VIETNAM | EQUITY RESEARCH

Company Report 2012

INITIATION OF COVERAGE

PHU NHUAN JEWELRY JSC

The Jewelry Industrys Queen

BUY
TARGET PRICE

48,800

26/7/2012

CURRENT PRICE

41,500

Vo Bach Ngoc Anh Thu

Thu.vbna@sbsc.com.vn
Ext: 8851

STOCK STATISTICS
Bloomberg Ticker
VN PNJ Equity
Outstanding shares (m)
59.9
Market Cap (VNDbn)
2,489
52W Price range (000VND) 24.8-46.4
3M Average Volume
55,551
Beta
0.7
Foreign ownership (%)
46.9
MAJOR SHAREHOLDERS
Cao Thi Ngoc Dung
Vietnam Azalea Fund Ltd*
Deutsche Bank AG
Dong A Bank Securities
Dong A Capital Co.

10.15%
6.90%
6.28%
1.92%
1.41%

STOCK PERFORMANCE

Price ('000 VND)

Volume

3M
5.8

6M
4.0

12M
56.6

2,300

1,600

15,000

50

Last Price
400

40

300

30
20
10
0

200
100
0

Volume ('000 shares)

Relative (%)
Absolute

We initiate coverage on Phu Nhuan Jewelry Joint Stock Company (PNJ), a jewelry
industry outperformer, with a BUY call. We like PNJ for its large domestic market share
(20%), strong branding and extensive distribution system focused on the medium- and
high-end markets.

A high-potential market: Between 2005 and 2011, the value of gold jewelry in
Vietnam increased at a six-year CAGR of 8%, from about USD399m to USD634m.
Vietnamese jewelry consumption is quite low compared to other countries like India
and China but the domestic markets growth is projected to be positive, driven by
the increase in domestic consumer demand in tandem with a rise in disposable
income levels.
A big domestic player: A strongly-branded player with a prestigious reputation, PNJ
is set to benefit from Vietnams jewelry markets growth. It is a well-positioned
medium- and high-end jeweller with a reputation for excellent design, authentic
quality and superior craftsmanship and enjoys an extensive distribution network and
better client-retailer relationships compared to its peers.
Ambitious plans: The management has set up a five-year plan to maintain its top
position in Vietnams retail jewelry market. It also plans to quadruple export
revenue, projecting annual revenue and profit growth at 20% and 15% respectively.
In addition, PNJ plans to expand its retail network to 300 stores by the end of 2017.
Excellent growth record: PNJs 2009-2011 CAGR of gold jewelry sales and gross
profit were 29% and 20% respectively, while CAGR for silver jewelry sales were
registered at 36% and 44%.
BUY. We project the companys posting an EPS of VND3,375 (on new capital of
VND799bn) and a forward PE of 9.2x in 2012. Our target price is VND48,800 per
share, implying a 17% premium on the current price.
Year-end Dec 31
Revenue (VNDbn)
Net profit (VNDbn)
% change yoy
EPS (VND)
Diluted EPS (VND)
BV (VND)
DPS (VND)
Div yield
ROA
ROE
P/E (x)
P/BV (x)

FY09

FY10

FY11

FY12F

FY13F

10,256
204
63%
5,112

13,752
212
4%
3,534

17,964
257
21%
4,285

2,556
23,894
2,500
4%
12%
21%
2.3
2.5

2,650
17,448
2,500
7%
10%
21%
5.6
2.0

3,214
18,841
2,500
6%
10%
24%
9.4
2.1

7,255
270
5%
4,500
3,375*
19,331
2,300
6%
10%
21%
9.2
2.1

7,453
324
20%
5,396
4,047*
21,378
2,000
5%
11%
23%
7.7
1.9

Source: PNJ, SBS estimates

* assuming PNJ to increase 33% its charter capital from VND599bn to VND799bn

1 | See Disclaimers at the end of the report

Consumer Goods

INVESTMENT THESIS
A burgeoning
jewelry market

Like other Asian markets, Vietnamese customers prefer gold jewelry over others. The Vietnam
jewelry market, valued at USD634m in 2011, and grew at CAGR of 8% in 2005-2011. Locallymanufactured gold jewelry is mainly for domestic consumption; export only takes a small percentage
of the total. Gold jewelry consumption is still quite low (0.15 gram/capita/year) compared with other
countries as India (0.39 gram/capita/year) and China (0.27 gram/capita/year). Going forward, growth
is projected to be positive, driven by increased domestic consumer demand along with the rise in
disposable income levels. Besides that, Vietnamese consumers also value gold as an important
savings and investment vehicle. Long term prospects for jewelry players are attractive, due to growth
in both population (87m people in 2011, CAGR of 1.4% in 1990-2011) and annual tourist arrivals
(3.6m people in 2011, CAGR of 11% in 2000-2011).

BUY
TARGET: 48,800 VND
INDUSTRY: CONSUMER GOODS

Vietnams jewelry industry is one of the economys growing segments. It is in the early stages of
development, marked by many small players but the market has been growing across all key
segments, including gold, silver, platinum and gemstones. Bigger players have significant
opportunities to capture a greater market share, thanks to their advantage of scale..

A player with a
strong retail
presence

A strongly-branded, prestigious company, PNJ is set to benefit from growth in the jewelry market. It is
a medium- and high-end jeweller with an extensive distribution network (151 stores as of 31 Dec
2011), and enjoys long-term client loyalty. Known for its excellent design, authentic quality and
superior craftsmanship, it has had a developed client base of medium- and high-income customers
for generations.
The company plans to aggressively grow its retail presence in Vietnam by adding 30 new stores in
FY12 to the existing 151 in the network. Since the end of June, it has fulfilled 36% its expansion plan
by opening 11 stores which include 2 gold, 8 silver and 1 Yabling accessories outlets.

Enhancing the
portfolio to drive
growth

PNJ plans to broaden its customer base by expanding its product portfolio and introducing new
machine-made, lightweight, Italian style jewelry to its range of products, which currently span the
low- (Yabling), medium- (silver, gold) and high end (CAO fine brand) segments. The companys new
jewelry factory, launched in 2012, will expand production capacity from 3m to 5m units, roll out
newer product ranges and reduce wastage, thereby improving margins. In 2011, PNJ shortened the
production process to meet orders more quickly by industrialising production in silvery jewelry by
95% and gold jewelry by 90%. The company also recently industrialised 95% of its low-end jewelry
production process, quickening supply to meet market demand. Currently, PNJs design team has 59
Vietnamese members; it is also working with several domestic and international designers to launch
international standard jewelry to the market.

An able
management
team

PNJs management is experienced, enthusiastic and well-motivated, with a 24-year history behind
them. The company has come a long way since its humble beginnings as a small jewelry trading store
in 1988. Today, the multi-outlet company has a mix of clients from the high-, middle- and low-ends,
an ever expanding retail network (growing from 87 outlets in 2007 to 151 in 2011), and a diversified
product portfolio. It also holds aggressive promotional, marketing and branding events.

