Company Quarterly Earnings Update – PNJ VN – Q1 2022

Summary of the Q1/2022 results of Phu Nhuan Jewelry (PNJ VN)

Q1/2022 results: highlights

  • Vietnamese jewelry purchasing has begun to recover, growing 10.0% y/y to 5.6 tons in Q1/2022. This is the first year-over-year increase following the last two quarters’ decline, and is the highest sales quarter since 2007, according to World Gold Council.
  • PNJ’s jewelry retail sales surged 43.2% y/y in Q1/2021, much higher than the industry average. The company’s total sales surged 41.2% y/y to VND10,142bn thanks to strong jewelry retail sales, while gold bar trading and jewelry wholesales also performed well. The gross margin declined somewhat due to a higher sales contribution from the gold bar trading business, while SG&A expenses as a percentage of sales decline somewhat as a result of higher sales growth. The operating margin and net margin plateaued at 9.3% and 7.1% respectively. All in all, net profit surged 40.7% y/y reaching VND721bn.
  • By the end of Q1/2022, PNJ has amassed a total of 340 retail stores (-1 stores Ytd) including 321 gold stores (+2 stores Ytd). PNJ has maintains a strong balance sheet, with total cash and cash equivalent at VND2,450bn, a strong increase from VND357bn at the end of 2021 thanks to the cash proceeds of VND1,410bn from issuing 15 million shares via private placement in Q1/2022. The company’s financial leveraging remains at low levels with a D/E ratio of 0.22x and a D/A ratio of 0.16x.


  • We maintain our view that jewelry sales will stay solid over the coming years amid generally strong economic growth, increasing income and discretionary consumption demand. The gold jewelry demand of Vietnam in 2021 was still about 30% below pre-pandemic levels, suggesting Vietnam’s jewelry market has a significant upside.
  • Despite foreseeing a solid growth in jewelry consumption in 2022, the sales expansion in Q1/2022 was stronger than our expectation. However, we believe such strong growth was mainly driven by the pent-up demand, thus the growth will normalize from 2023 onwards towards the long-term organic growth rate. Accordingly, we revise up our net profit forecast by 25.2% for 2022 to VND1,888bn (+82.8% y/y) and by 13.7% for 2023 to VND1,945bn (+3.1% y/y). From 2023 to 2026, we forecast net profit to grow with a CAGR of 9.2% based on the two main assumptions that SSSG will be 2.2% p.a. and the company will add about 30 new gold stores annually.


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