MIRA
INFORM REPORT
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Report Date : |
31.10.2007 |
IDENTIFICATION
DETAILS
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Name : |
LANGCHAO LG DIGITAL MOBILE COMMUNICATIONS CO., LTD. |
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Registered Office : |
No. 228, Changjiang Road, Economic & Technical Development
Zone, Yantai City, Shandong Province, 264006 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2005 |
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Date of Incorporation : |
Jan. 26, 2002 |
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Com. Reg. No.: |
004978 |
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Legal Form : |
Chinese-Foreign Equity Joint Venture Enterprise |
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Line of Business : |
Engaged in
manufacturing “LG” mobile phones. |
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 : |
Up To USD 1,000,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
name & address
LANGCHAO LG DIGITAL MOBILE COMMUNICATIONS CO., LTD.
NO. 228, CHANGJIANG ROAD, ECONOMIC & TECHNICAL DEVELOPMENT ZONE,
YANTAI CITY, SHANDONG PROVINCE, 264006 PR CHINA
TEL : 86 (0) 535-6938888
FAX : 86 (0) 535-6939999
EXECUTIVE SUMMARY
INCORPORATION DATE :
JAN. 26, 2002
REGISTRATION NO. :
004978
REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE
STAFF STRENGTH :
1,200
REGISTERED CAPITAL : USD 15,000,000
BUSINESS LINE :
MANUFACTURING
TURNOVER :
CNY 7,151,773,000 (AS OF DEC. 31, 2005)
EQUITIES :
CNY 182,365,000 (AS OF DEC. 31, 2005)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : UP TO
USD 1,000,000 (PERIODICAL REVIEW)
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : FAILRY STABLE
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : WELL KNOWN
EXCHANGE RATE :
CNY 7.42 = US$1
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
RMB - China Ren Min Bi Yuan
SC was registered as a Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Jan. 26, 2002.
Company Status: Chinese-foreign equity
joint venture enterprise This form of business in PR
China is defined as a legal person. It is a limited co. jointly invested by
one or more foreign companies and one or more PR China controlled companies
within the territories of PR China according to a certain proportion of
capital investment. The investing parties exercise business management,
share profits and bear all risks and liabilities of the co. together. The
equity joint venture law requires that foreign party contribute not less
than 25% of the registered capital, with no maximum. The investing parties
are free to agree on method of profit distribution and liabilities bearing
according to the proportion of capital investment. Each investing parties
contributes funds, tangible assets, technology & etc. The board of
directors excises the high authority. The joint venture usually has a
limited duration of 10 to 50 years. Enterprise with large investment, long
construction periods, low investment returns, introducing of advanced
technology & advanced technology products that have good competition
position in international market may extend beyond the 50 years limit.
SC’s registered
business scope includes researching developing, manufacturing, and selling
CDMA, GSM mobile phones, mobile information terminal technology, and related
products, providing after-sales services.
SC is mainly
engaged in manufacturing “LG” mobile phones.
Mr. Xin Weihua has
been chairman and general manager of SC since 2002.
SC is known
to have approximately 1,200 staff members at present.
SC is currently
operating at the above stated address, and this address houses its operating
office and factory in the economic & technical development zone of Yantai.
Our checks reveal that SC owns the total premise about 303,000 square meters.
SC is
not known to host website of its own at present.
Changes of its registered information:
|
Date of change |
Item |
Before the change |
After the change |
|
2006-8 |
Shareholders and shareholding |
Korean LG Electronics Inc. 60% Shandong Inspur Software Co., Ltd 30% LG Electronics (China) Co., Ltd.10% |
Korean LG Electronics Inc. 60% LG Electronics (China) Co., Ltd.10% Shandong Langchao Communication System Co., Ltd. 30% |
MAIN SHAREHOLDERS:
Name %
of Shareholding
Korean LG Electronics Inc. 60
LG Electronics (China) Co., Ltd. 10
LG Electronic
(China) Co., Ltd. is mainly engaged in manufacturing and supplying top level displayers,
information appliances and mobile terminal.
Address: 3-5F Jingwu Building, No. 5 North
Jiuxian Bridge, Chaoyang District, Beijing
Tel: 010-64311188-1606
Fax: 010-64317455
Web site: www.lge.com.cn
Shandong Langchao Communication System Co., Ltd. 30
Shandong Langchao Communication System Co.,
Ltd. was established on Apr. 8, 2005 with the registered capital CNY
52,000,000. Its main business scope
includes system developing, manufacturing and selling 3G, value added
services (wireless video, multimedia, mobile phone entertainment) and wireless
internet, technology consulting, training, and operating support.
l
Chairman and
General Manager:
Mr. Xin Weihua, in his 50’s with university education. He is currently
responsible for the overall management of SC.
Working Experience(s):
From 2002 to present Working in SC as chairman and general manager.
Also working in Langchao Electronic Information Industry Co., Ltd. as vice chairman and general manager Mr. Xin Weihua used to be the vice-director of the Electronic Research Institute of Shandong Province, vice general manager of microcomputer department, vice general manager of computer department
SC is mainly
engaged in manufacturing “LG” mobile phones.
