Back to Previous Page
Company Quarterly Earnings Update – PNJ VN – 2020 9M
Summary of the 2020 9M results of Phu Nhuan Jewelry (PNJ VN)
9M/2020 results highlights:
- PNJ’s net revenue reached VND11,668bn in 9M/2020, nearly flat compared to same period last year. Jewelry retail sales, which contributed 58% to total sales and 84% to gross profit, reported a slight growth of 4.4% y/y in sales mainly thanks to more operating stores while same store sales growth (SSSG) was still negative at single digit. Gross margin declined to 19.3% in 9M/2020 from 23.4% in same period last year mainly due to high gold price and weak customers’ demand. Net profit declined by 20.3% y/y to VND642bn in 9M/2020.
- In 9M/2020, PNJ has opened 23 new gold jewelry stores but closed other 17 stores, thus the company has a total of 296 gold jewelry stores by the end of the third quarter. PNJ targeted new store openings in tier 2 and 3 cities as the current coverage in Ho Chi Minh City (HCMC) and Hanoi is large enough.
- By the end of September 2020, PNJ’s cash and cash equivalent was VND232bn, accounting for merely 2.9% of total assets. Inventory was at VND6,325bn, mostly finished products and precious materials, which are considered highly liquid assets. The debt amount was VND2,260bn, giving low financial leverage with D/E of 0.3x and D/A of 0.5x.
Outlook
- The 9M/2020’s results were on track with our expectations in our previous report. The positive developments in Q4/2020 will be (i) the gradual decrease of gold price, which is down somewhat quarter-to-date to around $1,800/oz; Such decline will provide PNJ with more buffer zone to promote sales; (ii) Vietnamese should gradually resume their spending cut-backs on discretionary demand. However, the current gold price is still high and customer’s spending behavior will not promptly resume to pre-Covid-19 level, thus we maintain our view that PNJ’s SSSG and store opening will increase with modest rates in the long-run. We expect PNJ’s net profit to decline by 14.4% y/y to VND1,022bn in 2020, and recover by 23.3% y/y to VND1,260bn in 2021.
Company ratings and target prices are accessible for clients only.
If you are interested in getting full access to our paid Primary Research Materials feel free to get in touch with us at your convenience.
Our team is actively covering 50 companies in the listed Vietnamese equity space for our clients.
Featured image credit: Internet