2 | See Disclaimers at the end of the report

Excellent historic
growth record
coped with an
ambitious 5-year
plan

PNJ has had robust sales growth in the last three years, with 2009-2011 CAGR of gold jewelry sales
and gross profit were at 29% and 20% respectively. Meanwhile, silver jewelry sales and gross profit
had CAGR of 36% and 44% correspondingly.
The companys management set up a five year-plan that kicked off this year to maintain its growth
momentum, top the domestic market share, increase export revenue fourfold and increase revenue
and profit by 20% and 15% annually, eventually becoming Asias leading jewelry processor and
retailer.

BUY

We think this plan is feasible, as PNJ management has a clear strategy. It has contracted Milanese
consulting firm Value Partner to restructure and fine-tune its development plan to become Vietnam
and Asias top jeweller.

TARGET: 48,800 VND

VALUATION & RECOMMENDATION

BUY call at
DCF fai r-value
of VND48,800
/share

We used the DCF method for our evaluation on PNJ, based on its routine cash flow from the jewelry
business, and valued the company at VND48,800/share. Our calculation was based on the following
assumptions: an average risk-free rate (Rf) of 11.5%, a Beta of 0.72x (Bloomberg), a market premium
of 10%, and an average cost of debt (Rd) of 12%. We have estimated the cost of equity (Re) to be
18.7%, and consequently the weighted average cost of capital (WACC) of PNJ to be 14.9%. The
perpetual growth rate is roughly 4.5%/year after 2016.
FIGURE 1: DCF VALUATION APPROACH
(VNDm)
2012
FCFF
WACC

INDUSTRY: CONSUMER GOODS

Present value of given year's FCF

PV of FCF 2012-16
Terminal growth rate
PV of terminal value
FCFF
- Debt
FCFE
Number of shares (year-end)
DCF valuation per share
(VND)

(62,449)
15.07%
(54,272)
1,047,595
0.05
3,193,254
4,240,849
1,312,306
2,928,543
59,999,142
48,800

2013

2014

2015

2016

340,787

308,070

559,885

651,394

257,383

202,206

319,367

322,911

Source: SBS

Using this method, we arrived at a fair value of VND48,800/share for the company. At the current
price of VND41,500/share, our new 12M target price suggests a 18% return and thus, we recommend
a BUY on the stock.

3 | See Disclaimers at the end of the report

Risks

BUY

Raw material prices are the biggest risks in this business. Gold accounts for 70%-80% of the
companys cost of goods sold(COGS). The company cannot simply pass on the cost of gold to
jewelry customers and easily retain its margins at the same time, so the bullish gold market has
become a headwind for PNJ.
This is a low-margin company, with overall net profit margins of 1.5% in 2010 and 1.4% in 2011.
These are caused by the innate low margins (0.17%-0.34%) of the gold bar trading and gold
export businesses. Overall, PNJs jewelry businesses have fair gross margins: around 11% for gold
jewelry, 30% for CAO fine jewelry and 62% for silver jewelry. Looking forward, PNJ will focus its
core business to improve its profit margins.
The liquidity of the stock is low, making it less attractive as it limits the actions of large and
institutional investors. As of 15 Mar 2012, the free float is estimated at 59m shares, about 42% of
which are held by foreign institutional investors and 10% by domestic ones who are likely hold on
to their investments for the long term. Only 2.03% of remaining equity is available for foreign
investors, to comply with government mandates.

INDUSTRY: CONSUMER GOODS

TARGET: 48,800 VND

VIETNAMS GOLD INVESTMENT & JEWELERY INDUSTRY

The gold and gold jewelry sectors have always played an important role in Vietnams society and
economy. Between 2005 and 2011, the value of gold in Vietnam increased at a six-year CAGR of 34%,
from about USD882m to USD5,195m, mostly contributed by gold investments. In 2011, Vietnams
gold industry grew at 59% y-o-y with consumed volume hitting 100 tonnes at USD5,195m.
FIGURE 2: VIET NAM

Volume (tonnes)
Jewelry
Investment
Total
Value (USDm)
Jewelry
Investment
Total

GOLD DEMAND
2009

2010

2011

YoY (%)

Portion (%)

16
58
74

14
68
82

13
87
100

-10%
28%
21%

13%
87%
100%

502
1,814
2,316

558
2,713
3,271

634
4,561
5,195

14%
68%
59%

12%
88%
100%

Source: World gold council (WGC)

Vietnam is a small player in the global gold and gold jewelry market. This industry is a minor foreign
exchange earner. According to GSO, Vietnams precious gems, metal and jewelry export value was
valued about USD2.7bn (-6.1% y-o-y) in 2011. Exports to the South Africa and Switzerland alone
accounted for about 89% of total export of precious metals, gems and jewelry from Vietnam

4 | See Disclaimers at the end of the report

FIGURE 3: EXPORT AND IMPORT

PRECIOUS METAL, GEM & JEWELRY
2009-2011
3,000

82%
61%

2,000
39%
1,000

FIGURE 4: MAJOR METAL, GEM

& JEWELRY EXPORT MARKETS
FOR VIETNAM

100%

South Africa

80%

Switzerland

60%

America

2%

France

2%

40%

18%

20%
-

0%
2009

4M/2012

Japan

1%

Taiwan

1%

Hong Kong

1%

Autralia

0%
0%

Source: GSO, SBS

20%

40%

60%

Source: GSO, SBS

Demand for gold bars has surged in recent years; in 2011 it rose 28% y-o-y to 87 tonnes, thanks to
decreasing confidence in the VND on account of high inflation and the depreciation of its value
against the greenback. Investors have tried to hedge gold investments against paper moneys loss in
value. The Vietnamese gold investment market in 2011 alone was worth $4.5bn (up 68% y-o-y, and
growing 25% per annum from 2008-2011). Demand has been robust, due to the Vietnamese habit of
placing greater trust in gold and using it as an investment tool - over paper money and the local
banking system.
FIGURE 5: VNS GOLD INVESTMENT
QUARTERLY 2009-2012

Volume (tonnes)

40
35
30
25
20
15
10
5
0

MARKET SIZE,

1,877
1,373
1,087

940
304

563

494

453

503

481 789

633

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
-

Value (US$mn)

BUY
TARGET: 48,800 VND

2011

Import (USD m)
Export (USD m)
Import on export ratio (%)

Gold Investment

INDUSTRY: CONSUMER GOODS

2010

56%
33%

Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12
Volume (tonnes)

Value (US$m)

Source: WGC, SBS

Gold bars were traditionally traded by small family jewellers though the government has controlled
this business since 2012. According to 3 Aprils decree 24/2012/ND-CP, government now strictly
controls gold bar trading and gold jewelry businesses. The State now has monopolistic rights to
produce gold bars, manage exports and imports to produce them. Business licenses for gold bar
trading enterprises are granted when companies satisfy the following conditions: they must own
capital of over VND100bn, have paid gold trading taxes of over VND500m for two consecutive years
and possess a distribution network spread over at least three provinces. By the end of 2012, all small
family-owned businesses, banking and jewelery companies must have licenses to legally trade gold
bars.
In 1Q2012, demand for gold investments was at 20 tonnes (up 43% y-o-y, down 21% q-o-q), and
demand in 1QFY12 is likely to remain in a key position with a value of USD1,087m (down 21% q-o-q
and up 71% y-o-y).

