SFY(SZ:002572)2025-07-09 02:40Summary of the Home Furnishing Sector Conference Call Industry Overview - The home furnishing sector is expected to see a decline in new home demand over the next two years, with an increase in the proportion of second-hand home demand. Companies in this sector need to adjust their strategies to adapt to these market structural changes [1][2] - Leading companies in the home furnishing industry, such as Oppein, Sophia, Kuka, and Mousse, demonstrate strong operational resilience, with performance expected to remain stable or see slight growth in 2025, and further growth anticipated in 2026 [1][2] Key Points - Demand Environment Improvement: Although overall demand is still in a bottoming phase in 2025, the decline in new home demand is narrowing, and second-hand home demand is gradually improving. The demand structure is expected to further adjust, with a decrease in new homes and an increase in second-hand homes [2][3] - Stable Performance of Leading Companies: Leading companies are showing strong operational resilience and are expected to maintain stable or slight growth in performance. As construction accounts narrow further in 2026, these companies are likely to continue this trend [2][3] - High Dividend Returns: Leading companies have strong cash flow and profitability, with dividend payout ratios increasing. Dividend yields range from 4.5% to 6.7%, providing stable returns for investors. For instance, Sophia has maintained a dividend payout ratio exceeding 70% over the past two years [1][2][5] - Industry Consolidation Trend: The home furnishing industry is experiencing accelerated consolidation, with a decline in the area of large retail spaces and the exit of small to medium-sized distributors. Leading companies are expected to gain more market share due to their operational advantages [1][2] - Policy Support Expectations: Although there are no clear real estate policies currently, if demand continues to decline, it is likely that supportive policies will be implemented to stabilize the market, benefiting the home furnishing sector [1][3] - Long-term Value Realization: After undergoing adjustments, the home furnishing industry is entering a consolidation phase. Leading companies are investing in business, product, and team development, as well as building brand reputation, which will translate into long-term growth drivers. For example, Mousse's AI mattress is expected to create strong brand recognition and consumer loyalty [1][3] - Valuation and Dividend Attractiveness: The valuation of leading companies reflects short-term pessimism, but their long-term potential has not been fully realized. From a long-term investment perspective, these companies' valuations are attractive [3] Company-Specific Insights - Sophia: Currently valued at around 10 times earnings, with a dividend payout ratio exceeding 70% over the past two years, resulting in a dividend yield of approximately 6% to 7% [5] - Mousse: This company is rapidly advancing the market promotion and brand awareness of its AI mattress in 2025. It is one of the best-performing companies in terms of domestic sales growth, with expectations for positive growth [6] - Kuka: Facing challenges from changes in domestic demand and external sales disruptions, Kuka's stock price reflects these factors. However, the company has a strong management team and brand, along with investment opportunities in the home furnishing consolidation sector, indicating a positive long-term outlook [7] Overall Sentiment - The home furnishing sector has fully reflected some pessimistic sentiments regarding demand. The overall shareholder returns from this sector have been satisfactory, and companies with long-term advantages are expected to regain growth and benefit from industry consolidation. Therefore, there is an optimistic outlook for the home furnishing sector [8]