MIRA
INFORM REPORT
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Report Date : |
25.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
BAOSHAN IRON & STEEL CO., LTD. |
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Registered Office : |
Guoyuan, Fujin Road, Baoshan District, Shanghai 201900 Pr |
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Country : |
China |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
Feb. 3, 2000 |
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Com. Reg. No.: |
3100001006333 |
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Legal Form : |
Shares Limited Company |
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Line of Business : |
Engaged in manufacturing and selling raw steel materials and
billets. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
name & address
BAOSHAN IRON & STEEL CO., LTD.
GUOYUAN, FUJIN ROAD, BAOSHAN DISTRICT
SHANGHAI 201900 PR CHINA
TEL : 86 (0)
21-56784567
FAX : 86 (0)
21-26648046
EXECUTIVE SUMMARY
INCORPORATION DATE : FEB. 3, 2000
REGISTRATION NO. :
3100001006333
REGISTERED LEGAL FORM : SHARES LIMITED COMPANY
STAFF STRENGTH : 38,875
REGISTERED CAPITAL : CNY
17,512,000,000
BUSINESS LINE :
MANUFACTURING
TURNOVER :
CNY 94,123,803,000 (JAN. 1, 2007 TO JUN. 30, 2007)
EQUITIES :
CNY 89,070,802,000 (AS OF JUN. 30, 2007)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : LARGE AMOUNT
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : strong
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : WELL-KNOWN
EXCHANGE RATE : CNY 7.37=US1$
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY – China Yuan Ren Min Bi
SC was registered as a shares limited company at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Feb. 3, 2000.
Company Status: Shares limited co. This form of business in PR
China is defined as a legal person. Its registered capital is divided into shares
of equal par value and the co. raises capital by issuing share certificates
by promotion or by public offer. Shareholders bear limited liability to the
extent of shareholding, and the co. is liable for its debts only to the
extent of its total assets. The co has independent property of legal person
and enjoys property rights of legal person. The characteristics of
the shares limited co. are as follows: The establishment of the co.
requires at least two promoters and no more than 200, half of whom shall be domiciled
in China.. Natural person are allowed to
serve as promoters. The minimum registered capital of a co. is CNY 5M. while
that of the co. with foreign investment is CNY 5M. The total capital of a
co. which propose to apply for publicly listed must be no less than CNY
30M. The board of directors must
consist of five to nineteen directors. If the co. raises
capital by public offer, the promoters must not subscribe less than 35% of
the total shares. the promoters’ shares are restricted to transfer- within
one year of the offer. A state-owned enterprise that
is restructured into a shares limited co. must comply with the conditions
& requirements specified under the law & administrative rule.
SC’s registered business scope includes iron &
steel smelting and processing; manufacturing electric power, coal, industrial
gas; harbor, storage, transportation business related to iron and steel;
technology developing, technology transiting, technology services, technology
management & consultation services; automobile maintenance; exporting its
self-made products and technologies; importing raw materials, instruments &
apparatus, machinery, components, and technologies; processing
with imported materials, processing with imported samples, assembling with
imported parts, and compensation trade in agreement; manufacturing and selling high
grade raw steel materials and billets.
SC is
mainly engaged in manufacturing and selling steel materials and billets.
Mr. Ai
Baojun has been chairman of SC since Mar. of 2007.
SC is known to
have approx. 38,875 staff members 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 Shanghai. Our checks
reveal that SC owns the total premise about 350,000 square meters.
http://www.baosteel.com. The
design is professional and the content is well organized. At present it in both
Chinese and English versions.
E-mail: webman@baosteel.com
SC is the largest and most modernized iron and steel complex in China.
SC was ranged among the first three of the most competitive steel
producers globally according to "Guide to the World Steel Industry".
SC listed in Shanghai Stock Exchange in Dec. 2000 and the stock number
is 600019.
SC received attestation and passed reexamination by BSI.
SC was allowed to use the emblem of API.
SC obtained a certificate from JIS, and passed the QS9000 attestation by
GM, Ford and Chrysler, three most famous car makers in the world.
