MIRA
INFORM REPORT
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Report Date : |
22.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
Zte CORPORATION |
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Registered Office : |
Zte Plaza, South
Keji Road, Hi-Tech Industrial Park, Nanshan District Shenzhen City, Guangdong
Province 518057 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
Nov. 11, 1997 |
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Com. Reg. No.: |
4403011015176 |
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Legal Form : |
Shares Limited Company |
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Line of Business : |
Engaged in manufacturing
and selling wireless products, network products and terminal products. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
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
Zte CORPORATION
zte plaza, SOUTH keji road, hi-tech industrial
park, nanshan district
shenzhen city, guangdong province 518057 PR
CHINA
TEL :
86 (0) 755-26771071
FAX :
86 (0) 755-26770431
EXECUTIVE SUMMARY
INCORPORATION DATE : nov. 11, 1997
REGISTRATION NO. : 4403011015176
REGISTERED LEGAL FORM : shares limited co.
STAFF STRENGTH :
39,266
REGISTERED CAPITAL : CNY 959,521,650
BUSINESS LINE :
MANUFACTURING
TURNOVER :
CNY 23,031,684,000 (AS OF DEC. 31, 2006)
EQUITIES :
CNY 10,678,911,000 (AS OF DEC. 31, 2006)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : FAVORABLE TERMS
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : stable
OPERATIONAL TREND : steady
GENERAL REPUTATION : well known
EXCHANGE RATE :
CNY 7.41 = US$1
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 co. at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Nov. 11, 1997.
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 manufacturing cell-type communication system,
multimedia communication system, and transmitting system; developing and manufacturing
equipment of mobile communication, satellite communication, and micro-wave
communication, Beep-Pager, computer software, hardware, closed circuit
television, micro-wave communication, automation system of signal, message
processing system of computer, supervisory system of process, and warning
system; and the technological design, development, consultation, and service of
wired and wireless communication projects, including railway, orbit traffic of
subway, highway, mines, port, dock, and airport, and purchasing and selling
electronic equipment, microelectronic devices (excluding the products
privileged, prohibited or franchised), undertaking overseas and relative
projects, and international bidding projects
in China, also importing and exporting equipment and material needed by the
above overseas projects, providing labor service for overseas projects, and
technological development, purchase and sales of electronic system; and import
and export business, in addition, professional contract of telecommunication
projects.
SC is mainly
engaged in manufacturing and selling wireless products, network products
and terminal products.
Mr. Hou Weigui has
been chairman of SC since 2004.
SC is known
to have approx. 39,266 staff members at present.
SC is currently operating at the above stated address, and this
address houses its operating office and factory in the development zone of
Shenzhen. Our checks reveal that SC owns the total premise about 500,000 square
meters.
www.zte.com.cn The design is
professional and the content is well organized. At present, the web is in both
Chinese and English versions.
E-mail: fengjianxiong@zte.com.cn
SC has been listed in Shenzhen Stock Exchange Market with
the code of 000063 since 1997. In December 2004, SC was successfully listed on
the Main Board of The Stock Exchange in Hong Kong with the code of 763. ZTE
recorded the contract sales of approximately USD 4,111 million (CNY 34 billion)
in 2004.
·
In September 2003, SC was awarded “China Top Brand” title
for its CDMA mobile phone.
·
Total sales of handsets for the year 2004 exceeded 10 million
sets, up 100% over the previous year.
·
In 2003, the CDMA mobile phone, a new source of revenue for
SC, has been successfully put to the international market. SC won a US$100
million mobile phones order from VIVO (a Brazil telecom carrier) in May 2004, which
was the most valuable mobile phone contract ever won by a Chinese mobile phone
manufacturers to date.
·
In the 3G handset area, SC rolled out the smallest and
lightest foldable WCDMA handset in the world.
MAIN SHAREHOLDERS: (As of Jun, 30, 2007)
Name % of
Shareholding
Shenzhen ZTE New Communication Equipment
Co., Ltd. 37.41
Hong Kong Central Financial Nominee Co.,
Ltd. 16.64
Jade Dragon (Mauritius) Limited 1.91
Industrial and Commercial Bank of China
Ruixin Growth Stock Security Investment
Fund
1.45
DEUTSCHE BANK AKTIENGESELLSCHAFT 1.32
Industrial and Commercial Bank of China
Ruixin Mixed Security Investment Fund 1.26
Hunan Nantian Group Co., Ltd. 1.19
Security Investing Fund (Yi-Fang-Da)
0.92
Chinalife Insurance Company Ltd.
(005L-FH002 Shenzhen) 0.86
Industrial and Commercial Bank of China
Ruixin Worth Stock Security Investment Fund 0.73
Other shareholders 36.31
l
Legal
Representative and Chairman:
Mr. Hou Weigui, 66 years old with university education. He is currently responsible for the overall management of SC.
Working Experience(s):
From 2004 to present Working in SC as legal representative and chairman;
At present Working in Shenzhen ZE New Communication Equipment Co., Ltd. as vice-
chairman.
l
General
Manager:
Mr. Yin Yimin, 43 years old with university education. He is currently
responsible for the daily management of SC.
Working Experience(s):
From 1997 to present Working in SC as general manager;
At present Working in Shenzhen ZE New Communication Equipment Co., Ltd. as director.
SC is mainly engaged
in manufacturing and selling wireless products, network products and terminal
products.
SC’s products mainly include: IC product, IT
product, supervisory system and mobile telephone, etc.
SC sources its
materials 70% from domestic market, and 30% from the overseas market. SC sells
60% of its products in domestic market, and 40% to the overseas market.
The buying terms of SC include T/T, L/C and Credit of 30-90 days. The
payment terms of SC include T/T, L/C and Credit of 30-60 days.
