讀後心得

Shang Yi-KY has two major production bases in China and Cambodia. In response to the news that U.S. President Trump has raised the import tariff on Cambodian goods to 49%, the company stated that long-term orders from American customers remain normal and are unaffected in terms of production and collection, and that high-priced customized furniture is minimally impacted. Shang Yi-KY plans to serve non-American clients from its China base, while its Cambodia base will focus on the American market. The company's customized order model allows it to maintain an average gross profit margin of 34%-40%. Additionally, the Cambodian government has lowered tariffs on some American imported products, and the company has also agreed with its American customers to extend orders for up to 12 months, enhancing its bargaining power for raw materials. Shang Yi-KY is also actively expanding its non-American customer base, securing orders from Australia, Russia, Dubai, and Spain, and plans to acquire a Cambodian outdoor furniture company to expand production scale and revenue.

Shang Yi-KY has two major production bases in China and Cambodia. In response to the news that the U.S. President announced an increase in import tariffs on Cambodia to 49%, the company stated that U.S. clients are currently still adhering to long-term orders, with production, shipment, and collection unaffected. Assessments indicate that the company's high-priced, high-margin customized furniture is minimally impacted.

Shang Yi-KY mentioned that the company plans to use its China base to provide services for non-U.S. clients, while the Cambodia base will focus on production for U.S. clients. The business model is based on customized order production, with high-end brand clients having paid more than 50% of their deposits; therefore, timely delivery will be secured during the delivery period. Relying on long-term orders, the company leverages its bargaining power for raw materials to maintain an average gross profit margin between 34% and 40%.

Major furniture-producing countries globally include Vietnam, China, Canada, Mexico, Italy, and Cambodia, particularly with Vietnam, China, and Cambodia being significant hubs due to their low labor costs, achieving high market shares. Under the reciprocal tariff implemented on April 2, these countries are facing high tariffs of 25%-49%. This is undoubtedly a major blow to businesses offering mass-market low-margin furniture, while Shang Yi-KY's high-priced, high-margin furniture is less affected.

The Prime Minister of Cambodia has sent a letter to the U.S. President, deciding to reduce import tariffs on 19 categories of U.S. products from a maximum of 35% to 5%. It is expected that Cambodian officials will soon hold a teleconference with U.S. trade representatives. Shang Yi-KY stated that it has reached an agreement with U.S. clients to extend existing orders for an additional 12 months, which will help enhance the bargaining space for raw materials. Following the Cambodian government's announcement to reduce certain import tariffs, Shang Yi anticipates that raw materials imported from the U.S. will benefit from this, thereby lowering costs.

Shang Yi-KY will accelerate the development of non-U.S. clients to diversify risks and provide a dual effect on overall revenue and profitability. The company has successfully attracted orders from non-U.S. clients, including Casa Blanco from Australia, Dantone from Russia and Dubai, and El Corte Ingles from Spain. Notably, El Corte Ingles in Spain operates 86 retail stores and is expected to generate revenue of €14.4 billion 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 allocation of its production bases in China and Cambodia, and the impending acquisition of Cambodia Outdoor Furniture Co., Ltd., it will increase its outdoor furniture product line, expand production scale, and expects to contribute positively to revenue post-acquisition.