MIRA INFORM REPORT

 

 

 

Report Date :

03.12.2008

 

IDENTIFICATION DETAILS

 

Name :

TIONG HUAT RUBBER FACTORY SDN BHD

 

 

Registered Office :

1001-1002, Kompleks Sri Putra, Seberang Jalan Putra, 1st Floor, 05150 Alor Setar, Kedah

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2007

 

 

Date of Incorporation :

06.08.1969

 

 

Com. Reg. No.:

8700-M

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Processing and Sale of Rubber and Latex And Cultivation And Sale Of Palm Oil

 

 

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

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

EXECUTIVE SUMMARY

 

 

 

REGISTRATION NO.

:

8700-M

COMPANY NAME

:

TIONG HUAT RUBBER FACTORY SDN BHD

FORMER NAME

:

N/A

INCORPORATION DATE

:

06/08/1969

COMPANY STATUS

:

EXIST

LEGAL STATUS

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

1001-1002, KOMPLEKS SRI PUTRA, SEBERANG JALAN PUTRA, 1ST FLOOR, 05150 ALOR SETAR, KEDAH, MALAYSIA.

BUSINESS ADDRESS

:

SUNGAI DIVISION, U.P. ESTATE, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

TEL.NO.

:

04-4212732

FAX.NO.

:

04-4225558

EMAIL

:

info@tionghuatrubber.com

WEB SITE

:

www.tionghuatrubber.com

CONTACT PERSON

:

LOKE CHONG HOOI ( GENERAL MANAGER )

 

 

 

INDUSTRY CODE

:

25191

PRINCIPAL ACTIVITY

:

PROCESSING AND SALE OF RUBBER AND LATEX AND CULTIVATION AND SALE OF PALM OIL

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARES 5,000,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 688,204,388 [2007]

NET WORTH

:

MYR 42,798,002 [2007]

M1000 OVERALL RANKING

:

431[2008]

M1000 INDUSTRY RANKING

:

7[2008]

 

 

 

STAFF STRENGTH

:

220 [2008]

BANKER (S)    

 

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

GOOD

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND


The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The SC is principally engaged in the (as a / as an) processing and sale of rubber and latex and cultivation and sale of palm oil.

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

The SC is one of the Top Corporate Performers in the Malaysia 1000 (M1000) publication, a directory jointly published by Companies Commission of Malaysia (The Registrar Office), Minister of Domestic Trade and Consumer Affairs and our publication arm, BASIS Publications House Sdn Bhd.

According to the Malaysia 1000 publication, the SC's ranking are as follows:

 

 

 

 

YEAR

2008

2005

 

OVERALL RANKING

431

934

 

INDUSTRY RANKING

7

20

 

 

The major shareholder(s) of the SC are shown as follows :

 

Name

Address

IC/PP/Loc No

Shareholding

RIPRO SDN BHD

1001-1002, KOMPLEKS SRI PUTRA, SEBERANG JALAN PUTERA, LEVEL 1, 05150 ALOR SETAR, KEDAH, MALAYSIA.

153076

5,000,000.00

 

 

 

---------------

 

 

 

5,000,000.00

 

 

 

============

 

+ Also Director

 

The SC interest in other companies (Subsidiaries/Associates) are shown as follow :

 

Local No

Company

(%)

As At

426383

COMMERCE TRADE INTERNATIONAL SDN BHD

100

31/12/2007

 

 

 

 

 

 

 

 

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. LOW KOK HORNG

Address

:

99, TAMAN BERJAYA, 05050 ALOR SETAR, KEDAH, MALAYSIA.

IC / PP No

:

A1566863

New IC No

:

700528-02-5167

Date of Birth

:

28/05/1970

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

23/01/1998

 

DIRECTOR 2

 

Name Of Subject

:

MR. LOW KOK KEAN

Address

:

298, TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.

IC / PP No

:

A0157615

New IC No

:

650615-02-5963

Date of Birth

:

15/06/1965

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

23/01/1998

 

DIRECTOR 3

 

Name Of Subject

:

MR. LOW PING KUN

Address

:

28-29, PEKAN JITRA 2, 06000 JITRA, KEDAH, MALAYSIA.

IC / PP No

:

4808984

New IC No

:

550601-02-5665

Date of Birth

:

01/06/1955

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

23/01/1998

 

DIRECTOR 4

 

Name Of Subject

:

MR. LOW KEONG KOON

Address

:

28, PEKAN JITRA 2, 06000 JITRA, KEDAH, MALAYSIA.

IC / PP No

:

4472223

New IC No

:

530430-02-5573

Date of Birth

:

30/04/1953

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

23/01/1998

 

DIRECTOR 5

 

Name Of Subject

:

MR. TAN AH BAH

Address

:

3, JALAN DESA INDAH, TAMAN DESA INDAH, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

IC / PP No

:

4359496

New IC No

:

521213-02-5409

Date of Birth

:

13/12/1952

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

23/01/1998

 

DIRECTOR 6

 

Name Of Subject

:

MR. TAN SWEE HUAT

Address

:

6, LORONG 1, BUNGA RAYA PARK, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

IC / PP No

:

0806609

New IC No

:

320419-02-5155

Date of Birth

:

19/04/1932

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

06/08/1969

 

DIRECTOR 7

 

Name Of Subject

:

MR. TEH AH CHAN @ TEE CHOO

Address

:

74, TAMAN TIONG, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

IC / PP No

:

0086088

New IC No

:

360905-02-5317

Date of Birth

:

05/09/1936

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

06/08/1969

 

 


MANAGEMENT

 

 

