Phu Nhuan Jewelry (HOSE: PNJ) | 2Q26 Update, NO RATING

Diamond Incident Severely Clouds Near-Term Business Outlook

PNJ 2Q26 Performance

PNJ's 2Q26 results highlight the first material financial impact from the P-Lab-related diamond incident. Revenue remained resilient at VND8.5tn (+11.9% YoY), but a VND865bn buyback-related provision drove a VND282bn net loss. Excluding this provision, we estimate NPAT-MI would have remained positive at ~VND457bn.

Core retail remained relatively stable, with retail jewelry revenue up 3.0% YoY and GPM at ~29%. However, stronger growth in lower-margin wholesale and 24K gold diluted consolidated GPM to 18.4% (-310bps YoY). We estimate retail jewelry GPM remained healthy at ~29%.

Earnings Forecast

We revise FY26E revenue to VND42.4tn (+21.3% YoY) and NPAT-MI to VND1.31tn (-53.7% YoY), materially below PNJ’s pre-incident guidance of VND48.7tn revenue and VND3.41tn NPAT. We refrain from providing FY27E forecasts given limited visibility on the duration of the buyback cycle, inventory recoverability, and potential longer-term impact on PNJ's franchise.

Revise Recommendation to No Rating: Valuation Visibility Remains Insufficient

We therefore suspend our target price and rating (previous TP: VND66,400/share, adjusted for the April stock dividend). While the sharp share-price correction has compressed PNJ's headline P/E, we do not view historical or near-term earnings multiples as reliable valuation anchors while the earnings base remains subject to potentially material revisions.

We would look for three conditions before reassessing valuation: normalization of buyback activity, greater visibility on inventory recovery values, and evidence that core retail demand and brand equity remain intact.