SC's products have also obtained recognition by seven classification
institutions like China Classification (CCS), Bureau Veritas (BV), American
Bureau of Shipping (ABS), Lloyd's Register of Shipping (LR), Germanischer Lloyd
(GL), Det Norske Veritas (DNV) and Registro Italiano Navale Group (RINA).
Change:
In Mar. of 2007, SC’s former legal representative Mr. Xu Lejiang (徐乐江)
was taken place by the present one.
MAIN SHAREHOLDERS: (As of Jun.
30, 2007)
Name %
of shareholdings
Baosteel Group Co., Ltd.
74.25
Chinalife Insurance Company Ltd. (005L-FH002 Shanghai) 0.63
Chinalife Insurance (Group) Corp. (traditional &
common)
0.58
Security Investment Fund (Zhongyou Core) 0.48
Security Investment Fund (Yifangda Jiazhi) 0.38
Security Investment Fund (Nanfang Stable Growth) 0.34
Morgan Stanley & Co. International Limited 0.30
Security Investment Fund (Xinda Aoyin) 0.27
Security Investment Fund (Boshi 3rd Industry) 0.26
UBS LIMITED 0.25
Other shareholders 22.26
Baosteel Group Corporation (Baosteel) is
a super large steel conglomerate established on November 17, 1998 by Baoshan
Iron & Steel Group Corporation as the core merging with Shanghai
Metallurgical Holding Group and Shanghai Meishan Group Co. Baosteel Co., Ltd is
one of the first metallurgic companies in China to obtain certification of ISO
14001.
In the 2004 Fortune Global 500
list released in July 2005, Baosteel ranked No. 309, thus it becomes one of the
first Chinese manufacturers to maintain the title of Global 500 Company.
l
Chairman:
Mr. Ai Baojun, 47 years old with doctor’s degree. He is currently
responsible for the overall management of SC.
Working Experience(s):
Senior accountant and PdD supervisor of Northeastern University.
Mr. Ai has been engaged in management of steel industry for many years and has abundant theories and practice in corporate finance, accounting, strategic management, BPR and M&A. He joined Baosteel in September 1994, and worked as Vice President and Chief Accountant of Shanghai Baosteel Group Corporation from 1998 to 2000 and Director of Shanghai Baosteel Group Corporation from 1998 through 2005. Starting from February 2000, Mr. Ai has been working as Director and President of SC. He is deputy to the 10th National People’s Congress. Mr. Ai graduated from Northeastern University in 1983 and received his Master degree in enterprise management from the same university in 1988. He studied in U.S.A as a visiting scholar during 1990 to 1991. In 2002, Mr. Ai was awarded honorary PhD by Maastricht School of Management, Netherlands.
l
General Manager:
Mr. Fu Zhongzhe, 47 years old with university education. He is currently
responsible for the daily management of SC.
Working Experience(s):
Mr. Fu has rich experience in production and operation management of steel company. He joined Baosteel in July 1982 and has held positions as Director of Production Management Center of Production Department of Shanghai Baoshan Steelworks, Vice President of Baosteel Iron & Steel Trading Co., Director of Production Department of Baoshan Iron & Steel Group Corporation, Director of Steel Making Mill of Baosteel, Assistant to President of Shanghai Baosteel Group Corporation, Chairman and President of Baosteel Group Shanghai No.1 Iron & Steel Co., Ltd. Mr. Fu worked as Vice President of sc, and President of Baosteel Branch, SC concurrently from 2005 to March 2007. Since March 2007, Mr. Fu has been President of SC and Director of SC since April, 2007.
SC is
mainly engaged in manufacturing and selling raw steel materials and billets.
According to the
production flow, SC's production facilities include systems of sintering,
iron-making, steel-making and steel-rolling. Besides, IT has its own power
plant, which provides all the electricity for its production.
SC has 3 sintering
machines, with annual capacity of 14.9 million tons of agglomerate. The main
facilities in the sintering plant were imported from Japan, Britain and United
States.
