MIRA
INFORM REPORT
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Report Date : |
01.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
CHAIN CHON STAINLESS STEEL SDN BHD |
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Formerly Known As : |
CHIN FOH STAINLESS STEEL SERVICE CENTRE SDN BHD |
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Registered Office : |
20-2A, Jalan Up 1/5, Ukay Perdana, 68000 Ampang |
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Country : |
Malaysia |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
02.02.1996 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Steel Products |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
EXECUTIVE SUMMARY
LOCAL NO : 376181-M
COMPANY NAME : CHAIN CHON STAINLESS STEEL SDN BHD
FORMER NAME : CHIN FOH STAINLESS STEEL SERVICE CENTRE SDN BHD (23-11-2004)
INCORPORATION DATE : 02/02/1996
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : 20-2A, JALAN UP 1/5, UKAY PERDANA, 68000 AMPANG,
SELANGOR, MALAYSIA.
BUSINESS ADDRESS : LOT 1871, JALAN BALAKONG, BATU 13, KAMPUNGG BARU
BALAKONG, 43300 SERI KEMBANGAN, SELANGOR, MALAYSIA.
TEL NO : 03 - 89613996
FAX NO : 03 - 89613995
CONTACT PERSON : TAN YOKE KUEN (EXECUTIVE DIRECTOR)
INDUSTRY CODE : 5142
PRINCIPAL ACTIVITY : TRADING IN FERROUS STEEL, STAINLESS STEEL AND RELATED
PRODUCTS
AUTHORISED CAPITAL : MYR25,000,000.00 DIVIDED INTO ORDINARY SHARE 25,000,000 OF
MYR1.00 EACH.
ISSUED AND PAID UP CAPITAL: MYR11,544,161.00 DIVIDED INTO ORDINARY SHARE 8,000,000 CASH
AND 3,544,161 OTHERWISE OF MYR1.00 EACH.
SALES : MYR36,371,233 [2006]
NET WORTH : MYR16,675,424 [2006]
STAFF STRENGTH : 26 [2007]
BANKER (S) : STANDARD CHARTERED BANK MALAYSIA BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : STABLE
PAYMENT : PROMPT
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : MODERATE
CURRENCY EXPOSURE : LOW
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : MARGINAL GROWTH
HISTORY / BACKGROUND
The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.
The SC is principally engaged in the (as a / as an) trading in ferrous steel, stainless steel and related products.
The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).
The SC is not qualified to be one of the Top Corporate Performers in the Malaysia 1000 (M1000) publication, a directory jointly published by Companies Commission of Malaysia (The Registrar Office), Minister of Domestic Trade and Consumer Affairs and our publication arm, BASIS Publications House Sdn Bhd. The immediate holding company of the SC is CHAIN CHON INDUSTRIAL CO. LTD, a company incorporated in TAIWAN.
The major shareholder(s) of the SC are shown as follows :
Name Address IC/PP/Loc
No: Shareholding
CHAIN CHON INDUSTRIAL CO 14 SAN KUAI TSUO, BU-SHIN VILLAGE, 7,464,161
LTD TAYUAN
HSIANG, TAOYUAN HSIEN, TAIWAN.
SAGE SUCCESS SDN BHD 20-2A, JALAN UP 1/5, UKAY PERDANA, 68000 638745 4,080,000
AMPANG,
SELANGOR, MALAYSIA.
--------------------
11,544,161
===========
+ Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : KUO YIN TSUNG
Address : LANE 178, TA GUAN ROAD, TIEN-SHIN VILLAGE, TAYUAN
HSIANG, TAIWAN.
IC / PP No. : P133470628
Nationality : TAIWANESE
Date of Appointment : 28/02/2005
DIRECTOR 2
Name of Subject : CHEN SHIN-TSE
Address : 16, LORONG CP 8/33, TAMAN CHERAS PERDANA, 43200
CHERAS, SELANGOR, MALAYSIA.
IC / PP No. : P130223316
Nationality : TAIWANESE
Date of Appointment : 26/01/2005
DIRECTOR 3
Name of Subject : MS. TAN YOKE KUEN
Address : 5, JALAN MEGAH 12A, TAMAN MEGAH CHERAS, BATU 9, 43200
CHERAS, SELANGOR, MALAYSIA.
