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PNJ [BUY +52.9%] - Foray into watches bolsters fashion accessory ambitions - Update

We reiterate a BUY on PNJ, which, on the back of its dominant position in the fashion gold jewelry market, is in a sweet spot to capitalize on Vietnam’s fast-growing middle-affluent class. We lift our TP by 16% mainly due to higher medium-term SSSG and GPM forecasts for the jewelry retailing business while we also start incorporating PNJ’s foray into watch retailing. PNJ is trading at an attractive three-year PEG of 0.7 based on our forecasts.