Company Quarterly Earnings Update – PNJ VN – 2021 Q1

Summary of the 2021 Q1 results of Phu Nhuan Jewelry (PNJ VN)

Q1/2021 results: highlights

  • PNJ’s net revenue rebounded strongly by 43.6% y/y to VND7,181bn as sales of all businesses achieved positive growth. Jewelry retail sales reached VND3,962bn, up 34.4% y/y, resulting in the highest quarterly sales ever. Meanwhile, jewelry wholesale and gold bar trading sales reported big jumps of 28.3% y/y and 64.8% y/y respectively. The growth in jewelry retail sales in Q1/2021 can be attributed to (i) the number of gold stores increased by 4% y/y; (ii) the general recovery of the jewelry market; (iii) the company may have benefit from competitors closing their stores (mostly unbranded small stores); (iv) the low base of sales in March 2020, when the pandemic first occurred.
  • The gross margin shrank by 2.5 percentage points to 18.5% in Q1/2021 due to an increased proportion of gold bar trading sales while margins of single businesses were nearly unchanged. Net profit grew by 25.6% y/y to VND512bn in Q1/2021
  • By the end of Q1/2021, PNJ has 340 retail stores (+1 store YTD) including 309 gold stores (+3 stores YTD). PNJ’s financial position was strong as its financial leveraging was low with D/E of 0.2x.


  • PNJ has achieved a strong growth in retail sales and net profit in Q1/2021 with a SSSG of about 30% which greatly outperforms our original expectation. However, we think the strong rise in the demand for jewelry was just a temporary situation. As for the new stores opening, progress is quite slow in the first quarter while the current virus outbreak will soften the opening activities for the remainder of 2021. We revise our projected SSSG up to 12% (vs 5% in the last report) while adjusting down the number of new opening gold stores to 20 stores (vs 30 stores in the last report) in 2021. Thus, we expect PNJ’s net revenue to increase by 16.4% y/y to VND20,391bn and net profit to advance by 35.1% y/y to VND1,445bn in 2021.
  • We project PNJ’s net profit will grow by 18.2% y/y to VND1,708bnbn in 2022. From 2022 to 2024, we forecast net profit to grow with a CAGR of 9.1% based on two main assumptions; that SSSG will be 2-3% p.a, and the company will add about 20 new gold stores annually.

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