It is very difficult to buy raw gold.

Ms. Cao Thi Ngoc Dung, Chairwoman of PNJ Board of Directors, said that in the context of the fluctuating gold market, the purchase of raw materials, which was already difficult, became even more difficult, making it difficult to meet demand.

Speaking at the General Meeting of Shareholders held this morning (April 16), Ms. Cao Thi Ngoc Dung assessed that the business picture for 2024 is still not bright, the Company is monitoring any small fluctuations that may affect the price of gold to have appropriate solutions. The economy has recovered but not as expected.

The gold market is currently experiencing fluctuations due to the world geopolitical situation, and the expectation that the US Federal Reserve (Fed) will cut interest rates in June 2024 seems to have disappeared, so it will still affect the gold price. The increase in gold prices also increases assets, putting great pressure on businesses.

Ms. Cao Thi Ngoc Dung, Chairwoman of PNJ Board of Directors.

According to Ms. Dung, in the first quarter of 2024, PNJ's profit decreased by 1%, while in previous years, profit often increased in the first quarter of the year. Because this is an occasion with many festivals, especially the God of Wealth's day. The reason PNJ's profit decreased is because the price of gold increased, the demand for gold bars and gold rings was higher than for jewelry gold. Meanwhile, when the demand for gold bars increased, sales revenue increased, but the profit was not high.

On the other hand, one difficulty that PNJ is facing is that it is difficult to meet the input materials for production, including the God of Wealth festival at the beginning of the year. In order to have a supply to the market, the Company must prepare very early, but there are not enough materials to produce and meet the demand of buyers. Therefore, the profit earned during this year's God of Wealth season is not as good as previous years.

Meanwhile, the Company’s purchased raw materials must also ensure quality, especially in the context of the current volatile gold market, where purchasing raw materials on the market is even more difficult. That is also due to the slight decrease in PNJ’s profits in the first quarter of the year.

The economic picture still has many potential challenges, however, PNJ's Board of Directors proposed to submit to the General Meeting of Shareholders a business plan for 2024 to continue to grow with an expected revenue target of VND 37,147 billion, an increase of 12% compared to 2023 and an expected after-tax profit increase of 6% to VND 2,089 billion. These are all record numbers for the company. The expected dividend for 2024 continues to be 20% in cash.

The Chairman of the Board of Directors of PNJ said that the 2024 orientation includes adding new business development elements, opening more stores in new areas to attract new customers in deeper areas, but still having to optimize efficiency on each square meter. Currently, the Company's brand value has reached nearly 500 million USD and I am placing orders for 1 billion USD. PNJ also builds ESG activities to increase the company's brand value," said Ms. Dung.

"In 2023, we have cut many costs to achieve 8% profit growth, so it is difficult to cut further in 2024. The gold market is more volatile, new products such as gold bars have increased sales but lower profit margins affecting overall profits," said Ms. Cao Thi Ngoc Dung.

Responding to shareholders about PNJ's cost of goods sold fluctuating according to world gold prices, Ms. Dung said that the company's cost of goods sold only depends on 50% of fluctuations in world gold prices, because PNJ specializes in manufacturing and trading jewelry in addition to gold bars.

As for whether PNJ has enough raw gold reserves for 2024? According to Ms. Dung, it is very difficult because the price of gold is always fluctuating, while the company is currently not allowed to import gold. Therefore, it is normal for the company to stop production for 1-2 days due to lack of input materials.

For example, this year's God of Wealth occasion, PNJ has been preparing since October 2023, but still does not have enough raw materials to produce and meet customer demand. Because the Company currently has a large network, 100 stores and the wholesale and retail demand of customers is very large, but PNJ cannot always meet it in time.

Meanwhile, the Company's purchase of raw materials must always meet the regulations on origin and input sheet price. In addition, recently, the gold market has been constantly fluctuating and the Government has also directed management agencies to inspect the gold market, so many gold shops have temporarily closed, so the purchase of raw gold will be even more difficult.

Also at the General Meeting of Shareholders on the morning of April 16, PNJ held a ceremony to receive the First Class Labor Medal. This is an important and meaningful event, marking the 36th anniversary of PNJ's establishment and 20th anniversary of its equitization.

At the event, PNJ Chairman Cao Thi Ngoc Dung was awarded the First Class Labor Medal for her outstanding achievements in leading PNJ to many achievements in production, jewelry business and contributions to society. This is the second time Ms. Dung has received this noble title, after the first time in 2010.

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