Recognizing the importance of financial analysis for the existence and development of the enterprise, our group has conducted a research project on "Financial Analysis of Phu Nhuan Jewel
Trang 1NGÂN HÀNG NHÀ NƯỚC VIỆT NAM BỘ GIÁO DỤC VÀ ĐÀO TẠO
TRUONG DAI HOC NGAN HANG TP HO CHi MINH
KHOA TAI CHINH
BAI TAP NHOM
MON TAI CHINH DOANH NGHIEP
Trang 2DU AN: CONG TY CO PHAN VANG BAC DA QUY PHU NHUAN (PNJ)
Nhom: BEE GROUP
Lop:FIN303_2321_10_L22
Niên khóa: 2022-2026
GVHD: Nguyễn Thị Như Quỳnh
TP.Hồ Chí Minh, tháng 4 năm 2024
1 Financial Condition Analysis
1.1
1.2
1.3
1.4
1.5
Contents
Liquidity Ratios
Rrofitability Ratios
Asset Management Ratios
Capital Struture
Market Value
2 Stock Valuation
3 Cost of capital
4 Building a porfolio:
Trang 3INTRODUCTION
In the context of the current remarkable development of the market economy, there are numerous companies and businesses established in various fields with large, medium, and small scales Along with that, economic integration between countries around the world has made businesses increasingly competitive with each other To survive, stand firm, and develop in such a context, besides producing and providing the best products or services to the market, businesses also require strong financial potential
On the other hand, following the development trend of the economy, financial relationships are also becoming increasingly rich and diverse For businesses, the top goal is to maximize their value Therefore, businesses need to set for themselves a correct direction and simultaneously create high competitiveness against both domestic and foreign companies
From this reality, it can be seen that managers need to directly control all business activities of the enterprise by carefully analyzing the financial situation over time using important financial indicators such as liquidity, profitability, asset management, capital structure, and market value
Besides, investors can use stock valuation methods to determine the fair value of stocks to make
appropriate investment decisions Moreover, they can also analyze the cost of capital,
profitability ratios, and risk of the company to assess the effectiveness of business operations and the level of risk when investing in the company Thanks to that, business owners and investors will have basic and useful information to make decisions and orientations for the future of the business
Recognizing the importance of financial analysis for the existence and development of the enterprise, our group has conducted a research project on "Financial Analysis of Phu Nhuan Jewelry Joint Stock Company from 2018 to 2022"
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History begin:
PNJ was formerly known as Phu Nhuan District Jewelry and Gems Store, established on April 28, 1988, under the People's Committee of Phu Nhuan District
In 1990, the store was upgraded to Phu Nhuan Remittance Handicraft Company, directly under the City Party Committee's Finance and Administration Board PNJ's Phoenix gold bar brand was also born from this time
In 1992, the Company changed its name to Phu Nhuan Jewelry Company
In January 2004, PNJ officially switched to operating as a joint stock company with the name Phu Nhuan Jewelry Joint Stock Company
In April 2008, PNJ and Dong A Commercial Joint Stock Bank officially put gold bars branded "Phoenix PNJ - DongA Bank" into circulation on the market
In March 2009, PNJ shares were officially listed on HOSE, increasing charter capital to
400 billion VND
Business:
Diamond and gemstone testing services
House for rent
Producing and trading finished gold jewelry; silver; precious stones, finished gold bars
Distribution:
Phu Nhuan Jewelry (PNJ) is a leading jewelry and gemstone retailers in Vietnam PNJ currently has a nationwide distribution network of 166 retail shops and more than 3000 wholesale clients,
in addition to strong business connections in Australia, USA, EU and Japan Apart from gold bar trading, PNJ has five major jewelry concepts: (7) CAO: in the high-end category targeting successful business women; (ii) Jemma: accessories targeting a client segment in between the mid-income and high-income groups; (iii) PNJ Gold: targeting women over 30 years old; (7v) PN] Silver: targeting young girls and office women; and (v) Yabling: feeding teenagers’ needs for accessories at low prices
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DANG CAP
U GIA TRI DICH
1 Financial Condition Analysis
1.1 Liquidity Ratios
LIQUIDIT | 2018 2019 2020 2021 2022 Industry
