PNJ_BUY_TP 145.500_Upside 30.0_Sweet fruit from innovation efforAsset _BSC_Vietnam company update

VALUATION

BSC recommends BUY for PNJ at a 1-year price of VND 145.500/share upside 30% compared to 12/9/2022. Based on the name DCF/PE method with a ratio of 50% / 50%. We sawa 19% increase from the previous report thanks to

(1) Forecast revenue growth for 2022E/2023F is 28%/38% compared to the previous report thanks to the ability to increase the efficiency of factories and a more flexible sales strategy than expected.

(2) Reducing the forecasted gross profit margin for 2022E/2023F from 18.5%/19.5% (compared to the previous report) to 17.3%/17.7% thanks to the strategy of exploiting categories and the strategy of reducing prices to stimulate demand after a period of offsetting procurement in the second half of 2021-early 2022.

FORECASTING BUSINESS RESULASSET

BSC adjusted iAsset expectation for net revenue and NPAT in 2022 will reach VND33,436 billion (+70%YoY) and VND1,792 billion (+74%YoY) - Up 28%/11% compared to the previous report, equivalent to 129% of revenue plan and 136% NPAT target in 2022.

In 2023, revenue and net profit are expected to reach VND 37,832 billion (+13% YoY) and VND 2,147 billion (+20%YoY) equivalent to EPS FW=8,276 VND and P/E fw=13.6 - Lower than average P/E 3 years 19 times.

INVESTMENT THESIS

▪ Taking advantage of the industry gap after COVID-19, helping PNJ expand iAsset market share and scale in the period 2022-2023 (details)

▪ Growth potential comes from internal businesses, including (1) Strategy to expand market share by increasing the number of stores in 2nd and 3rd tier cities; (2) Product restructuring and cost optimization thanks to digital transformation applications (3) Exploiting potential young customer segmenAsset, and flexible sales policies.

Risk:

▪ The epidemic continues to affect jewelry purchasing power.

▪ Recoverable income was lower than expected.