In the morning trading session on July 3, PNJ shares of Phu Nhuan Jewelry Joint Stock Company (PNJ) decreased by 6.97% to a price of 58,700 VND/share right from the beginning of the trading session.
At about 10:30 am, this code recorded more than 10.7 million shares outstanding for sale at floor price, while there was no outstanding for buying. Matched order liquidity reached more than 900,000 shares, while the average trading volume per quarter per session was around 1 million shares. With this decrease, PNJ's market price was about 8% lower than at the beginning of the year. The market capitalization of the enterprise retreated to around 30,000 billion VND.
The above developments occurred after on the afternoon of July 2, Thanh Hoa Provincial Police informed that they had dismantled a transnational diamond smuggling ring, prosecuted 22 defendants and seized 1,100 diamonds of various types. Emerging in this smuggling ring is Mr. Dang Ngoc Thao (born in 1974), residing in Binh Thanh ward, Ho Chi Minh City, who is the Director of PNJ One Member Limited Liability Company (P-Lab) under Phu Nhuan Jewelry Joint Stock Company (PNJ), for the act of smuggling.
According to Thanh Hoa Provincial Police, P-Lab Company is one of the reputable gemstone appraisal units in the Vietnamese market, with the role of director, Mr. Dang Ngoc Thao colluded with other subjects to buy diamonds with incorrect parameters compared to the GIA inspection certificate that were smuggled at a cheap price. After that, with her professional knowledge, Thao sharpened the GIA code engraved on the diamond and renewed it according to the P-Lab code, and issued the diamond a new P-Lab inspection certificate to sell to customers for profit.
Maybank Securities Company has also just issued a comment related to the above information, assessing the incident as negative information, at least in terms of market sentiment. However, this securities company believes that the impact on PNJ's business operations, profits and investment arguments is currently relatively limited.
According to Maybank, the case seems to be only related to the alleged wrongdoings of a former leader, not showing broader issues in PNJ or P-Lab's operating system. In addition, P-Lab contributes a relatively small proportion to PNJ's profits and mainly operates in the field of providing inspection services. Therefore, the direct financial impact is assessed as insignificant.
However, Maybank notes that the incident may put pressure on market sentiment, as brand reputation and consumer confidence play an important role in the jewelry industry. However, the incident currently shows no signs that the issue goes beyond personal violations. Therefore, Maybank does not see sufficient grounds to adjust profit forecasts or investment arguments for PNJ. In the long term, Maybank believes that PNJ's value is still supported by a leading retail network, enforcement capacity and the trend of officializing the gold and jewelry market in Vietnam.
Phu Nhuan Jewelry Joint Stock Company also issued a press release stating that the case falls under the legal responsibility of individuals and is being considered by functional agencies according to the provisions of law. PNJ respects the investigation process and does not make any comments other than the information announced by competent authorities.
As the parent company of P-Lab, PNJ is closely coordinating with P-Lab in implementing the requirements of functional agencies, and at the same time supporting governance to ensure that P-Lab's operations are maintained stably, continuously and comply with current regulations.
PNJ always puts product quality and customer benefits first. All diamonds distributed by PNJ that are tested at P-Lab apply quality inspection procedures according to ISO standards, and at the same time compare quality standards of the GIA International Institute of Gemology and have archives to be able to trace the technical parameters of each diamond as required.
Activities at the PNJ system are still deployed stably and continuously.Customers are still fully served according to current policies, including sales, warranty, exchange, after-sales and related benefits.
