MIRA
INFORM REPORT
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Report Date : |
15.04.2008 |
IDENTIFICATION
DETAILS
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Name : |
JIANGSU TIANGONG
TOOLS CO., LTD. |
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Registered Office : |
Qianxiang Village, Houxiang Town, Danyang, Jiangsu Province, Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
07.07.1997 |
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Com. Reg. No.: |
000668 |
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Legal Form : |
Wholly Foreign-Owned Enterprise |
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Line of Business : |
Manufacturing and Selling Tools, Cutting Tools and Measure
Tools. |
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 : |
USD 2,000,000 |
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Status : |
Good |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
name & address
JIANGSU TIANGONG
TOOLS CO., LTD.
QIANXIANG VILLAGE, HOUXIANG TOWN, DANYANG,
JIANGSU PROVINCE, PR CHINA
TEL: 0086-511-86312333 FAX:
0086-511-86322038
EXECUTIVE SUMMARY
INCORPORATION DATE :
JUL. 7, 1997
REGISTRATION NO. :
000668
REGISTERED LEGAL FORM :
WHOLLY FOREIGN-OWNED ENTERPRISE
CHIEF EXECUTIVE :
MR. ZHU XIAOKUN (CHAIRMAN)
STAFF STRENGTH :
5,400
REGISTERED CAPITAL :
CNY 844,300,000
BUSINESS LINE :
MANUFACTURING
TURNOVER :
CNY 1,363,150,000 (AS OF DEC.
31, 2006)
EQUITIES :
CNY 358,690,000 (AS OF DEC. 31, 2006)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE :
UP TO USD 2,000,000
MARKET CONDITION :
COMPETITIVE
FINANCIAL CONDITION :
FAIRLY STABLE
OPERATIONAL TREND :
FAIRLY STEADY
GENERAL REPUTATION :
AVERAGE
EXCHANGE RATE :
CNY 6.99670 = USD 1
Adopted
abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY - China Yuan Renminbi
SC was registered as a
wholly foreign-owned enterprise at local Administration for Industry &
Commerce (AIC - The official body of issuing and renewing business license) on
Jul. 7, 1997.
Company Status: Wholly foreign-owned enterprise This
form of business in PR China is defined as a legal person. It is a limited
co. established within the territories of PR China with capital provided
totally by the foreign investors. More than one foreign investor may
jointly invest in a wholly foreign-owned enterprise. The investing
party/parties solely exercise management, reap profit and bear risks and
liabilities by themselves. This form of companies usually have a limited
duration is extendible upon approval of Examination and Approval
Authorities.
SC’s registered business scope includes manufacturing and
selling tools, cutting tools, measure tools, indoor and outdoor television
aerials; smelting and selling tool steel; importing and exporting business (excluding export
commodities limited
or prohibited by the state), able to engage in items that need
permit according to the regulation of the State Council, after obtaining the
permit from relative authorities.
SC is
mainly engaged in manufacturing and selling tools, cutting tools and measure
tools.
Mr.
Zhu Xiaokun is legal representative and chairman of SC at present.
SC is known to have approx. 5,400 employees 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
Danyang. Our checks reveal that SC owns the total premise, but SC’s accountant
refused to release the gross area of the premise.
SC is not known to host website of its own at present.
No significant events or changes were found during our
checks with the local Administration for Industry and Commerce.
MAIN SHAREHOLDERS:
Name %
of Shareholding
CHINA TIANGONG COMPANY LIMITED
(BVI) 100
l
Legal representative,
chairman and general manager:
Mr. Zhu Xiaokun, born in 1957 with university
education. He is currently responsible for the overall management of SC.
Working Experience(s):
At present Working
in SC as chairman, legal representative and general manager.
l
Vice-General manager:
Mr. Zhu Xingyuan , born in 1952 with university education.
He is currently responsible for the daily management of SC.
Working Experience(s):
At present Working
in SC as vice-general manager.
