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PNJ - Maintains a conservative earnings outlook amid dual headwinds

Q2 and FY25 Outlook: Jewelry demand is expected to slowly recover and FY25 performance is projected to decline, but PNJ maintains a “stable picture” backed by sufficient material reserves For the rest of 2025, we expect PNJ to maintain its business performance in line with its conservative plan for the year, based on the following key factors: • Store expansion remains a key strategy, though implementation may be pushed to Q3 onwards. While the company may not reach its maximum new store target of 25 outlets, it is expected to continue expanding in underpenetrated regions such as the North and Central Vietnam, where store density remains low relative to the population size. • The average revenue per store/month in 2025 is estimated to rise slightly by 3% YoY, as we observe that demand for PNJ’s products remains relatively consistent despite broader market softness. The company’s proactive approach in phasing out outdated designs and focusing on products made with lower gold content helps support revenue. • Gross margin is expected to expand YoY, driven by a decline in low-margin 24K gold trading (<1% gross margin) and a stronger sales mix of higher-margin jewelry products. • PNJ has been managing inventory cautiously since Q2-FY24 and is well-positioned to meet raw material (including gold) and finished goods to supply in 2025. Additionally, the company continues to supplement its portfolio with selected imported finished jewelry items. Thus, we forecast Q2-FY25 net revenue at VND 6,234.4 billion (-34.5% YoY, -35.3% QoQ) and NPAT-MI at VND 423.1 billion (-1.3% YoY, -37.6% QoQ). For FY25, our forecast remains more conservative than the company’s plan, with net revenue at VND 30,560.2 billion (-19.2% YoY) and NPAT-MI/EPS at VND 2,019.4 billion (-4.4% YoY) and VND 5,865 per share. Valuation and recommendation We believe that PNJ will continue to demonstrate resilience in the face of “dual headwinds,” backed by its leading position in the industry, strong brand, and adaptive management strategy tailored to each market environment. Applying valuation approach using a 5-year FCFF model and a P/E multiple comparison (weighted 50:50), the target price of PNJ’ share is VND 80,000/share. Based on the closing price of VND 83,400 on July 01, 2025, we give a NEUTRAL recommendation for PNJ.