Phan Tich Tai Chinh Doanh Nghiep d07 Bao Cao Phan Tich PNJ Nhom 10 (Cuuduongthancong - Com)

PNJ’S FINANCIAL STATEMENT ANALYSIS
1
From the perspective of investors, we issue a BUY recommendation on PNJ. The following
factors warrant the BUY recommendation:
1. PNJ has very strong comparative advantages and possesses a valuable opportunity
for prosperous development. In the first 6 months of 2016, GDP of Vietnam has decreased
remarkably, mainly due to the impact of environmental factors. In the first six months of
2016, the GDP has increased but the growth rate is still low. more than 1% over the previous
year. In addition, inflation and rising gold prices also adversely affect the economic situa-
tion in Vietnam, especially for companies producing and processing gold as PNJ. But with
those difficulties PNJ still stands and overcome, not only that PNJ is constantly expanding
but growing.
2. The firm has steadily improved the cost efficient management. The fact that the
company has expanded its production and business efficiency is reflected in the company’s
gross profit margin increasing by 2014, 2015 and 2016 respectively: 889 billion, 1168 billion,
1411 billion. After deducting expenses, PNJ’s after-tax profit for 2014, 2015 and 2016 is 255
billion, 75 billion, 450 billion respectively. The reason for the low profitability of the year
2015 is that the economy fluctuates sharply, affecting profit from core business activities and
other profit losses. Although profit after tax in 2015 is so sharp, but by 2016, PNJ changed its
business strategy and affirmed itself by 450 billion after-tax profit. This shows that PNJ is a
big company, capable of managing and operating a good business.
3. Financial risk and liquidity risk are moderate. Through the comparison of asset
structure and capital, we see the company’s asset structure moving towards increasing
short-term assets and decreasing the proportion of long-term assets. Specifically, in 2015, the
proportion of short-term assets is 64.73% and gradually increase to 2016 is 86.47%. Changes
in short-term asset structure in this direction are considered ineffective. Long-term assets of
the company in 2015, long-term financial investment is only 5.6% and fixed assets increased
slightly to 16.33%, 2016 does not make long-term financial investment and short-term assets
the reduction to 11.59%. In summary, PNJ’s asset structure tends to increase rapidly; The
capital structure tends to increase slightly and more stable.
- Coefficient of solvency2014 = 1.3
=> The ability to pay short-term liabilities from short-term assets of the company is al-
ways high. The financial structure of the company is balanced, the risk of payment is safe,
but the company is limited by the flexibility in the use of capital is a disadvantage that PNJ
encounter.
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2
4. Profitability has improved and was higher than the industry average for almost
ratios. The factor of profit and business are two closely related factors, turnover indi-
cates the role, position of the business in the market and profits show the quality and
efficiency of the end.
- Rate of return on turnover2014 = 3.6%
- Rate of return on tunrover2015 = 2.4%
- Rate of return on tunrover2016 = 6.9%
=> With a turnover of VND100 billion, the company generates 36 dong in 2014. Simi-
larly, in 2015, the company generates 24 dong of profit and in 2016, it generates 69 dong.
This shows that the business role and effect of the business is quite good.
This shows that PNJ is a company with good management, professional and flexible
sleep. The PNJ strategies used are well suited. However, there are still some difficulties
but PNJ still skillfully overcome. PNJ is constantly upgrading and expanding its system,
which is a good signal for investors. Therefore, we will choose PNJ for investment.
3
1. GDP factor:
In the year 2016, Vietnam’s target is to achieve a growth
rate of 6.7%, but in consecutive years there are big changes
affecting the economy. Natural disasters, droughts, floods,
etc., are the secondary cause of the decline in agriculture,
forestry and fishery, and the deepening of the mining
industry. of 2016 did not reach the target. Environment is also
an important factor influencing the growth rate, particularly
due to the impact of natural disasters, floods and droughts,
Source: http://cafef.vn
but the growth rate of Vietnam has decreased by 1%
equivalent about 1.7 billion. Due to the strong influence
of environmental factors, the agriculture, forestry and
fisheries sector had negative growth in the first 6 months.
The agriculture, forestry and fisheries sector showed
negative growth in the first and second quarters, but in the
third quarter, the growth rate increased and by the end of the
year, , 36%. According to estimates by the General Statistics
Office, the value of agricultural, forestry and fishery
production in 2016 at constant prices reached VND870.7
trillion, up 1.44% compared to 2015, lower than with the
increase in recent years (2015 increase of 2.62%, in 2014
increased 4%, in 2013 increased 3.6%, in 2012 increased
by 3%).
Industry and industry by the end of 2016 reached an
industry-wide increase of 7.5% compared to 2015, much
lower than the 9.8% increase in 2015 and 7.6% 2014 due to the
declining mining industry.
The trade balance in 2016 focused on exports, leading
to the trade surplus of USD 2.68 billion, of which the
domestic economic sector was USD 21.02 billion, the FDF was
23, $ 7 billion. Export turnover in 2016 is estimated at 175.9
billion USD, up 8.6% over the previous year. In particular,
the domestic economic sector reached $ 50 billion, up 4.8%. Source: http://cafef.vn
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4
The FDI sector (including crude oil) reached 125.9%,
up 10.2%. Import turnover in 2016 is estimated at $ 173.3
billion, up 4.6% over the previous year, of which the do-