5 | See Disclaimers at the end of the report

BUY

Vietnam Gold
Jewelry

Vietnams jewelry industry is largely unorganized. There are over 12,000 players in it, the majority
being family jewellers and the others comprising of organised retail players. The domestic jewelry
market has been growing across all key segments including gold, silver, platinum and gemstones, with
gold being the preferred choice among clients. Between 2005 and 2011, the value of gold jewelry in
Vietnam increased at a six-year CAGR of 8%, from about USD399m to USD634m. In 2011, Vietnams
gold jewelry demand grew by 14% y-o-y to USD634m, but occupied only 13% of total gold demand.
The jewelry market actually contracted in volume by 10% at 13 tonnes in 2011. The gold prices
double-digit increase helped to boost the value up 14% y-o-y, even as volume shrank 10% in the same
period.
Vietnams gold jewelry industry has grown in value at a CAGR of 8% (a 11% decrease) since 2005,
lower than the growth rate of nominal GDP. We attribute the modest increase to the bull market that
pushed up input costs and end-product prices, which eventually restrained growth.

6
5
183

4
3

269

245

135

114

122

131

121

116

162

138

136
91

2
1
0

Volume (tonnes)

320
280
240
200
160
120
80
40
-

Value (US$mn)

FIGURE 6: VNS JEWELRY MARKET SIZE,

MEASURED QUARTERLY FOR 2009-2012

Volume (tonnes)

TARGET: 48,800 VND

In 1Q2012, demand slipped 9% to five tonnes, as a y-o-y increase in the local price of gold (and
diminishing VND value) discouraged demand among customers already battling high inflation levels.
Gold jewelry demand in Vietnam in 1QFY12 is likely to turn positive, with a value of USD269m(up
9.8% y-o-y) and volume at five tonnes (down 9% y-o-y).

Value (US$m)

It is also apparent that jewelry isnt as popular in Southeast Asia as it is in China or India, which
account for 55% of global demand. Consumption in Vietnam is 0.15 gram/capita/year, compared with
India (0.47 gram/capita/year) and China (0.38 gram/capita/year). Going forward, growth in Vietnams
jewelery market is projected to be positive, driven by the increase in domestic consumer demand and
the rise in disposable income levels.
FIGURE 7: VNS JEWELRY CONSUMPTION PER CAPITA PER YEAR, 2011 DATA
0.500

0.469
0.381

0.400
Gr/capita/year

INDUSTRY: CONSUMER GOODS

Source: WGC, SBS

0.300
0.200

0.148
0.064

0.100
India

China
India

Source: WGC, SBS

6 | See Disclaimers at the end of the report

China

Vietnam
Vietnam

ThaiLand

ThaiLand

PNJS POSITION & STRENGTH

Market positions

Established in December 1988 as Phu Nhuan Jewelry Shop, equitised in January 2004 and listed in
March 2009, PNJ is a big manufacturer of jewelry products for the domestic Vietnamese market.

BUY

One of the jewelry industrys largest players, PNJ primarily focuses on the domestic market, which
contributes over 97% of its total jewelry sales while the remaining 3% comes from export. In Vietnam,
it owns 20% and 70% of market shares in gold and silver jewelry respectively. The company is ranked
at the 16th of the top 500 largest jewelry companies in the Asia, according to the Plimsoll World
Portfolio Analysis.

TARGET: 48,800 VND

Largest retail
distribution
system

PNJ currently has 151 retail stores nationwide and nearly 3,000 wholesalers, concentrated in 56
provinces around the country. Between 2007 and 2011, the number of stores increased at a five-year
CAGR of 20% and by December last year, the company owned 151 outlets, namely 131 PNJ stores, 15
CAO stores and 7 Jemma stores. PNJ plans to expand its retail presence by another nine gold and 21
silver stores in this year. It plans to open 30 to 40 new retail stores per year and aims to own 300
retail stores at the end of 2017.

FIGURE 8: NUMBER OF
STORES IN 2007-2011
160

139

FIGURE 9: STORES BY PRODUCTS

BRAND, 2011
151

110

120
87

CAO
7%

Jemma
4%

89

80
PNJ
89%

40

INDUSTRY: CONSUMER GOODS

0
2007 2008 2009 2010 2011
Source: PNJ, SBS

Business
Advantages

Quality workforce. PNJ has over 1,000 craftsmen, engineers, and active teams in designing,
marketing, sales and management.

Modern technological system. It owns hi-tech global standard manufacturing systems from
Germany and Italy, which are up to date.

Reputable brand name. PNJ has leading brands, namely PNJ Gold, PNJ Silver and CAO Fine
jewelry that domestic and foreign clients are familiar with.

Capacity

Currently, PNJ produces about three million items annually. This year, the company will open a new
facility and upgrade its production capacity to five million items.

7 | See Disclaimers at the end of the report

PNJS BUSINESS

TARGET: 48,800 VND

BUY

PNJs core
businesses

PNJ products include gold and silver jewelry, precious and semi-precious stones. The portfolio
includes rings, earnings, pendants, bracelets and necklaces. Most customers recognise PNJ Gold and
PNJ silver as two traditional, well-established brands. Besides that, PNJ also owns the luxury CAO Fine
and low-end Yabling brands. CAO fine Jewelry and JEMMA brands belong to PNJ subsidiary CAO
Fashion Company, which specialises in luxury jewelry and accessories. The Yabling brand has just
been launched on the market, retailing items in smaller volumes.

FIGURE 10: PNJS PRODUCT BRANDS

PNJ Gold

PNJ Silver

Yabling

JEMMA

Source: PNJ, SBS

Among the five brands, PNJ Gold and PNJ Silver are main contributors to sales and gross profit. The
gold jewelry market took 20% of total company sales and 52% of gross profit in 2011. The silver
jewelry took 1% and 18% respectively. Additionally there were premium market sales under the
premium CAO brand which took 0.4% sales and 5% gross profit respectively

FIGURE 11: REVENUE BY

SEGMENTS 2011

INDUSTRY: CONSUMER GOODS

CAO fine Jewelry

Watchs
0%

Orther
services Gas
0% 3%

Watchs
0%

Gold
Jewelry
20%

24k gold
export
28%
Gold bar
48%

Source: PNJ, SBS

8 | See Disclaimers at the end of the report

FIGURE 12: GROSS PROFIT BY

SEGMENTS 2011

Silver
Jewelry
1%
CAO
FINE
0%

24k
gold
Gold export
bar 1%
12%
CAO FINE
5%

Orther
services
2%
Gas
10%

Silver
Jewelry
18%

Gold
Jewelry
52%

Gold Jewelry
Segment

Established in 1988, PNJ Gold targets women aged 25-45 with medium and high incomes as
customers, offering products that feature precious and semi-precious gems set in 24k, 18k, 14k and
10k gold. In 2011, PNJ Golds contribution to total revenue shrank y-o-y) to 19.6% and contribution to
total gross profit decreased slightly from 52.7% (2009) to 51.5% (2011). In 2011, the gold jewelry
generated VND3,541bn in sales (up 0.6% y-o-y) to contribute to 20% of total revenue; in this, export
revenue accounted for 2.7% and domestic sales 97.2% of total revenue. From 2009 to 2011, PNJ gold
jewelry grew at CAGR of 28.4%.

