If you ask any investors about PNJ, the answer is about two impressions: the leader in PNJ and the retail network.
In all reports, securities firms such as Ban Viet (VCSC), BIDV Securities (BSC), Bao Viet (BVSC), KIS, Phu Hung (PHS) … all recommend buying PNJ shares of Phu Nhuan Jewelry Joint Stock Company (PNJ). The expected price that these securities companies estimate for PNJ can reach 132,000-140,000 VND / share, 30-40% higher than the current market price.
A person’s hot seat
If you ask any investors about PNJ, the answer is about two impressions: the leader in PNJ and the retail network. The name Cao Thi Ngoc Dung has been associated with PNJ since its establishment in 1988. Since then, 29 years ago, Ms. Dung is still the CEO of PNJ. For such a long time, Ms. Dung herself once said that it was time to withdraw and make room for newcomers to replace them. Remember, during the two meetings with us, Ms. Dung mentioned this transfer story. At the beginning of this year, when PNJ moved with the transfer plan, but in the end, it still could not do it for objective reasons: investors realized that PNJ still needed a CEO like Ms. Dung to continue accompanying.
At this year’s General Meeting of Shareholders, before votes of support from many shareholders, Ms. Cao Thi Ngoc Dung said she would be the CEO for at least the next 2 years. This decision once made some outside observers concerned that the decline of the age, the old style of operation could cause the bulging PNJ boat to move slowly.
But Ms. Dung seems to be proving the opposite. There is no sign of aging in her management. Ms. Dung also established new positions and chose young people to give them smoothly. For example, in April this year, Mr. Le Tri Thong was elected to the position of Vice Chairman when he was less than 40 years old. Mr. Thong is also in charge of strategy, information technology … at PNJ. Anna Vo, Creative Director, is a young girl, owns 3 international university degrees, is fluent in 4 foreign languages and graduated with a Master of Fashion at Istituto Marangoni (UK) Fashion Design Institute. All of them brought the essence to PNJ and breathed new winds into PNJ. This is also seen as a step to pave the way for a PNJ in the future without Ms. Dung as CEO.
For a long time, Ms. Cao Thi Ngoc Dung is compared to the operator of the PNJ machine. This is similar to Ms. Mai Kieu Lien from Vinamilk, Ms. Nguyen Thi Mai Thanh from REE, Ms. Pham Thi Viet Nga from Hau Giang Pharma, and Ms. Truong Thi My Khanh in Vinh Hoan. They are female leaders who dedicate their whole life to the Company and make an important contribution to the current success of the Company. They understand their business and their industry so deeply that it is difficult for any replacement to fill the void. This is a huge pressure for the inheritance class. Therefore, people only see a few changes, which took place quite smoothly like in Vinh Hoan.
Particularly in PNJ, the role of Ms. Dung is always meaningful, especially in the period when she boldly transformed and promoted the business model from trading gold bars to retailing gold jewelry. Thanks to that, the 2016 revenue of PNJ, although only about 40% compared to the Saigon Jewelry Company (SJC), but the gross profit is 7 times higher than SJC. In the silver jewelry segment, PNJ continuously changes, diversifies designs, expands the customer base, from 18-25 years old to 18-35 years old and adds a collection specifically for children, designs Men only.
In management, the PNJ side has applied the calculation of individual indicators associated with collective targets, emphasizing the capacity of key positions, increasing control of compliance in assessment, measurement, and appreciation. training production and sales teams … Notably, the strong investments in technology and systems have allowed PNJ to work on a big data project. From here, PNJ can capture and track consumer behavior and provide them with a more customized experience.
All these internal investments and restructuring, according to Ms. Cao Thi Ngoc Dung, have been prepared by PNJ for many years and have been realized through impressive business results, with revenue growth 9 May 2017 is 31%, reaching more than 7,700 billion VND. The profit after tax also increased by 41.6%, reaching 504 billion VND. The customer satisfaction index (NPS) is from 8.35 points in 2015 to 8.5 points in 2016, aiming to reach the lowest point of 8.7 points from 2017.
Two new stores per week
But what is a surprise to investors is the speed of PNJ’s retail network expansion. By the end of October 2017, PNJ had a total of 253 stores. This is the number of retail stores behind only a few big names such as The Gioi Di Dong, Vingroup. If only in retail jewelry, no one can pass PNJ to the chain of stores. Only 9 months of 2017, the total number of new stores of PNJ has surpassed the number of new stores of the whole year 2016. Rong Viet Securities Company (VDSC) said that, at the current rate, PNJ will complete the pepper opened 300 stores in 2018.
The speed of opening new stores of PNJ makes many people think of the strategy of The Gioi Di Dong with wide chain stores across the country. With this overwhelming tactic, The Gioi Di Dong has outstripped its competitors in the same industry and became the enterprise with the largest market share in the mobile phone and electronics sector in Vietnam.
The increase in the number of stores has an important meaning in increasing PNJ’s market share. The evidence is that with only 100 additional stores, PNJ’s market share has doubled, from 12-13% in 2012 to 26.5% at the end of 2016. BIDV Securities Company assessed that PNJ’s stores is gradually entering maturity. Sales of the whole chain of stores have increased 22%, outperforming the figure of 8-10% in the second half of 2016.
But in the short term, in order to have goods to serve at least 70% of the sale needs, PNJ expands factory operations. This is also how PNJ takes advantage of opportunities from the jewelry retail industry, according to the World Gold Council (WGC), Vietnam’s per capita gold jewelry consumption is only $ 6.2 / person, while such as Hong Kong (China) is 263 USD / person. However, the rate of jewelry spending / income GDP / person of Vietnam is in the high category, reaching 0.3% / GDP / person, just behind Hong Kong with 0.66%. This shows that Vietnamese people like to buy gold.
Investors saw the prospect from PNJ and were willing to pay an average price of 101,000 dong / share, exceeding PNJ’s expectation. As a result, last August, PNJ successfully raised VND 990 billion and plans to use that capital to invest in the retail system, reduce short-term debt and increase working capital.
PNJ is focusing on the core industry. Currently, PNJ only maintains 2 subsidiaries, related to the jewelry industry, CAO Fashion One-Member Limited Liability Company and PNJ Inspection One-Member Limited Liability Company (PNJLab). For out-of-industry investments, the Company has completed a resale or full provision.
“In the next 5 years, PNJ’s task will still be to develop the jewelry retail system intensively, how to keep PNJ to catch up with the production techniques of advanced countries in the world, so that PNJ will still keep its position. No. 1 in Vietnam market and leading in Asia. My task is to put strategies to implement this vision ”, Ms. Dung answered us.
* Source: Investment bridge