MIRA INFORM REPORT

 

 

Report Date :

26.09.2007

 

IDENTIFICATION DETAILS

 

Name :

KOBE BUSSAN CO LTD

 

 

Registered Office :

883 Naka-Isshiki Kakogun Hyogo-Pref 675-1177

 

 

Country :

Japan

 

 

Financials (as on) :

31.10.2006

 

 

Date of Incorporation :

Apr 1991

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Operator of commercial-use supermarket chains

 

 

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 3823.9 millions

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

name

 

KOBE BUSSAN CO LTD

 

 

REGD NAME

 

KK Kobe Bussan

 

 

MAIN OFFICE

 

883 Naka-Isshiki Kakogun Hyogo-Pref 675-1177 JAPAN

Tel        : 079-496-6610

Fax       : 079-496-6620

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

E-Mail address: store@kobebussan.co.jp

 

*.. Moved the Headquarters to the caption address in Jun 2006 from the former at: 370-1 Fukudome Kannocho Kakogawa City Kobe, as given; the address remains as its marketing division.

 

 

ACTIVITIES

 

Operator of commercial-use supermarket chains

 

 

STORES

 

Tohoku (25), Kanto (102), Chubu (54), Kansai (155), Chugoku (31), Shikoku (17), Kyushu (17).  (Tot 401)

 

 

FACTORY(IES)

 

China (2), Hong Kong (--food processing yards)

 

 

CHIEF EXEC

 

KANJI SAGAWA, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 90,076 M

PAYMENTS      REGULAR                     CAPITAL           Yen 64 M

TREND             STEADY                       WORTH            Yen 12,458 M

STARTED         1985                             EMPLOYES      268

 

 

COMMENT

 

OPERATOR OF COMMERCIAL-USE SUPERMARKET CHAINS.  FINANCIALS SITUATION CONSIDERED FAIR AND GOOD FOR CREDIT ENGAGEMENTS: US$300,000 / O/A 30 DAYS.

 

MAX CREDIT LIMIT: YEN 3,823.9 MILLION, 30 DAYS NORMAL TERMS.

 

                        Forecast (or estimated) figures for 31/10/2007 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established by Shoji Numata, now ch, in order to make most of his experience in the subject line of business.  Kanji Sagawa took the pres office on 01/09/2004, with S Numata taking the ch post.  This is an operator of commercial-use supermarket chains of about 400 stores including franchisees nationwide.  The firm also supplies foodstuffs and other goods to these franchisees.  Goods are manufactured at about 50 subcontracted factories in China and other S/E Asian countries.  Has two directly-run factories in China.  The firm does not handle fresh, perishable foodstuffs, which contribute greatly to inventory controls.  Imports from China account for about 60-70% of total imports of frozen vegetables.  Due to rising import prices from China, plans underway to switch procurement from China to other areas, including farm in Egypt.   New businesses, including prepared foods/restaurant business off to slightly slow start. 

 

 

FINANCIAL INFORMATION

           

The sales volume for Oct/2006 fiscal term amounted to Yen 90,076 million, a 17.8% up from Yen 76,494 million in the previous term.  Sales spurred by 72 stores opened in preceding term.   The recurring profit was posted at Yen 1,830 million and the net profit at Yen 1,131 million, respectively, compared with Yen 1,934 million recurring profit and Yen 1,198 million net profit, respectively, a year ago.  Profits deteriorated due mainly to rising costs of imports from China.  Weaker Yen affected adversely to increase costs/payment in Yen terms.

 

(Nov/2006 to Jul/2007 results): Sales Yen 72,202 million (up 9.0%), recurring profit Yen 1,282 million (down 0.5%), net profit Yen 775 million (down 3.6%).  (% compared with the same period the previous term).  14 new stores opened.  New products including Private Brand goods contributed.  Import costs continued rising which worsened profits.

 

For the current term ending Oct 2007 the recurring profit is projected at Yen 2,050 million and the net profit at Yen 1,285 million, respectively, on a 16.6% rise in turnover, to Yen 105,000 million.  Increased production at China factories will contribute to the sales growth.  Total snout 100 new stores (commercial-use stores) and 7/9 prepared food stores will contribute fully.  Cost ratio will fall on broadened lineup of lucrative private brand products and increased operation rates at China plant.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 3,823.9, on 30 days normal terms.  The proposed amount is considered well within the firm’s financial capacities.

