while also stimulating the experience of various product lines within the PNJbrand ecosystem.o In 2022, PNJ achieve lots of rewards:Top 50 Best Listed Companies in 2022.Top 50 Efficient
Overview
Founded in 1988, PNJ has become a leading Vietnamese jeweler, symbolized by its diamond-inspired logo representing longevity and prominence Its diversified offerings include gold, silver jewelry, precious stones, fashion accessories, souvenirs, watches, and real estate, catering to various customer segments.
- PNJ’s impressive growth can be seen through its expansion timeline In 1994, PNJ opened its first store in Hanoi, followed by a branch in Da Nang in 1998 By 1999, PNJ has successfully established its presence in the central market of Da Nang as well as the western market of Can Tho In 2010, PNJ was ranked 16th by Plimsoll in the top 500 largest jewellery companies in the world Until 2018, PNJ has charter capital of up to 1,081,020 billion.
- PNJ’s slogan, “Belief and Style”, reflects the company’s commitment to delivering quality products that align with customers’ personal style preferences The company’s operation process comprises various aspects, with a professional design team continually creating beautiful and unique jewellery models that capture the essence of elegance and charm PNJ’s nationwide network of retail stores offers a pleasant and convenient shopping experience for customers, complete with after- sales assurance and consulting service to ensure customer satisfaction.
- Moreover, PNJ has embraced the digital era by establishing an e-commerce platform, allowing customers to shop online and enjoy a convenient shopping experience from the comfort of their own homes This online marketplace complements the physical stores, providing customers with more choices and flexibility.
Investing in employee growth is crucial for PNJ, as evidenced by its comprehensive training programs These programs enhance sales skills and conduct knowledge, enabling employees to deliver exceptional customer service and advice By fostering continuous learning, PNJ empowers its workforce with the necessary expertise to excel in the competitive landscape.
- SWOT matrix is the business strategy of PNJ This strategy has proven to be highly effective in helping the company analyze internal strengths and weaknesses, as well as external opportunities and threats By leveraging this analysis, PNJ can develop appropriate strategies and business plans that capitalize on its strengths and address its weaknesses, thereby maximizing its potential and maintaining its position as a key player in the jewellery industry.
SWOT Analysis
Strengths
- In 2022, PNJ is determined to improve the implementation of sustainable development in line with ESG development For PNJ, ESG is a complete and comprehensive corporate governance framework.
- So far, PNJ has primarily assessed the data information framework, which is considered the key aspect of the business based on the GRI and CSI standards of VBCSD This process involves identifying risks and bridging the gap between the current state and the desired level, ultimately integrating these issues into the enterprise risk management framework.
- The company has a wide network of retail agents across the country, with 346 retail stores, mainly located in cities directly under the Central Government In addition to the domestic market, the PNJ brand is also present in 13 countries on 4 continents. This number plays a positive role in boosting PNJ's revenue growth.
- With over 25 years of dedicated efforts to excel, gain customer trust, and foster long- term customer relationships, PNJ is well-positioned to surpass its domestic competitors, gain a competitive edge, outperform emerging companies, and gradually expand into international markets
- PNJ has been recognized through awards and achievements such as: o In 2020, PNJ became the Best Jewelery Company in Asia-Pacific and was valued at $93.1 million by Forbes Vietnam, an 18% increase compared to the
2019 evaluation period In addition, PNJ's timely and effective actions in the F5-Refresh process were highly evaluated and honored by Talentnet for its outstanding HR policies in responding to Covid Moreover, the new brand STYLE By PNJ was launched this year. o In 2021, PNJ continued its journey to become a professional retailer and initiated a multi-brand distribution strategy with the collaboration of Pandora.The integration of international brands throughout the system helps PNJ tap into more potential customers who prefer high-end international products, while also stimulating the experience of various product lines within the PNJ brand ecosystem. o In 2022, PNJ achieve lots of rewards:
Top 50 Best Listed Companies in 2022.
Prominent Enterprises in Ho Chi Minh City.
Top 10 Outstanding Customer Experience Brands 2022.
Leading Top 10 Companies in the Trade and Service Sector Among
- According to market research report released by VNExpress in 2014, PNJ is perceived by customers as a brand that prioritizes quality and reliability, offering products served by courteous and professional staff Since its establishment in 1988, PNJ has been building a reputable organization, comprising responsible individuals who are committed to fostering mutually beneficial relationships with customers.
