Company Quarterly Earnings Update – PNJ VN – Q2 2022

Summary of the Q2/2022 results of Phu Nhuan Jewelry (VNM PNJ)

H1/2022 results: highlights

  • As per the end of Q2/2022, Vietnam’s jewelry demand and retail sales have surpassed pre-Covid levels. According to the World Gold Council, H1/2022 jewelry demand was up 17.3% y/y, supported by economic recovery and a post-covid surge in wedding demand. 7M/2022 real retail sales (adjusted for price effect) grew 11.9% y/y, higher than pre-Covid levels (+8.7%).
  • As for PNJ, H1/2022 jewelry retail sales surged 61.9% y/y, much higher than the average 17.3% of the industry, thanks to the company’s leading market position and market share gained from small unbranded stores which closed during Covid but could not reopen quickly once normal economic activity resumed. In total, PNJ’s sales reached VND18,211bn, +5% y/y or ~1.4x of H1/2019 results. The gross margin decreased 1.0 percentage point y/y as gold bar trading increased its share. Net profit advanced strongly by 47.8% y/y to VND1,088bn.
  • By the end of June 2022, PNJ had acquired a total 351 independent stores (+10 stores Ytd), of which 342 were gold stores (+15 stores Ytd). Their financial structure remained strong with D/E and D/A ratios at 0.10x and 0.08x. 72.2% of assets were highly liquid inventory. PNJ only had short-term loans which decreased 67.8% compared to the end of 2021 as PNJ used cash for repayment (VND4,730.3bn). Cash decreased significantly from VND2,450bn in Q1/2022 to VND758.7bn in Q2/2022.


  • We maintain our view that jewelry sales will remain solid over the coming years amid strong economic growth, increasing income and discretionary consumption demand. Despite foreseeing solid growth in jewelry consumption in 2022, the sales expansion in H1/2022 outperformed our expectations. However, the gross margin of the retail business is lower than our previous projection as the company may sacrifice price discounts to support sales. Thus, the overall impact on bottom line is minimal.
  • Accordingly, 2022 net profit will accelerate 77.8% y/y to VND1,830bn, while 2023 net profit will normalize to advance by 3.0% y/y to VND1,886bn. After two years, 2022 will see the net profit of PNJ exceed pre-Covid levels. From 2023-2026, net profit will grow at a CAGR of 9.0% p.a. to reach VND2,444bn in 2026 based on the two assumptions of 2.2% SSSG and 30 new stores opening each year.


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