(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 FINANCEKHOA TÀI CHÍNH

BÀI TIỂU LUẬN

FINANCIAL ANALYSIS OF PHU NHUAN JEWELRYJOINT STOCK COMPANY-PNJ

HCM City, 15 / 06 / 2023

Members: N o

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 CityPhone: (84-28) 39951703 – Fax: (84-28) 39951702 – Email: pnj@pnj.com.vnBusiness 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 PNJCharter 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.vnMain 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 of Phu 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 also marked in the professional branding work of PNJ, PNJ jewelry began to export, quickly dominated the market, 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 love jewelry.

January 2, 2004: PNJ was officially equitized Also during this time, PNJ won the title of Top 500 Leading 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 Miss Universe 2008 pageant held in Vietnam.

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

2009 -2011: ENHANCING DEVELOPMENT AND EXPANDING THE SCALE

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

In August 2009, CAO Fashion Company Limited was established along with the addition of the watch business 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 Quality Gold 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 to international 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 at 52A- 52B Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh City, which is considered as one of the centers jewelry center , the largest diamond in Vietnam market

On September 10, 2013, PNJ gold jewelry brand announced a new message "Honor true values" with the aim of Honoring the "golden" values, the noble qualities of women in today's modern society on the basis 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's image through the APEC VIETNAM 2017 badges; PNJ won “ASIA’S BEST REPORT ON THE SDGS”, 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, entered the Top 50 most effective business companies in Vietnam, and received the JNA award for the 4th time, 3 times in a row, reaching the Top 10 in 100 Sustainable Development Enterprises, becoming a billion-dollar enterpris.

2019-2022: ETERNAL SHINE

2019 “Press the regenerate button – F5 Refresh” creates a breakthrough for the next 5 years strategy Become a retailer Asia's best jeweler, in partnership with international partner Walt Disney

2021 Honoring the Best Jewelry Manufacturer and Craftsman in 2021 - World Jewelery Award JWA.

2022 Top 5 “Listed companies with good governance 2022”, Top 20 developed enterprises on HoSE (2022)

2.BUSSINESS PHILOSOPHY Logo meaning: Convergence and shine

The logo is inspired by the diamond, a symbol of longevity and wisdom The 5 rays of the logo are simple, 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 continuous development 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 of people 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 natural resources responsibly, and minimizing waste.

Reduce greenhouse gas emissions according to the national roadmap through transparent inventory of business 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 respecting differences, empowering with responsibility, encouraging opportunity creation and rewarding recognition.

Social Progess:

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

Develop human resources inside and outside PNJ through talent management and strategies to encourage individual and organizational learning and improvement.

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

Management Development:

Enhancing the performance of the Board of Directors through a governance model that is consistent with international practices, an accountability mechanism and effective interaction with stakeholders.

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

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

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1 Internal stakeholders.

- Employees: salesman, warehouse staff, security guard, accounting department, finance department, 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,

foreign-owned individuals

- Customers:

PNJ Gold Store : Aimed at female customers from 25-45 years old These customers usually have a decent or higher average income and expenditure.

PNJ Silver Store : Aimed at young customers from 15 to 25 years old Customers of this group are usually lovers of fashion accessories and love to assert themselves.

CAO Fine Jewellery store : The customer group that PNJ wants to target is high-income customers Are overseas Vietnamese visitors, or foreign tourists, people who are willing 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

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

Reduce the current liabilities: renegotiate payment terms with suppliers, reducing unnecessary expenses and paying off debt

Increase current assets: increase cash, account receivables and inventory by improving the company’s sales and collections processes

Sell long-term assets

*Quick ratio:

9

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 to 1.82 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 that the business sells slower than the industry.

Solution: Reduce inventory:

+ Promote the PNJ company's brands, including PNJ, PNJSilver, Disney|PNJ, Style by PNJ, and fashion 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 on necklace jewelry and a 40% special offer on colored stone and pearl jewelry.

* Average collection period:

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- In 2018, the average time it took to recover a debt was 5 days; in 2019, 2020, 2021, and 2022, it was 4 days The ratio tends to drop from 2018 to 2019 and remain consistent through 2022, which 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 collects money faster than the industry

Solution: Keep maintaining:

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

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

+ Explicit payment terms: Be specific about payment installments and late payment penalties in contracts and correspondence that contain payment terms.

*Average payment period:

12

Average payment period (days)

Average payment period (days)

- In 2018, the company paid its raw material suppliers in 11 days on average; in 2019, it took 19 days; in 2020, 12.5 days; in 2021, 16 days; and in 2022, 4 days.

- This ratio tends to fluctuate from 2018 to 2021 and drops to 4 days in 2022 So the company doesn't understand anything about the "Appropriation" in business.

Solution:

+ 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

- This ratio tends to decrease from 2.26 in 2018 to 1.84 in 2021 and increase to 2.54 in 2022 However, these ratios are all higher than the industry average (1.46) Infer that the firm uses its total assets efficiently.

Solution: Keep maintaining:

+ Improving the collection of debt: Receivables make up a sizable amount of the company's current assets, thus controlling receivables is a useful strategy to increase the effectiveness of the working 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-term commercial 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 materials must 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 and the company's reputation.

*Total equity turnover:

14

- One VND of owner's equity created 3.89 VND of net revenue in 2018, 3.71 VND in 2020, 3.34 VND in 2020, 3.25 VND in 2021, and 4.01 VND in 2022.This ratio tends to decrease from 3.89 in 2018 to 3.25 in 2021 and increase to 4.01 in 2022 However, these ratios are all higher than the industry average (2.14) Infer that the firm uses its owner's equity efficiently.

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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- This ratio tends to fluctuate from 2018 to 2021 and drops to 36% in 2022 However, these ratios are all lower than industry averages (110%) It shows that enterprises have better financial management ability, less dependence on loans and better debt payment ability.

Solution: Keep maintaining

*Total debts equity:

16

- 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 higher than 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:

17