{"id":71063,"date":"2020-06-11T09:03:24","date_gmt":"2020-06-11T02:03:24","guid":{"rendered":"https:\/\/yuanta.com.vn\/?post_type=phan-tich&#038;p=71063"},"modified":"2020-06-11T09:03:24","modified_gmt":"2020-06-11T02:03:24","slug":"pnj-hope-for-the-best-prepare-for-the-worst","status":"publish","type":"phan-tich","link":"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/pnj-hope-for-the-best-prepare-for-the-worst","title":{"rendered":"PNJ: Hope for the best, prepare for the worst"},"content":{"rendered":"<p><strong>Event<\/strong><\/p>\n<p>We attended PNJ\u2019s AGM on June 10. The company proposed modest profit guidance due to the COVID-19 impact and high gold price environment.<\/p>\n<p><strong>Key highlights<\/strong><\/p>\n<p><strong>Weak 2020 profit guidance.<\/strong> The company targets 2020 profit after tax of VND 832.3bn, down 30% YoY, mainly attributable to the expected slowdown in sales to VND 14,485 bn, -15% YOY. Management stated that the COVID-19 impact is still unknown and the high gold price environment could undermine jewelry demand.<\/p>\n<p><strong>But sales recovered in May<\/strong>. 4M20 revenue fell 4% YoY to VND5,502bn. This was driven by the COVID-19-related shutdown in April, which resulted in 47% YoY revenue decline for the month. However, sales recovered in May, expanding by +20% YoY.<\/p>\n<p><strong>Expanding the distribution network and manufacturing capacity.<\/strong> PNJ plans to open 31 new stores in 2020, mostly in tier 2 and 3 cities, which would result in 380 total stores (+8.9% YoY). Management also plans 1) to renovate its legacy production capacity to manufacture previously imported products and 2) to build a new facility in Long An province to address the environmental issues from its plating process, with 2020 capex guided at VND 150 bn (-37% YoY). PNJ also plans to continue investing in its digital transformation to improve its retail management.<\/p>\n<p><strong>2020E dividend guidance<\/strong>. PNJ targets a 2020 dividend of 18% of par value. Assuming this is paid in cash, the 2020E yield would be 2.8%.<\/p>\n<p><strong>ESOP for 2020<\/strong>. PNJ plans to issue ESOPs of 0.85% of outstanding shares if management fulfills 115% of its profit guidance, and each 1ppt that earnings exceed that level will add an additional 0.06% in new shares. The ESOP is subject to a 36-month transfer limit.<\/p>\n<p><strong>Accumulating gold bars to ensure liquidity<\/strong>. Given the unpredictable impact of COVID-19, the company plans to increase its gold bar inventory in 2020 as means of ensuring sufficient liquidity.<\/p>\n<p><strong>Our view<\/strong><\/p>\n<p><strong>We transfer coverage of PNJ to Binh Truong<\/strong> with publication of this note, and our investment thesis is currently under review. Overall, PNJ remains highly profitable with 28.7% ROE in 2019 underpinned by net margin of 7.0% and net debt\/equity of 55.1% as at Dec 2019 declining sharply to 42.4% as at 1Q20<\/p>\n<p>For the complete report, please access here: <a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/wp-content\/uploads\/2020\/06\/20200610-PNJ-AGM-2.pdf\">20200610 PNJ AGM<\/a><\/p>\n<p><strong>Analyst: Binh Truong,<\/strong> <em>binh.truong@yuanta.com.vn<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Event We attended PNJ\u2019s AGM on June 10. The company proposed modest profit guidance due to the COVID-19 impact and high gold price environment. Key highlights Weak 2020 profit guidance. The company targets 2020 profit after tax of VND 832.3bn, down 30% YoY, mainly attributable to the expected slowdown in sales to VND 14,485 bn,&#8230;<\/p>\n","protected":false},"author":10,"featured_media":0,"template":"","class_list":["post-71063","phan-tich","type-phan-tich","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.3 (Yoast SEO v23.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>PNJ: Hope for the best, prepare for the worst | Yuanta Vietnam<\/title>\n<meta name=\"description\" content=\"Event We attended PNJ\u2019s AGM on June 10. The company proposed modest profit guidance due to the COVID-19 impact and high gold price environment. 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