MIRA
INFORM REPORT
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Report Date : |
11.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
CHINA NATIONAL COTTON GROUP CORPORATION |
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Registered Office : |
11/F, Section C, Tongtai Building, No. 33, Financial Avenue, Xicheng District,
Beijing, 100027 |
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Country : |
China |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
October, 1993 |
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Com. Reg. No.: |
1000001001519 |
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Legal Form : |
Limited Liabilities Company |
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Line of Business : |
Processing and Selling Cotton and Related Products |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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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Maximum Credit Limit : |
USD 500,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
COMPANY NAME &
ADDRESS
CHINA NATIONAL COTTON GROUP CORPORATION
11/f, section C, tongtai building, no. 33, financial avenue, xicheng
district, beijing, 100027 PR CHINA.
TEL: 86 (0) 10-88086549
FAX: 86 (0) 10-88086562
EXECUTIVE SUMMARY
INCORPORATION DATE : OCTOBER, 1993
REGISTRATION NO. : 1000001001519
REGISTERED LEGAL FORM : LIMITED
LIABILITIES COMPANY
CHIEF EXECUTIVE :
MR. lv guangbin (CHAIRMAN)
STAFF STRENGTH :
120
REGISTERED CAPITAL : CNY 130,000,000
BUSINESS LINE :
PROCESSING AND TRADING
TURNOVER :
CNY 2,950,020,000 (AS OF DEC.
31, 2006)
EQUITIES :
CNY 333,040,000 (AS OF DEC. 31, 2006)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : UP TO USD 500,000 (periodical review)
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : FAIR
OPERATIONAL TREND : FAIRLY STEADY
GENERAL REPUTATION : well-known
EXCHANGE RATE :
CNY
7.39 = US1$
Adopted
abbreviations:
ANS - amount not stated
NS - not stated SC - subject
company (the company inquired by you)
NA - not available
CNY - China Yuan Renminbi
SC was registered as a limited liabilities company at local
Administration for Industry & Commerce (AIC - The official body of issuing
and renewing business license) in October, 1993.
Company Status: Limited liabilities co. This form of business in PR China is defined as a legal
person. Shareholders bear limited liability to the extent of shareholding,
and the co. is liable for its debts only to extent of its total assets. The
characteristics of this form of co. are as follows: Upon the establishment of the co., an investment
certificate is issued to the each of shareholders. The board of directors is comprised of three to thirteen
members. The minimum registered capital for a co. is listed as
follows: -manufacturing co. : CNY
500,000.00 -trading &wholesaling co. : CNY
500,000.00 -retailing co. :
CNY 300,000.00 -consultancy & service co. : CNY 100,000.00 Shareholders may take their capital contributions in cash
or by means of tangible assets or intangible assets such as industrial
property and non-patented technology. Cash contributed by all shareholders must account for at
least 50% of the registered capital while contribution by intangible assets
must not exceed 20% of the registered capital. Existing shareholders have pre-exemption right to purchase
shares of the co. offered for sale by the other shareholders and to
subscribe for the newly increased registered capital of the co.
SC’s registered business scope includes processing and selling cotton,
hemp, linter, by products and cotton yarn; technology developing, manufacturing
and selling agricultural machinery, common machinery, meters, electronic
products; selling garments, textiles, leather products, timber, steel, metal
products, vehicle parts, and chemical raw materials; storage transportation;
exhibition for developing, manufacturing, and processing products; import and
export of various goods and technologies; processing and compensation trades;
barter trade, transit trade, information and real estate consulting of the
above business; technology development, technology consulting, technology
services, technology transferring, technology training; engineering technology
designing and construction consultation.
SC is mainly engaged in processing and selling cotton and related
products.
Mr. Lv Guangbin has been legal representative and chairman of SC since
2001.
SC owns approximately 120 staff at present.
