(Tiểu luận) topic financial analysis of phu nhuan jewelryjoint stock company pnj

Cao Thi Ngoc Dung – Chairman of the Board of Directors of PNJCharter capital: 3,281,691,880,000 Three thousand two hundred and eighty-one billion six hundredand ninety-one million eight

UNIVERSITY OF ECONOMICS AND FINANCE

KHOA TÀI CHÍNH

BÀI TIỂU LUẬN

TOPIC:

FINANCIAL ANALYSIS OF PHU NHUAN JEWELRY

JOINT STOCK COMPANY-PNJ

HCM City, 15 / 06 / 2023

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Company’s name:

Vietnamese name: Công ty cổ phần vàng bạc đá quý Phú Nhuận

English name: Phu Nhuan Jewelry Joint Stock Company

Short name PNJ,.JSC

Head office: 170E Phan Dang Luu – Ward 3 – Phu Nhuan District – Ho Chi Minh City

Phone: (84-28) 39951703 – Fax: (84-28) 39951702 – Email: pnj@pnj.com.vn

Business registration certificate: 0300521758

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Tax code: 0300521758

Company type: Joint-stock company

Legal representative: Ms Cao Thi Ngoc Dung – Chairman of the Board of Directors of PNJ Charter capital: 3,281,691,880,000 ( Three thousand two hundred and eighty-one billion six hundred

and ninety-one million eight hundred and eighty thousand dong)

Website: www.pnj.com.vn

Main business sectors:

-Producing and trading in gold, silver, precious stones, fashion accessories, and souvenirs

-Trading in watches and buying and selling gold bars

-Testing service for diamonds, precious stones, precious metals

-Real estate business

Stock code: PNJ

1.PROCEDURES AND DEVELOPMENT :

1988-1992: FORMATION AND DETERMINATION OF DEVELOPMENT STRATEGY

On 28/04/1988, Phu Nhuan Gold and Silver Trading Store was born, under the People's Committee ofPhu Nhuan District

In 1992, PNJ officially named Phu Nhuan Gold and Silver Gem Company after two name changes

1993 – 2000: ACCELERATED EXPANSION OF NETWORKS AND INDUSTRIES

From 1994-1999: PNJ established branches in Hanoi, Da Nang and Can Tho This period is alsomarked in the professional branding work of PNJ, PNJ jewelry began to export, quickly dominated themarket, was trusted by consumers, and affirmed its prestige

2001 – 2004: PROMOTE TRADE CONSTRUCTION AND EQUITIZATION

In 2001, PNJSilver brand was officially born to meet the beauty needs of young people who lovejewelry

January 2, 2004: PNJ was officially equitized Also during this time, PNJ won the title of Top 500Leading Retail Enterprises in Asia - Pacific and received the First Class Labor Medal

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RE-BRANDING AND DEVELOPING PREMIUM LABEL

CAO Fine Jewelery brand was officially born PNJ is the jewelry and crown sponsor for the MissUniverse 2008 pageant held in Vietnam

On 3/4/2008, PNJ officially announced the change of the new logo on the 20th anniversary ofestablishment

2009 -2011: ENHANCING DEVELOPMENT AND EXPANDING THE SCALE

In March 2009, PNJ shares were officially listed on HOSE, increasing charter capital to 400 billiondong

In August 2009, CAO Fashion Company Limited was established along with the addition of the watchbusiness of world famous brands at PNJ system

With 142 stores, PNJ becomes the company with the largest jewelry retail system in Vietnam

In 2010, PNJ was recognized as a national brand by the Government and received the National QualityGold Award

In March 2011, PNJ started construction of the most modern PNJ Jewelry Factory in Vietnam

2012 – 2018: RECONSTRUCTION FOR PERMANENT DEVELOPMENT

In 2012, PNJ hired a foreign consultant to standardize the management system according tointernational standards

On October 18, 2012, PNJ inaugurated PNJ Jewelry Factory after nearly 18 months of construction.With a total investment capital of 120 Billion VND

On 12/01/2013, PNJ inaugurated the largest jewelry, diamond and watch center in the whole system at52A- 52B Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh City, which is considered as one of thecenters jewelry center , the largest diamond in Vietnam market

On September 10, 2013, PNJ gold jewelry brand announced a new message "Honor true values" withthe aim of Honoring the "golden" values, the noble qualities of women in today's modern society on thebasis of modern social integration platform

In 2014, PNJ had nearly 200 stores nationwide

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Week 2017 - PNJ is honored to accompany the APEC 2017 high-level week, promoting Vietnam'simage through the APEC VIETNAM 2017 badges; PNJ won “ASIA’S BEST REPORT ON THESDGS”, Outstanding Enterprise of the Year – ASEAN and Top 3 Asian Retailers voted by JNA,

In 2018, PNJ marked the 30-year milestone with the largest jewelry fashion show in Vietnam, enteredthe Top 50 most effective business companies in Vietnam, and received the JNA award for the 4thtime, 3 times in a row, reaching the Top 10 in 100 Sustainable Development Enterprises, becoming abillion-dollar enterpris

