How does the US use the tariff stick to impose tariffs on Chinese goods affect Stone Technology?

US President-designate Trump posted a post on his social media account on November 26, local time, falsely claiming that a 10% tariff would be imposed on all goods imported from China. Since Trump's election, the imposition of tariffs on Chinese goods has become a topic that Chinese exporters are most concerned about. Stone Technology (688169.SH) is representative of China's high-tech exports overseas in recent years. After the US imposed tariffs, did it have a negative impact on business operations? The company recently responded to the outside world that as a high-net-worth technology product, the stone sweeping robot is very popular with users in the US market, and the negative impact of tariffs on the company is very limited. At the same time, the company will further expand the US market, further cooperate with channel providers, and accelerate the expansion of its market share and sales volume in the US market.

Opinions within the US do not unify Chinese companies or are influenced to varying degrees

In fact, Trump has been hyping up the topic of imposing tariffs for a long time, and the specific tax rate has changed over and over again. In the end, there is still a lot of uncertainty about the actual increase in Chinese goods. However, within the US, discussions on tariffs are becoming increasingly heated.

Recently, a report from the National Retail Federation (NRF) showed that Trump's proposed tariffs on imported goods from the US could drastically increase the prices of clothing, toys, furniture, household appliances, footwear, and travel goods.

The NRF report said that if the price of a product rises too high, it will be impossible for US retailers to digest and pass it on to consumers, causing many consumers to be unwilling or unable to pay. The report stated, “Tariffs are first paid by US importers... As products enter retail shelves, tariff costs also shift and are reflected in the form of rising prices of goods sold to US consumers.”

Recently, many US retail giants have also spoken out one after another to indicate that after tariffs are raised, they will consider increasing the retail price of their products to transfer costs. According to the NRF report, under the new tariffs, consumers will eventually pay more for six categories of travel items: clothing, toys, furniture, household appliances, and footwear.

Due to the game of interests between various parties in the US, it is still unclear what the final tariff increase will be. However, for some companies with large export businesses, the capital market's concerns about their operating risks will inevitably increase. Recently, concerns about tariffs have also affected investors' confidence to a certain extent, and the stock price performance of some export companies has also been relatively sluggish.

Regarding the actual impact of tariffs imposed by the US on Chinese companies, some experts believe that compared to daily necessities with low net worth and low technological content, high-tech products with technical advantages are more resilient to risks in overseas markets. Sweeping robots are currently one of the major products in China. Previously, in competition with local sweeper robot brands in North America, Chinese robot vacuum products were clearly more expensive, but with their technical advantages, they rapidly expanded in the US market.

Technological products have strong resilience to risks and continue to expand the North American market

Currently, Chinese brand sweeping robots occupy a large leading position in all major markets around the world. Among them, Stone Technology is in the top 3 in 14 overseas countries and regions, while North America is one of the important destinations for them to go overseas. And under this round of additional tariffs, will Stone Technology take the lead in entering the tax increase list? After the imposition of tariffs, will Stone Technology's competitiveness in the North American market be affected?

The relevant person in charge of Stone Technology said that as the first Chinese sweeping robot brand to enter the US market, Stone Technology has established a good reputation and brand image among American users, and the company's products mainly have a great advantage in the middle and high-end markets. Users at this stage are relatively less sensitive in terms of price. It is foreseeable that tariffs will have a limited impact on the sales volume of the company's products. At the same time, Stone Technology is increasing cooperation with local channel providers in the US. Currently, it has established in-depth cooperation with major US retail giants. With these partners, it is expected that sales will reach a new level.

According to previous reports, Stone Technology is speeding up the simultaneous online and offline layout of the North American market. In the North American market, Stone Technology has entered platforms such as Amazon, HomeDepot, Target, Bestbuy, and WalMart, and has opened official brand stores.

According to Magic Mirror data, in 2023, the market share of Stone Technology's high-end products that cost more than $800 has reached 57%, surpassing the established home appliance brand iRobot. In terms of offline channels, financial data shows that in less than a year since Stone Technology entered the US retail market last year, it has expanded more than 1,400 Target stores and more than 1,000 Best Buy stores, covering more than 700 cities across the US. In North America, sales of 47,000 units were achieved in the first half of this year, an increase of 20% over the previous year.

“On the one hand, there is the steady growth of the North American market, and on the other hand, the continuous rise of more emerging markets. The benefit of Stone Technology's global operation is that it can distribute business risks well and ensure that the company can achieve healthy and healthy growth as a whole.” The person in charge said.