SC is currently operating at the above stated address, and this address
houses its operating office and factory in the industrial zone of Beijing. Our
checks reveal that SC owns the total premise about 2,000 square meters.
http://www.chncc.com/ The design is
professional and the content is well organized. At present it is in Chinese
version.
Email: master@chncc.com
No significant events or changes were found during our checks with the
local Administration for Industry and Commerce.
MAIN SHAREHOLDERS:
Name
%
of Shareholding
All China Federation of Supply and Marketing Cooperatives 95
China Cotton Industries, Ltd. 5
All China Federation of Supply and Marketing Cooperatives has a history
of more than 80 years in China. The government of the People’s Republic of China
has always regarded the development of cooperatives as an important aspect in
promoting agricultural and rural economic development, and given them
conscientious guidance, support and push. In July of 1954, the first national
congress of China’s cooperatives was convened, which changed the name of United
Headquarters of the Chinese Supply and Marketing Cooperatives into All-China
Federation of Supply and Marketing Cooperatives (ACFSMC) and set up a unitary
system of supply and marketing cooperatives nationwide.
China Cotton Industries Ltd. was established in 1996 with its
headquarters in Beijing. It is the most important supplier of complete
production lines and spare parts in China’s cotton processing industry. It’s
business scope covers R&D, manufacturing of complete production lines of
cotton and cotton by-product processing, cotton processing and trade.
Legal representative and General manager:
Mr. Lv Guangbin , ID # 370602501008103, 57
years old with high school education. He is currently responsible for the
overall management of SC.
Working Experience(s):
1986/7---1995/10 Worked in Shandong Yantai
Supply & Marketing Cooperatives as director;
1995/10---2001/1 Worked in China Huanong
Enterprise Group Corporation as CEO;
From 2001 to present Working
in SC as chairman and general manager.
Vice-general manager:
Mr. Shi Jinkai , in his 50’s with university education. He is currently
responsible for the overall management of SC.
Working Experience(s):
From 2000 to present Working
in SC as vice-general manager.
SC is mainly engaged in processing and selling cotton and related
products.
SC’s products mainly include cotton, flax and related products, etc.
SC sources its materials 60% from domestic market, and 40% from overseas
market, mainly India and Europe. SC sells 100% of its products in domestic
market.
The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days.
The payment terms of SC include Check, T/T and Credit of 30-60 days.
SC is known to have the following subsidiaries:
China National Cotton Group Hebei Cotton Co., Ltd.
China National Cotton Group Guangdong Cotton Co., Ltd.
China National Cotton Group (Qingdao) Cotton Co., Ltd.
Henan China National Cotton Co., Ltd.
China National Cotton Group Sinkiang Cotton Co., Ltd.
China National Cotton Group Shanghai Cotton Co., Ltd.
Etc.
Overall payment appraisal :
( ) Excellent (
) Good (X) Average (
) Fair ( ) Poor
( ) Not yet determined
The appraisal serves as a reference to reveal SC's payments habits and
ability to pay. It is based on the 3
weighed factors: Trade payment experience (through current enquiry with SC's
suppliers), our delinquent payment and our debt collection record concerning
SC.
Trade payment experience : SC did not provide any name of
trade/service suppliers and we have no other sources to conduct the enquiry at
present.
Delinquent payment record : None in our database.
Debt collection record :No overdue amount owed by SC was placed to us for
collection within the last 6 years.
Agricultural Development Bank of China Office
AC#：20399990010100000015391
Relationship: Normal.