mestic economic sector gained $ 71.1 billion, up 4%; FDI
sector reached USD 102.2 billion, up 5.1%.
CPI in the whole year 2016 increased 4.74%: CPI in
December 2016 increased 4.74% compared with December
2015, average monthly increase of 0.4%. The average CPI in
2016 will increase by 2.66% over the average in 2015.
Although the increase of 2016 is higher than that of
2015, it is still much lower than the average CPI of some
recent years and still within the 5% target set by the Na-
tional Assembly. Given the difficult economic environment,
although the growth rate in 2016 is lower than the set target,
it is a success for Vietnam as it has overcome these
difficulties.
2. Inflation and Gold Price: Source: http://cafef.vn
Target and output (CPI, PPI), interest rates and interest rates play a big role in determining the
inflation rate, thus impacting the price of gold. The number of economic models like GDPs and GDP
(gross) also makes the economy a normal one, and can make investments in precious metal reserves.
Policies also have a significant impact on prices. If the conflicts in the Middle East create turmoil,
it will affect the safety of investing in national bonds or currencies. To avoid these risks, investments
can turn to precious metal investments. Prices or other commodities may be affected and from affecting
precious metals. The price boost the growth card booster.
The precious metals market has high payment transactions, can enter the order and exit the order
several times in a minute.Thus, prices are prone to fluctuations in the short term without necessarily
following the long-term trend.
Factors affecting the price of gold in Vietnam. According to the convention on the world gold
market, the unit price quoted is usually USD / ounce, 1 ounce = 1 troy ounce = 0.833 gold, 1 gold =
1.20556 ounce.
Domestic gold market, unit price is usually in VND / volume, with public
The prices of gold from the world are as follows:
Gold price (VND / tael) = World gold price (USD / ounce) * 1.20556 * Billion -price VND / USD
From the above formula, it can be seen, the price of gold in Vietnam depends directly on the
price of gold
- The exchange rate of VND / USD, besides, depends on supply and demand in Vietnam gold
market South, affected by the stock market and macroeconomic factors in the country such as:
interest rate, price index
5
1. Sector overview
In the gold and silver jewelery market in Vietnam, PNJ and Bao Tin Minh Chau are well-
known brands known by many consumers. PNJ dominates the market with nearly 40% market
share in the country. Over the past 20 years of operation and development, PNJ has become one of
the leading companies in the jewelry business in Vietnam and one of the largest enterprises in
Region 5 with the “Top 500 Leading retailers in Asia Pacific, “setting the record for” the first
enterprise to invest in the most modern and largest jewelry production technology in Vietnam “.
in the south, Bao Tin Minh Chau dominates the northern market. Apart from these two large
enterprises, there are about 10,000 small enterprises involved in manufacturing and trading in this
field
2. Analysis of specific risks of PNJ

The development of the economy affecting the main business of PNJ is the production and
trading of jewelery and precious stones. This influence is reflected by the demand for jewelry
products will increase as the economy develops, the people’s life is increasing. Conversely, when
the economic downturn of consumption demand will decrease as this is not the essential commodi-
ty of life. This is considered a big risk for PNJ.
Risks from abnormal fluctuations in input material prices for jewelry production. The unpre-
dictable price of gold and silver materials will reduce business efficiency, increase costs, and make
it difficult for PNJ to set up business plans. Especially the change of gold price will have a certain
impact on PNJ’s operations.
PNJ uses most of its short-term debt to finance inventory (mainly short-term gold loans). This
fixes some of the risks from volatility of gold prices but will increase the risk from interest rates on
bank loans.
Exchange rate risk has a significant impact on PNJ’s business as most of PNJ’s raw materials
are imported from abroad and PNJ also exports jewelery market.
3, Analysis of revenue structure, cost and profit.

