from the value. So this is a gross appraisal value, not a clean net amount that is automatically available to shareholders.

In addition, a photovoltaic system sits on the roofs of the buildings and is owned by the Ram On Rapac Solari partnership, and the appraisal itself makes clear that the PV system is not included in the property value. Again, there is value here, but it is split across legal and economic layers, and not all of it sits directly in the pocket of Ram On shareholders.

The chart sharpens the point: the asset itself looks stable and even somewhat stronger, but Ram On's accounting does not reflect it at fair value, while the fair value disclosed in the appendix is also not a net value after taxes and monetization costs. The real estate therefore strengthens the thesis, but does not solve it on its own.

Outlook

Before looking at 2026, it helps to frame five non-obvious findings from this cycle:

1. Polyram remained the value and dividend anchor, but year-end 2025 also showed that even this anchor is not immune to margin pressure and softer demand.
2. The risk holdings are no longer sitting in the gray zone of "maybe they recover." Classoos has already been almost fully cut off, Kando was marked down heavily, and Ai Theo remains stuck in a dispute.
3. The real estate creates a genuine cushion, but it is a gross cushion, not free cash. Betterment levy, permit fees, and an actual monetization decision are still ahead.
4. The parent was not far enough away from the collateral test on the Polyram shares at year-end, which is why the debt reduction in early 2026 was necessary rather than cosmetic.
5. The board fight around Eldav proves that the market is beginning to demand a managerial answer to the discount question, not just an accounting one.

Those points lead to one conclusion: 2026 is a proof year for Ram On's capital allocation. It is not a growth year and not an operating turnaround year. It is a year in which management has to show that it knows how to turn one good holding and one valuable real-estate layer into a simpler and clearer capital structure.

What has to happen for the thesis to strengthen

First, Polyram has to continue generating enough operating profit and dividends, even if 2026 is not a peak sales year. As long as Polyram keeps distributing, the parent keeps getting oxygen. If that dividend stream slows materially, the entire Ram On value model starts to look tighter.

Second, the risk holdings need to stop consuming headlines and capital. Ram On does not need to sell everything tomorrow. It does need to show that the private portfolio is no longer producing fresh negative surprises. Otherwise, every improvement in Polyram and real estate will again be absorbed by write-downs.

Third, the company needs either to keep reducing debt or at least maintain a clearer distance from the collateral trigger on the Polyram shares. The move from 1.77 to 1.98 is an improvement, but it is not a huge cushion. If Polyram's share price weakens again without further debt reduction, the pressure can return quickly.

Fourth, the real-estate path needs to become more concrete. Not necessarily a transaction tomorrow, but at least a clearer framework for what is being examined, under what conditions, and how gross appraised value can turn into accessible shareholder value.

What the market may measure in the near term

Over the next days, weeks, and quarters, the market probably will not spend much time on the fact that the discount exists. It will focus on whether there is a new reason to believe that the discount can close. The debt reduction in early 2026 should be read positively. Any further sign of debt reduction or stronger liquidity will likely be welcomed. On the other hand, any additional negative update in Kando or Ai Theo will remind the market that this is not just a structural discount story, but also a capital-allocation story.

That chart matters because it sharpens the starting point for 2026. On one hand, a large part of the cleanup has already happened. On the other hand, that does not mean the risk is behind the company. It only means the coming year starts after the accounting has already admitted a large part of the problem.

What kind of year this is

If 2026 needs one label, it is a proof year for the holding company. Ram On does not need to prove that Polyram is a real business. That part is already fairly clear. It needs to prove that the parent knows how to do three things: preserve the core value anchor, reduce the price of optionality, and lower dependence on a debt structure secured by that same anchor asset.

Risks

Double concentration in Polyram

Ram On depends on Polyram twice: through the equity holding and through the property leased to it. If Polyram's operating business weakens, Ram On will feel it both in dividends and in the market's willingness to read the property as a clear cushion of value. The company itself classifies the concentration in Polyram as a special risk with medium impact.

A private portfolio with only partial control

The company explicitly acknowledges that in its private holdings it generally owns minority positions and therefore has limited influence on management. That is not just formal language. Classoos is the clearest example of the cost of partial control when the business model breaks. In both Kando and Ai Theo, Ram On is not in full control either.

Debt secured by the main asset

The bank loan was taken to increase the Polyram stake, which means the risk sits directly on the same asset that is supposed to close the discount. If Polyram's share price weakens or if the company does not continue to reduce debt, the buffer to the collateral trigger can shrink again.

Real-estate value is not automatically liquid value

The property in Moshav Ram On is a good asset, fully occupied and tied to a clearly identified anchor tenant, but part of its valuation also rests on a new plan, market assumptions, and a gross value that does not deduct betterment levy or permit fees. In addition, the lease was extended through June 30, 2035, and the appraisal's second-stage analysis assumes market rent for a vacant property. That is legitimate appraisal methodology, but it is not the same as cash already sitting in the company.

Thin trading and a fragmented ownership structure

The company has no control block, and on the latest trading day turnover was only NIS 3,440. That means even if there is real value here, there may be no mechanism to unlock it quickly. In stocks like this, a discount can persist not because everyone thinks the company is bad, but because there is limited trading depth and no controlling shareholder pushing a clear strategic move.

Short Interest

The short data do not support an aggressive bearish read on the stock. If anything, they suggest the opposite. Short interest as a percentage of float has been running at only around 0.07% to 0.09% in recent weeks, and SIR has stayed around 0.93 to 1.22 days. Even relative to the sector averages, 0.34% short float and 0.916 days of SIR, Ram On is not a stock the market is actively attacking through a large short position.

That does not mean the market is bullish. It means something else: the skepticism here is expressed through thin trading and a structural discount, not through leveraged short positioning.

Conclusion

Ram On exits 2025 as a holding company whose main value anchor is still strong, but whose surrounding structure has become less forgiving. Polyram still holds the value, the real estate still provides another layer of support, but 2025 proved that the risk investments are not free upside. They are a real cost. The market is likely to keep reading the stock through the question of whether the company can simplify that structure, not through the question of whether it owns good assets.

The current thesis in one line: Ram On looks cheap on paper because Polyram and the real estate are worth more than the market cap, but the discount will remain as long as the parent does not reduce debt, ringfence the risk holdings, and turn gross value into accessible value.

What changed relative to the earlier way of reading the company is that optionality has stopped being a side story. Classoos has now been almost fully written off, Kando was cut sharply, and the board fight shows that even meaningful shareholders are no longer satisfied with merely looking at the value gap. The strongest counter-thesis is that Polyram alone, together with the real estate and liquid resources, already more than covers Ram On's market value, so even if the rest of the portfolio remains messy, the discount is simply too deep. That is a smart objection, but it assumes the value is truly accessible, and that is exactly the part that still needs proof.

What may change the market's interpretation in the short to medium term is not another theoretical discussion about NAV, but a practical step: further debt reduction, clearer framing around real-estate monetization, or alternatively enough stability to show there is no new hole forming inside the private holdings. This matters because in Ram On, capital quality matters at least as much as capital quantity. In a small holding company, the gap between value that looks good in the report and value that is actually reachable by shareholders is the whole story.

What has to happen in the next two to four quarters is also fairly clear: Polyram needs to preserve profit and dividend capacity, parent debt needs to keep moving down or at least stay comfortably away from the collateral trigger, and the risk holdings need to stop producing new negative surprises. What would weaken the thesis is the exact opposite: a sharper deterioration in Polyram, renewed pressure on debt secured by Polyram shares, or another round of write-downs that shows optionality is still eating the equity base.