IC / PP No. : 6248970
New IC No : 610812-06-5490
Nationality : MALAYSIAN CHINESE
Date of Appointment : 26/01/2005
DIRECTOR 4
Name of Subject : YU CHENG-YANG
Address : 16, LORONG CP 8/33, TAMAN CHERAS PERDANA, 43200
CHERAS, SELANGOR, MALAYSIA.
IC / PP No. : M15648908
Nationality : TAIWANESE
Date of Appointment : 28/08/2000
DIRECTOR 5
Name of Subject : LI CHING-PO
Address : 1F, 63 AI 2 STREET, TAOYUAN CITY, TAIWAN.
IC / PP No. : P135036541
Nationality : TAIWANESE
Date of Appointment : 24/05/2000
Remark : OLD P/P : M20179434
MANAGEMENT
Name of Subject : TAN YOKE KUEN
Position : EXECUTIVE DIRECTOR
Name of Subject : YAP HSENG CHEEN
Position : MARKETING MANAGER
AUDITOR
Auditor : SHAMSIR JASANI GRANT THORNTON
Auditors' Address : FABER IMPERIAL COURT, JALAN SULTAN ISMAIL, LEVEL 11-1, 50250 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
COMPANY SECRETARY
Company Secretary : MS. YONG MEE YEE
IC / PP No. : A2481881
New IC No. : 730411-14-5074
Address : 202, BLOCK E4, WANGSA MAJU, SECTION 2, 53300 KUALA
LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
Date of Appointment : 21/10/2004
BANKING
Banking relations are maintained principally with :
Banker Name : STANDARD CHARTERED BANK MALAYSIA BHD
The SC enjoys normal banking routine with above mentioned banker(s).
No adverse record was found during our investigation.
ENCUMBRANCE (S)
ENCUMBRANCE 1
Date of Creation : 15 Jun 2005
Description of Charge : N/A
Amount Secured : RM 8,800,000.00
Description of Property Affected : N/A
Name & Address of Chargee : BUMIPUTRA-COMMERCE BANK BHD
Form 40 Dated
Registered and Numbered 2 In The Register of Charges
LEGAL CHECK AGAINST THE SC
*A check has been conducted in our databank against the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia back dated since 1900. No legal action was found in our databank. No winding up petition was found in our data bank
PAYMENT RECORD
SOURCES OF RAW MATERIALS :
Local : YES
Overseas : YES
Import Countries : CHINA , TAIWAN.
The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :
OVERALL PAYMENT HABIT
Prompt [ X ] Good [ ] Average [ ]
Fair [ ] Poor [ ]
CLIENTELE
Local : YES
Domestic Markets : MALAYSIA.
Overseas : YES
Export Market : INDIA , SINGAPORE , SAUDI ARABIA.
Credit Term : 30 - 60 DAYS.
Payment Mode : TELEGRAPHIC TRANSFER (TT) , CHEQUES.
Type of Customer : WHOLESALERS .
OPERATIONS
Goods Traded : STEEL PRODUCTS
Competitor(s) : LOONGSYN SDN BHD
MASTUS CORPORATION SDN BHD
TEIK JOO CHAN SDN BHD
UNIVERSAL SEJATI (M) SDN BHD
W & T ELECTRICAL TRADING SDN BHD
Ownership of premises : LEASED/RENTED
Total Number of Employees :
YEAR 2007 2006 2005
GROUP N/A N/A N/A
COMPANY 26 28 25
Branch : NO
RECENT DEVELOPMENT
We have checked with the Malaysian National News Agency's (BERNAMA) database, but no latest development was noted in our investigation.
CURRENT INVESTIGATION
Latest fresh investigations carried out on the SC indicated that :
Telephone Number Provided By Client : 0389613996
Current Telephone Number : 03-89613996
Match : YES
Address Provided By Client : LOT 1871, JLN BALAKONG, BATUIN KAM PURJ
NARU BALKONG 43300 SERI KEMBANGAN
Current Address : LOT 1871, JALAN BALAKONG, BATU 13, KAMPUNGG
BARU BALAKONG, 43300 SERI KEMBANGAN,
SELANGOR, MALAYSIA.
Match : NO
Latest Financial Accounts : YES
Other Investigations
We conducted an interview with Ms Lam from the SC's Admin Department. She revealed some information pertaining to the SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Erratic [ 2003-2006 ]
Profit / ( Loss ) before tax : Increased [ 2003-2006 ]
Return on Shareholder Funds : Unfavourable [ 9.06% ]
Return on Net Assets : Acceptable [ 14.42% ]
The fluctuating turnover reflects the fierce competition among the existing and new market players. The higher profit could be attributed to the increase in turnover. The unfavourable return on shareholders' funds and net assets could indicate that the SC's management was inefficient in utilising its assets to generate returns.
