It is very difficult to purchase raw gold.

According to Ms. Cao Thi Ngoc Dung, Chairwoman of the Board of Directors of PNJ, given the volatile gold market, the already difficult task of procuring raw materials has become even more challenging, making it difficult to meet demand.

Speaking at the Annual General Meeting held this morning (April 16), Ms. Cao Thi Ngoc Dung assessed that the business outlook for 2024 remains uncertain. The company is monitoring any minor fluctuations that could affect gold prices in order to implement appropriate solutions. The economy is recovering, but not as well as expected.

With the gold market currently volatile due to global geopolitical situations, and expectations of a US Federal Reserve (Fed) interest rate cut in June 2024 seemingly fading, gold prices will continue to be impacted. Rising gold prices lead to increased asset value, putting significant pressure on businesses.

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

According to Ms. Dung, PNJ's profit decreased by 1% in the first quarter of 2024, whereas in previous years, profits usually increased in the first quarter. This is because it is a time with many festivals, especially the God of Wealth Day. The reason for PNJ's profit decrease is the high price of gold, with demand for gold bars and gold rings exceeding that for gold jewelry. Meanwhile, while increased demand for gold bars leads to increased sales revenue, the profit earned is not high.

On the other hand, one difficulty PNJ is facing is the difficulty in securing raw materials for production. Even during the Lunar New Year's God of Wealth festival, the company needs to prepare very early to ensure a sufficient supply for the market, but still lacks enough materials to meet customer demand. Therefore, profits this year during the God of Wealth festival are lower than in previous years.

Meanwhile, the company's raw material procurement must also ensure quality, especially given the current volatile gold market, where sourcing raw materials is even more difficult. This is also why PNJ's profits decreased slightly in the first quarter of the year.

The economic landscape still presents many potential challenges; however, the PNJ Board of Directors proposed to the General Meeting of Shareholders a business plan for 2024 that continues to grow, with a projected revenue target of VND 37,147 billion, a 12% increase compared to 2023, and a projected after-tax profit increase of 6% to VND 2,089 billion. These are all record figures for the company. The expected dividend for 2024 remains at 20% in cash.

The Chairwoman of PNJ's Board of Directors stated that the 2024 plan includes adding new business development elements, opening more stores in new areas to attract new customers in more remote regions, while still optimizing efficiency per square meter. Currently, the company's brand value is nearly $500 million, and I am aiming for $1 billion. PNJ is also building ESG activities to further enhance the company's brand value,” Ms. Dung said.

"In 2023, we cut many costs to achieve an 8% profit growth, so it's unlikely we can cut further in 2024. The gold market is more volatile, and while new items like gold bars have increased sales, their lower profit margins are impacting overall profitability," said Ms. Cao Thi Ngoc Dung.

Responding to a shareholder's question about whether PNJ's cost of goods sold fluctuates with world gold prices, Ms. Dung stated that the company's cost of goods sold only depends on 50% of the fluctuations in world gold prices, because PNJ specializes in the production and trading of jewelry in addition to gold bars.

Regarding the question of whether PNJ has sufficient gold reserves for 2024, Ms. Dung stated that this is difficult because gold prices are constantly fluctuating, and the company is currently not allowed to import gold. Therefore, it is normal for the company to halt production for 1-2 days due to a shortage of raw materials.

For example, for this year's God of Wealth Festival, PNJ started preparing in October 2023, but still didn't have enough raw materials to produce enough to meet customer demand. This is because the company has a wide network of 100 stores and a huge demand for wholesale and retail purchases, but PNJ can't always keep up with the demand.

Meanwhile, the company's raw material procurement must always comply with regulations regarding origin and input price. Furthermore, the gold market has been fluctuating recently, and the government has directed regulatory agencies to inspect the gold market. As a result, many gold shops have temporarily closed, making the procurement of raw gold even more difficult.

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

At this event, PNJ's Chairwoman, Cao Thi Ngoc Dung, was awarded the First-Class Labor Medal for her outstanding leadership in achieving numerous successes in the jewelry manufacturing and business industry, as well as her contributions to society. This is the second time Ms. Dung has received this prestigious award, following her first time in 2010.

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