SC's iron-making
system consists of 3 over 4000-cubic-meter blast furnaces, the main parts of
which came from Japan. Its annual iron-making capacity has reached 10.25
million tons.
SC's steel-making
system includes 3 converters, each with a capacity of 300 tons, 2converters,
each with a capacity of 250 tons, a 150 ton DC arc furnace with double base and
extra high power, 2 sets of 1930mm casters, 2 sets of 1450mm casters, a set of
six-strand flattening round/square caster and several pieces of secondary
steel-making equipment. All these facilities were from Japan and Germany. SC's
annual capacity of crude steel has gone up to 11.2 million tons.
Steel-rolling system consists of the following
facilities:
A set of 1300mm
blooming train;
A set of 140mm HR
seamless steel tube unit;
A set of 2050mm
hot rolling mill;
A set of 1580mm
hot rolling mill;
A set of 2030mm
cold rolling mill;
A set of 1420mm
cold rolling mill;
A set of 1550mm
cold rolling mill;
A set of 5mm to
25mm continuous high-speed wire rod mill.
Almost all the above equipment was manufactured
by Japanese and German leading companies and constantly transformed
technically. The annual capacity of its 140mm HR seamless steel tube unit has
now reached 550 thousand tons; the annual capacity of the 2050mm hot rolling
mill has reached 5 million tons; 1580mm hot rolling mill, 3 million tons;
2030mm cold rolling mill, 2.20 million tons; 1420mm cold rolling mill, 800
thousand tons; 1550mm cold rolling mill, 1 million tons and high speed wire rod
mill, 500 thousand tons.
SC sources its
materials 70% from domestic market, and 30% from Europe and Southeast Asia. SC
sells 80% of its products in domestic market, and 20% to European and American
Countries.
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, L/C and Credit of 30-60 days.
*Major Suppliers:
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Baosteel Group Enterprise Development Corp.
Baosteel Group Shanghai Meishan Co., Ltd.
*Major Customers:
==============
Baosteel Group Shanghai Pudong Iron & Steel Co., Ltd.
Shanghai Baosteel International Economic and
Trade Co., Ltd.
SC is
known to have the following subsidiaries at present:
Shanghai Meishan Iron & Steel Co., Ltd.
Ningbo Baoxin Stainless Steel Co., Ltd.
NipponSteel Automotive Board Co., Ltd.
Yantai Lubao Steel Pipe Co. Ltd.
Baosteel Huangshi Board Co., Ltd.
Shanghai Baosteel International Economic and
Trade Co., Ltd.
Shanghai Baoxin Software Co., Ltd.
Baosteel Chemical Co., Ltd.
BAOSTEEL AMERICA INC
HOWA TRADING CO., LTD.
BAO-ISLAND ENTERPRISES LIMITED
BAOSTEEL HONGKONG TRADING COMPANY LIMITED
BAOSTEEL TRADING EUROPE GMBH
BAOSTEEL SINGAPOPE PTE LTD.
BAO-TRANS ENTERPRISES LTD.
BAOSTEEL AUSTRALIA MINING COMPANY PTY LTD.
BAOSTEEL DO BRASIL LTDA
BAOVALE MINERACAO S.A.
Baoyin Special Steel Pipe Co., Ltd.
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’s suppliers
declined to make any comments.
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.