BUY

In geographical terms, Vietnams South and South East areas are major markets, accounting for
76.99% of gold jewelry revenue in 2011, with a growth rate of 19.36% y-o-y. The fiercely competitive
and unique North market accounted for only 6.67% of gold jewelry sales, the Central and Western
areas 8.7% each. PNJs business in the Western region saw the greatest growth, with a 19.98%
increase in sales. In recent years, gold prices have fluctuated in an uptrend to affect overall gross
profits; in 2011, the gross profit in this segment was 10.7%, down 4.4% y-o-y.

FIGURE 13: REVENUE AND GROSS

PROFIT IN GOLD JEWELRY
4,000

15.0%
12.3%

TARGET: 48,800 VND

FIGURE 14: GOLD JEWELRY

SALES BY MARKET 2011

3,000

11.2%
10.0%

North
7%

Central
8%

Western
8%

10.7%

2,000

5.0%

1,000
0

South
77%

0.0%
2009

2010

Revenue (VND bn)

2011
GPM (%)

INDUSTRY: CONSUMER GOODS

Source: PNJ, SBS

Silver jewelry
segment

The PNJ Silver brand was established from June 2001, targeting girls aged 15 to 25 years and selling
fashion jewelry made from pure silver. PNJ silver jewelry contributed only 0.9% of revenue but gross
profit went up by 17.5%.
In 2009-2011, PNJ silver jewelry enjoyed robust growth at CAGR of 36.1%. In 2011, silver jewelry
revenue showed robust growth of 36.82% y-o-y at VND164bn, with revenues from the South
expanding 37% y-o-y, North by 47%, Central by 67% and the West by 54%.
The South area (including Ho Chi Minh City and the South East) accounted for 62.59% in sales,
followed by the North (22.8%), West (7.6%) and the Central (6.9%) areas. PNJ Silver seems to be a
monopoly brand as there is less competition in the North with a y-o-y high growth rate, and gross
profit of 78% in (up 9.3% y-o-y) last year.

9 | See Disclaimers at the end of the report

FIGURE 15: REVENUE AND GROSS

PROFIT IN SILVER JEWELRY
200
71.6%
150

78.3%

90.0%

Central
7%

Western
8%

60.0%

70.3%

100
30.0%

50
0

North
23%

South
62%

0.0%
2009

2010

2011

BUY

Revenue (VND bn)

Source: PNJ, SBS

TARGET: 48,800 VND

CAO fine jewelry

& JEMMA
segments

CAO Fine Jewelry and Jemma, owned by PNJ subsidiary CAO Fashion Company, are targeted towards
successful businesswomen aged 30 to 45 years, selling luxury jewelry with unique and sophisticated
designs. Jemma targets women with medium to high incomes, aged from 25 to 35 years and markets
fashion jewelry and stylish accessories in fresh, new colours and made with various materials. These
two brands contributed only 0.5% in sales and 5% in gross profit last year.
In 2011, the CAO Fashion Companys sales were split between CAO Fashion Jewelry (90.4%) and
Jemma (9.6%)
FIGURE 17: REVENUE AND GROSS
PROFIT CAO COMPANY
100

60.0%
48.2%

80
60

FIGURE18: CAO JEWELRY SALES

BY BRANDS 2011
JEMMA
10%

33.8%
40.0%

34.5%

40

20.0%

20

INDUSTRY: CONSUMER GOODS

FIGURE 16: SILVER JEWELRY

SALES BY MARKET 2011

CAO
Fine
90%

0.0%
2009

2010

2011

Revenue (VND bn)

Source: PNJ, SBS

Gold bar trading

& 24k gold
exports

Beside jewelry, PNJ also trades in gold bars and exports gold. The gold bar business operates on very
thin margins, as prices fluctuate and there is a great difference between world and domestic prices.
Gold bar trading is the biggest contributor for PNJ, generating 47.9% of total revenue (2011), though
it made up only 11.6% in gross profit last year. Between 2009 and 2011, the gold bar business grew at
a CAGR of 149%. In 2011, the gold bar revenue grew by 103.5% y-o-y at VND8,640bn, with the gross
profit margin improved at 0.99%, up seven times from the year before.
In the same period, PNJ 24k gold bar exports were at VND4,966bn (down 14% y-o-y) which was 27.5%
of total revenue and 1.3% of total gross profit. Between 2009 and 2011, PNJs gold exports had a
CAGR of 119%

10 | See Disclaimers at the end of the report

FIGURE 19: REVENUE AND GROSS

PROFIT GOLD BAR TRADING
10,000

1.50%

8,000

0.99%

6,000

0.13%

0.14%

BUY
TARGET: 48,800 VND

1.35%

1.50%

6,000

0.50%

1.00%
0.32%

2,000
0.00%

2009
2010
2011
Revenue (VND bn)

0.50%
0.20%

0.00%
2009
2010
2011
Revenue (VND bn)

Source: PNJ, SBS

Non-core
businesses

INDUSTRY: CONSUMER GOODS

8,000

4,000

4,000
2,000

1.00%

FIGURE 20: REVENUE AND

GROSS PROFIT 24K GOLD
EXPORT

PNJ investment

PNJ had a 70% stake in gas trading company Dai Viet Energy JSC, which it divested to Tolagaz Viet
Nam Ltd in Dec 2011 for VND 122.5bn. PNJ received a VND52.5bn deposit for the sale on 31 Dec
2011, contributing 3.4% to 2011s revenue and raising it by 14.5% y-o-y. It announced the liquidation
of its Dai Viet shares on 29 June.

PNJ also has long term investments in banking, real estate and fuel worth VND733bn, comprising 25%
of its total assets and 65% of shareholders equity in FY2011, which generated VND64bn last year.
Total long-term investments at the end of 2011 was valued at VND712bn, after it liquidated its share
of the Kinh Do real estate company.
FIGURE21: PNJ FINANCIALS LONG TERM INVESTMENT
2009
2010
Investment value (VND bn)
520.4
749.5
Joint-venture investment
129.7
261.5
Saigon fuel JSC
49.9
138.6
Dong A land JSC
72.0
91.9
Hong Vina Ltd.,
7.8
10.7
Consolidated value of associated Company
20.3
Stock investment
401.3
486.0
Dong A bank
272.1
356.8
M&C Corp (real estate)
65.4
65.4
Que Huong Liberty Hotel
40.8
40.8
Kinh Do Real estate JSC
23.0
23.0
Bond investment
0.2
12.8
Dai Viet investment
1.1
Hoang Minh Giam Project
10.1
Convertible bond
1.7
Government bond
0.2
Provision
(10.8)
(10.8)
Source: PNJ, SBS

11 | See Disclaimers at the end of the report

2011
712.4
258.3
138.6
91.9
27.8
464.7
356.8
65.4
42.5
10.6
0.5
10.1
(21.1)

DongA Bank (EAB) is the companys biggest investment, accounting for 48% of total investments. PNJ
was a founding shareholder of DongA Bank, with 7.7% ownership at the end of 2011. EABs pre-tax
profit for the same period was VND1,255bn (up 46% y-o-y), with a 16% dividend rate at par value.

