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 to 49%, the company stated that its long-term order production and shipping with American clients have not been affected, and the impact on high-end customized furniture is limited. Shang Yi-KY plans to utilize its Chinese base to serve non-American clients, while the Cambodian base will focus on the American market. Additionally, the company has agreed with American clients to extend order deadlines to enhance bargaining power for raw materials. The Cambodian government has also reduced certain import tariffs, which helps Shang Yi reduce costs. The company is currently actively expanding its non-American client base, having received orders from Australia, Russia, and Spain, and plans to acquire an outdoor furniture company in Cambodia to expand production capacity and further promote revenue growth.

Shang Yi-KY (8482) has two major production bases in China and Cambodia. Regarding the announcement by U.S. President Trump of an increase in import tariffs on Cambodia to 49%, the company stated that, with long-term contracts signed with U.S. clients, it is still maintaining normal production, shipping, and collection, with relatively limited impact. The company further assessed that its production of high-priced, high-profit customized furniture can still remain stable.

Shang Yi-KY pointed out that it plans to use the production base in China to serve non-U.S. clients while the Cambodia base will focus on products needed by U.S. clients. The company's current business model is a customized order-based production, and high-end brand clients have already paid over 50% of the deposit, ensuring that products are delivered within the agreed timeline. Therefore, the company uses long-term orders as an advantage for material price negotiations, keeping its average gross margin consistently between 34% and 40%.

• The major furniture producing countries globally include Vietnam, China, Canada, Mexico, Italy, and Cambodia, where Vietnam, China, and Cambodia are significant clusters with a high market share due to lower labor costs.
• The reciprocal tariffs implemented by President Trump on April 2 have imposed high tariffs ranging from 25% to 49% on the aforementioned countries, which undoubtedly poses a serious impact on businesses providing popular low-margin furniture; however, Shang Yi-KY's high-priced, high-margin customized furniture is less affected.

The Prime Minister of Cambodia has written to Trump, deciding to immediately lower the import tariffs on 19 types of U.S. products from a maximum of 35% to 5%. It is expected that Cambodian officials will soon hold a conference call with U.S. Trade Representatives. Shang Yi-KY also stated that it has negotiated with U.S. clients to extend existing orders to 12 months, which will provide greater room for raw material price negotiations. In addition, the Cambodian government has begun to lower some import tariffs, which will benefit Shang Yi in its imports of raw materials from the U.S., further reducing costs.

To diversify risk and achieve a dual effect of overall revenue and profit, Shang Yi-KY will also accelerate the expansion of non-U.S. clients. Currently, non-U.S. clients have successfully secured orders from Casa Blanco in Australia, Dantone from Russia and Dubai, and El Corte Ingles from Spain. Notably, El Corte Ingles in Spain has 86 retail stores locally, and its expected revenue in 2024 is projected to reach 14.4 billion euros, making it the largest retail department store in Europe.

Shang Yi-KY believes that, with the support of both U.S. and non-U.S. clients and the flexible scheduling of its two major production bases in China and Cambodia, the company will also acquire Homeyard Casual Cambodia Co., Ltd., further expanding its outdoor furniture product line and production scale, and expects to contribute to revenue post-acquisition.