Y RATIOS Averages
Current 2.02 1.83 2.21 2.04 2.45 2.74
Ratio
Quick Ratio | 0.16 0.08 0.19 0.12 0.3 1.87
PNJ's current ratio over the years mentioned has consistently been greater than 1 This demonstrates the company’s high liquidity and favorable financial position
—— industry In general, during the period of 2018-2022, PNJ's
Averages short-term payment ratio increased (from 2.02 to
2.45) However, the increase was not continuous (it
decreased in 2019 from 2.02 to 1.83 and in 2021 from 2.21 to 2.04)
2018 2019 2020 2021 2022
The current liquidity ratios over the years are consistently lower than the industry average (1.87), indicating that the company's business
5
Trang 6operations are not secure and pose significant risks This suggests that PNJ is not effectively optimizing its assets
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
20182019202020212022
=—— Quid Ratio Industry Averages
PNJ has had a quick ratio consistently below 1 for
5 consecutive years, indicating that the company may struggle to meet its debt obligations when they come due This implies that its short-term assets are insufficient to cover its short-term liabilities and it may need to sell inventory early to ensure debt repayment, putting the business in a financially precarious position
Overall, during the period of 2018-2022, PNJ's quick ratio increased (from 0.16 to 0.3), but not
consistently (in 2019 it decreased from 0.16 to 0.08 and in 2021 from 0.19 to 0.12) And it still remains significantly lower than the industry average (1.87)
1.2 Rrofitability Ratios
2018 2019 2020 2021 2022 Industry
Averages Net Profit | 6.59% 7.02% 6.10% 5.26% 5.34% 0.59% Margin
Return on | 14.91% 13.88% 12.61% 9.69% 13.58% 6.52% total assets
ROE 25.63% 26.41% 20.40% 17.11% 21.44% 14.44%
8.00%
7.00%
6.00% ~
5.00%
4.00%
3.00% -
2.00%
- PNIJ's net profit margin ratio has shown a decreasing trend from 6.59% in 2018 to 5.34% in
2022 However, it still remains higher than the industry average (0.59%)
- Overall, the indices over the 5-year period also
Net Profit indicate the company's good business
Margin Industry Averages
0.00%
2018 20192020 20212022
performance The company needs to regularly
evaluate, control, and develop these indices to attract investments
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16.00% PNJ's return on assets (ROA) has shown a 14.00% — decreasing trend from 14.91% in 2018 to 12.00% 13.58% in 2022 It decreased steadily from 10.00% 2018-2021 and increased again in 2022 8.00% | —_
ne stry The ROA of PNJ over the years has 6.00% - Averages consistently been higher than the industry 4.00% +T—————————— average (6.25%), which is a very positive 200% sign for the company It indicates that the 0.00% company efficiently utilizes its assets and
eo A ODO 2v at optimizes available resources
Po oP’ PY PY
Although PNJ's ROA has not dropped to excessively low levels over the 5-year period, it could still affect investor attraction Therefore, the company needs to implement cost- saving policies and measures to enhance profitability
30.00% PNJ's return on equity (ROE) has shown a
decreasing trend from 25.63% in 2018 to 21.44% in
2022 However, it still remains higher than the 20.00% - industry average (14.44%), indicating that PNJ
effectively utilizes shareholders’ equity
25.00%
15.00% =——ROE
=—— Industry oy
10.00% Averages PNJ needs to maintain and further increase its ROE 5.00% by increasing after-tax profits and reducing
0 =
expenses
0.00%
In general, based on the profitability indices, it is evident that PNJ has operated relatively efficiently over the past 5 years PNJ demonstrates a quite high profitability compared to the general landscape The company has effectively utilized borrowed capital, thereby amplifying the return on equity higher than the return on assets
1.3 Asset Management Ratios
ASSET 2018 2019 2020 2021 2022 Industry
MANAGEMENT Averages
RATIOS
Inventory Turnover | 2.37 1.93 2.15 1.82 2.66 7.87
Total Asset Turnover | 2.26 1.98 2.06 1.84 2.54 -
Average Inventory 153.8 189.5 169.7 200.4 137.2 -
Trang 8Days
PNJ's inventory turnover ratio over the years has consistently been much lower than the industry average of 7.87 This suggests that the
Turnover Ratio COMPAny's inventory management may not be
¬ Industry efficient
Averages
Ì ”>>—=ễềẻề £ In general, this ratio has slightly increased from
2.37 times in 2018 to 2.66 times in 2022, but 0-———————— the increase has not been consistent The
