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PNJ [BUY +21.8%]- Accelerating expansion to cement leadership position - Update

We reiterate our BUY rating on PNJ with 21.8% total return. We increase our target price by 5.2% primarily due to roll-over effects and a 50 bps contraction in WACC. We pencil in 40 new stores in FY17 vs 31 in FY16. This, coupled with 8% SSSG, will pull high-margin retailing revenue up by an estimated 23.3% vs FY16. FY17 core NPAT is forecast to grow 17.3% against reported growth of 32.4% as PNJ will no longer be burdened by DongA provisioning in 2017.