PNJ Flash note – NOT RATING

PNJ stock hitting the ceiling on Friday may have been driven by news confirming that the company is fully compliant with legal regulations governing diamond imports, while diamonds under investigation were not distributed through PNJ’s network. The investigators’ confirmation should help ease uncertainties over potential legal implications for the company and restore confidence among both customers and investors, thereby reducing liquidity pressure related to the buy-back.

We are currently suspending our rating on the stock. However, with a clearer picture of the company’s separation from the individuals’ responsibilities in the incident, coupled with the significant provision for the buy-back recorded in 2Q, we may review our rating for PNJ in our upcoming updates.

In 2Q2026, the company recorded an estimated provision of VND865bn in association with repurchase transactions occurring after the reporting date. The provision was made under utmost prudence principles, which aim to cover the maximum loss in relation to buy-back, based on information available as of the date of preparation of the financial statements. This may imply that incremental provisions in the following quarters might be lower or small or even zero.

The stock has fallen by 36% since the event first emerged and is trading at TTM P/E of 7.0x, compared to 3-year median of 14.4x, and P/B of 1.5x, compared to 3-year median of 2.8x.