PNJ’s revenues and profits come from four main sources: jewelry, gas, seafood and financial
investment. Jewelry business is the main industry contributing most of revenue and profit to the
company in recent years. This is the PNJ industry has many strengths, has developed strongly in
the past years and has great potential for development in the coming years.
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6
4, Vietnam steel industry prospects
SWOT ANALYSIS
Strength (S) Opportunity (O)

- Over 20 years of experience in jewelry industry, - Potential growth of jewelry industry in Vietnam is
PNJ has built a strong brand that many consumers still great.
believe.
- With the current advantages, the ability to expand
- PNJ has a wide system of shops, agents to serve and occupy the market of PNJ in the future is very
the distribution and introduction of products. big.
- PNJ is a founding shareholder of East Asia Bank, - The real estate market is recovering, and joint
which receives many incentives from the bank in its ventures with PNJ will have more projects imple-
financing activities. mented, potentially contributing to PNJ’s profitabil-
ity in the future.
Weakness (W) Challenge (T)
- PNJ’s main business, manufacturing jewelry busi- - Increasing competition among enterprises in the
ness is risky but difficult to predict and overcome. jewelry industry both at home and abroad.
- The profit from gas and fishery is not high. - With a large financial investment capital, PNJ
will face significant challenges if this investment is
- The current financial investment activities have
not effective.
not brought significant profit to the company despite
the fact that financial investment accounts for a high
proportion of assets
7
5, SECTOR ANALYSIS BY MICHAEL PORTER’S 05 FORCES MODEL
a. Impact from Supply: Jewelry industry in Vietnam is a specific industry, from raw materials
to machinery and equipment for production, most of them are imported from abroad. Therefore,
the pressure from suppliers is very large. For physical gold items, the import and export activities
are strictly controlled by the State, only a few enterprises are allowed to trade gold import and
export in certain periods. For gold jewelry producers, besides the gold supply from the world,
these enterprises also purchase gold from the people for production. However, the supply of gold
from the population depends on the price of gold. The supply of jewelry in Vietnam is highly
impacted and dependent on sources from overseas.
b. Impact from demand Jewelry is not essential commodity for life, so there will be
fluctuations in the development of the economy. In the coming years, the demand of jewelry
industry will increase in the world as the economy grows again. In Vietnam, the demand for
beautification is increasing due to the improved income of the people. With a large population,
young people, the trend of consumption increases quickly, the demand for jewelry in Vietnam
is very large in the future. The demand for gold bullion is affected by the hoarding, dedication
and speculative activity of investors. However, the need for speculation only appears in the
context of economic instability, many investors find shelter where gold. Therefore, in the
economic trend of recovery, the demand for gold bars for speculation will decrease in the future.
c. Alternative products Due to traditional Vietnamese habits, gold and silver jewelry
products are difficult to replace in holidays, Tet holidays, weddings ... Gold is also the preferred
property. Leading for hoarding purposes.
d. Barriers to market and potential competitors
- The business of jewelry from gold, silver, precious stones will have less barriers for new
businesses to participate. These enterprises only engage in regular trading, import and export of
jewelry and are subject to competition among enterprises in the industry.
- The field of jewelry production from gold, silver, precious stones will create more barriers
for enterprises want to join the industry. These barriers include technology barriers, capital,
branding and distribution systems.
- The production and trading of gold bars is subject to state management, so there will be big
legal barriers for enterprises wishing to participate.
e. Competition of the same industry: With the participation of banks in the production and
trading of gold bars, gold jewelry will create competition for the industry in the future. In
addition, Vietnam promises to be the destination of many big fashion brands of the world,
including jewelry items, businesses in the industry will have to compete strongly from both
domestic and foreign.
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8
Company overview
• Campany’s name: Phu Nhuan Jewelry Joint
Stock Company
• Stock code: PNJ
• Business registration certificate: 0300521758
• Tax code: 0300521758
• Chartered capital: 755.970.350.000 VNĐ
• Legal representative: Ms. Cao Thi Ngoc Dung -
Chairman of the board, General Director
• Main business lines:
- Producing and trading jewelry in gold, silver,
Ms. Cao Thi Ngoc Dung
precious stones, fashion accessories, souvenirs.
Source: https://www.pnj.com.vn/
Trading watches and buying gold bars
- Service of diamonds, precious stones, precious
metals
- Trading real estate.
• VISION: Asia’s leading jewelry and fashion
retailer, holding the # 1 position in the medium
and high-end segments in Vietnam.
• MISSION: PNJ bring pride to customers with
exquisite jewelry products, superior quality.
• CORE VALUES: Integrity - Accountability -
Source: Team analysis
Quality - Innovation – Mounting
• SHAREHOLDER STRUCTURE:
State owned 0.00%
Foreign ownership 49.00%
Possess another 51.00%
• LOGO:
Meaning of logo: Meeting and Shining
• SLOGAN: Faith and Style
Source: https://www.pnj.com.vn/
9
1. INCOME STATEMENT ANALYSIS
• PROFIT STRUCTURE.
TABLE 1: PROFIT STRUCTURE - UNIT: million VND

