MIRA INFORM REPORT

 

 

Report Date :

23.05.2007

 

IDENTIFICATION DETAILS

 

Name :

DAIKIN INDUSTRIES LTD

 

 

Registered Office :

Umeda Center Bldg, 2-4-12 Nakazaki-Nishi Kitaku Osaka 530-8323

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

Feb 1934

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturing of air conditioners

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

Yen 20785.8 millions

 

 

Status :

Good

 

 

Payment Behaviour :

Usually correct

 

 

Litigation :

Clear

 

 

name

 

DAIKIN INDUSTRIES LTD

 

 

REGD NAME

 

Daikin Kogyo KK

 

 

MAIN OFFICE

 

Umeda Center Bldg, 2-4-12 Nakazaki-Nishi Kitaku Osaka 530-8323 JAPAN

Tel: 06-6373-4312

Fax: 06-6373-4330

URL: http://www.daikin.co.jp/

E-Mail address: info@daikin.co.jp

 

 

ACTIVITIES

 

Mfg of air conditioners

 

 

BRANCHES

 

Tokyo (3), Suita

 

 

OVERSEAS

 

New York, Düsseldorf, Singapore, Beijing, Shanghai, Guangzhou

(Affiliates): China (10), Europe (16), Asia/Oceania (11), North & Latin America (9), other (2).  (Tot 48)

 

 

FACTORY(IES)

 

Sakai (2), Yodogawa, Shiga , Kashima

 

 

CHIEF EXEC

 

NORIYUKI INOUE, CH & CEO

YUKIYOSHI OKANO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 792,857 M

PAYMENTS      REGULAR                     CAPITAL           Yen 28,023 M

TREND             STEADY                       WORTH            Yen 343,492 M

STARTED         1934                             EMPLOYES      21,747

 

 

COMMENT

 

MFR SPECIALIZING IN AIR CONDITIONERS.      FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 20,785.8 MILLION, 30 DAYS NORMAL TERMS.

 

 

                        Forecast (or estimated) figures for 31/03/2007 fiscal term

 

 

HIGHLIGHTS

           

This is the largest mfr of commercial-use air conditioners.  Makes household-use air conditioners, too.  Pioneer of application of CFC as refrigerant for freezers.  Diversified into hydraulic equipment, fluorine resins/gas, and shells/warheads for Defense Agency.  World’s top class in fluorine chemicals.  Holds 17.1% of domestic share in home-use air conditioners, only shade behind Matsushita Electric Ind, whose share is 17.3%.  Active in overseas operations accounting for about 50% of total sales. 

 

(Recent news release dated 19/01/2007):

 

Completion of acquisition for O.Y.L. Industries Berhad (Headquarters in Kuala Lumpur, Malaysia) was effected as of January 18, 2007.  The total purchase price for 100% of OYL shares    was approx Yen 243,800 million. 

           

Our comments: OYL sales are approx Yen 170,000 million/annually.  Synergy effects of the purchase are said to be Yen 10,000 million/annually after 3 years.  The purchase will place the firm second globally in the air conditioning sector.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2006 fiscal term amounted to Yen 792,857 million, an 8.8% rise from Yen 728,880 million in the previous term.  Sales of air conditioners/freezers grew in domestic market thanks to hot summer temperature, and strong demand in overseas markets, particularly in Europe & China that was sustained from the previous fiscal year.  Other factors contributing to the rise included in the Chemicals Div’s sales, particularly sales of semiconductor-related products & automakers.  By divisions, air conditioning was up 8.9% to Yen 641,657 million; chemicals up 7.8% to Yen 107,411 million.  The recurring profit was posted at Yen 68,682 million and the net profit at Yen 40,708 million, respectively, compared with Yen 63,478 million recurring profit and Yen 38,747 million net profit, respectively, a year ago.  Wrote off Yen 1,952 million as extraordinary losses stemming from the withdrawal of unprofitable operations.

 

For the current term ending Mar 2007 the recurring profit is projected at Yen 76,000 million and the net profit at Yen 45,500 million, on a 22.3% rise in turnover, to Yen 970,000 million.  Air conditioners will continue increasing, led by growing demand particularly in China, other in Europe &    USA.  Continues expansion & production boost at plants in Asia & Europe.  Cost reduction efforts will continue to cover higher material and labor costs.  Cost cuts will further include review of design process and increased overseas procurement.

 

(Fourth Quarter results ending Dec/2006): Sales 657,707 million (up 16.2%), operating profit Yen 58,840 million (up 24.5%), recurring profit Yen 59,475 million (up 23.5%), net profit Yen          32,698 million (up 15.5%). (% compared with the same period the previous year).  Exports expanded, led by steady capital investment and weaker Yen against foreign currencies.  Particularly to France, Australia, China and Thailand.  Fluorine resins were in increased demand in China and    those for domestic semiconductor mfrs.  Supply of ammunitions/warheads to Self Defense Agencies centered in the 3rd quarter period contributed.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 20,785.8 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:            Feb 1934

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                    500 million shares

Issued:                          263,813,973 shares

Sum:                            Yen 28,023 million

Major shareholders (%): Japan Trustee Services Bank T (18.6), Master Trust Bank of Japan (6.8), Chase Manhattan Bank (London) (4.5), State Street Bank of Trust (4.3), Northern Trust Co (3.3), Matsushita Electric Ind (2.6), Bank of New York (2.6), Trust & Custody Services Bank (2.1), SMBC (1.8), BBH Boston Custodian GMO (1.7); foreign owners (36.6).

