PNJ - NPAT only grows 7% YoY, despite solid 14% YoY retail sales growth - Earnings Flash
  • 2025-01-24T00:00:00
  • Company Research

* 2024 results: Net revenue was VND37.8tn (USD1.5bn; +14% YoY) and NPAT was VND2.1tn (USD84.6mn; +7% YoY), fulfilling 99% and 106% of our respective forecasts. Net revenue tracked in line with our expectation, but NPAT came in slightly ahead of our forecast due to lower-than-expected SG&A expenses. Despite this, we see potential downside risks to our 2025F forecasts due to weaker-than-expected consumer spending reflected in PNJ’s December 2024 retail sales, pending a more comprehensive review.

* 2024 segmental performance:

- Retail sales (58.3% of total sales) remained solid with 14% YoY growth, which was primarily driven by a growing customer base alongside store expansion.

- Wholesales (10.0% of total sales) jumped 35% YoY due to mom-and-pop shops increasingly purchasing jewelry from PNJ to ensure authentic origins.

- Gold bar sales (30.8% of total sales) rose 12% YoY. Despite strong sales in 5M 2024 driven by the rally of the domestic gold price, sales declined after June 2024 due to the State-owned commercial banks' direct gold bar sales initiative.

* 2024 profitability: Blended GPM slightly decreased by 0.6 ppts YoY to 17.6%. We estimate a YoY decline in retail GPM driven by the negative impacts of challenges in raw gold material sourcing since early Q2 2024 and higher sales of lower-margin high-gold content jewelry in H1 2024 outweighing the shift in the product portfolio toward lower gold content jewelry (higher-margin but lower sales value per item) in H2 2024. Additionally, the net margin shrank by 0.4 ppts YoY to 5.6%.

* Q4 2024 results: Net revenue declined 12% YoY to VND8.6tn due to a 58% YoY decline in gold bar sales. Retail sales growth slowed to 11% YoY, reflecting weaker consumer spending and a shift toward lower gold-content jewelry, which has lower sales value per item. Meanwhile, NPAT increased 16% YoY to VND733bn, supported by SG&A expenses declining 4% YoY.

* Store expansion: In 2024, PNJ’s store count increased by 29 stores to 429 stores (in line with our projection of 30 net new stores).

PNJ’s Q4 2024 and 2024 results

VND bn

Q4 
2024

YoY

2024

YoY

2024/
Vietcap’s 2024F

Net revenue

8,581

-12%

37,823

14%

99%

-        Retail

6,176

11%

22,274

14%

98%

-        Wholesales

1,014

48%

3,821

35%

97%

-        Gold bar

1,400

-58%

11,767

12%

102%

-        Others

78

-51%

344

-44%

97%

Gross profit

1,791

2%

6,672

10%

100%

SG&A expenses

-913

-4%

-4,002

13%

96%

EBIT

878

10%

2,670

6%

107%

PBT

864

9%

2,651

7%

106%

NPAT-MI

733

16%

2,115

7%

106%

Gross margin

20.9%

2.9 ppts

17.6%

-0.6 ppts

 

SG&A/net sales

10.6%

0.9 ppts

10.6%

-0.1 ppts

 

SG&A/retail sales

14.8%

-2.1 ppts

18.0%

-0.2 ppts

 

EBIT margin

10.2%

2.0 ppts

7.1%

-0.6 ppts

 

NPAT-MI margin

8.5%

2.1 ppts

5.6%

-0.4 ppts

 

Source: PNJ, Vietcap (Segment revenue is gross revenue)

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