2014 2015 2016
PARTS OF
PROFIT
VALUE PROPORTION VALUE PROPORTION VALUE PROPORTION
Net profit from

333,148 130% 197,097 186% 548,093 106%
operation activity
Profit from finacial
activity before 8,167 3% (348,426) -329% (103,098) -20%
interest
Other profit 1,886 1% (9,985) -9% 42,535 8%
Total accounting
255,351 100% 106,063 100% 517,432 100%
profit before tax

TABLE 2: COMPARE THE PROFIT STRUCTURE - UNIT: million

2015/2014 2015/2015

PARTS OF PROFIT
VALUE PROPORTION VALUE PROPORTION
Net profit from operation activity (136,051) 6% 350,997 -13%
Profit from finacial activity before
(356,593) -189% 245,328 169%
interest
Other profit (11,871) -6% 52,519 13%
Total accounting profit before tax (149,288) 411,369
Table 1: First, we see that profit from operating

activity covers a large proportion of PNJ’s profit struc-
ture in 3 years.
In 2014, Profit from financial activities before
interest was 3 percents. That is the largest proportion,
however, it gradually drop. The profit from financial
activities before interest percentage tremendously de-
creased 329% in 2015 and increased 309% in 2016. This Source: Team analysis
is a reasonable profit struture.

The table 2 shows that the proportion of profit from operating activity has continuosly
dropped over three years 2014, 2015 and 2016, exception the other profit increased. In 2014, the pro-
portion of profit from operating activity is more than 100% because of 1,885,914,261 VND increasing
of the other profit. In 2015, proportion of profit from operating activity is 6% and covers a large
proportion of total amount of 2014 EBT increase. On the other hand, other profit is still minus but
we can see that in 2015, PNJ has its best profit structure.
Going to 2016, proportion of profit from finacing activity jumps to 169%, covers a large pro-
portion of total amount of 2016’s EBIT increase. Besides, profit from operating activity falls leads to
unsustainable profit structure.
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10
• HORIZONTAL ANALYSIS
TABLE 3: THE ANALYSIS OF THE CHANGE IN INCOME STATMENT –

UNIT: million VND
VND CHARGE % CHARGE

ITEMS 2014 2015 2016
2015/2014 2015/2014 2016/2015
1.Revenue
from sales
of mer-
9,199,218 7,706,035 8,564,590 (1,493,181) 858,555 -16.23% 11.14%
chandises
and sevices
rendered
2. Gross
profit from
sales of
merchan- 889,236 1,168,050 1,411,293 278,815 243,243 31.35% 20.82%
dises and
sevices
rendered
3. Net profit
from opera- 333,148 197,097 548,093 (136,051) 350,997 -40.84% 178.08%
tion activity
4. Total
accounting
255,351 106,063 517,432 (149,288) 411,369 -58.46% 387.85%
profit be-
fore tax
5. Total
profit be- 175,669 25,014 444,235 (150,655) 419,221 -85.76% 1675.92%
fore taxs
6. Profit
after corpo-
95,921 (86,552) 304,095 (182,473) 390,647 -190.23% -451.35%
rate income
tax
Revenue from sales of merchandises and sevices rendered rising quickly from -16.23% in
2015/2014 to 11.14% in 2016/2015. Therefore, we can see that PNJ has succeeded in there op-
erating activity. However, PNJ needs to consider if is safe or not. Wherether PNJ can control
the increase and decrease in future and this growth rate is logical to other items.
11
Total accounting profit before tax in 2015 compare to 2014 decrease 149,288,287,857
VND but in 2016 compare to 2015 is 8 times higher. The reason is based on analysis of
the parts of profit:
Fristly, Net profit from operation activity in 2015 compare to 2014 goes down
by 136,051,112,454 VND (about 40.48% decrease rate), but in 2016 compare to 2015, its
increase greatly by 178.08%.
Secondly, profit from finacial activity before interest gains 8,167,040,004 VND in
2014 but
losses in the next years
Thirdly, other profit increase quickly, in 2016 PNJ has there other profit gains
42,534,539,239 VND – 400 times higher than 2015. The increase of other profit is not
good at all, but it makes the result better.
So we can figure out that in 2015, the decrease of total accounting profit before
tax caused by the decrease of the parts of profit such as: net profit from operation activ-
ity (decrease by 356,593,453,614 VND), other profit (decrease by 11,870,643,733 VND)
and profit from finacial activity (decrease by 136,051,112,454 VND). Similary, in 2016
of total accounting profit before tax increase by 245,328,016,315 VND mainly causes by
the increase of net profit from operation activity (increase by 350,996,907,172 VND),
other profit (increase by 52,519,268,711 VND) and profit from finacial activity (increase
by 245,328,016,315 VND)
Total profit before taxs in 2015 is lower 150,654,819,527 VND than 2014, in 2016
is higher 419,221,071,941 VND than 2015. Profit after taxs increases more than the in-
crease of of total
accounting profit before tax because the increase rate of Interest expenses is lower than
the increase rate of profit before taxs and interest.
Profit after corporate income tax in 2015 compare to 2014 is decrease strongly by
182,472,535,485 VND but it go up hight in 2016 compare with 2015. The reason is the
decrease of tax expense by 719.11%. On the other hand, in 2016 tax expense goes up
hight by 633.36%.
In summary, we can see that growth rate of the parts of profit is slow in 2015 and fater
in 2016. The main point caused this increase is the increase of net profit from operation
activity
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12
• VERTICAL ANALYSIS
TABLE 4: THE COST SAVING EFFECTIVE ANALYSE - UNIT: Million VNĐ
ITEMS PROPORTION TO NET SALES COMPARISON

