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PNJ – Wedding season is coming – Earnings Update

Company Note 22/10/2020    265


  • PNJ posted VND3,962bn (-0.1% yoy) and VND202bn(-2.8% yoy) in 3Q20 revenue and NP, respectively.
  • For 9M20, revenue edged up 0.1% yoy to VND11,779bn while net profit fell 20.3% yoy to VND642bn, making up 66% of our forecast.
  • Reiterate ADD with unchanged TP of VND78,800.

Market price

Target price

Dividend yield



VND 67.000

VND 78.800




3Q20 results: recovery underway

  • In Sep 20, PNJ reported VND1,239bn (-1.5% yoy) in revenue and VND94bn (-0.4% yoy, +80.1% mom) in net profit, signaling a strong rebound from the performance of Aug 20 (-11.5% yoy in NP). These 3Q20 results were positive amid the impacts of the second Covid-19 outbreak in Vietnam, in our view.
  • 3Q20 revenue stayed flat at VND3,962bn (-0.1% yoy) thanks to the 19.1% yoy/9.5% yoy respective revenue growth of gold bar and retail sale segments, offseting the 40% yoy drop of wholesale channel.
  • 3Q20 gross margin contracted 5% pts yoy due to higher contribution of gold bar sales at 28.7% of total revenue (+4.6% pts yoy).
  • 3Q20 financial expenses increased 37% yoy on increasing short-term debts since 2H19 to support PNJ’s expansion and inventory stocking.
  • Altogether, 3Q20 NP slightly fell 2.8% yoy to VND202bn. For 9M20, net profit sank 20.3% yoy to VND642bn, making up 66% of our forecast.

Unveil the new concept – STYLE by PNJ

On 18 Oct 20, PNJ launched a new concept – STYLE by PNJ – which targets to offer young generation a wide range of products (gold, silver jewelry, watches,…) at reasonable prices. We believe the new concept is attractive as it leverages on customers’ jewelry experience with new and modern spaces in the STYLE by PNJ areas and customer-oriented products based on their personality to create their lifestyle. Thereby, this new concept can support the sales of PNJ’s stores, especially PNJ silver stores. PNJ plans to re-design its silver stores (38 stores, or 11% of total stores at end-9M20) with this new concept.

Hope on the upcoming wedding season (4Q20-1Q21)

According to PNJ, its revenue in Vietnamese women’s day (20 Oct 2020) increased 50% yoy thanks to big sales promotion program, better brand awareness after mass media advertising in 9M20. The peak seasons of PNJ’s sales are usually winter and spring, combined with the pent-up effects after many weddings have been delayed due to the social distancing in two waves of Covid-19 (in Apr 20 and Jul-Aug 20), thus PNJ expects a stellar performance in 4Q20. We expect VND340bn for 4Q20 net profit (-12% yoy), making up the remaining 34.3% of our full-year forecast.

Reiterate ADD with unchanged TP of VND78,800

Potential re-rating catalysts include 1) a faster-than-expected store opening speed, 2) better-than-expected demand recovery after the pandemic, and 3) the launch of new products which is expected to boost sales. Downside risk to our call is the next wave of COVID-19 outbreak in Vietnam which could lead to another social distancing period.

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