MIRA
INFORM REPORT
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Report Date : |
03.09.2007 |
IDENTIFICATION
DETAILS
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Name : |
SIHUI HUAKAI MUSICAL INSTRUMENTS CO., LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
Dec. 28, 2004 |
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Com. Reg. No.: |
003112 |
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Legal Form : |
Chinese-Foreign Contractual Joint Venture |
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Line of Business : |
Engaged in
manufacturing and selling various musical
instruments. |
RATING &
COMMENTS
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MIRA’s Rating : |
C |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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Status : |
Poor |
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Payment Behaviour : |
Unknown |
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Litigation : |
Clear |
name & address
SIHUI HUAKAI MUSICAL INSTRUMENTS CO., LTD.
TEL : 86 (0) 758-3263641
FAX : 86 (0) 758-3263645
EXECUTIVE SUMMARY
INCORPORATION DATE :
DEC. 28, 2004
REGISTRATION NO. :
003112
REGISTERED LEGAL FORM : CHINESE-FOREIGN CONTRACTUAL JOINT VENTURE
STAFF STRENGTH :
752
REGISTERED CAPITAL : HKD5,880,000
BUSINESS LINE :
MANUFACTURING
TURNOVER :
CNY21,700,000 (AS OF DEC. 31,
2006)
EQUITIES :
CNY -4,300,000 (AS OF DEC. 31,
2006)
PAYMENT :
FAIR
RECOMM.
MARKET CONDITION : FAIR
FINANCIAL CONDITION : POOR
OPERATIONAL TREND : downward
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY7.56= US$1 AS OF
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY -
SC was reregistered as a Chinese-foreign contractual joint venture enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Dec. 28, 2004.
Company Status: Chinese-foreign contractual 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. The
investing parties are free to agree on the proportion of profit and product
distribution and liabilities bearing according to the provisions of the
contract. If the
ownership of all fixed assets is to be given to the Chinese party upon
expiration of the term of cooperation as agreed upon by the Chinese and
foreign parties in the contract, the foreign party may recover its
investment during the term of cooperation according to the provisions of
the contract. The foreign party may recover its investment before the venture
has paid its income tax upon examination and approval of the finance and
tax authorities according to State taxation regulations. In case the
foreign party recovers its investment within the term of cooperation
according to the above paragraphs, the foreign and Chinese parties shall be
liable to the debts of the venture in accordance with laws and the
contract. The joint venture usually has a
limited duration of 10 to 50 years.
SC’s registered business scope includes manufacturing and
selling various musical instruments, semi-finished products, relevant
components, and related products.
SC is mainly
engaged in manufacturing and selling various musical instruments.
Mr. Huang Zhiwen
has been chairman of SC since 2004.
SC is known to have approx. 752 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 Sihui. Our checks reveal that SC
rents the total premise about 10,000 square meters.
SC is not known to host web site of its own at present.
Until December 31, 2006, SC’s paid-up capital was CNY6,290,000.
MAIN SHAREHOLDERS:
Name % of
Shareholding
Sihui Wenkang Trading Co., Ltd. 17.01
Hong Kong Rui Kai Co., Ltd. 82.99
l
Chairman and
General Manager:
Mr. Huang Zhiwen, in his
Working Experience(s):
From 2004 to present Working in SC as chairman and general manager;
At present Working in Sihui Huasheng Musical Instruments Co., Ltd. as general manager.
SC is mainly
engaged in manufacturing and selling various musical
instruments.
SC’s products mainly include: piano, guitar, and other musical
instruments.
SC sources its
materials 100% from overseas market, mainly
The buying terms of SC include Check, T/T, L/C, Check and Credit of 30-60 days. The payment terms of SC
include T/T, L/C, Check and Credit of 30-60 days.
*Major Supplier:
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Hong Kong Rui Kai Co., Ltd.
*Major Customer:
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Hong Kong Rui Kai Co., Ltd.
SC is
not known to have any subsidiary at present.
Overall payment appraisal :
( ) Excellent (
) Good ( ) Average (X) 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 did not
provide any name of trade/service suppliers and we have no other sources to
conduct the enquiry at present.
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.
Agricultural Bank of
AC#：650001040009525
Relationship:
Balance Sheet (as of Dec. 31, 2006)
Unit: CNY’000
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Cash & bank |
470 |
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Inventory |
31,010 |
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Accounts
receivable |
4,180 |
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Other Accounts
receivable |
0 |
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Advances to
suppliers |
0 |
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To be apportioned
expense |
0 |
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Other current
assets |
810 |
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Current assets |
36,470 |
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Fixed assets |
41,000 |
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Long term
investment |
0 |
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Other assets |
12,530 |
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Total assets |
90,000 |
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Short loans |
57,000 |
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Bills payable |
0 |
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Accounts payable |
16,000 |
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Advances to
customers |
0 |
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Other Accounts
payable |
25,000 |
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Withdraw the
expenses in advance |
0 |
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Other current
liabilities |
-3,700 |
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Current liabilities |
94,300 |
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Long term
liabilities |
0 |
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Other
liabilities |
0 |
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Total
liabilities |
94,300 |
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Equities |
-4,300 |
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Total
liabilities & equities |
90,000 |
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Income Statement (as of Dec. 31, 2006)
Unit: CNY’000
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Turnover |
21,700 |
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Cost of goods
sold |
22,400 |
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Sales expense |
1,700 |
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Management expense |
3,800 |
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Finance expense |
2,900 |
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Profit before
tax |
-9,900 |
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Less: profit tax |
0 |
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Profits |
-9,900 |
Important Ratios (as of Dec. 31, 2006)
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*Current ratio 0.39
*Quick ratio 0.06
*Liabilities to
assets 1.05
*Net profit
margin (%) -45.62
*Return on total
assets (%) -11.00
*Inventory
/Turnover ×365 522 days
*Accounts
receivable/Turnover ×365 70 days
*Turnover/Total
assets 0.24
* Cost of goods
sold/Turnover 1.03
PROFITABILITY:
POOR
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The turnover of SC appears fair in its line.
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SC’s net profit margin is poor.
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SC’s return on total assets is poor.
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SC’s cost of goods sold is too high, comparing
with its turnover.
LIQUIDITY:
POOR
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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 fair level.
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The inventory of SC appears large.
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The accounts receivable of SC is maintained in an acceptable level.
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The short-term loan of SC appears TOO LARGE.
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SC’s turnover is in a fair level, comparing with the size of
its total assets.
LEVERAGE:
POOR
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The debt ratio of SC is too high.
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The risk for SC to go bankrupt is fairly high.
Overall
financial condition of the SC: Poor.
SC is considered medium-sized in its line with poor financial conditions.
The large amount of inventory and short-term
loan could be a threat to SC’s financial condition. Great caution is required
in providing credit to SC & COD is recommended.
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%)