Working Capital Control:
Stocks Ratio : Favourable [ 41 Days ]
Debtors Ratio : Unfavourable [ 71 Days ]
Creditors Ratio : Favourable [ 1 Days ]
The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the SC was weak in its credit control. However, the SC could also giving longer credit periods to its customers in order to boost its sales or to capture /retain its market share. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.
LIQUIDITY:
Liquid Ratio : Favourable [ 19.36 Times ]
Current Ratio : Favourable [ 26.57 Times ]
A minimum liquid ratio of 1 should be maintained by the SC in order to assure its creditors of its ability to meet short term obligations and the SC was in a good liquidity position. Thus, we believe the SC is able to meet all its short term obligations as and when they fall due.
SOLVENCY:
Interest Cover : Acceptable [ 9.19 Times ]
Gearing Ratio : Favourable [ 0.00 Times ]
The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. The SC had no gearing and hence it had virtually no financial risk. The SC was financed by its shareholders' funds and internally generated fund. During the economic downturn, the SC, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.
Overall Assessment
Although the turnover was erratic, the SC had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability.The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations.The SC had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment.The SC was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The SC has good chance of getting loans, if the needs arises.
Overall financial condition of the SC: STABLE
COMMENTS
Incorporated in 1996 as a private limited company, the SC is principally engaged in trading of ferrous steel, stainless steel and related products. With a large paid up capital of RM11,544,161, the SC can further enhance its business in the near term. Under the major control of its holding company, Chain Chon Industrial Co. Ltd, it allows the SC to enjoy the benefits of timely assistance when the needs arise. Having been in the market for over a decade, the SC should have established its own image and reputation over times.
Over the years, the SC has built up a wide and stable clientele base in the market. Apart from serving to the local market, the SC has expanded its business to other countries such as India, Singapore and Saudi Arabia. This global approach has benefited the SC in terms of higher earnings and market shares Presently, the business activities of the SC are overseen by Executive Director, Tan Yoke Kuen assisted by 26 staff in its operations. The SC's overall management capability is regarded average and more efforts are expected from the SC in order to compete with its rivals.
Referring to the financial year ended 2006, the SC's pre-tax profit grown by 36.87% to RM2.19miilion, despite a lower turnover of RM36.37million. Return on shareholders' funds was low, indicating that the management was inefficient in utilising its funds to generate returns. However, the SC is in a good liquidity position. This clearly implies that the SC would be able to repay all its short term obligations. Being a zero geared company, the SC virtually has no financial risk as it is mainly dependent on its internal funds to finance its business.
We noted that the SC's products are from both local and overseas suppliers. Being involved in import and export activities, the SC is subjected to forex risk.
Based on our historical financial data, the SC's overall payment habit is prompt. The SC is clear of any litigation.
The industry is reaching its maturity stage and only a marginal growth can be expected. With the normal outlook of the industry performance, the SC is required to be more competitive in order to retain its market position.
In view of the above, we recommend credit be granted to the SC normally.
THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
PROFIT AND LOSS ACCOUNT
For The Year Ended 31-December-2006
CHAIN CHON STAINLESS STEEL SDN BHD
2006 2005
MYR MYR
TURNOVER 36,371,233 47,739,930
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PROFIT/(LOSS) FROM OPERATIONS 2,190,074 1,600,088
SHARE OF
PROFITS/(LOSSES) OF ASSOCIATED
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PROFIT/(LOSS)
BEFORE TAXATION 2,190,074 1,600,088
Taxation <679,029> <523,587>
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PROFIT/(LOSS)
AFTER TAXATION 1,511,045 1,076,501
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS 1,511,045 1,076,501
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PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 1,511,045 1,076,501
RETAINED
PROFIT/(ACCUMULATED LOSS) BROUGHT
FORWARD
As previously
reported 3,620,218 2,543,717
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As restated 3,620,218 2,543,717
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PROFIT
AVAILABLE FOR APPROPRIATIONS 5,131,263 3,620,218
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RETAINED
PROFIT/(ACCUMULATED LOSS) CARRIED
FORWARD 5,131,263 3,620,218
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RETAINED BY: The Company 5,131,263 3,620,218
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5,131,263 3,620,218
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INTEREST
EXPENSE (as per notes to P&L)
Hire purchase 4,166 4,454
bankers'
acceptance 263,311 161,467
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267,477 165,921
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BALANCE SHEET
As At 31-December-2006
CHAIN CHON STAINLESS STEEL SDN BHD
2006 2005
MYR MYR
ASSETS
EMPLOYED:
FIXED ASSETS 2,576,575 3,246,663
LONG
TERM INVESTMENTS/OTHER ASSETS
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INTANGIBLE
ASSETS
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TOTAL LONG
TERM ASSETS 2,576,575 3,246,663
CURRENT
ASSETS
Stocks 4,079,711 10,559,840
Trade debtors 7,095,102 9,035,919
Other
debtors, deposits & prepayments 97,240 343,948
Items in
transit between head office & branches
Amount due
from related companies - 126,307
Cash &
bank balances 3,713,231 3,032,636
tax
recoverable 46,246 295,943
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TOTAL CURRENT
ASSETS 15,031,530 23,394,593
CURRENT
LIABILITIES
Trade
creditors 65,315 551,751
Other
creditors & accruals 205,985 337,100
Hire purchase
& lease creditors 30,009 52,412
Bill &
acceptances payable - 7,646,038
Amounts owing
to holding company - 2,347,318
provisions 264,390 145,267
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TOTAL CURRENT
LIABILITIES 565,699 11,079,886
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NET CURRENT
ASSETS/(LIABILITIES) 14,465,831 12,314,707
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TOTAL NET
ASSETS 17,042,406 15,561,370
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FINANCED
BY:
SHARE CAPITAL
Ordinary
share capital 11,544,161 11,544,161
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TOTAL SHARE
CAPITAL 11,544,161 11,544,161
RESERVES
Retained
profit/(Accumulated loss) carried
forward 5,131,263 3,620,218
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TOTAL
RESERVES 5,131,263 3,620,218
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SHAREHOLDERS'
FUNDS/EQUITY 16,675,424 15,164,379
LONG TERM
& DEFERRED LIABILITIES & PROVISIONS
Hire purchase
creditors 29,982 59,991
Deferred
taxation 337,000 337,000
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TOTAL LONG TERM & DEFERRED
LIABILITIES &
PROVISIONS 366,982 396,991
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17,042,406 15,561,370
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FINANCIAL RATIOS
As At 31-December-2006
CHAIN CHON STAINLESS STEEL SDN BHD
2006 2005
MYR MYR
TYPES OF
FUNDS
Cash 3,713,231 3,032,636
Net Liquid
Funds 3,713,231 3,032,636
Net Liquid
Assets 10,386,120 1,754,867
Net Current
Assets/(Liabilities) 14,465,831 12,314,707
Net Tangible
Assets 17,042,406 15,561,370
Net Monetary
Assets 10,019,138 1,357,876
BALANCE
SHEET ITEMS
Total
Borrowings 59,991 112,403
Total
Liabilities 932,681 11,476,877
Total Assets 17,608,105 26,641,256
Net Assets 17,042,406 15,561,370
Net Assets
Backing 16,675,424 15,164,379
Shareholders''
Funds 16,675,424 15,164,379
Total Share
Capital 11,544,161 11,544,161
Total
Reserves 5,131,263 3,620,218
LIQUIDITY
(Times)
Cash Ratio 6.56 0.27
Liquid Ratio 19.36 1.16
Current Ratio 26.57 2.11
WORKING
CAPITAL CONTROL (Days)
Stock Ratio 41 81
Debtors Ratio 71 69
Creditors
Ratio 1 4
SOLVENCY
RATIOS (Times)
Gearing Ratio 0.00 0.01
Liabilities
Ratio 0.06 0.76
Times
Interest Earned Ratio 9.19 10.64
PERFORMANCE
RATIO (%)
Operating
Profit Margin 6.02 3.35
Net Profit
Margin 4.15 2.25
Return On Net
Assets 14.42 11.35
Return On
Capital Employed 14.39 11.31
Return On
Shareholders'' Funds/Equity 9.06 7.10
Dividend Pay
Out Ratio (Times) 0 0
NOTES
TO ACCOUNTS
Contingent
Liabilities 0 0
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)