PNJ - Net margin is expected to recover from Sept-2023
- In Aug-2023, PNJ recorded revenue and net profit of VND2,303 bn (-2.6% MoM; -1.1% YoY) and VND76 bn (-13.6% MoM; -3.8% YoY). Although the retail segment remained the largest contributor to total revenue, the gold bar presented the highest sales growth among business segments at VND704 bn (+3.9% MoM; +55% YoY). Profit decreased at a higher pace than revenue due to the higher contribution of gold bar to total revenue.
- We forecast Q3 2023 sales and net profit to be VND7,089 bn (+5.7% QoQ; -3.7% YoY) and VND258 bn (-22.8% QoQ; +2.4% YoY), respectively. On the back of the upcoming wedding season (mid-Sept), we expect that retail sales would recover from Sept-2023, resulting in a higher gross margin. With the assumption of stable opex/sales ratio, we believe that the net margin will move in the same trend as the gross margin.
- Based on the combination of FCFE valuation model (50%) and multiple comparison (50%), with an applied 2024 P/E of 15.1x, our target price is VND88,000. Adding a cash dividend of VND2,000, the 12-months expected return is +12.1% compared to the closing price on Oct 11st 2023, equivalent to an ACCUMULATE recommendation
Phu Nhuan Jewelry Joint Stock Company is a Vietnam-based company engaged in the jewelry sector. It manufactures and markets jewelry pieces, stamped gold bars, and jewelry products made of gold and silver. It also trades gemstones and precious metals as materials for jewelry manufacturing. The Company operates jewelry stores under various brand names, such as PNJ Gold, PNJ Silver, CAO Fine Jewelry, and is involved in wholesale trade of stamped gold bars branded Phuong Hoang PNJ - DongA Bank. In addition, the Company provides jewelry evaluation and testing services. It is engaged in the trading of liquefied petroleum gas (LPG), real estate operations and seafood processing through its subsidiaries and affiliates.
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