2014 2015 2016
2014 2015 2016 2015/2014 2016/2015
1.Revenue
from sales of
merchandis-
9,199,218 7,706,035 8,564,590 100.00% 100.00% 100.00% 0.00% 0.00%
es and sevic-
es rendered
3. Gross
profit from
sales of mer-
889,236 1,168,050 1,411,293 10.70% 17.87% 19.73% 7.16% 1.86%
chandises
and sevices
rendered
6. Net profit
from opera- 333,148 197,097 548,093 257.02% 167.67% 411.23% -89.35% 243.56%
tion activity
9. Profit from
finacial ac-
8,167 (348,426) (103,098) 77.25% -99.62% -95.14% -176.87% 4.48%
tivity before
interest
10. Other
1,886 (9,985) 42,535 23.09% 2.87% -41.26% -20.23% -44.12%
profit
11. Total
accounting
255,351 106,063 517,432 13539.92% -1062.25% 1216.50% -14602.18% 2278.75%
profit before
tax
13. Total
profit before 175,669 25,014 444,235 220.46% 30.86% 606.91% -189.60% 576.05%
taxs
16. Profit af-
ter corporate 95,921 (86,552) 304,095 32703.10% 4457.72% 172922.04% -28245.38% 168464.33%
income tax
13
The proportion of profit before tax to net sales in 2014 is 13539.92%, in 2015 is -1062.25% and
in 2016 is 1216.50%. Compare with last year, proportion of EBIT to net sales in 2015 decrease by
14602.18% and in 2015 increase by 2278.75%.

The proportion of profit before tax to net sales in 2014 is 13539.92% caused by proportion of
net operating profit to net sales gets 257.02%, revenue of finacing activity gets 5.62% and the affect of
other profit makes proportion of profit before tax to net sales increase by2 3.09%.
In 2015, the proportion of Net profit from operation activity gets 167.67%, it’s lower 89.35%
than in 2014. However, the proportion of profit from finacial activity in 2015 decrease by 4.95% com-
pared with 2014. Therefore, proportion of EBIT to net sales in 2014 decrease 14602.18% caused not
only by the ineffective of cost saving and lack of other profit but also the profit from finacial activity
before interest falls down.
Proportion of EBT to net sales in 2014 is 220.46%, in 2015 is 30.86%, in 2016 is 606.91%. The
reason makes proportion of EBT to net sales in 2015 and 2016 increase (decrease) more than propor-
tion of EBIT to net sales is the proportion of interest expenses to net sales in 2015 increase 26283.27%
compared with 2014 and in 2016 decrease 62.27% compared with 2015.
ROS in 2014 is 32703.10%, 2015 is 4457.72%. ROS is lower than the proportion of EBT to net
sales because proportion of corporate income tax expense to net sales in 2015 is 406..46% higher than
2014. In 2016, ROS increase by 168464.33% compared with 2015. Because proportion of corporate
income tax expense to net sales increase 406.46% (more than proportion of EBT to net sales), ROS in
2016 still increase while proportion of EBT to net sales increase.
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14
• ANALYSIS OF FACTORS AFFECTING BUSINESS PROFIT OF PNJ CORPORATION
TABLE 5: THE FACTORS AFFECT NET OPERATING PROFIT - UNIT: Million VNĐ
PROPORTION TO NET
COMPARISION INFULENCE LEVEL
SALES
EFFECT
ITEMS EFFECT OF
2015/2014 2016/2015 OF
SAVING
2014 2015 2016 2015/2014 2016/2015 SAVING
COSTS
revenue revenue COSTS
2016/2015
2015/2014
1. Net rev-
enue from
sales of
100,00% 100,00% 100,00% 0,00% 0,00%
goods and
rendering
of services
2. Cost of
goods sold
90,33% 84,84% 83,52% -5,49% -1,32% -1.348.845 728.419 -423.152 -113.107
and services
provided
3. Gross
profit mar-
gin on sales 10,70% 17,87% 19,73% 7,16% 1,86% -189.618 109.929 468.433 133.314
and service
provision
5. Enterprise
manage- 36,52% 27,73% 24,07% -8,79% -3,65% 25.188 35.961 -37.259 -20.228
ment costs
6. Net profit
from core
257,02% 167,67% 411,23% -89,35% 243,56% -31.024 26.381 -105.027 324.616
business
activities
Profitability of products and services in 2016 increased by 243,242,999,998 VND compare with
2015, it’s about 1.86%.Profitability of core business on revenue in 2016 decreasing by 350,996,907,172
VND compared with 2015. This result shows that in 2016, the company did not use operating expenses
effectively and profit increased by 350,996,907,172 VND due to the increase of revenue, the inefficient
use of cost reduced the profit. The company reduces the efficiency brought about by increased sales.
Impact of revenue from sales of goods and rendering of services: In 2015 the gross profit mar-
gin of the company is 1.86%, so for every 100 dong sales revenue, the company has 243,242,999,998
VND gross profit. The SG & A / sales ratio was 39.23%, meaning that PNJ had to spend 88,282,234,010
VND in 109,929,226,724 VND in gross profit to cover SG & A expenses. 21,646,992,713 VND to pay for
other types of expenses such as paying interest and paying corporate income tax.
Sales revenue in 2016 will increase 129,692,870,816 VND compared to 2015, if the profit margin
on sales in 2016 remains the same as in 2015, the profit of core business will increase 350,996,907,172
VND
Impact of Direct Cost Savings: In 2016, the cost of goods sold on sales was 82.53%, down 1.32% from
2015, indicating that the company did not save costs in 2016 This leads to higher cost of goods sold,
leading to a decrease in core operating profit.
Effect of saving cost of sales: The cost of sales in 2016 is 39.23%, so on average 100 PNJ revenue
is spent on selling 5.53 VND.
The impact of the efficiency of enterprise management cost savings: On average 100 dong of
revenue, the company has to spend 15.7 VND for management activities.
15
2. BALANCE SHEET ANALYSIS
TABLE 6: STRUCTURE OF ASSETS (unit: million VNĐ)

