MIRA INFORM REPORT

 

 

Report Date :

05.10.2007

 

IDENTIFICATION DETAILS

 

Name :

KAWASAKI HEAVY INDUSTRIES LTD

 

 

Registered Office :

Kobe Crystal Tower, 1-1-3 Higashikawasakicho Chuoku Kobe 560-8680

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

Oct 1986

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturing of heavy electric machinery & engineering works

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

Yen 21996.4 millions

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

--

 

 

name

 

KAWASAKI HEAVY INDUSTRIES LTD

 

 

REGD NAME

 

Kawasaki Jyukogyo KK

 

 

MAIN OFFICE

 

Kobe Crystal Tower, 1-1-3 Higashikawasakicho Chuoku Kobe 560-8680 JAPAN

Tel        : 078-371-9530

Fax       : 078-371-9566

URL      : http://www.khi.co.jp/

E-Mail address: (through the URL to each division)

 

*.. The given address is its Tokyo Head Office at: World Trade Center Bldg, 2-4-1 Hamamatsucho Minatoku Tokyo

 

 

ACTIVITIES

 

Mfg of heavy electric machinery & engineering works

 

 

BRANCHES

 

Tokyo, Sapporo, Sendai, Hyogo, Akashi, other (Tot 28)

 

 

OVERSEAS

 

China (2), Taipei, Seoul, Jakarta, Singapore, Kuala Lumpur, Bangkok, USA (2), Brazil, UK, Netherlands

(Subsidiaries): USA (6), Canada, Brazil (2), UK (3), Germany (4), Netherlands (3), Korea, China (4, including Hong Kong), Thailand, Philippines, Indonesia, Australia

 

 

FACTORY(IES)

 

Kobe, Akashi, Hyogo, Gifu, other (Tot 10)

 

 

OVERSEAS

 

USA (4), Brazil, UK, China (2), Philippines, Indonesia, Thailand

 

CHIEF EXEC

 

TADAHARU OHASHI, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 1,438,618 M

PAYMENTS      REGULAR                     CAPITAL           Yen 103,187 M

TREND             STEADY                       WORTH            Yen 295,377 M

STARTED         1896                             EMPLOYES      29,211

 

 

COMMENT

 

MFR OF HEAVY ELECTRIC MACHINERY & ENGINEERING WORKS.  FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 21,996.4 MILLION, 30 DAYS NORMAL TERMS.

 

                        Forecast (or estimated) figures for 31/03/2008 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established originally in 1878 by Shozo Kawasaki for mfg Western-style oceangoing steel ships, on his account, and was incorporated in 1986.  This is a comprehensive heavy electric machinery mfg & engineering company, with strength in railroad rolling stocks, motorcycles and medium-sized gas turbines.  Also major shipbuilder.  Since incorporated spun off various divisions, such as steel, transportation, etc into independent firms, which now constitute its main group firms.  In Oct 2006, spun off its environmental operations (handling refuse incineration facilities & recycling facilities for natural resources).  Because construction of major refuse incineration facilities peaked the firm decided to restructure operations.  Highly competitive in railway rolling stock & medium-size gas turbines.

 

(Recent News from Nikkei dated 14/08/2007):

 

Relating to India’s 11th five-year plan (2007-2012), where India outlined investments of slightly more than Yen 15 trillion on the nation’s power grid and nearly Yen 8 trillion on the rail system.  the subject has entered final negotiations with India’s national rail operator to begin joint production of freight carriages in 2009.  Seen as a top candidate to win orders for the cars, the subject firm will invest Yen 5-10 billion for a controlling stake in a joint venture with Indian Railways slated to launch next spring.  The supply contract, worth Yen 400-500 billion (estimated), calls for producing 1,900 freight cars over 15 years starting at the end of 2009.

           

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2007 fiscal term amounted to Yen 1,438,618 million, an 8.9% up from Yen 1,322,487 million in the previous term.  The growth was supported by 17.8% increased orders than previous year, mainly due to risen orders in the Rolling Stock & Construction Machinery, Aerospace and Plant & Infrastructure Engineering segments.  Aerospace and Consumer Products & Machinery segments reported the strongest gains.  The recurring profit was posted at Yen 49,052 million and the net profit at Yen 29,771 million, respectively, compared with Yen 30,885 million recurring profit and Yen 16,467 million net profit, respectively, a year ago.

 

(Apr/Jun/2007 results): Sales Yen 330,444 million (up 9.3%), operating profits Yen 19,197 million (up 90.8%), recurring profit Yen 19,138 million (up104.9%), net profit Yen 12,010 million (up 117.3%).  (% compared with the same period last year).  Profits improved at shipbuilding and plant businesses, in addition to favorable foreign exchange rate. 

 

For the current term ending Mar 2008 the recurring profit is projected at Yen 58,000 million and the net profit at Yen 36,000 million, respectively, on 2.9% rise in turnover, to Yen 1,480,000 million.  Rolling stock licensing income from China will decrease, but motorcycles will benefit from launch of new models.  Shipbuilding will be profitable after wiping out unprofitable operations.  300,000 ton dock under construction at JV shipyard in China.

 

The financial situation is considered FAIR to GOOD and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 21,996.4 million, on 30 days normal terms. 

