Dragon Capital has resumed investment in Phu Nhuan Jewelry Joint Stock Company (PNJ), with its two funds, DCDS and DCDE, reacquiring shares in august. This move follows a complete divestment in july, when PNJ was absent from both funds' portfolios. Additionally, Dragon Capital-affiliated shareholders reduced their stake in july, selling over 2,5 million shares and bringing their ownership down to 4,56%, thereby ceasing to be a major shareholder.
The august investment report highlights DCDS, the market's largest equity open-ended fund, now holds 690.000 PNJ shares. These shares are valued at nearly 29,05 billion VND, representing 0,46% of the fund's total assets. DCDE, an open-ended fund focused on dividend policy, holds 55.100 shares, valued at approximately 2,32 billion VND, accounting for 0,25% of its total assets.
Combined, the two funds currently own 745.100 PNJ shares, worth about 31,37 billion VND based on the 42.100 VND per share price at the end of august. However, this allocation does not yet indicate PNJ is a key investment for either fund.
This re-entry by Dragon Capital occurred after a volatile month for PNJ. The stock plummeted from over 63.000 VND in early july to a low of 30.750 VND in just three weeks, losing almost half its value. It then recovered to 42.100 VND by the end of august. As of the close of trading today, the market price has further adjusted, falling nearly 13% to 36.750 VND.
In august, beyond DCDS and DCDE, other foreign organizations also increased their ownership in PNJ. Investors represented by Sprucegrove Investment Management raised their holding to above 5%, while a group associated with T. Rowe Price also surpassed this threshold again.
PNJ is undergoing restructuring following a crisis linked to a former leader of PNJ Inspection Company (P-Lab), who was involved in a diamond smuggling ring. According to the semi-annual financial report, consolidated after-tax profit reached 728,5 billion VND, a 35% decrease. This profit decline was primarily due to the company setting aside provisions for potential losses related to its buyback policy for previously sold goods.
The company reported executing buybacks worth nearly 4,997 billion VND from 1/7 to 3/9, with corresponding losses exceeding 1,446 billion VND. The rate of customers reselling goods was 100%. Overall, for its entire goods buyback policy, the total loss provision recorded surpassed 2,267 billion VND.
At the end of august, the Thanh Hoa Police announced that the diamonds in the smuggling case had not entered PNJ's retail system. This announcement helped improve the stock's market price compared to its short-term low at the end of july.
Tat Dat
