Company Quarterly Earnings Update – PNJ VN – 2021 9M

Summary of the 2021 9M results of Phu Nhuan Jewelry (PNJ VN)

9M/2021 results: highlights

  • PNJ reported net sales of VND877bn in Q3, equivalent to only 22% of the same period last year. Accordingly, 9M’s net revenue reached VND12,514bn, up 7.3% y/y thanks to positive growth in H1/2021. The gross margin declined slightly in Q3, causing 9M/2021’s gross margin to drop by 0.8 percentage points to 18.5%. Furthermore, the operating margin reduced by 1.8 percentage points to 6.3%. All in all, net profit dropped 10.2% y/y to VND576bn, of which PNJ bore a loss of VND160bn in Q3.
  • By the end of 9M/2021, PNJ’s financial position was strong as its financial leveraging was low with a D/E ratio of 0.4x and a D/A ratio of 0.2x. Its cash and cash equivalent were relatively thin at VND192bn, representing only 2.1% of the total assets. Most of the company’s assets come in the form of inventory which amounts to VND7,451bn (81.3% total assets) and are highly liquid.


  • Q3’s results were lower than previous expectations due to the prolonged lockdown. In the previous report, we expected PNJ’s stores would have resumed normal operations from September 2021 onwards, however this was delayed until October, causing a sharp drop in sales in Q3. Despite all PNJ’s stores reopening in October, traffic in these stores seems relatively low as of yet. It is reasonable to assume lingering concerns related to the pandemic may be impacting the public’s decisions to go out and their discretionary demands.
  • We revise our forecast for 2021 down by 27.8% to VND 875bn (-18.2% y/y) due to the closure of PNJ’s stores for the whole Q3 leading to the losses in the quarter. The severity of this closure and its impact exceeded our expectations. Regarding 2022, we adjust 2022’s net profit down by 12.4% to VND1,530bn (+74.8% y/y). We expect the jewelry demand to recover at a modest pace. Consumers will continue to be hesitant about their discretionary demands until the pandemic is fully contained.

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