讀後心得

Shang Yi-KY (8482) has two major production bases in China and Cambodia. In response to the adjustment of import tariffs on Cambodia by the United States, the company stated that it has signed long-term orders with American clients, and production and shipping have not been affected, with limited impact on customized high-priced furniture. Shang Yi-KY plans to use its China base to serve non-American clients, while the Cambodia base will focus on American clients. The company emphasized that high-end brand clients have paid more than half of their deposits and are fulfilling delivery agreements, maintaining a gross profit margin between 34%-40%. In addition, the Prime Minister of Cambodia has written to the U.S. side to lower import tariffs on certain American products. Shang Yi-KY will negotiate with American clients to extend order periods to enhance bargaining power for raw materials. The company also plans to expand its non-American client base and has already gained interest from clients in Australia, Russia, and Spain, with Spain's El Corte Ingles becoming an important partner. Shang Yi-KY believes that through customer support and flexible production base scheduling, along with the upcoming acquisition of an outdoor furniture company, it will further expand its capacity and revenue.

Shang Yi-KY has two major production bases located in China and Cambodia. In response to the announcement by U.S. President Trump to raise import tariffs on Cambodia to 49%, the company stated that long-term orders signed with U.S. clients are still maintaining normal production, shipment, and collection, and the impact on the company’s high-priced, high-margin customized furniture production is relatively limited.

Shang Yi-KY pointed out that the company plans to use its China base to serve non-U.S. clients, while the Cambodia base will focus on the production needs of U.S. clients. The company’s business model is based on customized order production, and high-end brand clients have already paid over 50% of the deposit. According to the agreed delivery schedule, the company can supply goods on time, thus leveraging long-term orders as bargaining chips for raw material pricing, maintaining an average gross margin between 34%-40%.

The main furniture-producing countries globally include Vietnam, China, Canada, Mexico, Italy, and Cambodia, with Vietnam, China, and Cambodia having a higher market share due to lower labor costs. In the reciprocal tariffs imposed by President Trump on April 2, the high tariff range imposed on the aforementioned countries is 25%-49%. This is undoubtedly a severe blow to businesses that provide low-margin furniture for the mass market, while the high-priced, high-margin customized furniture offered by Shang Yi-KY is relatively less affected.

Recently, the Prime Minister of Cambodia has written to Trump, deciding to “immediately” lower the import tariffs on 19 categories of American products from the original maximum of 35% to 5%. It is expected that Cambodian officials will have a phone conference with U.S. trade representatives. Shang Yi-KY indicated that it has agreed with U.S. clients to extend the current orders for 12 months to provide greater bargaining power for raw materials. Additionally, the Cambodian government has announced a reduction in certain import tariffs, which is expected to benefit Shang Yi in importing raw materials from the United States, achieving cost reduction.

Shang Yi-KY also plans to accelerate the expansion of non-U.S. clients to achieve both risk diversification and overall revenue profit. Currently, non-U.S. clients have successfully attracted orders from Casa Blanco in Australia, Dantone in Russia and Dubai, and El Corte Ingles in Spain. Among them, El Corte Ingles in Spain has 86 retail stores in the region, and it is estimated that revenue will reach 14.4 billion euros in 2024, 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, along with the flexible dispatch of its two major production bases in China and Cambodia, and the imminent acquisition of a Cambodian outdoor furniture company, it will join the outdoor furniture product line, expand production capacity, and is expected to contribute to revenue after the acquisition.