Logo meaning: Convergence and shine

The logo is inspired by the diamond, a symbol of longevity and wisdom The 5 rays of the logo aresimple, powerful but no less soft and flexible, typical for the jewelry industry, which is the core activity

of the business Those 5 rays represent the five elements, symbolizing the movement and continuousdevelopment of PNJ

Slogan / tagline: Belief and Style

Vision: To become Asia's leading company in jewelry making and retailing beauty products, reaching

out to the world

Mission: PNJ is constantly innovating to bring exquisite and valuable products that honor the beauty ofpeople and life

Core values: Integrity to last Stick to the goal Interest in mutual development

Customer care Pioneering to make a difference

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II SUSTAINABLE DEVELOPMENT

ESG Declaring: “PNJ ACTS RESPONSIBLY TO HONOR THE BEAUTY OF PEOPLE AND LIFE IN

A SUSTAINABLE WAY”

Environmental protection and enhancement

Promote a circular economy model by maximizing the life-cycle value of products, using naturalresources responsibly, and minimizing waste

Reduce greenhouse gas emissions according to the national roadmap through transparent inventory ofbusiness activities

Comply with legal regulations on waste management and aim to reduce emissions to “zero” according

to the National Environment Strategy of the Government of Vietnam

Promote efficient use of energy and resources, towards rational use of renewable energy

Create a diverse, fair and inclusive environment in the business by listening to and respectingdifferences, empowering with responsibility, encouraging opportunity creation and rewardingrecognition

Social Progess:

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Care for the team in many aspects such as mental health, social connection, financialsustainability through employee welfare programs.

Develop human resources inside and outside PNJ through talent management and strategies toencourage individual and organizational learning and improvement

Honoring beauty, humanity into business activities and spreading good values with initiatives toimplement social responsibility (CSR)

Management Development:

Enhancing the performance of the Board of Directors through a governance model that isconsistent with international practices, an accountability mechanism and effective interactionwith stakeholders

Promoting the balance of interests of the Company, shareholders with the interests ofstakeholders by fair and transparent benefit and risk control mechanisms

Committed to practicing good accounting practices through the application ofinternational accounting standards and a transparent and open financial and accountingreporting system as required and recommended by regulatory authorities government

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1 Internal stakeholders.

- Employees: salesman, warehouse staff, security guard, accounting department, financedepartment, jewelry workers,

- Manager: chief executive officer (CEO), chief financial officer (CFO), chief accountant,

- Owners: members of the Board of Directors, shareholders

2 External stakeholders

- Suppliers: Jewelry and crown sponsors, jewelry manufacturing and retail companies, company

that exploits and sells materials for jewelry making,

- Society: The owner leases the premises , Business Partners, media company,

- Government: People's Committee of Phu Nhuan District

- Creditors: Vietcombank , BIDV , Vietinbank , SeABank , HSBC ,

- Shareholders: members of the board of directors, internal members of the company,

to pay for expensive jewelry products

Export of finished gold and silver jewelry : Up to now, PNJ is the only enterprise operating

in this export segment The markets that PNJ targets are mainly the US, Germany and Denmark,

1.Analysing the ratio

a Liquidity ratio

*Current ratio:

8

2018 2019 2020 2021 2022 0.00

Analysing: : Ratio of 5 years: 2.02 (2018), 1.83 (2019), 2.21 (2020), 2.04 (2021), 2.45 (2022)tend to increase but still lower than industry average (2.59) This is not good for the company

Analysing: Ratio of 5 years: 0.16 (2018), 0.08 (2019), 0.19 (2020), 0.12 (2021), 0.30 (2022is much lower than the industry average (1,72) This is not good for the company

Solution: Promotional gifts attached, Discount, Discount by set (combo), Reduce inventory by PR

products and companies

Analysing:

- In 2018, businesses sold items to the market 2.37 times; in 2019, 1.93 times; in 2020, 2.15 times;

in 2021, 1.82 times; and in 2022, 2.66 times This ratio tends to decrease from 2.37 times in 2018 to1.82 times in 2021 and increase to 2.66 in 2022, which is good for the firm

- However, the ratio in five years was lower than the industry average by so much (31.63) Infer thatthe business sells slower than the industry

Solution: Reduce inventory:

+ Promote the PNJ company's brands, including PNJ, PNJSilver, Disney|PNJ, Style by PNJ, andfashion accessories like earrings and necklaces made of gold, jewels, and diamonds

+ Some goods are discounted according to the month, for instance, in July, there is a 6% discount onnecklace jewelry and a 40% special offer on colored stone and pearl jewelry

* Average collection period:

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20180 2019 2020 2021 2022 2

is positive for the business Because cash collection is quicker than before

- The ratio in 5 years is much lower than the industry average (10.14) Infer that the business collectsmoney faster than the industry

Solution: Keep maintaining:

