PNJ - Guidance for 7% YoY decline in NPAT, yet retail sales to outperform tough jewelry industry - AGM Note

1. Key AGM resolutions:

* 2025 guidance: Gross revenue of VND31,607bn (USD1.3bn; -17% YoY) and NPAT of VND1,960bn (USD78mn; -7% YoY; 85% of our full-year forecast). We see potential downside risks to our 2025F forecasts, pending a more comprehensive review.

* Share repurchase plan: The AGM approved PNJ to repurchase up to ~8mn shares (~2.5% of outstanding shares) via order matching and/or put-through. Details on repurchase prices and the timeline have not yet been disclosed.

* Cash dividend: Shareholders approved a FY2024 cash dividend of VND2,000/share (2.9% yield), including a VND600/share advance paid in March 2025. Shareholders also approved a FY2025 cash dividend guidance of VND2,000/share (2.9% yield).

* FY2024 ESOP: PNJ received approval to issue ~3.24mn shares (0.96% of current shares outstanding) at VND20,000/share in 2025. Shares are subject to a 3-year lock-up period: 30% become transferable after Year 1, another 30% after Year 2, and the remaining 40% after Year 3.

* The FY2025 ESOP proposal was not approved, receiving an approval rate of 60.237% - below the required threshold of 65%. This proposal was aimed to issue ESOP shares for PNJ’s employees, capped at 1% of total outstanding shares. PNJ would have been eligible for this issuance if its 2025 actual NPAT ≥ VND1,568bn (80% of 2025 guided NPAT).

* Cash bonuses for the BOD and key management will be based on PNJ’s 2025 actual NPAT:

- Cash bonus of VND35bn (USD1.37mn) if VND1,960bn (2025 guided NPAT) ≤ 2025 actual NPAT < VND2,113bn (2024 actual NPAT).

- Cash bonus of VND50bn (USD1.96mn) if 2025 actual NPAT ≥ VND2,113bn (2024 actual NPAT).

2. Discussions:

* PNJ managed to outperform the Vietnamese jewelry market in 2024. Its number of new customers increased 15% YoY in 2024 driven by (1) continued store expansion and (2) customer acquisition from other players. Additionally, PNJ’s average ticket size dropped 2% YoY in 2024 and remained relatively flat in Q1 2025 vs Q4 2024 due to soft consumer spending.

* Store network expansion: PNJ targets a net addition of 12 to 25 new stores in 2025, depending on consumer spending.

* Raw material procurement remains a challenge for the whole jewelry industry.

* “Men code by PNJ” product line:

- The soft launch of PNJ’s men’s jewelry line has shown upbeat early results. PNJ plans to officially launch this product line (including jewelry and non-jewelry items for men) in late Q2-early Q3 2025.

- The company plans to expand this business line under a shop-in-shop model and may consider standalone stores if market conditions are favorable.

* Art product relaunch: PNJ is preparing to rebrand and relaunch its art products line.

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