BUY

Dong A Land. PNJ holds 30.6% capital of Dong A Land, another long-term investment. Due to real
estate market difficulties, the implementation of two main projects, Golden Square in Da Nang City
and Phu Thuan Residential in District 7, were affected. Dong A Lands revenue were largely derived
from construction and consultant services. Total revenue generated was VND55bn, while the
company incurred a VND15bm loss, from interest expenses.
Sai Gon Fuel JSC (SFC). PNJ owns 49.99% of Sai Gon Fuel JSC, as of end-2011. SFC VND1,794bn (up
28% y-o-y) in revenue and the profit before tax of VND39.1 bn (down 46.8% y-o-y) for 2011 because
of high cost of goods sold in real estate and gas segments.
Sai Gon M&C and Que Huong Liberty. PNJ holds 5% and 2.6% in each company respectively and
plans to exit from them via a deal this year.

TARGET: 48,800 VND

FIGURE 22: FINANCIAL REVENUE

(VND BN)
60.0
50.0
40.0
30.0
20.0
10.0

2009
2010
2011

FIGURE 23: FINANCIAL

EXPENSE (VND BN)
120.0
100.0
80.0
60.0

2009
2010
2011

40.0
20.0
-

INDUSTRY: CONSUMER GOODS

Source: PNJ, SBS

In 2011, the company recorded dividends from its investments amounting to VND53bn, which
comprised 82% of total financial income.
Interest expenses are big burden for PNJ. From 2009-2011, the companys interest expenses grew at
CAGR of 58.5%. The interest expense incurred in 2011 was VND104bn (77% y-o-y). PNJs huge
interest expense for its gold debt to produce jewelry always offset high dividend income.

12 | See Disclaimers at the end of the report

PNJ FINANCIAL ANALYSIS

Low profit
margin business

The company has increased gold bar sales and gold exports since 2009. From 2009 to 2011, revenue
grew at a CAGR of 32%, gross profit at CAGR of 21.4% and net profit at CAGR of 12%. Management
has tried to manage gross margins around 4% against the fluctuating price of gold. Net margins has
decreased from 2% (2009) to 1.4% (2011) because of high interest expense offsetting gross profits.
FIGURE 24: PROFIT MARGIN IN 2007-2011 (%)
20,000

10.0%

8.5%

8.4%

8.0%

BUY

15,000

6.0%

4.9%

4.7%

10,000

3.9%

4.1%

3.0%
2.0%

5,000

1.5%
1.4%

TARGET: 48,800 VND

2.0%
0.0%

2007

2008

2009

2010

Revenue (VND bn)

Gross profit margin (%)

2011

Gross profit (VND bn)

Net profit margin (%)

Source: PNJ, SBS

Selling &
administration
expenses are
under control

PNJ owns 151 jewelry stores and has a network that expands by 15 to 20 stores each year. Increased
sales along with network expansion have marked expenses growing at CAGR of 36%, while
administrative costs increased at CAGR of 44% in 2007 to 2011. Selling and administration costs
decreased slightly y-o-y in 2011; PNJ tries to maintain them at 1.8% and 0.6% of sales respectively
FIGURE 25: SELLING & ADMINISTRATION EXPENSE ON SALES
IN 07-11 (%)
4.0%

INDUSTRY: CONSUMER GOODS

4.0%

3.6%

3.4%

3.0%
2.0%
0.9%

1.8%

1.8%

0.6%

0.6%

0.5%

2009

2010

2011

1.6%

1.1%

1.0%
0.0%
2007

2008

% selling expense o sales

Source: PNJ, SBS

13 | See Disclaimers at the end of the report

% administration expense o sales

Financial Income

In 2011, PNJ incurred a net loss of VND61bn, mainly due to the increment on interest expenses (from
VND58bn to VND103bn, +76.9% y-o-y). Short- and long-term debts rose to VND1,339bn (+57% y-o-y)
by the second quarter, indicating a huge burden on interest expenses.
Abnormal incomes were lower than the year before (-30% y-o-y), as it recorded a low income from
associates (approx. VND11bn) in 2011 against VND21bn in 2010
FIGURE 26: FINANCIAL GAIN
(LOSS) (VND BN)

BUY

40

22.2%

20

1.6%

-3.8% -0.7%

TARGET: 48,800 VND

(20)

FIGURE 27: ABNORMAL INCOME

(VND BN)
30.0%

50

20.0%

40

10.0%

30

0.0%

20

(40)

-10.0%

(60)

-20.0%

(80)

-19.1% -30.0%

20%
15%
16%

6%

6%

4%

0%
2007

2007 2008 2009 2010 2011

12%
8%

10
2008

2009

2010

2011

Other income (VND bn)

Income from associates (VND bn)
% abnormal income in PBT

Financial gain (loss) (VND bn)

% financial income in PBT
Source: PNJ, SBS

Profitability

PNJ showed a strong return on equity (ROE) at 24.2% (+12.5% y-o-y) in 2011, led by the asset
turnover increases of 9.9% y-o-y and a higher proportion of debt in the firms capital structure
(+11.6% y-o-y). Returns on asset were at 10.4% (+1.96% y-o-y), and the debt level ratio was at 60.5%
of total assets.
FIGURE 28: ROE & ROA IN 07-11 (%)
30.0%

INDUSTRY: CONSUMER GOODS

9%

8%

25.0%

24.2%

24.0%
21.7%

21.3%

21.5%

20.0%
15.0%

12.4%

11.0%

11.6%

2008

2009

10.2%

10.4%

2010

2011

10.0%

5.0%
0.0%
2007

ROE (%)
Source: PNJ, SBS

14 | See Disclaimers at the end of the report

ROA (%)

Capital structure

More loans are needed to fund gold manufacturing and store expansion; the latter requires over
VND150bn in investment. Short term debt shrank by 36.39% in 2011 as PNJ narrowed its short-term
loans in gold by VND600bn while it increased its own USD and VND loans, especially long-term
borrowings which increased 4.3 times from 2010.
FIGURE 29: CAPITAL STRUCTURE
2009-2011 (VND BN)
2,000

1.6

BUY

1,600

800

2.0

1,200

1.6

1.3
1.1

1,200

FIGURE 30: LOAN STRUCTURE

2009-2011 (VND BN)

1.2

0.8

0.8

0.5

400

800
400

0.4

Short term loan Long Term loan

(VND bn)
(VND bn)

2007 2008 2009 2010 2011

INDUSTRY: CONSUMER GOODS

TARGET: 48,800 VND

Debt (D)

Equity (E)

D/E (%)

2007

2008

2009

2010

2011

Source: PNJ, SBS

PROJECTION & OUTLOOK

Mission & Goals
for 2012-2017

PROJECTIONS
1H2012 results

PNJ aims to be a leading company in jewelry processing and retailing in Asia, while holding pole
position in Vietnam for all of its segments.
It aims for its export sales to expand fourfold by the end of 2017, with revenue increasing 20% and
profit by 15% each year.

