In this project, the purpose to make an estimate of firm value and stock intrinsic value using corporate

value model and write a valuation report.

Date: 28/05/2021 Current price: 101,000 VND The highest: 103,000 VND
The shortest: 100,800 VND Transaction volume: 8,505,700
Industry: Manufacturing/ Fabricated Metal Product/ Other Fabricated Metal Product Manufacturing

Market profile
Closing price (VND) 101,000
30 – day trading volume 447,668
52 weeks highest price 2,208,530
52 weeks lowest price 196,400
Foreign ownership ratio 48.99%
Shares Outstanding 227,367,000
Market cap (VND billion) 22,964,0200,000
Dividend yield (%) 1.3780
EPS 4.308
P/E 23.58
BVPS 25,303,000
P/B 4.02
Table 1: (Source: Vietstock website)
PNJ: Phu Nhuan Jewelry Joint Stock Company
1. Business Description & stock performance

• English name: Phu Nhuan Jewelry Joint Stock Company

• Charter capital: 2,276,123,620,000 VND
PNJ was formerly known as Phu Nhuan District Jewelry Store, established on 28/04/1988, under the
People's Committee of Phu Nhuan District. PNJ's main business activities include testing diamonds and
gemstones, manufacturing and trading finished gold jewelry; the silver; precious stones, gold bars,
precious stones or semiprecious stones.
Products and services at PNJ Company
PNJ Gold Jewelry: Since its inception in 1988 until now, PNJ gold jewelry brand has been constantly
innovating to continuously launch hundreds of collections of diverse gold materials, rich in gemstones
with unique designs. (Included: High jewelry fine jewellery; Jewelry & accessories PNJ silver; Jewelry
style by PNJ; Disney PNJ; Corporate gift products; Diamonds, precious stones, precious metals; Fashion
watch.
Chart 1: Revenue structure by product
Company Strategies
Vision: To become Asia's leading company in jewelry making and retailing beauty products, reaching out
to the world.
Mission: PNJ is constantly innovating to bring exquisite products with real value to honor the beauty of
people and life.
Core value: Integrity For Personality; Continuously Hollow The Goal; Interested With Development;
Delicious For Customers; Different Creation Penion
Sustainable development philosophy: Put customer's benefits and social benefits into the business's
benefits.
Industry Overview and Competitive Positioning
Vietnam Economic Performance

Chart 2: Vietnam’s GDP growth (Source: General Statistics Office)

As we known, 2020 is a really special year with the dual effects of Covid 19 and natural disasters, having
a heavy impact on the economy and consumption trends, in which "Social distancing" is considered as
one of the events. highlight of the year. Slowing retail and economic growth and a sharp drop in
consumer confidence are major challenges that PNJ has faced in the past year. GDP growth rate for the
whole year reached 2.91%, the lowest in the period 2010 - 2020. People's incomes were affected,
consumer confidence decreased, retail growth of goods only reached 7%, the lowest in the period 2010-
2020.
Competitive Positioning
STOCK MARKET CAP P/E P/B
PNJ 21,940,873,329,500 21.7 3.81
SHI 2,514,555,049,200 58.68 1.85
KVC 188,100,000,000 -4.87 0.37
ITQ 131,138,177,500 75 0.51
SSM 34,137,591,300 5.08 0.48
MCP 403,410,082,000 20.9 1.85
PMS 7.53 0.9
Table 2: Competitive of PNJ
In difficult market conditions, many large retail enterprises in the world and Vietnam could not stand,
PNJ still reached the target and exceeded the plan in terms of both revenue and profit.
The proportion of retail revenue accordingly increased sharply, accounting for 59.7% of the Group's total
revenue for the whole year, reaching the highest level in recent years.
2. Financial position, business performance

Chart 3: Vietnam jewelry market share

Financial 2016 2017 2018 2019 2020

Indicators
Net revenue 8,564,590 10,976,837 14,571,136 17,000,681 17,510,789
(million dong)
Profit after tax 449,574 724,856 959,923 1,193,925 1,069,310
EPS 4,575 7,084 6,986 6,016 4,748
BVPS 15,267 28,016 22,425 20,326 23,047
P/E (times) 14.54 19.34 13.33 14.30 17.06
P/B (times) 4.36 4.89 4.16 4.23 3.51
Cash dividend 18% 18% 20% 18% 20%
 ROA 13.10% 17.77% 17.74% 15.88% 12.52%
ROE 31.38% 32.01% 28.34% 28.69% 21.78%
Table 3: Key financial ratio