 

 

REGISTRATION

 

Date Registered:            Oct 1986

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                    3,360 million shares

Issued:                          1,659,625,876 shares

Sum:                            Yen 103,187 million

Major shareholders (%): Japan Trustee Securities Bank T (5.2), Master Trust Bank of Japan T (4.6), TCSB

                                    (Mizuho Bank) (3.4), JFE Steel (3.3), Nippon Life Ins (3.2), Tokio Marine & Nichido Fire

                                    Ins (3.0), Employees’ S/Holding Assn (2.0), Company’s Kyoeikai Assn (1.7), Nippon-Koa

                                    Ins (1.6), SMBC (1.6); foreign owners (19.9)

No. of shareholders:       124,555

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

Managements:               Masamoto Tasaki, ch; Tadaharu Ohashi, pres & CEO; Masatoshi Terasaki, v pres; Akira

                                    Matsuzaki, v pres; Chikashi Motoyama, mgn dir; Jiro Noguchi, mgn dir; Masashi Segawa,

                                    mgn dir; Shin’ichi Tamba, mgn dir; Shuji Mihara, mgn dir; Satoshi Hasegawa, mgn dir

 

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

 

 

Related companies

 

Kawasaki Shipyard, Kawasaki Precision Machinery, NIPPI Corp, Kawasaki Thermal Engineering, Kawasaki Motors Corp, Kawasaki Safety Service Ind, Kawaju Shoji, other

           

 

OPERATION

 

Activities: Comprehensive heavy electric machinery mfg & engineering works:

 

(Sales breakdown by divisions):

 

Shipbuilding (8%): new-building ships, ship repairs, ship remodeling, other;

Railway Rolling Stock (13%): railway rolling stocks, civil-engineering machinery & equipment, snow plow, crushing machines;

Aerospace (19%): aircraft, spacecraft, other;

Gas Turbine & Machinery (13%): jet engines, multi-purpose gas turbines, generating machinery;

Industrial Plants, Environment & Steel Structure (8%): industrial machinery & plants, boilers, environmental machinery & equipment, steel structures;

Multi-Purpose Machinery (28%): motorcycles, four-wheel vehicles, water-crafts (jet ski), multi-purpose gasoline engines, industrial robots;

Others (12%): hydraulic equipment, fire-preventive equipment, medical equipment, management of welfare facilities, other. 

Overseas Sales Ratio (54.0%): N America 23.4%; Europe 8.3%; Asia 12.9%, other region 9.4%.

 

Clients: [Mfrs, wholesalers] Sojitz Corp, Marubeni Corp, Sumitomo Corp, Itochu Corp, JR    West Japan, other

 

No. of accounts: 3,000

 

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Sojitz Corp, Sumitomo Corp, Sojitz Aerospace, Itochu Corp, Marubeni Corp, Kawasho Corp, Fujitsu Ltd, Maeda Construction, Itochu Aviation, Kawajyu Finance, Mitsubishi Heavy Ind, Fuji Heavy Ind, other.

 

Payment record: Regular

 

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

 

 

Bank References

 

Mizuho Corporate Bank (H/O)

SMBC (H/O)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2007

31/03/2006

INCOME STATEMENT

 

 

 

  Annual Sales

　

1,438,618

1,322,487

 

  Cost of Sales

1,213,524

1,148,547

 

      GROSS PROFIT

225,094

173,940

 

  Selling & Adm Costs

155,952

132,145

 

      OPERATING PROFIT

69,141

41,794

 

  Non-Operating P/L

-20,089

-10,909

 

      RECURRING PROFIT

49,052

30,885

　

      NET PROFIT

29,771

16,467

BALANCE SHEET

 

 

 

 

  Cash

　

39,350

37,650

 

  Receivables

 

428,588

422,551

 

  Inventory

 

427,934

383,016

 

  Securities, Marketable

　

　

 

  Other Current Assets

66,045

72,682

 

      TOTAL CURRENT ASSETS

961,917

915,899

 

  Property & Equipment

253,819

246,219

 

  Intangibles

 

15,128

15,795

 

  Investments, Other Fixed Assets

127,115

106,172

 

      TOTAL ASSETS

1,357,979

1,284,085

 

  Payables

 

412,501

409,942

 

  Short-Term Bank Loans

118,463

133,627

 

　

 

　

　

 

  Other Current Liabs

275,542

259,090

 

      TOTAL CURRENT LIABS

806,506

802,659

 

  Debentures

 

80,826

103,062

 

  Long-Term Bank Loans

84,927

53,994

 

  Reserve for Retirement Allw

77,484

69,113

 

  Other Debts

　

12,859

12,161

 

      TOTAL LIABILITIES

1,062,602

1,040,989

 

      MINORITY INTERESTS

 

5,507

 

Common stock

103,187

92,084

 

Additional paid-in capital

53,189

42,094

 

Retained earnings

125,798

100,775

 

Evaluation p/l on investments/securities

19,342

14,097

 

Others

 

(6,084)

(11,424)

 

Treasury stock, at cost

(55)

(38)

 

      TOTAL S/HOLDERS` EQUITY

295,377

237,588

　

      TOTAL EQUITIES

1,357,979

1,284,085

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2007

31/03/2006

 

Cash Flows from Operating Activities

　

45,859

45,760

 

Cash Flows from Investment Activities

-43,312

-36,510

 

Cash Flows from Financing Activities

-1,306

-16,720

　

Cash, Bank Deposits at the Term End

　

39,224

37,505

ANALYTICAL RATIOS            Terms ending:

31/03/2007

31/03/2006

 

 

Net Worth (S/Holders' Equity)

295,377

237,588

 

 

Current Ratio (%)

119.27

114.11

 

 

Net Worth Ratio (%)

21.75

18.50

 

 

Recurring Profit Ratio (%)

3.41

2.34

 

 

Net Profit Ratio (%)

2.07

1.25

 

 

Return On Equity (%)

10.08

6.93

 

 

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.

 

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