In 1H2012, the company added 11 new stores, totalling 162 outlets across Vietnam. Management
was confident of meeting its target of adding 30 stores during the current financial year.
In its unconsolidated financial results, PNJ reported 1HFY12 net revenue of VND3,318bn (down 58%
y-o-y) on the back of weak gold bar demand. Gold segment sales decreased 59% at VND2,956bn
while gold bar sales shrank 61% to VND1,454bn. 24k gold exports were down 100% y-o-y and gold
jewelry only shrank by 1% y-o-y at VND 1,796 bn. PNJ expects gold trading revenue to fall this year,
due to expected lower consumption of gold bars after the issuance of the new MOF circular on gold
bar trading management. Besides that, silver jewelry sales slightly increased 0.5% (at VND85 bn) in
basis y-o-y respectively.
Moreover, selling expense has increased with higher employees wages. PNJ had a operating profit of
VND152bn (down 16% y-o-y) for 2011, which translated into a PAT of VND127bn (-14% y-o-y).

15 | See Disclaimers at the end of the report

FIGURE 31: P&L (VNDBN)

TARGET: 48,800 VND

BUY

Total revenue
Gold segment
Gem & Jewelry
Silver segment
Watch
Service
Net revenue
Expenditure
as % of sales
Cost of goods sold (COGS)
% COGS on revenue
Selling expenses
% on revenue
Administration expenses
% on revenue
EBIT
Financial income/loss
Other income
Profit before tax
Total tax
Net profit

1H12

7,962
7,276
590
86
3
8
7,930
(7,748)
97.7%
(7,612)
96.0%
(101)
1.3%
(34)
0.4%
182
(2)
5
183
(36)
148

Y-O-Y%

3,344
2,956
293
86
3
5
3,318
(3,165)
95.4%
(3,023)
91.1%
(109)
3.3%
(33)
1.0%
152
(7)
10
156
(29)
127

-58.0%
-59.4%
-50.2%
0.5%
5.3%
-40.7%
-58.2%
-59.1%
-2.4%
-60.3%
-5.1%
7.5%
156.8%
-3.4%
130.9%
-16.1%
209.5%
113.3%
-15.2%
-19.3%
-14.2%

Source: PNJ, SBS

Gross profit margins for 1H12 was up to 8.9% (+4.8% y-o-y), due to strong contributions from the
jewelry segment. Gold jewelry sales accounted for 70% of gross profit, followed by silver at 22%, gold
bar trading at 6% and others at 2%. The cost of goods sold as a percentage of net sales were down 5%
y-o-y to 91.1% in 1HFY12. Gross profits margin of jewelery sales also decreased on average by 2.2%
due to more spending on promotions to boost sales in 1H2012.
PNJ recorded 4.6% (+2.3% y-o-y) in EBIT margin in 1H2012, while net profit margin went up to 3.8%
(+1.96% y-o-y). According to the companys targets, PNJs operations in 1HFY12 have fulfilled the
revenue and net income target at 32% and 49% respectively
FIGURE 32: MARGIN (%)

INDUSTRY: CONSUMER GOODS

1H11

Gross profit margin

EBIT margin
EBT margin
Effective tax rate
Net profit margin

Projections for
2012-2016

1H11
4.0%
2.3%
2.3%
19.5%
1.9%

1H12
8.9%
4.6%
4.7%
18.6%
3.8%

Y-O-Y%
4.88%
2.30%
2.38%
-0.94%
1.96%

On 25 May 2012 the State Bank officially promulgated Circular No. 16/2012/TT-NHNN to guide some
articles of Decree No. 24/2012/ND-CP on the management of gold trading activities. According to the
circular, the six-month transition period for gold trading businesses starting on 10 July is a period in
which banks and enterprises need to acquire new licenses in order to be legally allowed to trade in
gold bars.
Over the next five years, PNJ will focus on its core business while reducing its operations in gold bar
trading and 24k gold exports. We expect revenue from gold and CAO fine jewelry sales to grow at
CAGR of 13% and 11%, lower than the 24% and 22% respectively recorded from 2007 to 2011. Silver
sales will grow to 35%, a 1% increase from the 2007 to 2011 period as well.
In 29 June, PNJ also completed liquidating its stake in Dai Viet Energy (Vinagas) to Totalgaz Company
at VND122.5bn, thereby earning VND52.5bn in income for the company

16 | See Disclaimers at the end of the report

INDUSTRY: CONSUMER GOODS

TARGET: 48,800 VND

BUY

Charter capital
raising plan

The company is scheduled to increase its charter capital from VND599.9bn to VND799.9bn (+33% y-oy) through the issuance of 19,999,728 shares, of which 60% has been set aside for bonus shares, 25%
for private issue and 15% allocated for its Employee Stock Ownership Plan in FY12.
The Company recently announced that the ex-right date for bonus share would be 24 August 2012.
We also raised the questions of schedule and target price for the remainder of shares to be issued,
though company representatives answered that the plan has not fixed yet. In this model, we assume
that the issuing price for employees and strategic investors will be VND15,000 and VND34,000 per
share (after being adjusted for the bonus share issuance mentioned), respectively. Hence, the total
proceeds from the issuance is approximately VND200 bn.

FIGURE 33: PNJ P&L PROJECTION FY12-16

(VND bn)
2009
2010
2011

2012E

2013E

2014E

2015E

2016E

Total Net Sales

Sales growth (%)
CoGS
Gross profit
Gross profit margin (%)
SG&A
SG&A as % of sales
EBITDA
EBITDA margin (%)
EBITDA growth rate (%)
Operating profit
Operating profit margin (%)
Financial income & Others
Pre-tax income
Tax
Effective tax rate (%)
Net profit
Net profit margin (%)
Net profit growth (%)
Number of shares (m, year-end)
EPS (VND)
EPS growth (%)

10,256
145%
9,755
501
5%
247
2%
292
3%
52%
254
2%
20
275
55
20%
204
2.0%
63%
40
5,112

13,752
34%
13,211
542
4%
322
2%
280
2%
-4%
219
2%
45
264
53
20%
212
1.5%
4%
60
3,534

17,964
31%
17,226
738
4%
388
2%
334
2%
19%
351
2%
(32)
318
61
19%
257
1.4%
21%
60
4,285

7,255
-60%
6,586
669
9%
356
5%
447
6%
34%
313
4%
20
333
63
19%
270
3.7%
5%
80
3,375*

7,453
3%
6,626
827
11%
365
5%
552
7%
23%
462
6%
(30)
432
108
25%
324
4.3%
20%
80
4,047*