SC is
mainly engaged in manufacturing and selling tools, cutting tools and measure
tools.
SC’s products mainly include: drills, electric hammer,
coarse thread tap and spade drill.
SC sources its materials 95% from domestic market and 5%
from the overseas market. SC sells 50% of its products to overseas market and 50% in domestic
market.
The buying terms of SC include Check, L/C, T/T and Credit of
30-60 days. The payment terms of SC include Check, T/T, L/C, and Credit of
30-60 days.
*Major Supplier*
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Danyang Banghua Materials Co., Ltd.
*Major Customer*
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Harbin Measuring & Cutting Tool Factory
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: 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.
Agriculture
Bank of China Danyang Houxiang Sub-branch
AC#322901040000945
Relationship:
Normal.
Balance Sheet
Unit: CNY’000
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as
of Dec. 31, 2006 |
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Cash
& bank |
114,460 |
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Bills
receivable |
32,800 |
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Accounts
receivable |
280,220 |
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Other
receivables |
21,240 |
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Advances to
suppliers |
113,910 |
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Inventory |
599,370 |
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Other
current assets |
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------------------ |
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Current
assets |
1,162,000 |
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Fixed
assets |
216,840 |
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Fixed
assets net value |
211,040 |
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Projects
under construction |
5,520 |
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Project
materials |
280 |
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Long
term investment |
24,680 |
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Other
assets |
9,000 |
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------------------ |
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Total
assets |
1,412,520 |
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============= |
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Short
loans |
285,860 |
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Bills
payable |
150,150 |
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Accounts
payable |
104,990 |
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Welfare
payable |
30,600 |
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Advances from
clients |
20,030 |
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Accrued
payroll |
15,950 |
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Tax
payable |
16,310 |
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Other
payable |
58,800 |
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Accrued expenses |
10,680 |
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Surcharge
payable |
460 |
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Other
current liabilities |
0 |
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------------------ |
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Current
liabilities |
693,830 |
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Long
term liabilities |
360,000 |
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Total
liabilities |
1,053,830 |
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Equities |
358,690 |
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Total
liabilities & equities |
1,412,520 |
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Income Statement
Unit: CNY’000
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as of Dec. 31, 2006 |
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Turnover |
1,363,150 |
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Cost of goods
sold |
1,091,870 |
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Sales expense |
41,210 |
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Management expense |
50,470 |
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Finance expense |
52,400 |
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Investment
income |
3,590 |
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Profit before
tax |
160,190 |
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Less: profit tax |
48,080 |
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Profits |
112,110 |
Important Ratios
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as
of Dec. 31, 2006 |
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*Current ratio |
1.67 |
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*Quick ratio |
0.81 |
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*Liabilities
to assets |
0.75 |
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*Net profit
margin (%) |
8.22 |
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*Return on
total assets (%) |
7.94 |
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*Inventory
/Turnover ×365 |
161 days |
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*Accounts
receivable/Turnover ×365 |
76 days |
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*Turnover/Total
assets |
0.97 |
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* Cost of
goods sold/Turnover |
0.80 |
PROFITABILITY:
FAIRLY GOOD
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The turnover of SC appears fairly good in its line.
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SC’s net profit margin is fairly good.
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SC’s return on total assets is fairly good.
l
SC’s cost of goods sold is average, comparing with its
turnover.
LIQUIDITY:
AVERAGE
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The current ratio of SC is maintained in a normal level.
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SC’s quick ratio is maintained in a normal level.
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The inventory conversion period of SC appears large.
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The accounts receivable of SC appears fairly large.
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SC’s short-term loan is in an average level.
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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 fairly high.
l
The risk for SC to go bankrupt is average.
Overall
financial condition of the SC: Fairly Stable.
SC is considered large-sized in its line with fairly stable
financial conditions. The large amount of inventory could be a threat to SC’s
financial condition. A credit line up to USD 2,000,000 would appear to be
within SC’s capacities.
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%)