 

 

REGISTRATION

 

Date Registered:            Apr 1991

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                    32 million shares

Issued:                          8.8 million shares

Sum:                            Yen 64 million

Major shareholders (%): Shoji Numata (53.4), Company’s Treasury Stock (5.0), Mineko Numata (4.5), Masumi

                                    Numata (4.5), Hirokazu Numata (4.5), Japan Trustee Services Bank T (4.5), Matsui Miso

                                    (1.4), Trust & Custody Services (1.3), Master Trust Bank of Japan T (0.9), Takahiko

                                    Matsui (0.7); foreign owners (0.2)

No. of shareholders:       3,936

Listed on the S/Exchange (s) of: Osaka (Second Section)　(Listed in Jun/2006).

Managements:               Shoji Numata, ch; Kanji Sagawa, pres; Masaru Numata, dir; Takeo Yoneda, dir; Chikara

                                    Nakajima, dir; Yusuke Okazaki, dir; Kazuo Asami, dir; Takumi Kobayashi, dir

 

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

 

 

Related companies

 

Kobe Bussan Foods (Hong Kong), Dalian Fulaixin Foods, Kobebussan Foods Ltd (Anqin) (--China). 

          

 

OPERATION

 

Activities: Operator of commercial-use supermarket chains of a total 401 stores, including franchisees, nationwide; also imports foodstuffs from about 50 subcontracted factories in China, including 3 subsidiaries, and other S/E Asian countries (--100%). 

 

Imports from China account for 60-70% of total vegetable imports. 

 

Import sources are expanded to Egypt, etc

 

Clients: Consumers, franchisees, other

 

No. of accounts: Unavailable

 

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Imports from China & other S/E Asian subcontracted factories.  Also supplied from Nippon Meat Packers, Itoham Foods, Prima Meat Packers, Marudai Foods, Snow Brand Access, other.

 

Payment record: Regular

 

Location: Business area in Kakogun, Hyogo-Pref.  Office premises at the caption address are owned and maintained satisfactorily.

 

 

Bank References

 

MUFG (Kobe-Chuo)

SMBC (Kobe)

 

Relations: Satisfactory

 

 

Financials

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/10/2006

31/10/2005

INCOME STATEMENT

 

 

 

  Annual Sales

　

90,076

76,494

 

  Cost of Sales

86,414

72,754

 

      GROSS PROFIT

3,661

3,740

 

  Selling & Adm Costs

1,869

1,839

 

      OPERATING PROFIT

1,792

1,900

 

  Non-Operating P/L

38

34

 

      RECURRING PROFIT

1,830

1,934

　

      NET PROFIT

1,131

1,198

BALANCE SHEET

 

 

 

 

  Cash

　

12,928

4,972

 

  Receivables

 

4,200

3,547

 

  Inventory

 

2,942

2,534

 

  Securities, Marketable

　

　

 

  Other Current Assets

290

303

 

      TOTAL CURRENT ASSETS

20,360

11,356

 

  Property & Equipment

2,728

1,181

 

  Intangibles

 

142

80

 

  Investments, Other Fixed Assets

231

86

 

      TOTAL ASSETS

23,461

12,703

 

  Payables

 

7,479

6,458

 

  Short-Term Bank Loans

　

　

 

　

 

　

　

 

  Other Current Liabs

562

745

 

      TOTAL CURRENT LIABS

8,041

7,203

 

  Debentures

 

　

　

 

  Long-Term Bank Loans

　

　

 

  Reserve for Retirement Allw

33

28

 

  Other Debts

　

2,928

2,554

 

      TOTAL LIABILITIES

11,002

9,785

 

      MINORITY INTERESTS

 

 

 

Common stock

64

64

 

Additional paid-in capital

8,302

106

 

Retained earnings

4,005

2,873

 

Evaluation p/l on investments/securities

122

　

 

Others

 

0

(125)

 

Treasury stock, at cost

(35)

(1)

 

      TOTAL S/HOLDERS` EQUITY

12,458

2,917

　

      TOTAL EQUITIES

23,461

12,703

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/10/2006

31/10/2005

 

Cash Flows from Operating Activities

　

1,506

1,560

 

Cash Flows from Investment Activities

-1,915

-648

 

Cash Flows from Financing Activities

8,336

　

　

Cash, Bank Deposits at the Term End

　

12,634

4,696

ANALYTICAL RATIOS            Terms ending:

31/10/2006

31/10/2005

 

 

Net Worth (S/Holders' Equity)

12,458

2,917

 

 

Current Ratio (%)

253.20

157.66

 

 

Net Worth Ratio (%)

53.10

22.96

 

 

Recurring Profit Ratio (%)

2.03

2.53

 

 

Net Profit Ratio (%)

1.26

1.57

 

 

Return On Equity (%)

9.08

41.07

 

 

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