Furniture Industry Smiles as Remote Work Spreads... Hanssem Soars 32% This Month

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] Furniture companies are gaining attention as beneficiaries of the novel coronavirus disease (COVID-19). This is attributed to the increased interest in home interior design as the time spent at home has increased due to the expansion of remote work.

According to the Korea Exchange on the 21st, Hanssem's stock price closed at 67,500 KRW, up 5.80% (3,700 KRW) from the previous trading day. Hanssem's stock price has continued its strong performance, rising 32.4% this month alone as of the previous day. During this period, it significantly outperformed the KOSPI return of 8.2%. Other furniture stocks such as Hyundai Livart (36.9%), Zinus (19.1%), Ace Bed (10.4%), Enex (41.7%), and Sidiz (9.7%) also showed a simultaneous rebound during the same period.

It is analyzed that the non-face-to-face era created by COVID-19 has expanded the demand for qualitative investment in homes, creating opportunities for furniture and interior companies. Recently, the spread of remote work and the increase in non-face-to-face consumption have spread new consumption patterns, positively impacting furniture companies' online sales. KB Securities researcher Sang-guk Lim said, "Attention should be paid to the fact that the domestic interior market is continuously growing, with expanding demand for indoor space remodeling due to aging residential environments."

The fact that the housing market is being reorganized into an era of qualitative supply is also positive. In the 2010s, qualitative supply was pursued through housing reconstruction and redevelopment, but in the 2020s, this method has been blocked, and the trend of qualitative improvement through interior design is strengthening. Hana Financial Investment researcher Sang-wook Chae analyzed, "In the late 2010s, the booming housing maintenance projects created an unfavorable business environment for interior-related companies, but considering the current government's policy and the strengthening of housing maintenance project regulations after the April 15 general election, consumer demand for qualitative supply is likely to naturally manifest as a revival of interior-related companies."

However, since the furniture industry is heavily influenced by the construction market, apartment supply volume and move-in volume are expected to be major variables affecting performance. The second quarter, when real estate transaction volume is expected to decline due to the impact of COVID-19, could be a critical period. According to the Ministry of Land, Infrastructure and Transport, the number of housing sales transactions in March was about 108,600, down 5.7% compared to about 115,200 in February.