Revenue & Profit Growth

20,000,000 25.00%
18,000,000 20.36%
19.07%
16,000,000 17.42% 19.61%20.00%
16.48%
14,000,000
12,000,000 15.00%
10,000,000
8,000,000 7.02% 10.00%
6.60% 6.59%
6,000,000 5.25%
3,460,713 6.11%
3,434,733
4,000,000 1,911,964
2,779,084 5.00%
1,411,293 959,923 1,193,925 1,069,310
2,000,000 449,574 724,856
- 0.00%
2016 2017 2018 2019 2020

Net revenue Gross profit Net profit

Gross profit margin Net profit margin

Chart 4: Revenue & Profit Growth (Source: Vietstock website)

Consolidated gross profit margin for the whole year reached 19.7% and continued to remain high
compared to previous years. This is especially meaningful in a year of continuous difficulty due to the
pandemic, social distancing and a sharp drop in consumer demand; reflects the determination, efficiency
and internal strength of the whole Group.
According to Stockbiz.vn, the net profit margin of the "Personal belongings" industry including PNJ is
-2.84%. Meanwhile, PNJ is 6.11%. This difference illustrates differences in the cost structure of each
industry: compared to the large “Fabricated Metal Product” industry, the “Personal Belongings” industry
spends more on activities such as corporate management, finance and marketing. market, and spend less
on factors such as materials.
PNJ's net profit margin increases gradually until 2019, and decreases to 6.11% in 2020. However, the
Covid 19 epidemic has made PNJ spend more in 2020. From an investor's perspective, PNJ is in a
favorable position because of its profit margin. net profit margin is higher than the industry average net
profit margin and has a continuously increasing net profit margin. This shows that PNJ is doing a good
job of effectively reducing its costs - at any given levels of sale - the higher its net profit margin.

PNJ Industry
Debt-to-equity ratio 0.35x 1.87x
ROA 12.52% 6.30%
ROE 21.78% 15.20%
Quick ratio 0.19x 1.15x
Gross profit ratio -0.75% 18.61%
Table 4: Leverage & Profitability ratios (Source: Vietstock, Stockbiz)
The debt-to-equity ratio lower than 1, it means the assets of the PNJ are financed mainly by equity. In
principle, the smaller this ratio, which means that liabilities account for a small percentage of total assets
or total capital, the less difficult the business will be in finance. However, a low D/E may mean that the
business has a low risk of debt repayment, but it can also show that the business does not know how to
borrow for business and, to exploit the benefits of efficiency tax savings.
PNJ has an average leverage ratio compared to the industry. This shows that the enterprise's financial
autonomy shows that the enterprise has not yet taken advantage of many financial leverage advantages.
PNJ's ROA is at 12.52%, higher than the industry's 6.22%. Proving that the level of use of assets of the
enterprise is very good. The decrease in capital was mainly due to a decrease in loans & short-term
finance leases (the impact decreased by 9%), and payables to sellers decreased by 2.4%. Due to the
improved business situation in the second half of the year, PNJ proactively paid off loans to optimize
capital structure. Other short-term liabilities and undistributed profit after tax increased by 2.3% and 6.6%
respectively, but ROA remained stable, although lower over the years. According to Table 4, this rate has
decreased over time due to the Covid 19 pandemic.
The higher the PNJ’s ROE ratio, the more effectively the company uses shareholders' capital, which
means that the company has harmoniously balanced between shareholder capital and borrowed capital to
exploit its competitive advantage in the future. capital raising process, scale expansion. Therefore, the
higher the ROE ratio, the more attractive the stocks are to investors.
In addition, a high ROE maintained for many years also shows the competitive advantage of PNJ.
Enterprises with high competitiveness, competitive advantage, or monopoly often have very high ROE.
This ratio has gradually decreased over time, from 31.38% (2016) to 21.78% in 2020, but PNJ still
maintains its strength very well.