Constructions
Bank of China
AC#：055177-00263174374
Relationship:
Normal
Consolidated
Balance Sheet
Unit: CNY’000
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As of Dec. 31, 2006 |
As of Jun. 30, 2007 |
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Cash & bank |
5,337,491 |
8,514,452 |
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Short investment |
11,503 |
0 |
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Bills receivable |
5,200,575 |
4,595,059 |
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Advances to
suppliers |
3,506,685 |
5,166,359 |
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Accounts
receivable |
5,181,926 |
6,232,955 |
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Inventory |
31,514,549 |
38,400,411 |
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Other accounts
receivable |
851,974 |
793,345 |
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Expenses to be
apportioned |
6,589 |
0 |
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Other current
assets |
4 |
5,001,647 |
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Current assets |
51,611,296 |
68,704,228 |
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Fixed assets |
94,334,067 |
91,257,630 |
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Fixed assets net
value |
81,867,270 |
77,376,836 |
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Project
materials |
568,801 |
1,008,889 |
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Projects under
construction |
11,897,996 |
12,871,905 |
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Long term
investment |
2,712,666 |
3,749,145 |
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Other assets |
2,401,549 |
6,642,687 |
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Total assets |
151,059,578 |
170,353,690 |
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Short loans |
19,972,694 |
22,042,208 |
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Bills payable |
1,691,587 |
6,468,342 |
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Accounts payable |
12,084,960 |
14,239,486 |
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Salaries payable |
918,487 |
1,536,640 |
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Taxes payable |
1,073,504 |
942,784 |
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Advances from
clients |
7,204,746 |
7,426,872 |
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Estimated
liabilities |
0 |
0 |
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Long-term
investment with in one year |
358,454 |
0 |
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Other accounts
payable |
1,106,109 |
942,264 |
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Drawing-expense
in advance |
385,187 |
0 |
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Other current
liabilities |
2,470,580 |
21,370,023 |
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Current
liabilities |
47,266,308 |
74,968,619 |
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Long term
liabilities |
16,770,989 |
6,105,350 |
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Other liabilities |
147,499 |
208,919 |
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Total
liabilities |
64,184,796 |
81,282,888 |
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Equities |
86,874,782 |
89,070,802 |
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------------------ |
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Total
liabilities & equities |
151,059,578 |
170,353,690 |
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Consolidated
Income Statement
Unit: CNY’000
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|
As of Dec. 31, 2006 |
As of Jan. 1,
2007 to Jun. 30, 2007 |
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Turnover |
157,791,465 |
94,123,803 |
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Cost of goods
sold |
129,228,902 |
82,571,790 |
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Sales expense |
2,238,967 |
955,790 |
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Management expense |
5,388,150 |
2,161,316 |
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Finance expense |
1,306,365 |
522,419 |
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Profit before
tax |
19,007,733 |
12,199,882 |
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Less: profit tax |
5,997,469 |
3,528,597 |
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Profits |
13,010,264 |
8,671,285 |
Important Ratios
=============
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As
of Dec. 31, 2006 |
As
of Jun. 30, 2007 |
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*Current ratio |
1.09 |
0.92 |
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*Quick ratio |
0.43 |
0.40 |
|
*Liabilities
to assets |
0.42 |
0.48 |
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*Net profit
margin (%) |
8.25 |
9.21 |
|
*Return on
total assets (%) |
8.61 |
5.09 |
|
*Inventory
/Turnover ×365 |
73days |
149days |
|
*Accounts
receivable/Turnover ×365 |
12days |
24days |
|
*Turnover/Total
assets |
1.04 |
0.55 |
|
* Cost of goods
sold/Turnover |
0.82 |
0.88 |
PROFITABILITY:
FAIRLY GOOD
l
The turnover of SC appears fairly good in its line in 2006.
l
SC’s net profit margin is fairly good.
l
SC’s return on total assets is maintained in a fairly good level.
l
SC’s cost of goods sold is average, comparing with its turnover.
LIQUIDITY: AVERAGE
l
The current ratio of SC is maintained in a normal level.
l
SC’s quick ratio is maintained in a fair level.
l
The inventory of SC is maintained in a large level.
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The accounts receivable of SC is average.
l
SC’s short loans appear fairly large.
l
SC’s turnover is in an average level, comparing with the size of its
total assets.
LEVERAGE: AVERAGE
l
The debt ratio of SC is average.
l
The risk for SC to go bankrupt is low.
Overall financial
condition of the SC: Strong.
Opinion amount: USD 25,000,000
SC is
well-known in its industry with strong financial conditions. The given credit line
appears to be within SC’s capacities.
RATING
EXPLANATIONS
|
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 |
|
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 |
|
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 |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
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 |
|
<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%)