+ Monitor and control customer receivables on a regular basis: The management of debt will also beconsiderably easier for firms with regular monitoring of client receivables

+ Organizing receivables management more effectively: Businesses must improve their internalstructure and analyze their receivables

+ Explicit payment terms: Be specific about payment installments and late payment penalties incontracts and correspondence that contain payment terms

*Average payment period:

12

Average payment period (days)

+ Negotiate debt payback after 45 days with seasoned clients

+ Contract for new customers, repay the debt after 45 days

+ Training managers to know how to use "Appropriation"

*Total asset turnover:

13

Solution: Keep maintaining:

+ Improving the collection of debt: Receivables make up a sizable amount of the company'scurrent assets, thus controlling receivables is a useful strategy to increase the effectiveness of theworking capital of the business

+ Control the receivables: The firm must rely on the customers' ability to repay their debts,categorise them in accordance with their ability to do so, and take into account their long-termcommercial relationships (patrons) throughout time

+ Improve inventory and raw material management: To cut the cost of obtaining resources,carefully plan the process of buying and storing raw materials for each time Purchased materialsmust be inspected for quality in line with the published production technical requirements,preventing the use of subpar materials that might compromise the quality of the final product andthe company's reputation

*Total equity turnover:

14

2018 2019 2020 2021 2022 0.00

Solution: Keep maintaining:

+ Have a reasonable policy of exploiting and creating capital

+ Promote investment activities to renew equipment and assets

+ Working capital planning: Working capital planning is one of the most important and essential tasks for businesses

+ Manage inventory, reduce storage costs: Maintaining inventory at a reasonable level is an important condition for the company to improve the efficiency of short-term capital use

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Solution: Keep maintaining

*Total debts equity:

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- Total liabilities account for 72% of owner’s equity in 2018, 88% in 2019, 62% in 2020, 77% in

2021, and 58% in 2022 This ratio tends to fluctuate from 2018 to 2021 and drops to 58% in

2022, which is good for the firm because business is good However, these ratios are much higherthan the industry average (-816%) The company uses financial leverage inefficiently

Solution: To reduce the total debt equity:

-Increase the amount of equity by issuing more shares

-Sell off non-core assets to raise cash and reduce debt levels

-Improve a company's profitability by increasing revenue or reducing costs, which can lead to higher earnings and increased equity

*Interest coverage ratio:

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Interest coverage ratio

Analysing

- The company’s ability to pay interest tends to fall from 10.77 in 2018 to 9.74 in 2020, but theindex will tend to rise to 25.60 in 2022 The increased ratio gives a more plausible view of theenterprise’s investment capability, which makes investors more confident and significantlyincreases their investment capabilities

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2018 2019 2020 2021 2022 0.00%

Gross profit margin Industry average

Analysing:

Gross profit accounted for 19.07% of net revenue in 2018, 20.36% in 2019, 19.62% in 2020,18.41% in 2021, and 17.50% in 2022 From 2018 to 2019, the gross profit margin increased by1.29%; from 2019 to 2022, the gross profit margin decreased to 2.86%

The ratio of 5 years has tended to decrease, so it is not good for the company However, it islower than the industry average (16.66%), so the company has a low profit

*Operating profit margin:

Operating profit margin

Operating profit margin Industry average

Analysing:

Earnings before interest and tax accounted for 8.70% of net revenue in 2018, 9.54% in

2019, 8.57% in 2020, 7.08% in 2021, and 7.10% in 2022 The ratio of 5 years has tended

to decrease, so it is not good for the company However, it is much higher than theindustry average (2.78%)

*Net profit margin:

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2018 2019 2020 2021 2022Net profit after tax 960 1.193 1.069 1.029 1.811Net revenue 14.571 17.001 17.551 19.547 38.876Net profit margin 6,59% 7,02% 6,09% 5,26% 4,66%

The gross profit margin, operating profit margin, and net profit margin calculated above indicate

that the profit margins have decreased sharply, caused by too high costs

Solution: Reduce costs by:

-Cost of goods sold: reduction of material prices; finding a new supplier

-Cost of sale: Reducing employees is ineffective Set a set of targets: exceeding the target is rewarded; reaching the goal is sitting quietly; not reaching a target is laying off

-Financial expenses: reducing interest by reducing debt

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-Profiting from financial activity: leaving the investment room

*Earnings per share:

2018 2019 2020 2021 2022

Net profit after tax 960 1.193 1.069 1.029 1.811 Number of normal stocks 0,328 0,328 0,328 0,328 0,328 Earnings per share (VND/dividend) 2.927 3.637 3.259 3.137 5.521

Solution:

To maintain EPS, the company needs to increase sales and reduce costs In addition, thecompany may increase the selling price of its products or services to increase revenue, seek newmarket opportunities, or scale its operations to increase sales and revenue In addition, thecompany should also improve operational performance by optimizing production processes,ensuring efficient investment and inventory management, and increasing labor productivity

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