COMPARE PRO-
PROPORTION PORTION
CODE ASSET VALUE VALUE
31/12/2014 VALUE 31/12/2015 31/12/2016 2015/2014 2016/2015
31/12/2016
31/12/2015
A.
SHORT-
100 64,73% 1.830.871 76,12% 2.265.185 86,47% 3.102.580 11,39% 10,35%
TERM
ASSETS
I. Cash
and cash
110 9,63% 272.305 1,27% 37.885 4,33% 155.348 -8,35% 3,06%
equiva-
lents
II. Short-
term
120 0,00% 0 0,00% 65 0,00% 65 0,00% 0,00%
financial
assets
III. Short-
130 term re- 2,52% 71.325 1,59% 47.171 1,75% 62.721 -0,94% 0,16%
ceivables
IV. Inven-
140 50,82% 1.437.416 71,75% 2.135.225 79,12% 2.838.690 20,93% 7,37%
tory
V. Other
150 short-term 1,76% 49.825 1,51% 44.839 1,28% 45.756 -0,25% -0,23%
assets
B. LONG-
200 TERM 35,27% 997.801 23,88% 710.707 13,53% 485.407 -11,39% -10,35%
ASSETS
I. Long-
210 term re- 0,00% 0 0,71% 21.217 0,74% 26.443 0,71% 0,02%
ceivables
II. Fixed
220 15,97% 451.729 16,33% 486.103 11,59% 415.801 0,37% -4,75%
assets
IV. Un-
finished
240 0,03% 739 0,21% 6.279 0,21% 7.533 0,18% 0,00%
long-term
assets
V. Long-
term
250 18,80% 531.864 5,60% 166.666 0,00% 0 -13,20% -5,60%
financial
investment
OTHER
LONG-
260 0,48% 13.469 1,02% 30.441 0,99% 35.630 0,55% -0,03%
TERM
ASSETS
TOTAL
ASSETS
270 100,00% 2.828.672 100,00% 2.975.891 100,00% 3.587.987 0,00% 0,00%
(270 = 100
+ 200)
PAGE
16
TABLE 7: STRUCTURE OF EQUITY (unit: million VNĐ)
COMPARE
PROPORTION
CODE CAPITAL PROPORTION
VALUE VALUE VALUE
31/12/2014 31/12/2015 31/12/2016 2015/2014 2016/2015
31/12/2014 31/12/2015 31/12/2016
300 C. LIABILITIES 54,16% 1.532.149 55,80% 1.660.638 58,18% 2.087.660 1,64% 2,38%
I. Short-term
310 49,30% 1.394.565 53,14% 1.581.406 56,35% 2.021.661 3,84% 3,20%
liabilities
II. Long-term
330 4,86% 137.584 2,66% 79.232 1,84% 65.999 -2,20% -0,82%
liabilities
D. OWNER-
400 45,84% 1.296.5223 44,20% 1.315.253 41,82% 1.500.327 -1,64% -2,38%
SHIP CAPITAL
410 I. Equity 45,84% 1.296.523 44,20% 1.315.253 41,82% 1.500.327 -1,64% -2,38%
11. Profit after
421 tax is not dis- 7,17% 202.733 3,79% 112.867 10,41% 373.500 -3,37% 6,62%
tributed
TOTAL CAPI-
TAL SOURC-
440 100,00% 2.828.672 100,00% 2.975.891 100,00% 3.587.987 0,00% 0,00%
ES (440 = 300
+ 400)
17
Base on the table, we can figure out that PNJ’s assets structure changes with
the decrease in proportion of short-term assets and the increase in proportion of long-term
assets. In 2014 the proportion of short-term assets is 64.73% and increases to 86.47% in 2016.
Particularly, inventories covers a large proportion and still increase gently from 50.82% in
2014 to 79.12% in 2016; cash index is quite fluctuate but still decrease after all (in 2014: 9.63%,
in 2015: 1.27% and in 2016: 4.33%). This structure of short-term assets changed in ineffective
way. The proportion of long-term assets in 2014 mainly effected by the proportion of long-
term financial investment (18.8%) and the proportion of fixed assets (15.97%). In 2015, by the
proportion of long-term financial investment decrease by 5.6% and the proportion of fixed
assets increase by 26.33%. in 2016, PNJ use no more money to long-term financial investment
and decrease the proportion of fixed assets to 11.59%.
The proportion of Short-term debt increased gently from 49.3% in 2014 to 56.35% in
2016 and it’s logical to the decrease of The proportion of short-tern assets structure. The
proportion of long-term debt decrease maily by the decrease of ownership capital and long-
term loans and borrowings. the proportion of ownership capital decrease from 45.84% in
2014 to 41.82% in 2016 and the the proportion of Long-term loans and borrowings goes down
from 4.86% in 2014 to 1.84% in 2016.
In summary, the conpany’s structure of assets is ineffective but funding for assets if
logical with that.
PAGE
18
3. RATIO ANALYSIS
a. Current solvency coefficients