No. of shareholders:       10,567

Listed on the S/Exchange (s) of: Tokyo, Osaka, Nagoya, Sapporo, Fukuoka

Managements: Noriyuki Inoue, ch; Yukiyoshi Okano, pres; Katsuhiko Takagi, v pres; Guntaro Kawamura, v pres; Hiroshi Tanaka, v pres; Masanori Togawa, mgn dir; Shigeki Hagiwara, dir; Takeshi Ebisu, dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

 

Related companies

 

Daikin Europe, Daikin America, other (Tot 99 as of Mar/06).

           

 

OPERATION

           

Activities: Manufactures air conditioners & freezers (81%), chemicals (13%), others (6%).

 

Overseas sales ratio 46.4%: Asia/Oceania (18.1%): Singapore, China, Hong Kong, Taiwan, Korea, Indonesia, Philippines, Australia, India; Europe (22.6%): UK, France, Italy, Germany, Spain, Belgium, Greece, Portugal; Americas (4.6%): USA, Mexico, Argentina; Other regions (1.1%): Mid East, Africa.

           

(Handling items by divisions):

 

Air Conditioning & Refrigerator Div: Room air conditioners, room air cleaners, Commercial-use air conditioners, commercial-use air cleaners, large-scale refrigerators, marine-type container refrigeration units, container refrigeration, marine vessel air conditioners & refrigerators, water chillers;

           

Oil Hydraulic Div: oil hydraulic products for industrial machinery, oil hydraulic products for mobile equipment, centralized lubrication units & systems;

           

Defense Systems Div: ammunition, precision components for aircrafts, warheads for serial torpedoes; home oxygen therapy equipment, veterinary equipment;

           

Chemical Div: fluoro polymers, synthesized products, fluoro carbon gas, fluoro coatings,   fluoro elastomers, high performance chemicals;

           

New Operations Div: computer graphics systems.

 

Clients: [Wholesalers, government agencies] Daikin Kucho Tokyo (Kucho means Air Conditioners, Daikin Europe NV, Daikin Kucho Osaka, Sumitomo Corp, National Defense Agency, Daikin Kucho Tokai, Daikin America Inc, Daikin Kucho Kyushu, Itochu Non-ferrous Material, other.

 

No. of accounts: 2,000

 

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Matsushita Electric Ind, Sumikei Corp, Daikin Facilities, Fuso Ind, Chofu Seisakusho, Daikin Electronic Parts Inc, Arai Seisakusho, Shimohira Electric Ind, Ryusho Ind, other.

 

Payment record: Regular

 

Location: Business area in Osaka.  Office premises at the caption address are owned and maintained satisfactorily.

 

 

Bank References

 

SMBC (Osaka H/O)

Resona Bank (Osaka-Chuo)

 

Relations: Satisfactory

 

 

FINANCES

(Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2006

31/03/2005

INCOME STATEMENT

 

 

 

  Annual Sales

　

792,857

728,880

 

  Cost of Sales

522,385

472,221

 

      GROSS PROFIT

270,471

256,658

 

  Selling & Adm Costs

203,394

195,761

 

      OPERATING PROFIT

67,077

60,896

 

  Non-Operating P/L

1,605

2,582

 

      RECURRING PROFIT

68,682

63,478

　

      NET PROFIT

40,708

38,747

BALANCE SHEET

 

 

 

 

  Cash

　

55,461

41,842

 

  Receivables

 

147,679

136,292

 

  Inventory

 

140,242

141,893

 

  Securities, Marketable

　

14,003

 

  Other Current Assets

47,588

33,552

 

      TOTAL CURRENT ASSETS

390,970

367,582

 

  Property & Equipment

196,485

170,209

 

  Intangibles

 

13,632

13,477

 

  Investments, Other Fixed Assets

118,295

66,605

 

      TOTAL ASSETS

719,382

617,873

 

  Payables

 

84,252

78,065

 

  Short-Term Bank Loans

53,044

57,643

 

　

 

　

　

 

  Other Current Liabs

147,157

132,459

 

      TOTAL CURRENT LIABS

284,453

268,167

 

  Debentures

 

20,000

20,000

 

  Long-Term Bank Loans

36,030

36,960

 

  Reserve for Retirement Allw

5,072

4,553

 

  Other Debts

　

19,096

5,438

 

      TOTAL LIABILITIES

364,651

335,118

 

      MINORITY INTERESTS

11,238

8,633

 

Common stock

28,023

28,023

 

Additional paid-in capital

25,968

25,971

 

Retained earnings

250,247

215,681

 

Evaluation p/l on investments/securities

33,053

12,294

 

Others

 

7,751

(6,501)

 

Treasury stock, at cost

(1,550)

(1,347)

 

      TOTAL S/HOLDERS` EQUITY

343,492

274,121

　

      TOTAL EQUITIES

719,382

617,873

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2006

31/03/2005

 

Cash Flows from Operating Activities

　

63,511

43,970

 

Cash Flows from Investment Activities

-63,420

-42,091

 

Cash Flows from Financing Activities

-4,283

3,534

　

Cash, Bank Deposits at the Term End

　

54,177

55,385

ANALYTICAL RATIOS            Terms ending:

31/03/2006

31/03/2005

 

 

Net Worth (S/Holders' Equity)

343,492

274,121

 

 

Current Ratio (%)

137.45

137.07

 

 

Net Worth Ratio (%)

47.75

44.37

 

 

Recurring Profit Ratio (%)

8.66

8.71

 

 

Net Profit Ratio (%)

5.13

5.32

 

 

Return On Equity (%)

11.85

14.13

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>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/normal.

 

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

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

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%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions