PNJ – Retail segment will drive the growth in 2024
- In the picture of economic recovery, we believe that retail segment will be growth driver for PNJ’s performance in 2024, in the pillars of, (1) the increase in jewelry demand; (2) the leading position of PNJ in reaching customers thanks to the largest store network throughout Vietnam; and (3) PNJ‘s various advertising and promotional
- In the assumption that the gold prices will be traded at high level in 1H2024, we forecast 2024 net sales and NPAT–MI to reach VND35,375 bn (or USD1,461 mn; +6.8% YoY) and VND2,245 bn (or USD93 mn; +13.9% YoY), respectively. The equivalent EPS is VND6,345 (+13.9% YoY).
- Based on the P/E (50%) and FCFF (50%) valuation methods, we raise PNJ's target price to VND97,500 from VND86,200 in our previous report, based on: (1) Increase 2024 NPAT-MI; and (2) Decrease WACC. PNJ’s stock price has increased by +15% YTD on the expectation of both recovery in the retail segment in 2024 and surge in the gold bar price. Therefore, we suppose that the positive expectation of PNJ’s performance has been reflected in the stock price movement.
- However, PNJ still has both upside and downside risks. We recommend investors to follow new signals from PNJ’s operations over the next 12-month that are not included in our current forecast, or wait for a correction in PNJ stock prices to make a suitable investment decision
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