From the end of 2014 to the end of 2016, PNJ’s current ratio was always higher than 1 and kept
increasing. In 2014, the current ratio was 1.31 and picked up to 1.53 in 2016. We can see that
PNJ has enough current capital to invest in current assets.
On the other hand, quick ratio of PNJ form 2014 to 2016 was always lower than 1. Moreover,
this ratio kept decreasing. In 2014, it was 0.28 but in 2016 it was only 0.13. PNJ’s quick ratio
reached the lowest point of 0.08 in 2015. This is the peculiarity of retail businesses when the
inventory has high propotion in short-term assets structure.
PNJ’s Current solvency coefficients
Source: the authors make from PNJ’s financial statement from 2014 to 2016
b. Assets Management Ratios and Debt Management Ratios

Inventory turnover speed decreases because the inventory turnover decreased and the day
sales of inventory increases.
From those years. PNJ has moved from gold business to jewelry production. The peculiarity
of jewelry production needs time to analyse and meticulous making. It makes PNJ’s inventory
turnover decreases. The days sales of inventory gets the highest point of 126.16 days in 2016.
Table 8. Assets Management Ratios and Debt Management Ratios
2014 2015 2016
Inventories turnover 6.53 4.65 2.63
Days sales of inventory 54.69 98.36 125.16
Fixed assets Turnover 19.56 16.43 18.99
Times interest earned 5.02 3.31 9.07
Debt to Equity 1.08 1.2 1.35
Financial Leverage Ratio 2.18 2.26 2.39
Ability to pay Interest if quite stable. EBIT is from 4 to 9 times higher than interest expense.
19
c. Profitibility Ratios
As we can see from the table, PNJ’s proditibility ratios increases in overall. In 2015, those
ratios went down strongly but it reached the highest point in 2016. In summary, PNJ’s busi-
ness activities was better in 2016.
Table 9. Profitibility Ratios
2014 2015 2016
Net profit margin ratio 2.78% 0.98% 5.26%
Basic earning power ratio 14.34% 9.24% 20.23%
Return on total assets ratio 8.83% 2.60% 13.73%
Return on equity ratio 19.53% 5.79% 32.00%
Internal industry competition