- PNJ actively engages in community collaboration through its PNJ Charity Fund In
In 2015, PNJ generously allocated 4.5 billion VND to charitable endeavors, extending educational opportunities through scholarships for underprivileged students and delivering care packages to remote and impoverished communities (VietNamNet, 2015; PNJ, Mái ấm của những tấm lòng, 2015) These initiatives have fostered a strong reputation for PNJ, earning praise and admiration from customers who recognize the company's commitment to social responsibility.
Weaknesses
● PNJ is not as favourable in the North as it is in the South:
The gold bar business segment of PNJ is unimpressive due to its low gross profit margin (0.17%) and contributes only 0.2% to the company's total revenue. Additionally, PNJ faces less beneficial conditions in the Northern region compared to the Southern region Bao Tin Minh Chau (BTMC) is still holding the number one position in the Northern market, particularly HaNoi This is partly because BTMC established its presence long before PNJ came Besides, according to researchers, people in HaNoi are more traditional and enjoy jewelry of nostalgic style as well as the aversion to change
● All raw materials are mainly imported:
All raw materials are mostly imported This is attributed to the peculiarity of the jewelry manufacturing industry that requires high quality raw materials and VietNam's skill level has not yet reached that level However, the excessive import may cause PNJ's contracts to be heavily affected by external factors such as political tensions, exchange rate fluctuations, inflation.
The jewelry industry is highly price-sensitive, with customers actively seeking competitive alternatives and comparing costs PNJ's gold bar trade, which yields a negligible profit margin (0.03%), is a prime example of this For instance, selling 1 tael of gold for 55.25 million Vietnamese dong results in a mere profit of 450,000 dong This price volatility can significantly affect PNJ's profitability and market share, particularly amidst economic turmoil.
Opportunities
The rapid growth of e-commerce provides an avenur for PNJ to expand its online presence and tap into the increasing trend of online jewelry shopping By investing in user-friendly and secure e-commerce platforms, enhancing their digital marketing efforts, and providing an integrated online shopping experience, PNJ can reach a wider customer base, including customers outside VietNam.
According to the latest report form World Gold Council (WGC), global demand for gold jewelry has recovered from the decline caused by Covid-19 pandemic since
2020 In 2021, the demand for gold jewelry in Vietnam increased by 11% Moreover, global gold consumption in the fourth quarter of 2021 reached 1,147 tons, nearly a 50% increase compared to the same period in the previous year This trend is occurring as individual investors are seeking safe investment channels to protect their assets among increasing inflation and economic instability caused by the Covid-
Continual product innovation is essential to stay competitive in the jewelry industry.PNJ can invest in research and development to introduce new designs, incorporate unique materials, and stay on top of changing fashion trends By offering innovative and distinctive products, PNJ can differentiate itself from competitors and attract a broader customer base.
Threats
Intense Competition with Industry Peers:
The jewelry industry is divided into different segments, including low-end, mid-range, and high-end With numerous established and emerging brands saturating the market, competition is fierce among names like PNJ, Doji, SJC, Bảo Tín Minh Châu, Phú Quý, as well as smaller brands like Shimmer and FloralPunk Jewelry stores are rapidly emerging, indicating a highly competitive landscape.
Fluctuations in Domestic and Global Gold Prices:
The significant price disparity between SJC gold and the global market poses concerns for consumers, raising risks Moreover, heightened demand for gold jewelry has led to material shortages for manufacturers and retailers due to limitations on import and export activities These factors amplify the challenges in the gold market, creating uncertainties for buyers and supply chain disruptions.
To stay competitive in the dynamic jewelry market, PNJ must closely monitor evolving consumer preferences and fashion trends By conducting thorough market research, they can identify shifts in demand and adjust their product offerings accordingly Staying updated with the latest fashion trends and actively engaging with customers through various channels allows PNJ to align its products with the changing desires of its target audience This proactive approach helps them maintain market share and prevent declining sales due to a failure to respond to the evolving demands of jewelry consumers.
