- We reiterate our BUY rating for PNJ and raise our target price (TP) by 3.6% mainly due to a 17% upward revision to our aggregate 2022F-2024F NPAT as PNJ’s sales are significantly tracking ahead of our previous expectation. This factor is partially offset by our increased in-house WACC assumption due to a 50-bp increase in our risk-free rate assumption.

- We increase our aggregate 2022F-2024F retail revenue forecasts by 33%, which is mainly driven by our upward revision of PNJ’s SSSG in 2022 due to our stronger conviction regarding the surging demand among PNJ’s major target customers — the middle and affluent class (MAC). Meanwhile, we expect PNJ’s SSSG in 2023-2024 to normalize to mid to high-single-digit rates.

- We forecast a retail revenue CAGR of 32% in 2021-2024F vs ~11% YoY growth in 2021, which is driven by our high-double-digit SSSG forecast in 2022 and mid to high-single-digit SSSG in 2023-2024 — coupled with an average of 35 new gold stores p.a. Expected improvements in the product mix and operating leverage also drive our EPS CAGR forecast of 34% in 2021-2024F.

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