2018 2019 2020 2021 2022 company's inventory turnover is very low, indicating a slow sales turnover and significant inventory holding
The overall performance of PNJ's total asset Total Asset Turnover utilization over 5 years has increased from 2.26 in
3 2018 to 2.54 in 2022 This indicates that the company 2.5 efficiently utilizes its total assets in its business
1.5-————————— Turnover operations
1
0 N 7 — The fact that this index for PNJ is high and greater
% 4 O Ñ % than 1 indicates that the company is operating very
SY Sy SY Sh sh PrP PrP YP + efficiently in using its total assets to generate profits TU
In general, PNJ's average inventory turnover cycle Average Inventory decreased from 154 days in 2018 to 137.2 days in
Days 2022 The faster the turnover, the more sales are
made, leading to a reduction in the number of days
200 Average inventory is held This is a positive sign for the
150 Z^ ~~~ Inventory Days company However, this index increased in 2019 from
100 154 to 189.12 days and in 2021 from 169.8 to 200.5
250-
` days The company made timely adjustments to bring
| 92 Say dữ the index back down the following year
®®®®%
However, PNJ's average inventory tumover cycle over
the years remains very high, indicating that the company is facing difficulties in selling its
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1.4 Capital Struture
2018 2019 2020 2021 2022 Industry
Averages
Debt ratio | 42% 43% 38% 43% 37% 89% Equity ratio | 58% 57% 62% 57% 63% 11% Debt to 0.7 0.8 0.6 0.8 0.6 1.65 Equity ratio
Financial 1.7 1.8 1.6 1.8 1.6 -
Levergage
ratio
From 2018 to 2020, PNJ maintained a relatively low and stable debt ratio, ranging from 38% to 43%, Meanwhile, the equity ratio showed stable growth and reached a high level, fluctuating from 57% to 63% The debt-to-equity ratio (D/E) over the past 5 years has consistently remained
below 1, ranging from 0.6 to 0.8
PNJ's low and stable debt ratio indicates that the company has tightly controlled the use of equity
capital and maintained a reasonable level of debt, minimizing financial risks On the other hand,
the stable and high growth of the equity ratio reflects investors’ confidence in PNJ's profit- making ability and growth potential
PNJ's capital structure is relatively healthy with a low debt ratio, high equity ratio, and a moderate level of financial leverage, indicating the ability to meet debt obligations The company can sustain this growth pace to ensure financial stability and safety in the future However, with the low debt ratio, it can be seen that PNJ has not fully utilized the potential of raising capital through debt, resulting in not maximizing financial leverage and the company's growth potential This raises a question about careful consideration in managing capital structure and using various sources of capital to achieve a balance between optimizing profits and minimizing financial risks
1.5 Market Value
2018 2019 2020 2021 2022 P/E 13.34 14.30 17.06 21.26 11.92 P/B 4.15 4.23 3.51 3.64 2.62 EPS 6,841 4,896 4,308 4,197 5,223
During this period, PNJ's price-to-earnings ratio decreased (from 13.34 in 2018 to 11.92 in 2020) and showed significant fluctuations
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Overall, PNJ's earnings per share (EPS) decreased from 6,841 VND per share (2018) to 5,223 VND per share (2022) This affects the company's ability to attract investments
PNJ's EPS is currently at a relatively good level, indicating that investing in PNJ will generate good profits However, this index has been trending downwards in recent years and may increase
in the coming years
2 Stock Valuation
Gordon Growth Model
P= D, _ Dox(1+g)
In which:
Po: Actual market price of the stock today
Di: The dividend of stockholder expected to receive
Do: Dividends that shareholders received in the previous year
g: expected growth rate in dividends as predicted by investors (2 = Ty 1é LNGL x ROE)
re! expected rate of return
The dividend
NAM trend Dividend payout ratio | ROE | Retained earning ratio| Rate of growth (g)
"| over the years Ý 5 5 5 5
2018 2000 10% 25.63% 90.0% 23.07%
2019 2000 18% 26.08% 82.0% 21.39%
_—_ 209 2022 2023 2024 ce eeeeee _| 16.03%
2021 | | | | _| 13.69%
2022 | ' ' ' _| 17.15%
18.26%
PO DI
This is the rate at which dividends are expected to increase in the future To estimate this value, the team used historical data on PNJ's dividend growth from 2018 to 2022 to determine the expected average dividend growth rate
Re= 20%
g= 18.26%
Actual market price of the stock today (P0)