LX Hausys, Hyundai Livart
Double-Digit Growth This Year
[Asia Economy Reporter Minji Lee] Riding the wave of the interior design boom and a booming construction market, interior-related stocks have shown a remarkable upward trend.
According to the Korea Exchange on the 22nd, LX Hausys rose about 29% from 78,000 KRW to 101,000 KRW so far this year. During the same period, Hyundai Livart also increased by 26%. The leading interior company Hanssem only rose 11%, largely due to profit-taking selling following the private equity fund sale decision earlier this month, causing a roughly 20% drop from its peak price of 149,000 KRW.
The ongoing home decoration craze since last year and the domestic and international construction market boom have driven the rise in interior stocks. Looking at the card spending growth rate in the first half of this year, interior-related consumption ranked third after department stores and automobiles, increasing by 10% compared to the previous year. As the home interior market expands, LX Hausys, which had a large B2B scale, is recently increasing its B2C share by exposing decorative materials and flooring to consumers through interior showrooms.
Following the home decoration craze, sales of office furniture have also significantly increased recently due to the spread of remote work. Researcher Seonghwan Choi from Research AlEum explained, "Office furniture, which was mainly sold B2B, is expanding into B2C sales channels. The remote work culture is rapidly spreading, and with students continuing remote classes, sales of home office furniture are expected to grow."
Growth in the B2B furniture market is also expected in the second half of the year. As domestic apartment construction and pre-sale volumes increase, built-in furniture sales to domestic construction companies are rising. Overseas orders are also increasing again. Researcher Sera Park from Shin Young Securities explained, "In the case of Hyundai Livart, with about 150 billion KRW worth of order backlog accumulated in Iraq and Qatar in the first half, a sales rebound from B2B corporations is expected next year."
Concerns about performance due to rising raw material prices are expected to gradually ease. This is because the increase in raw material costs is being reflected by raising furniture selling prices. Although wood prices surged about 87% compared to a year ago to 14,160 KRW per sheet in May, supply and demand have normalized, alleviating concerns about further price increases. Hyundai Livart raised prices of home furniture by about 3-5%, and Hanssem increased prices on 75% of its product lineup by 5% compared to before, improving profitability.
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