讀後心得

Shang Yi-KY has production bases in China and Cambodia. In response to the United States increasing import tariffs on Cambodia, the company stated that long-term orders from American clients have not been affected, and the impact on high-priced customized furniture is limited. The company plans to utilize its base in China to serve non-American clients, while the Cambodian base will focus on American clients. Shang Yi-KY operates a customized order production model and enhances its gross profit margin to 34%-40% through long-term orders. The Cambodian government has lowered import tariffs on certain American products, which will benefit Shang Yi, and the company plans to expand its non-American client base to diversify risk. Recently, it has received orders from Australia, Russia, and Spain. The company will also acquire a Cambodian outdoor furniture company to further expand its production capacity and revenue.

Shang Yi-KY has two major production bases in China and Cambodia. In response to U.S. President Trump announcing an increase in import tariffs on Cambodia to 49%, the company stated that U.S. clients have signed long-term orders with them. Current production, shipping, and payment have not been affected, and it is estimated that the impact on the high-priced, high-margin customized furniture produced by the company is limited.

Shang Yi-KY pointed out that the company plans to provide services to non-U.S. clients through its China base, while the Cambodia base will focus on the production needs of U.S. clients. The company’s business model is customized order-based production, and high-end brand clients have already paid more than 50% of the consumer deposit, which requires clients to deliver on time within the agreed period. Therefore, the company uses long-term orders as leverage for raw material bargaining, keeping its average gross profit margin consistently between 34%-40%.

The world's major furniture-producing countries include Vietnam, China, Canada, Mexico, Italy, and Cambodia, among which Vietnam, China, and Cambodia enjoy a higher market share due to lower labor costs. Under the reciprocal tariffs implemented by President Trump on April 2nd, these countries face high tariffs ranging from 25%-49%, which undoubtedly deals a heavy blow to businesses providing popular low-margin furniture products. However, the high-priced, high-margin customized furniture offered by Shang Yi-KY is relatively less affected.

The Prime Minister of Cambodia has sent a letter to Trump, deciding to "immediately" reduce the import tariffs on 19 categories of American products from a maximum of 35% to 5%. It is expected that Cambodian officials will soon hold a phone conference with U.S. trade representatives. Shang Yi-KY stated that the company has reached an agreement with U.S. clients to extend current orders to 12 months, increasing the bargaining space for raw materials, and the Cambodian government has already announced a reduction in some import tariffs, which is expected to benefit Shang Yi from importing raw materials from the U.S., resulting in cost savings.

Additionally, Shang Yi-KY will accelerate the expansion of non-U.S. clients to achieve both risk diversification and improvement in overall revenue and profitability. Currently, non-U.S. clients have successfully attracted the favor of Australia’s Casa Blanco, Russia and Dubai's Dantone, and Spain's El Corte Ingles, along with orders. Among them, Spain's El Corte Ingles is the most emblematic, with 86 retail stores locally and anticipated revenue of 14.4 billion euros in 2024, making it the largest retail department store in Europe.

Shang Yi-KY believes that with the support of U.S. and non-U.S. clients, and utilizing the flexible dispatch of its two production bases in China and Cambodia, along with the upcoming acquisition of Homeyard Casual Cambodia Co., Ltd., it will expand its outdoor furniture product line, enhance production scale, and expects to contribute to the company's revenue post-acquisition.