- We increase our target price (TP) for PNJ by 5% and maintain our OUTPERFORM rating.
- Our higher TP is mainly driven by (1) nudging up our 2023F NPAT by 3% as we decrease our SG&A expense forecast by 6% due to PNJ’s lower-than-expected salary expenses and the company outsourcing services in H1 2023, in addition to (2) extending our explicit forecast horizon to 2028 from 2027 as we are now in H2 2023.
- Despite weak domestic consumption in H1 2023, PNJ’s retail sales declined by only 10% YoY due to the company’s (1) more resilient middle-affluent consumer base and (2) launches of new collections accompanied with effective marketing campaigns to gain market share.