Financial Ratio of PNJ from 2020 to 2022
Calculation of financial ratios
FINANCIAL RATIOS OF PNJ FROM 2020 TO 2022
PNJ JEWELRY JOINT STOCK COMPANY
(Ending a year) 300,880,402,245 111,969,758,488 98,997,286,429 Average account receivable 206,425,080,367 105,483,522,459 114,342,799,953 Inventory (Begining a year) 8,754,741,712,359 6,545,905,987,056 7,030,420,371,216 Inventory (Ending a year) 10,506,054,932,284 8,754,741,712,359 6,545,905,987,056 Average inventory 9,630,398,322,322 7,650,323,849,708 6,788,163,179,136 Current assets 11,966,357,761,798 9,292,192,238,421 7,143,929,036,497 Noncurrent asset 1,370,766,887,448 1,326,824,308,701 1,339,217,061,954 Total assets
(Beginning a year) 10,619,016,657,122 8,483,146,098,451 8,602,964,421,816 Total assets (Ending a year) 13,337,124,649,246 10,619,016,657,122 8,483,146,098,451 Total average assets 11,978,070,653,184 9,551,081,377,787 8,543,055,260,134
(Ending a year) 4,883,064,421,396 4,563,002,409,508 3,231,907,356,443 Average current liabilities 4,723,033,415,452 3,897,454,882,976 3,624,884,090,456 Noncurrent liabilities
(Ending a year) 9,965,573,000 43,380,157,361 9,376,877,000 Average noncurrent liabilities 26,672,865,181 26,378,517,181 8,607,331,500 Total debt/liabilities 4,749,706,280,633 4,606,382,566,869 3,241,284,233,443
Cost of goods sold 27,949,348,024,381 15,948,760,134,458 14,076,055,770,112 Gross profit 5,927,106,534,772 3,598,298,230,376 3,434,732,880,887 Operating expense
Analysis of the performance through 3 years (2020-2022)
Net income (EBITDA) 2,424,900,893,712 1,408,823,973,954 1,508,304,432,835 Total Equity 8,444,094,654,850 6,012,633,980,253 5,241,861,865,008 Interest expenses 94,421,152,974 104,380,274,160 154,416,694,276 Tax expenses 540,486,830,932 269,158,555,562 282,174,591,374 EBIT (Earnings before interest and taxes) 3,059,808,877,618 1,782,362,803,676 1,944,895,718,485
Acid-Test ratio (Quick ratio) 0.30 0.12 0.19
1 Current Ratio: a Formula: b Data Analysis:
- In the period of 2020-2022, the current ratio of PNJ is quite high (>1 - acceptable for most businesses) and tends to increase, in 2020 the current ratio is 2.45 it just decreased slightly to 2.04 in 2021 (by 0.17) and increase to 2.21 in 2022 (by 0.4) because the current asset increased by 1.67 and current liability increased by 1.51 so the increase was caused by greater current assets than the current liabilities, indicating that the company's solvency is increasing and it means that company’s ability to pay its debts in the future is more feasible But as a general rule, current ratio above 2.0 is considered healthy and the acceptable minimum ratio is 1.0, so in the next 3 years PNJ may have a current ratio at appreciating level, showing that the company has enough cash and availability investment to use and liquid in business activities.
- In the year 2020-2022, PNJ's current ratio is increasing (2.21 > 2.45) by 10.86% showing that the current asset of PNJ is growing faster than current liabilities while SJC’s current ratio is decreasing (11.4 > 8.2) by 28.08%, showing that the current liability of SJC is growing faster than current assets The current ratio assesses a company’s ability to pay its short-term so the increase in PNJ is great and the decrease in SJC is considered healthy and indicative of strong short-term financial health.
SJC boasts a higher current ratio compared to PNJ, with a ratio three times larger This suggests that SJC has a stronger short-term liquidity position, reducing the likelihood of encountering financial difficulties Conversely, PNJ's lower current ratio indicates a potential vulnerability to financial challenges in the future.
2 Acid-test ratio (Quick Ratio): a Formula: b Data Analysis:
- During the period of 2020-2022, the quick ratio of PNJ is 0.19 and 0.3 respectively, an increase of 61.62%, tends to increase because the ratio of current assets (1.67) > the ratio of current liabilities (1.51) but the quick ratio is less than 1 ( the ratio of current assets (1.08) but the quick ratio is more than 1 (>1) indicates that the company has enough liquid assets to cover its current liabilities without relying on inventory This suggests good short-term liquidity.
- In conclusion, the increasing of PNJ is still below ideal threshold of 1 so it should improve liquidity position over time The increasing indicates that the company is gradually strengthening its ability to meet short-term obligations using its liquid assets About SJC, in spite of still maintaining a ratio above the ideal threshold, it still needs to concern to the company's quick ratio is decreasing This indicates that the company's ability to meet short-term obligations using its liquid assets may weakening over time.
3 Account receivable turnover: a Formula : b Data Analysis:
- According to the data table, the period 2020 - 2022, account receivable turnover of PNJ has coefficients of 153.14 185.31 , and 164.11 respectively, showing that debts are recovered with good efficiency year by year This is good because the company's accounts receivable turnover ratios are significantly above average, indicating a rapid collection of receivables This shows that the company has efficient credit management and ability to maintain a healthy cash flow (converting credit sales into cash quickly).
