Retrived from Stockbit, Mastersystem Infotama (MSTI) has reported robust financial results for the third quarter of 2024, showcasing a net profit of 149 billion rupiah. This figure represents a remarkable increase of 79% year-over-year and a significant 155% quarter-over-quarter. As a result, the net profit for the first nine months of 2024 reached 312 billion rupiah, marking a 63% rise compared to the previous year. This performance corresponds to 59% of the net profit forecast for the full year of 2024, according to Stockbit. The results exceeded expectations, particularly given that the net profit for the same period in 2023 was only 43% of the total realized for the entire fiscal year.

The strong growth in net profit can be attributed to two main factors: robust revenue generation and efficient operational expenses (opex). MSTI reported revenue of 1.6 trillion rupiah in Q3 2024, reflecting an 83% increase year-over-year and a 119% increase compared to the previous quarter. Over the first nine months of 2024, revenue grew by 52% year-over-year, totaling 3.5 trillion rupiah. Notably, MSTI continues to have a backlog of new contracts amounting to 2.4 trillion rupiah that had not yet been recognized as revenue by the end of the first half of 2024, with some of this backlog starting to be recorded in Q3 2024. The company's management has projected revenue growth of 19% to 24% for the full year of 2024.

However, it is important to note that the gross profit margin saw a decline, dropping to 15.8% in Q3 2024, compared to 21% in Q3 2023 and 19.1% in Q2 2024. This decrease in margin is likely due to larger projects that yield relatively lower margins. Nevertheless, the substantial contract values have a positive impact on operational efficiency, as evidenced by overall reduced operational expenses. In Q3 2024, Opex was recorded at just 78 billion rupiah, showing a year-over-year increase of 17% and a quarter-over-quarter increase of 6%, which is significantly lower than the revenue growth.

Additionally, MSTI also reported other income of 21 billion rupiah in Q3 2024, a substantial rise from just 1 billion rupiah in Q3 2023 and 4 billion rupiah in Q2 2024. This diversified income stream contributes to the overall financial health of the company.

MSTI is scheduled to hold an earnings call soon, where management plans to discuss the dynamics of gross margin and operational expenses, as well as updates on new contracts acquired by the company.

The impressive performance in Q3 2024 suggests that MSTI is on track for accelerated growth in the second half of the year. Although predicting specific net profit realizations for Q4 2024 is challenging due to seasonal factors affecting the business, the confidence remains high that the estimated net profit of 531 billion rupiah will be achieved or even surpassed. With this projected net profit, MSTI is currently trading at an attractive valuation of 9.1x P/E, making it a compelling investment opportunity.