7,748
4%
6,786
962
12%
380
5%
691
9%
25%
582
8%
(32)
551
138
25%
413
5.3%
28%
80
5,164*

8,165
5%
7,076
1,090
13%
408
5%
790
10%
14%
681
8%
(32)
649
162
25%
487
6.0%
18%
80
6,085*

8,767
7%
7,488
1,278
15%
447
5%
942
11%
19%
831
9%
(34)
797
199
25%
598
6.8%
23%
80
7,473*

22%

-31%

21%

-21%

20%

28%

18%

23%

Source: SBS forecast

* assuming PNJ to increase 33% its charter capital from VND599bn to VND799bn

17 | See Disclaimers at the end of the report

COMPANY OVERVIEW
Background

PNJ was established in 1988 as a trading business and today, is one of the leading gold jewelry players
in Vietnam with a 20% market share. The groups initial capital was registered at VND599.9bn in Dec
2011. This year, the company will increase its charter capital from VND599.9bn to VND799.9bn (+33%
y-o-y) through the issuance of 19,999,728 shares, of which 60% has been set aside for bonus shares,
25% for private issue and 15% allocated for its Employee Stock Ownership Plan in FY12

Charter capital
(VND bn)

BUY

CHART 34: PNJS CHARTER CAPITAL

1000
800
600
400
200
0

800
600
40

55

100

120

240

300

TARGET: 48,800 VND

Source: PNJ, SBS

Shareholders
Structure

Up to 30 June, there were 599m outstanding shares held by domestic and foreign investors to the
ratio of 1.13:1. The companys share liquidity averages 55,551 shares per day over a period of 90
days. There is room for another 2.03% in its foreign shareholding portion
About 10.1% of PNJs shares are owned by chairman and General Director Ms Cao Thi Ngoc Dung.
Other major shareholders are the Vietnam Azaleah Fund Ltd (6.90%), Deutsche Bank (6.28%), DongA
Bank Securities (1.92%) and Dong A Capital Company (1.41%)
CHART 35: PNJS SHAREHOLDER STRUCTURE
1.9%
10.1%

1.4%

CEO - Ms Dung
Dong A Bank Securities
Dong A Capital Company

33.8%

Other domestic investors

INDUSTRY: CONSUMER GOODS

6.3%

39.6%
6.9%

Vietnam Azalea Fund Ltd

Deutche Bank & Deutche AM

Other foreign investors

Source: PNJ, Bloomberg, SBS

Company
Structure

CHART 36: SUBSIDIARIES AND ASSOCIATED COMPANIES (31/12/2011)

Company

Business type

PNJs stake

Charter Cap (VND bn)

Subsidiary
CAO fashion Company Ltd.,

Jewelry

100.00%

10

PNJ laboratory company Ltd., (PNJL)

Appraisal Services

100.00%

10

Associated company
Dong A land JSC

Real estate

30.62%

100

Saigon fuel JSC (SFC)

Fuel

49.99%

103

Source: PNJ, SBS

18 | See Disclaimers at the end of the report

APPENDIX 1
B A L A NC E SH E E T ( V N D b n )
Assets
Current assets
Long-term assets
Fixed assets
Long-term investments
Resources
Liabilities
Current liabilities
Long-term borrowings and liabilities
Equities
Owner's equity
Contributed capital
Capital surplus
Retained profits/(accumulated losses)

Y E A R L Y R AT I O S
2009

2010

2011

2,025.7

2,464.2

2,928.1

982.0

1,176.6

1,605.0

1,043.6

1,287.6

1,323.1

362.8

331.6

419.6

520.4

749.5

712.4

2,025.7

2,464.2

2,928.1

987.4

1,375.1

1,771.0

869.7

1,224.7

973.4

117.7

150.4

797.6

991.4

1,060.4

1,130.5

955.7

1,046.9

1,130.5

400.0

600.0

600.0

425.0

225.0

225.0

52.3

143.7

197.1

I NC O M E S T A T E M E N T ( V N D b n )
Net sales
COGS
Gross profit /(loss)
Financial income
Financial expense
Interest expense
Selling expenses
G&A expenses
Net operating profit /(loss)
Other income
Other expenses
Profit /(loss) before tax
Corporate income tax
Profit after tax
Net profit/(accumulated losses)

2009

2010

2011

10,256.3

13,752.4

17,963.8

9,755.4

13,210.5

17,225.5

500.9

541.9

738.3

85.2

86.1

64.8

75.8

60.4

125.5

185.5

243.3

289.5

61.1

79.2

98.1

263.7

245.1

289.9

12.1

30.7

29.9

1.0

11.9

1.6

274.7

263.9

318.2

54.6

51.9

60.7

219.8

211.3

257.5

204.5

212.0

257.1

C A SH FL O W ST A T E M E N T ( V N D b n )
2009
Cash flows from operating activities
Profit/(loss) before tax
Depreciation and amortisation
Allowances and provisions
Profits/(losses) from investing activities
Operating profit before changes in WC
CF from operating activities
Cash flows from investing activities
Receipt/payments for additions to assets
Receipt/payments for investments entities
CF from investing activities
Cash flows from financing activities
Proceeds from equity issued
Proceeds from long-term borrowings
CF from financing activities
Net CF during the period
Cash at the beginning
Cash at the end

19 | See Disclaimers at the end of the report

2010

2011

274.7

263.9

318.2

41.0

43.9

42.3

2.5

0.1

12.1

(71.7)

(83.8)

(69.0)

299.7

282.8

493.3

45.5

3.1

154.2

(102.5)

(112.4)

(115.7)

(125.6)

(217.1)

(70.0)

(102.5)

(203.3)

(102.9)

3,836.4

6,600.0

8,767.1

121.6

263.1

61.2

64.7

62.8

112.6

210.5

275.0

337.8

275.0

337.8

454.1

(0.0)

Growth rate
Revenue growth rate
Gross profit growth rate
Net profit growth rate
Total asset growth rate
Equity growth rate
Profitability ratios
Gross profit margin
EBIT margin
Profit before tax margin
Net profit margin
ROA
ROE
Dupont Analysis
Net profit margin(1)
Asset turnover (2)
Equity multiplier (3)
ROE = (1)x(2)x(3)
Management ratios
Receivable outstanding days
Inventory outstanding days
Payable outstanding days
Asset turnover
Long-term asset turnover
Fix asset turnover
Liquidity ratios
Current ratio
Quick ratio
Cash ratio
Capital Structure
Total debt/Total Equity
Total debt/Total Asset
Total asset/Total Equity
Index per share
PE
PBV
PS
EPS (VND per share)
Revenue/share (VND/share)
Book value (VND/share)