- In 2020-2021, SJC's receivable turnover ratio is 291.36, 233.83 and 400.99 respectively, showing that debts are recovered very efficiency because the company's accounts receivable turnover ratios are exceptionally high, indicating an extremely rapid collection of receivables These ratios suggest that the company has highly efficient credit management and strong ability to maintain a healthy cash flow.
- In conclusion, PNJ's receivable turnover ratio is increasing by 7.16% and SJC's receivable turnover ratio is increasing by 37.63% Additional, SJC has a significantly better debt collection ability than PNJ, with a ratio that is 2.4 times higher So, PNJ should focus on improving credit management and collection efforts, while SJC should maintain effective credit practices and streamline collection processes. Monitoring these ratios and taking appropriate actions will help both companies optimize their debt collection abilities.
4 Inventory turnover: a Formula: b Data Analysis:
PNJ Cost of goods sold 27,949,348,024,381 15,948,760,134,458 14,076,055,770,112 98.56%
SJC Cost of goods sold 26,903,377,760,518 17,557,535,264,334 23,232,507,806,107 15.80%
- PNJ's inventory turnover increased stably from 2020 to 2022 in spite of the impact of the Covid-19 pandemic, but the ratio is relatively low, slightly above the industry average A lower inventory turnover ratio suggests slower sales or excess inventory levels It may indicate challenges in selling products because the biggest challenge in
The unprecedented challenges of the COVID-19 pandemic in 2020 necessitate a reassessment of inventory management strategies for PNJ To optimize inventory turnover and mitigate potential risks, the company should consider adjusting production levels, implementing effective sales and marketing campaigns, and refining its inventory management processes.
- Compared to PNJ, SJC’s inventory turnover is 8 times higher than PNJ’s and SJC’s inventory turnover decreased from 2020 to 2022 especially in 2021 the ratio is significantly drop because of the COGS go down so the ratio of 3 years are relatively high and it is not stable, indicating that the company is selling its inventory at a rapid pace This indicates that inventory management and sales processes are still in good performance during the pandemic.
- In general, due to the impact of the Covid-19 epidemic, the inventory turnover for both PNJ and SJC tended to be unpredictable and unstable, but it still increased in
2020 Although SJC reduced its inventory turnover to adapt and respond to the pandemic, it still needs to maintain a sufficient accumulation level to promptly supply products when the pandemic passes.
5 Day’s sales uncollected: a Formula: b Data Analysis:
- The smaller in day’s sales uncollected, the better for the company because the company collects money from customers earlier and shows this is good revenue and bad debts are cleared.
- In the period 2020-2022, PNJ’s rate of day’s sales uncollected has increased by 57.10% (from 2.06 to 3.24) The ratios for PNJ are relatively low, indicating a shorter average collection period The slight increase in 3 years, which means the company has potential challenges in collecting payments from customers in the future.
SJC's Sales to Cash (SJC) ratio declined by 28.32%, from 1.27 to 0.91, signaling efficient credit management and robust collection efforts Despite fluctuations over the past three years, SJC's SJC ratio remains consistently low, indicating strong control over credit terms and prompt payment behavior from customers, demonstrating prudent financial management and minimizing the risk of bad debts.
Recommendations
- Leverage Export Potential: VNJ's reputation for craftsmanship and quality presents an opportunity to expand its exports to international markets PNJ should strategically target markets with a preference for high-quality and unique jewelry By strengthening its international presence and distribution networks, PNJ can tap into the growing demand for Vietnamese jewelry products worldwide.
- Strengthen Branding and Marketing: PNJ should continue to build and reinforce its brand reputation This can be achieved through targeted marketing campaigns, partnerships with influencers or celebrities, and participation in industry events and exhibitions By effectively communicating its unique value proposition and brand story, PNJ can increase brand awareness and attract a loyal customer base.
Customer experience is paramount for PNJ Excellent customer service, personalized recommendations, and attentive staff enhance the overall experience After-sales support and meticulous attention to detail build customer loyalty and encourage positive referrals By prioritizing customer satisfaction, PNJ cements its position as a trusted and reputable brand.
- Monitor Industry Trends: The jewelry industry is constantly evolving, with changing consumer preferences and fashion trends PNJ should stay up-to-date with industry trends and monitor competitor activities This can help PNJ identify new opportunities, adjust its product offerings, and stay ahead of the competition.
- Develop Sustainable Practices: As sustainability becomes increasingly important to consumers, PNJ should consider incorporating sustainable practices into its operations This can include responsible sourcing of materials, ethical labor practices, and environmentally friendly production processes By showcasing a