SC’s products
mainly include: “LG” mobile phones.
SC sources its materials 10% from domestic
market, mainly from Yantai, and 90% from overseas market, mainly from South Korean.
SC sells 20% of its products in domestic market, mainly to Beijing and
Shandong, and 80% to overseas market, mainly to South Korean and USA.
The buying terms of SC include Check, L/C, T/T and Credit of
30-60 days. The payment terms of SC include Check, L/C, T/T, and Credit of
30-60 days.
*Major Customers*
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LG Electronics (China) Co., Ltd.
*Major Suppliers*
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Dongdu Electronic (Yantai) Co., Ltd.
Address: No. 1 Fuda Road, Shengquan Industrial
Park, Laishan District, Yantai
Tel: 0535-6729381
Fax: 0535-6729385
SC is
not known to have any subsidiary at present.
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: A trade enquiry currently conducted with SC's
supplier(s) reveal the following:
Supplier A
Products sold: Mobile Phone Chargers
Date account opened: N/A
Line of credit: N/A
Terms: T/T, Credit of 30-60 days
Average monthly sales: N/A
Current balance: N/A
Rating Key: 3
Any Special Comments: _________________________
Payment record keys:
1 = Prompt: Payment made before the credit
period expires
2 = As agreed terms: Payment made upon due
date
3 = Slightly slow but acceptable: Payment made
5 to 20 days beyond agreed terms
4 = Slow: Payment made 16 to 45 days beyond
agreed terms
5 = Poor: Payment made over 45 days beyond
agreed terms
6 = No comment: Account is newly opened &
record is not yet established
Note: In some
instances, payment beyond terms can be the result of disputes over merchandise,
lost invoices, disputed accounts & etc.
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.
China Merchant Bank Yantai Branch
AC#：7680188810001
Relationship:
Normal.
Balance Sheet
Unit: CNY’000
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as
of Dec. 31, 2005 |
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Cash & bank |
75,460 |
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Accounts
receivable |
1,286,023 |
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Other accounts
receivable |
3,714 |
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Inventory |
364,432 |
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Prepaid expenses |
733 |
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Other current
assets |
70,516 |
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------------------ |
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Current assets |
1,800,878 |
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Fixed assets |
435,405 |
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Fixed assets net
value |
343,052 |
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Projects under
construction |
616 |
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Long term
investment |
36,582 |
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Other assets |
1,686 |
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------------------ |
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Total assets |
2,182,814 |
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============= |
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Short-term loans |
121,053 |
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Accounts payable |
1,588,661 |
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Advances from clients |
15,760 |
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Welfare payable |
2,558 |
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Tax payable |
18,041 |
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Surcharge
payable |
1,778 |
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Other payable |
64,153 |
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Accrued expenses |
33,498 |
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Other current
liabilities |
127,947 |
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------------------ |
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Current
liabilities |
1,973,449 |
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Long term
liabilities |
27,000 |
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------------------ |
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Total
liabilities |
2,000,449 |
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Equities |
182,365 |
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------------------ |
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Total
liabilities & equities |
2,182,814 |
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============= |
Income Statement
Unit: CNY’000
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as of Dec. 31, 2005 |
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Turnover |
7,151,773 |
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Cost of goods
sold |
6,643,259 |
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Sales expense |
356,631 |
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Management expense |
116,373 |
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Finance expense |
0 |
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Profit before
tax |
63,678 |
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Less: profit tax |
3,955 |
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Profits |
59,723 |
Important Ratios
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as
of Dec. 31, 2005 |
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*Current ratio |
0.91 |
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*Quick ratio |
0.73 |
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*Liabilities
to assets |
0.92 |
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*Net profit
margin (%) |
0.84 |
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*Return on total
assets (%) |
2.74 |
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*Fixed
assets/Total assets |
0.20 |
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*Inventory
/Turnover ×365 |
19days |
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*Accounts
receivable/Turnover ×365 |
66days |
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*Turnover/Total
assets |
3.28 |
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* Cost of
goods sold/Turnover |
0.93 |
PROFITABILITY:
AVERAGE
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The turnover of SC appears good in 2005.
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SC’s net profit margin appears average.
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SC’s return on total assets appears average.
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SC’s cost of goods sold is average, comparing with its turnover.
LIQUIDITY: FAIR
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The current ratio of SC is maintained in a fair level.
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SC’s quick ratio is maintained in a normal level.
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The short loan of SC appears fairly large in 2005.
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The inventory of SC appears fairly large in 2005.
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The accounts receivable of SC appears LARGE.
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SC’s turnover is in a fairly good level, comparing with the size of its
total assets.
LEVERAGE: FAIR
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The debt ratio of SC is high.
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The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly stable.
SC is considered medium-sized in its line with fairly good background.
The large amount of accounts receivable could be a threat to SC’s financial
condition. It is considered a credit line up to USD 1,000,000 appears to be
within SC’s capacities upon a periodical review basis.
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%)