PNJ Update – BUY

The company reported splendid 1Q2026 with an EAT upturn of 117% YoY, better than our expectation, driven by expansion in the 24K gold-excluded gross margin.  We revise 2026 EAT projection by 21% to VND3,982bn (+40.8% YoY) and our target price by 25% to VND110,500/share by YE2026. Rating BUY.

Net revenue and EAT skyrocketed by 79% and 117% YoY, to VND17,245bn and VND1,467bn, respectively, in 1Q2026.

Revenue surged in all segments including retail (+21.7% YoY), wholesale (+33.9% YoY) and 24K gold (+325% YoY), though it was largely a price-led result in line with elevated gold prices.  The introduction of a new buy-back policy for selected product lines – at gold market prices instead of fixed rates previously – and non-PNJ products since early 2026 along with recycling old inventories has favored PNJ in sourcing materials, while waiting for the government’s new moves on granting gold importing quotas. This supported not only its core retail segment but also the expansion of high-gold-content products, a category that had contracted in 2025 due to material constraints.

The sharp rise in EAT was propelled by enhancement in the 24K gold-excluded gross margin, despite a squeeze in the overall gross margin owing to increased contribution of the 24K gold segment. Elevated gold prices enabled the company to realize fruitful gains from the sale of inventories accumulated earlier at much higher prices and facilitate the recycling old inventories/products thanks to offsetting its high costs. Additionally, profitability improved in the 24K gold segment, as a result of the company’s product mix optimization for better margins in the peak season 1Q.

We project net revenue and EAT for PNJ at VND47,669bn (+36.3% YoY) and VND3,982bn (+40.8% YoY) in 2026, 21% higher than our prior update. According the management, the core retail segment will sustain the expansion of store network selectively, while continuing to fortify efficiency through replacing locations, upgrading stores (in terms of scale, experiment, etc.), and boosting online sales. We expect that rosy net revenue growth will likely persist in the rest of 2026; however, the divergence between top and bottom line growth may shrink as the fruitful difference between inventory costs and selling prices may narrow, unless gold price extends its skyrocketed uptrend.