2009

2010

2011

145.4%

34.1%

30.6%

43.1%

8.2%

36.3%

62.9%

3.7%

21.3%

20.4%

21.6%

18.8%

7.0%

9.5%

8.0%

4.9%

3.9%

4.1%

2.7%

1.9%

1.8%
1.4%

2.0%

1.5%

10.1%

8.6%

8.8%

21.4%

20.3%

22.7%

2.0%

1.5%

1.4%

211.9%

235.4%

259.0%

21.4%

20.3%

22.7%

1.4

0.8

0.8

19.5

20.8

20.5

0.2

0.2

0.2

5.1

5.6

6.1

9.8

10.7

13.6

28.3

41.5

42.8

1.1

1.0

1.6

0.5

0.3

0.7

0.3

0.3

0.5

103.3%

131.4%

156.7%

48.7%

55.8%

60.5%

211.9%

235.4%

259.0%

7.10

9.79

9.68

0.14

0.15

0.14

5,843

4,240

4,285

293,038

275,050

299,402

23,894

17,448

18,841

1.74

APPENDIX 2
B AL A NC E SH E E T ( V N D b n )
QII-11
Assets
2,765.6
Current assets
1,494.1
Long-term assets
1,271.5
Fixed assets
351.9
Long-term investments
725.5
Resources
2,765.6
Liabilities
1,598.3
Current liabilities
748.5
Long-term liabilities
849.8
Equities
1,141.4
Equity
1,141.4
Contributed capital
600.0

QU AR T E R L Y R A T I O S
QIII-11
3,143.4
1,814.0
1,329.4
413.3
720.8
3,143.4
1,984.7
1,136.2
848.5
1,131.5
1,131.5
600.0

QIV-11
2,916.7
1,606.7
1,310.0
412.4
702.1
2,916.7
1,769.9
847.7
922.2
1,120.2
1,120.2
600.0

QI-12
2,899.2
1,584.2
1,315.1
426.1
713.8
2,899.2
1,650.2
856.1
794.1
1,223.6
1,223.6
600.0

225.0
207.9

225.0
198.0

225.0
129.8

225.0
290.3

I NC O M E S T A T E M E N T ( V N D b n )
QII-11
Total Revenue
4,554.8
Net sales
4,542.4
COGS
4,401.8
Gross profit /(loss)
140.6
Financial income
26.7
Financial expense
32.4
Interest expense
28.1
Selling expenses
59.5
G&A expenses
19.8
Net operatiing profit
55.7
Other income
7.8
Other expenses
1.1
Profit /(loss) before tax
62.4
Corporate income tax
8.5
Profit after tax
54.0
Net profit
54.2

QIII-11
6,514.9
6,498.3
6,301.3
197.0
6.0
42.2
33.2
72.9
21.8
66.1
4.0
0.2
69.9
18.8
51.0
50.2

QIV-11
3,212.8
3,189.2
3,005.6
183.6
24.9
32.8
23.9
89.4
32.1
54.1
5.4
5.9
53.7
5.7
48.0
48.7

QI-12
2,054.0
2,035.9
1,829.9
206.0
21.9
29.1
29.0
74.0
21.0
103.9
20.6
7.1
117.3
25.1
92.2
93.4

Capital surplus
Retained profits

20 | See Disclaimers at the end of the report

Growth rate
Revenue growth rate (Y-o-y)
Gross profit growth rate (Y-o-y)
Net profit growth rate (Y-o-y)
Profitability ratio
Gross margin
EBIT margin
Net profit margin
ROA (4Q)
ROE (4Q)
Management ratio
Receivable outstanding days
Inventory outstanding days
Payable outstanding days
Liquidity ratio
Current ratio
Quick ratio
Cash ratio
Capital Structure
Total debt/Total equity
Total debt/total asset
Total asset/total equity
Index per share
PE
EPS (VND per share)

QII-11

QIII-11

QIV-11

QI-12

6.7%
5%
-16%

36.3%
60%
-17%

15.0%
31%
42%

-45.4%
-8%
0%

3.1%
2.0%
1.2%
9.6%
21.7%

3.0%
1.6%
0.8%
8.4%
20.9%

5.8%
2.4%
1.5%
8.6%
21.8%

10.1%
7.2%
4.6%
8.4%
21.4%

1
18
0

1
13
2

1
29
0

2
51
0

1.8
0.8
0.5

1.8
0.8
0.4

1.4
0.8
0.5

1.8
0.7
0.4

140.0%
57.8%
242.3%

175.4%
63.1%
277.8%

158.0%
60.7%
260.4%

134.9%
56.9%
236.9%

10.3
4037

10.7
3871

10.1
4111

10.1
4108

REPORT TRACKING

Reports issued
Company Note
Company Update 1Q12

Date
25/11/2011
10/5/2012

55.0

Recommendation
Not Rated
Not Rated

PNJ

12M Target price

NA
NA

Market price at issuing date

35,500
42,500

SBS target Price

50.0
45.0
40.0
35.0
30.0
25.0

20.0
15.0
10.0

SBS Research Guide to Investment Ratings

Buy: Share price may exceed 15% over the next 12 months
Neutral: Share price may fall within the range of +/- 15% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 15% over the next 12 months
Not Rated (NR): Stock is not within regular research coverage

21 | See Disclaimers at the end of the report

48.8

DISCLAIMER
The information and statements contained herein, including any expression of opinion, are based upon sources believed to be reliable
but their accuracy, completeness, and correctness are not guaranteed. Expressions of opinion herein were arrived at after due and
careful consideration and they were based upon the best information then known to us, and in our opinion are fair and reasonable in
the circumstances prevailing at the time. Expressions of opinion contained herein are subject to change without notice. This document
is not and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. SBS and other related
companies and/or their officers, directors and employees may have positions and may have affect transactions in securities of
companies mentioned herein and may also perform or seek to perform investment banking services for these companies. No person is
authorized to give any information or to make any representation not contained in this document and any information or
representation not contained in this document must not be relied upon as having been authorized by or on behalf of SBS. This
document is private circulation only and is not for publication in the press or elsewhere. SBS accepts no liabilities whatsoever for any
direct or consequential loss arising from any use of this document or its contents. The use of any information, statements forecasts and
projection contained herein shall be at the sole discretion and risk of the users. This document is confidential and is intended solely for
the use of its recipient. Any duplication or redistribution of this document is prohibited.

Sacombank Securities Company

Head office
278 Nam Ky Khoi Nghia street, District 3 Ho Chi Minh City Vietnam
Tel: +84 (8) 6268 6868
Fax: +84 (8) 6255 5957
www.sbsc.com.vn

Research Division
Tel: +84 (8) 6268 6868 (Ext: 8763)
Email: sbs.research@sbsc.com.vn

Hanoi
th
6 -7th Floor, 88 Ly Thuong Kiet Street
Hoan Kiem District
Hanoi
Vietnam
Tel: +84 (4) 3942 8076
Fax: +84 (8) 3942 8075
Email: hanoi@sbsc.com.vn

Cambodia
Sacombank Securities (Cambodia) PLC
56 Preah Norodom Blvd
Sangkat CheyChumneas, Khan Daun
Penh,
Cambodia
Tel: +855 23 999 890
Fax: +855 23 999 891

22 | See Disclaimers at the end of the report

Laos
Lanexang Securities Public Company
5th Floor, LSX Building, Ban Phonthan
Vientiane Capital
The Lao P.D.R