Jason Furniture (Hangzhou) (SH:603816)2025-06-11 15:49Summary of Conference Call Records Industry Overview - The records primarily discuss the home furnishings industry, focusing on the impact of national subsidy policies on sales performance and market dynamics in 2025 [1][5][10]. Key Points and Arguments Sales Performance and Expectations - Initial sales expectations for 2025 were set at 50 million yuan, but actual performance has been disappointing due to changes in national subsidy policies, with April showing a 50% year-on-year decline and May a 20% decline [1][4]. - The overall sales for January to May 2025 remained flat compared to the previous year, indicating significant market pressure [1][4]. - A specific dealer reported a sales drop from 45 million yuan in 2023 to 33 million yuan in 2024, with a projected 50 million yuan for 2025, which now seems unlikely [2]. Impact of National Subsidy Policies - The suspension of subsidies in Hubei province has led to a decrease in customer traffic, although the conversion rate has improved as customers focus more on product quality and actual prices rather than subsidies [1][9]. - The cancellation of subsidies has resulted in a pessimistic outlook for sales growth in the second half of 2025, with dealers preparing for the worst-case scenario [10]. - The national subsidy orders from 2024 have mostly been fulfilled, with 90% delivered by March 2025 [11]. Customer Behavior and Market Dynamics - Customers are increasingly prioritizing product quality over subsidies, as evidenced by improved conversion rates despite lower foot traffic [9]. - The market has shown seasonal trends, with significant sales peaks in the fourth quarter of the previous year [13]. - The average customer transaction value has not significantly increased due to the subsidy policies, as customers still opt for lower-priced options [18]. Financial Metrics - The net profit margin for 2024 was negative, with a stable gross margin for cabinets at over 50%, while wardrobe margins decreased from 48.5% to around 47% [19]. - Rent reductions have been implemented, decreasing from 150,000 yuan to 110,000 yuan per month, saving approximately 500,000 yuan annually [21][45]. - Tax costs have increased due to the subsidy policies, putting additional pressure on profit margins [22]. Future Outlook - The overall market sentiment for the second half of 2025 is not optimistic, with expectations of low growth due to market contraction and competition from local processing plants [10][33]. - The company aims to achieve a retail target of 1.05 billion yuan for the year, despite challenges faced in the first half [33]. Additional Insights - The records highlight the challenges faced by dealers in adapting to the changing subsidy landscape and the need for improved service quality to maintain customer satisfaction [8][10]. - There is a noted increase in the average transaction value for finished and customized furniture, but the actual conversion rates have not improved correspondingly [41]. Conclusion The conference call records provide a comprehensive overview of the challenges and dynamics within the home furnishings industry, particularly in relation to national subsidy policies and their impact on sales performance, customer behavior, and financial metrics. The outlook for the remainder of 2025 appears cautious, with significant adjustments needed to navigate the evolving market landscape.