Number of enterprises in the industry
In terms of gold trading, this is a conditional business. There are 22 banks and16 en-
terprises officially licensed to trade in gold bars.
In terms of jewelry production, there are many competitors insde and outside our
country. According to Decree 24, many enterprises unable to trade in gold bars, so that
they focused on jewelry business. Gold jewelry production in a Vietnamese traditional
industry. As a result, Vietnamese product are more and more diversified. Moreover, Viet
Nam has already been a potential market for many foreign jewelry importers
Scale of the internal business
In terms of gold trading, because of the involment of banks and credit institutions
so that it has a large scale. Accoding to Decree 24/2012/NĐ-CP on gold trading activities
management, conditions for granting gold bars trading legally is the enterprises must have
at least 100 billions authorized capital.
In terms of jewelry, according to Decree 24, many enterprises unable to trade in gold
bars, so that they focused on jewelry business. These enterprises has smaller scale.
In summary, gold bars trading is facing the competition from banks and credit institution.
Jewelry production is in competition from domestic and foreign enterprises.
Growth rate and growth potential in the industry
In 2016, the industry’s growth rate was 27%, 17% lower than in 2015.
According WGC, Vietnamese jewelry’s demand increased in 2016, 6.31% higher than
in 2015.
PAGE
20
Demand of gold jewelry inViet Nam
millions USD
Source: the authors make from date of WCG
Compared to many other countries in the world, gold jewelry market in Viet Nam
is only in the initial stage and has developed rapidly in the last 5 years. Besides PNJ has
28 years history, there are many other strong company such as Doji Jewelry, SJC Jewelry...
Among the factors affects the industry, the most important factors are population growth,
income and costumer trend. According to the General Statistics Office, Viet Nam has 91
millions people, for 70% is in 14-64 years of age of which 51% are women.
According to World Gold Council, Vietnam’s per capita consumtion of gold jewelry
is still lower than other countries in Asia. In 2015, Vietnamese consumtion of gold jewelry
is 6.2 USD/person while in Hong Kong it was 263USD/person. The reason is Vietnamese
GDP is quite low just about 2,050USD/person while in Hong Kong it was 40,170USD/
person. On the other hand, the rate of jewelry consumtion per GDP of Vietnam, it is quite
high, just 0.66% lower than Hong Kong. We can see that Vietnamese spend a lot on gold.
In conclusion, we can see that competition among jewelry industry enterprises is
very intense.
21
References:
1. Business Finance Analyzing Curriculum of HCMC Banking University, Ho Chi Minh City,
2016.
2. Slide the lecture by instructor Tran Minh Tam, 2017.
3. www.giavang.net
4. www.pnj.com.vn
5. www.baoninhbinh.org.vn
6. http://tapchitaichinh.vn/
7. www.nguoitieudung.com.vn
8. http://cafef.vn/
9. http://www.cophieu68.vn/
10. Analyzes of the most award-winning teams in the CFA Research Challenge: https://
www.cfainstitute.org/community/challenge/about/Pages/past_champions.
11. PNJ’s analysis report in 9-01-2017 by KIS Viet Nam sercurities analysis
PAGE
22
DISCLOSURES:
This report is prepared based on the data collected from various resources, which, by the
report’s authors’ knowledge, is reliable. All references used in this report are cited fully.
This report is not intended to serve as an advice for any economic decisions and the au-
thors of this report do not hold any financial interest in the company. The sole purpose of
this report is to serve for the purpose of learning and researching.
23
NAME STUDENT CODE
1 Trần Tâm Anh 030630141983
2 Nguyễn Công Đa 030630141123
3 Tan Lịch Phong 030630141274
4 Nguyễn Thị Thu Thủy 030630141432
5 Nguyễn Thị Minh Trí 030630141103
6 Phạm Thị Thảo 030630142183
PAGE
24

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PNJ’S FINANCIAL STATEMENT ANALYSIS

billion, up 4.6% over the previous year, of which the do-

2. Inflation and Gold Price: Source: http://cafef.vn

2. Analysis of specific risks of PNJ

3, Analysis of revenue structure, cost and profit.

Strength (S) Opportunity (O)

TABLE 1: PROFIT STRUCTURE - UNIT: million VND

Net profit from

TABLE 2: COMPARE THE PROFIT STRUCTURE - UNIT: million

Table 1: First, we see that profit from operating

is a reasonable profit struture.

TABLE 3: THE ANALYSIS OF THE CHANGE IN INCOME STATMENT –

VND CHARGE % CHARGE

ITEMS PROPORTION TO NET SALES COMPARISON

14602.18% and in 2015 increase by 2278.75%.

Source: Team analysis

TABLE 6: STRUCTURE OF ASSETS (unit: million VNĐ)

Source: Team analysis

a. Current solvency coefficients

b. Assets Management Ratios and Debt Management Ratios

Internal industry competition

Source: the authors make from date of WCG

1 Trần Tâm Anh 030630141983

2 Nguyễn Công Đa 030630141123

3 Tan Lịch Phong 030630141274

4 Nguyễn Thị Thu Thủy 030630141432

5 Nguyễn Thị Minh Trí 030630141103

6 Phạm Thị Thảo 030630142183

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