Balance Sheet
Unit: CNY’000
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as
of Dec. 31, 2005 |
as
of Dec. 31, 2006 |
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Cash & bank |
196,874 |
227,650 |
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Inventory |
1,842,245 |
2,221,500 |
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Accounts receivable |
12,024 |
90 |
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Advances to suppliers |
469,246 |
262,030 |
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Other receivables |
537,970 |
562,570 |
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A receivable tax rebate of export |
16,573 |
/ |
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Other current assets |
136,209 |
20 |
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------------------ |
------------------ |
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Current assets |
3,211,141 |
3,273,860 |
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Fixed assets |
139,624 |
144,680 |
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Fixed assets net value |
97,572 |
95,280 |
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Projects under construction |
0 |
0 |
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Long term investment |
156,817 |
163,630 |
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Other long tem assets |
0 |
1,690,100 |
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Other assets |
1,694,930 |
4,240 |
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------------------ |
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Total assets |
5,160,460 |
5,227,110 |
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============= |
============= |
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Short loans |
2,608,645 |
2,681,360 |
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Accounts payable |
37,368 |
28,390 |
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Notes payable |
50,000 |
84,980 |
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Taxes payable |
-384,195 |
-411,120 |
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Other payable |
215,262 |
314,780 |
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Advances from customers |
372,771 |
426,620 |
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Welfare expenses payable |
3,988 |
0 |
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Salaries payable |
3,730 |
0 |
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Other current liabilities |
25 |
-137,000 |
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------------------ |
------------------ |
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Current liabilities |
2,907,594 |
2,988,010 |
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Long term liabilities |
1,906,057 |
1,906,060 |
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------------------ |
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Total liabilities |
4,813,651 |
4,894,070 |
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Equities |
346,809 |
333,040 |
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------------------ |
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Total liabilities & equities |
5,160,460 |
5,227,110 |
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Income Statement
Unit: CNY’000
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as
of Dec. 31, 2005 |
as
of Dec. 31, 2006 |
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Turnover |
1,789,158 |
2,950,020 |
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Cost of goods sold |
1,746,758 |
2,807,340 |
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Add: Income from other operations |
/ |
2,500 |
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Sales expense |
30,927 |
72,150 |
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Management expense |
23,331 |
35,280 |
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Finance expense |
27,727 |
27,980 |
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Investment income |
11,533 |
4,710 |
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Subsidy income |
31,002 |
11,690 |
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Non-operating income |
5,503 |
1,530 |
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Non-operating expense |
/ |
26,820 |
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Profit before tax |
9,000 |
890 |
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Less: profit tax |
0 |
4,660 |
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Profits |
9,000 |
-3,770 |
Important Ratios
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as
of Dec. 31, 2005 |
as
of Dec. 31, 2006 |
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*Current ratio |
1.10 |
1.10 |
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*Quick ratio |
0.47 |
0.35 |
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*Liabilities to assets |
0.93 |
0.94 |
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*Net profit margin (%) |
0.50 |
-0.13 |
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*Return on total assets (%) |
0.17 |
-0.07 |
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*Inventory /Turnover ×365 |
376 days |
275 days |
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*Accounts receivable/Turnover ×365 |
2 days |
1 day |
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*Turnover/Total assets |
0.35 |
0.56 |
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* Cost of goods sold/Turnover |
0.98 |
0.95 |
PROFITABILITY: FAIR
The turnover of SC appears fairly good in its line, and it increased in
2006.
SC’s net profit margin is average in 2005 and fair in 2006.
SC’s return on total assets is average in 2005 and fair in 2006.
SC’s cost of goods sold is fairly high, comparing with its turnover.
LIQUIDITY: FAIR
The current ratio of SC is maintained in a normal level in both 2 years.
SC’s quick ratio is maintained in a poor level in both 2 years.
The inventory of SC appears LARGE in both 2 years.
The accounts receivable of SC appears average.
The short loans of SC appear TOO LARGE.
SC’s turnover is in a fair level, comparing with the size of its total
assets.
LEVERAGE: FAIR
The debt ratio of SC is high.
The risk for SC to go bankrupt is average.
Overall financial condition of the SC: Fair.
SC is considered medium-sized in its line with favorable background. But
the large amount of short loans and inventory could be a threat to SC’s
financial condition. A credit line up to USD 500,000 would appear to be within
SC’s capacities upon a periodical review.
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%)