PNJ CEO Denies Link to 28,000 Smuggled Diamonds; SSI Cuts 2026 Profit Forecast

Overview

PNJ (Phu Nhuan Jewelry) CEO Cao Thi Ngoc Dung has publicly stated that the 28,000 smuggled diamonds involved in a recent cross-border case are unrelated to PNJ’s distribution system. The statement follows the arrest of Dang Ngoc Thao, director of PNJ’s wholly owned subsidiary P-Lab. SSI Research has lowered its 2026 net profit forecast for PNJ to VND 3,333 billion and placed the stock under review.

Key Facts

• PNJ CEO Cao Thi Ngoc Dung confirmed that the 28,000 smuggled diamonds did not enter PNJ’s distribution system.
• Dang Ngoc Thao, director of P-Lab (a PNJ subsidiary), was arrested and detained in connection with a cross-border diamond smuggling case.
• PNJ stated it only imports diamonds through official channels from suppliers in Thailand and Hong Kong, with full import documentation.
• Customer diamond buyback volumes surged after the news broke on July 2 but quickly normalized.
• PNJ’s board is considering a share buyback of up to 8 million shares (about 1.6% of outstanding shares), as approved by the AGM.
• SSI Research lowered its 2026 net profit forecast for PNJ to VND 3,333 billion from VND 3,569 billion.
• SSI placed its recommendation and target price for PNJ under review, pending official conclusions from authorities.

What Happened

On July 6, 2026, PNJ held a meeting with investors to address the arrest of Dang Ngoc Thao, director of P-Lab, a wholly owned subsidiary that provides independent diamond certification. CEO Cao Thi Ngoc Dung stated unequivocally that the 28,000 smuggled diamonds are not related to PNJ’s operations. She emphasized that P-Lab does not trade diamonds and that PNJ has no diamond purchase transactions with P-Lab. PNJ imports diamonds exclusively through official channels from suppliers in Thailand and Hong Kong.

Following the news, PNJ experienced a temporary spike in customers selling back diamonds, but volumes have since returned to normal. The company noted that inventory levels rose temporarily but remain manageable. PNJ also clarified that despite family relationships between board member Dang Thi Lai and the arrested director, internal governance and audit functions remain independent.

Market Context

PNJ shares closed at VND 54,600 on July 6, down 6.98% on heavy volume of 565,000 shares, reflecting investor concern. The stock is listed on HOSE and has been a bellwether for Vietnam’s retail and consumer discretionary sector. The broader market has been under pressure from rising interest rates and slowing consumer spending, but PNJ’s recent decline is primarily event-driven. SSI’s downgrade and review status add to near-term uncertainty.

Strategic Significance

The smuggling case poses a reputational risk to PNJ, a company built on trust and brand integrity. While PNJ has taken steps to distance itself from the incident, the involvement of a subsidiary’s director raises governance questions. SSI’s forecast cut reflects potential impacts on consumer confidence and brand equity. Long-term investors will need to assess whether PNJ’s strong market position and operational controls can withstand this episode. The planned share buyback and insider purchases signal management’s confidence, but the final outcome depends on regulatory investigations.

What to Watch

• Official conclusions from Vietnamese authorities on the smuggling case and any potential links to PNJ.
• PNJ’s Q3 2026 earnings report for signs of revenue or margin impact from the diamond buyback surge.
• Updates on the share buyback program and insider trading disclosures.
• SSI Research’s reinstatement of a formal recommendation and target price.
• Consumer sentiment surveys or foot traffic data at PNJ stores in the coming months.