At the Beijing Business Work Conference held recently, Beijing proposed to explore the trade-in of furniture this year, but the specific details are still under discussion and the details have yet to be implemented. However, Lenovo’s home appliance trade-to-end at the end of last year, and whether the furniture trade-in can be promoted from Beijing to the national promotion, to what extent the furniture industry has brought benefits, the market immediately gave a positive response. Yesterday, the home industry's Meike shares (600337), Yihua Wood (600978) and Sofia (002572) rose 5.64%, 4.91% and 4.10% respectively, and the Hong Kong-listed Dynasty Furniture (1198.HK) also rose sharply. 7.49%.
Good for furniture companies
Zhou Haichen, an industry analyst at Shenyin Wanguo, said that furniture trade-in was first proposed by furniture companies spontaneously. Some home stores and furniture brands have used this form to drive sales. Zhou Haichen believes that the old-for-new approach not only solves the problem of consumers dealing with old furniture, but also helps to protect the environment and the use of renewable resources, while at the same time driving consumption and achieving a win-win result. However, in terms of specific implementation, furniture is not like a standard model of home appliances, and the pricing of furniture of different materials is also very different. For example, the cost of ordinary MDF processing is higher than the value of recycling, so it is difficult to implement. The timetable for advancement is also uncertain. However, this news still reflects the willingness of the policy to stimulate furniture consumption. In view of the successful precedent of the home appliance trade-in policy from Beijing demonstration to national promotion, Beijing's proposal is almost in the snow for furniture companies in the cold winter.
In terms of beneficiary stocks, Zhou Haichen’s judgment on Beijing’s pilot is expected to advance from the furniture store, which is good for Sofia, which has a good distribution in the store channel. Meanwhile, Meike, Daya Technology (000910), Yihua Wood and Del Home (002631) can also be concerned.
The key depends on the subsidy who pays the bill.
Wang Feng, an industry analyst at Guotai Junan, believes that the practice of some stores in the past was that the old furniture was returned to the furniture store for recycling, and all of them were deducted at 5% of the new furniture transaction price, and the market effect was better. It is not excluded that the policy draws on this practice to promote the upgrading of household consumption.
Among related listed companies, he suggested focusing on Meike and Sofia. Because the share of Meike shares in the Beijing area is relatively large, the unit price of the products is relatively high, and the attractiveness of consumers to trade-in is also greater; Sophia's sales channels are more to enter the major home or building materials stores, if the policy starts to promote, the stores Undoubtedly the first to benefit. Wang Feng reminded that since the specific details of the policy are still unclear, the most important thing to follow is whether the subsidy for trade-in is paid by the government or the enterprise. This will have a significant difference in the degree of benefit to the furniture companies, so it needs to be closely tracked.
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