- We cut our target price (TP) for PNJ by 2% to VND113,500/share but reiterate our BUY rating.

- Our lower TP is driven by our 6% lower aggregate 2024-2029F NPAT-MI forecast (respective cuts of 6%/13%/10%/8%/1%/2% for 2024/25/26/27/28/29F), which is partly offset by the positive impact of rolling our TP horizon forward to end-2025. Our lower aggregate earnings projection is caused by lowering our 2024-2029F retail GPM assumptions as we expect a gradual resumption of activities in the gold market to alleviate challenges in sourcing raw gold materials. Previously, we expected a significant recovery in 2025F, following the expected completion of gold market inspections in 2024F.

- We believe PNJ is well-positioned to spearhead the branded jewelry industry’s growth along with the recovery of Vietnam’s middle-income and affluent class consumption. In the medium to long run, we anticipate that Vietnam’s growing middle-income class will increasingly favor buying jewelry from reputable brands as opposed to purchasing it from unbranded mom-and-pop stores, which still accounted for ~67% of the market in 2022, according to Euromonitor.

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