*Major Suppliers:
=============
Shenzhen ZTE New Communication Equipment
Co., Ltd.
Tel: 0755-26773000
Fax: 0755-25738717
Shenzhen ZTE Weixiantong Equipment Co., Ltd.
Tel: 0755-25733351/25739300
Fax: 0755-25704048
*Major Customers:
=============
Shenzhen ZTE Information & Technology Co., Ltd.
Tel: 0755-83432699
Fax: 0755-83432694
Shenzhen ZTE Integrated Circuit Design Co., Ltd.
Tel: 0755-86169099
Fax: 0755-86169100
SC is known to have the following subsidiaries:
Shenzhen
ZTE Kangxun Electronics Co., Ltd.
Shenzhen
ZTE Software Co., Ltd.
Anhui
Yalong Communication Technology Co., Ltd.
Shenzhen
Xingfei Science & Technology Co., Ltd.
ZTE
Istanbul Trading Ltd.
ZTE
Hrvatska D.O.O.
ZTE Corporation
Bulgaria Ltd.
ZTE
Deutschland GmbH
ZTE
POLAND Sp. Zo. o.
Shenzhen
ZTE Liwei Technology Co., Ltd.
Newinfo
Holdings Limited
WANAAG
COMMUNICATIONS LIMITED
ZTE
Canada Inc.
ZTE
Netherlands B.V.
Congo-Chine
Telecom International Network (CCTNET)
ZTE GHANA
LIMITED
Shenzhen
ZTE Wireless Communication Co., Ltd.
Shenzhen
Hongde Battery Co., Ltd.
ZTE
NIGERIA INVESTMENT LTD.
ZTE (HK)
Ltd. Saudi Arabia
ZTE
Sweden AB
PT. ZTE
Indonesia
Xi’an
ZTE Jingcheng Communication Co., Ltd.
ZiMax
Technologies Inc.
Guangzhou
Western Telecom System & Software 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.
China
Construction Bank Shenzhen Branch
AC#：006002630033847
Relationship:
Normal.
Consolidated
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 |
5,573,132 |
4,311,060 |
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Inventory |
151,174 |
2,760,995 |
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Accounts
receivable |
3,441,922 |
5,329,628 |
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Other Accounts
receivable |
279,975 |
439,904 |
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Accounts payable
in advance |
151,174 |
51,757 |
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Bills receivable
|
1,244,853 |
1,658,406 |
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Other current
assets |
7,093,946 |
6,004,157 |
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Current assets |
17,936,176 |
20,555,907 |
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Fixed assets net
value |
2,380,171 |
2,591,858 |
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Projects under
construction |
126,741 |
469,636 |
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Long term investment |
85,459 |
100,681 |
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Other assets |
1,250,584 |
2,198,867 |
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Total assets |
21,779,131 |
25,916,949 |
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============= |
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Short loans |
99,695 |
945,726 |
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Bills payable |
1,977,584 |
2,242,566 |
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Accounts payable |
4,292,208 |
4,749,099 |
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Salaries payable |
622,804 |
668,307 |
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Shares payable |
163,008 |
83,941 |
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Taxes payable |
-670,282 |
-699,658 |
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Other Accounts
payable |
626,066 |
666,430 |
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Withdraw the
expenses in advance |
861,024 |
635,875 |
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Other current
liabilities |
2,037,924 |
1,482,113 |
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------------------ |
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Current
liabilities |
10,010,031 |
10,774,399 |
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Long term
liabilities |
1,173,276 |
3,504,117 |
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Other
liabilities |
0 |
0 |
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------------------ |
------------------ |
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Total
liabilities |
11,183,307 |
14,278,516 |
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Equities |
10,125,095 |
10,678,911 |
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Minority
Shareholders’ equity |
470,729 |
959,522 |
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------------------ |
------------------ |
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Total
liabilities & equities |
21,779,131 |
25,916,949 |
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Consolidated
Income Statement
Unit: CNY’000
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|
As of Dec. 31, 2005 |
As of Dec. 31, 2006 |
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Turnover |
21,575,920 |
23,031,684 |
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Cost of goods
sold |
13,944,797 |
15,171,797 |
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Sales expense |
3,023,126 |
3,140,108 |
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Management expense |
3,137,066 |
4,010,206 |
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Finance expense |
288,751 |
239,617 |
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Profit before
tax |
1,501,864 |
1,069,617 |
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Less: profit tax |
158,545 |
125,624 |
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Minority
interest income |
148,976 |
136,640 |
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Profits |
1,194,343 |
807,353 |
Important
Ratios
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|
|
2005 |
2006 |
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*Current ratio |
1.79 |
1.91 |
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*Quick ratio |
1.78 |
1.65 |
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*Liabilities
to assets |
0.51 |
0.55 |
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*Net profit margin
(%) |
5.54 |
3.50 |
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*Return on
total assets (%) |
5.48 |
3.11 |
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*Inventory
/Turnover ×365 |
3 days |
44days |
|
*Accounts
receivable/Turnover ×365 |
58 days |
84days |
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*Turnover/Total
assets |
0.99 |
0.89 |
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* Cost of
goods sold/Turnover |
0.65 |
0.66 |
PROFITABILITY: FAIRLY GOOD
l
The turnover of SC appears good in its line in 2005 and
2006.
l
SC’s net profit margin is fairly good.
l
SC’s return on total assets is fairly good.
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 fairly good
level.
l
SC’s quick ratio is maintained in a fairly good level.
l
The inventory of SC is maintained in an average level.
l
The accounts receivable of SC appears fairly large.
l
The short-term loan of SC is maintained in an average level.
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 average.
Overall
financial condition of the SC: Stable.
SC is well-known in its industry with stable financial conditions.
Credit dealings with SC in favorable terms can be considered.
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 |
|
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 |
|
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%)