 

1)

Name of Subject

:

LOKE CHONG HOOI

 

Position

:

GENERAL MANAGER

 

 

 

 

 

2)

Name of Subject

:

LOW KOK HORNG

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

3)

Name of Subject

:

TAN CHAI SIN

 

Position

:

ACCOUNTANT

 

 

 

 

 

4)

Name of Subject

:

THAM

 

Position

:

ASSISTANT HUMAN RESOURCE MANAGER

 

 

 

 

 

5)

Name of Subject

:

TAN YOU CHAI

 

Position

:

PRODUCTION MANAGER

 

 

 

 

 

AUDITOR

 

Auditor

:

KIAT & ASSOCIATES

Auditor' Address

:

3A, JALAN RANGOON, 10400 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. MAK POH IM

 

IC / PP No

:

4962764

 

New IC No

:

560609-07-5164

 

Address

:

7 TAMAN PUMPONG, 05250 ALOR SETAR, KEDAH, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

The SC enjoys normal banking routine with above mentioned banker(s). The SC has bank charges with above mentioned banker(s).

 

 

 

ENCUMBRANCE (S)



ENCUMBRANCE 1

Date of Creation

:

10/01/1981

Description Of Charge

:

N/A

Amount Secured

:

RM700,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

UNITED MALAYAN BANKING CORPORATION BHD

 

Form 40 Dated

Registered and Numbered 3 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

12/12/1983

Description Of Charge

:

N/A

Amount Secured

:

RM300,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

UNITED SHANGHAI BANKING CORPORATION

 

Form 40 Dated

Registered and Numbered 6 In The Register of Charges



ENCUMBRANCE 3

Date of Creation

:

25/03/1996

Description Of Charge

:

N/A

Amount Secured

:

RM700,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

UMBC

 

Form 40 Dated

Registered and Numbered 14 In The Register of Charges



ENCUMBRANCE 4

Date of Creation

:

25/03/1996

Description Of Charge

:

N/A

Amount Secured

:

RM700,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

UMBC

 

Form 40 Dated

Registered and Numbered 15 In The Register of Charges



ENCUMBRANCE 5

Date of Creation

:

07/01/2000

Description Of Charge

:

N/A

Amount Secured

:

RM16,700,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 16 In The Register of Charges



ENCUMBRANCE 6

Date of Creation

:

07/01/2000

Description Of Charge

:

N/A

Amount Secured

:

RM16,700,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 17 In The Register of Charges



ENCUMBRANCE 7

Date of Creation

:

25/02/2008

Description Of Charge

:

N/A

Amount Secured

:

RM5,535,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MAYBANK ISLAMIC BHD

 

 

 

 

 

 

 

Form 40 Dated

Registered and Numbered 19 In The Register of Charges


LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia back dated since 1900.

No legal action was found in our databank.

No winding up petition was found in our databank.

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

Import Countries

:

JAPAN,THAILAND,CHINA,INDIA,INDONESIA



The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt

[

 

]

 

Good

[

X

]

 

Average

[

 

]

 

Fair

[

 

]

 

Poor

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

20%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

80%

Export Market

:

AUSTRALIA, BRAZIL, SINGAPORE, TAIWAN, JAPAN, NEW ZEALAND, CHINA, EUROPE, UNITED STATES, MIDDLE EAST,
WORLDWIDE

Credit Term

:

30 - 60 DAYS,AS AGREED

 

 

 

 

 

 

Payment Mode

:

CHEQUES,TELEGRAPHIC TRANSFER (TT),LETTER OF CREDIT (LC)

Type of Customer

:

DISTRIBUTORS,MANUFACTURING INDUSTRIES

 

OPERATIONS

 

Products manufactured

:

RUBBER AND LATEX PRODUCTS

 

 

 

Brand Name

:

THR

 

 

 

Competitor(s)

:

GETAHINDUS (M) SDN BHD

MARDEC BHD

MARDEC INDUSTRIAL LATEX SDN BHD

MARDEC PROCESSING SDN BHD

SYNTHOMER SDN BHD

 

 

 

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2008

2007

2006

2005

2004

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

220

200

200

190

184

 

 

 

 

 

Branch

:

YES

Other Information:


The SC is principally engaged in the (as a / as an) processing and sale of rubber and latex and cultivation and sale of palm oil.

The SC's products has undergone stringent quality control in every stage of the production process which has resulted in the

recognisation by the Standard and Industrial Research Institute of Malaysia (SIRIM).

The SC's products are normally shipped as bales packed in crates or on shrink wrapped pallets. The rubber is tested to meet standard ASTM and ISO specifications.

We were informed that the SC's core product is Standard Malaysia Rubber or SMR.

Besides that the SC also has warehouse to keep stocks and materials.

Its also informed us that the SC has a foriedn workers from Vietnam, Myanmar, Thailand, Nepal and Bangladesh.


PROJECTS


No projects found in our databank

RECENT DEVELOPMENT


We have checked with the Malaysian National News Agency's (BERNAMA)database, but no latest development was noted in our investigation.

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

04-4212732

Match

:

YES

 

 

 

Address Provided by Client

:

SUNGAI DIVISION U P ESTATE 08000 SUNGAI PETANI KEDAH

Current Address

:

SUNGAI DIVISION, U.P. ESTATE, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

 

Other Investigations


We conducted an interview with the SC's Human Resources Dept, Ms Tham. She kindly furnished us some information pertaining on the SC and its related services and operations.

FINANCIAL COMMENTS

 

Profitability:

Turnover

:

Increased

[

2005 - 2007

]

Profit/(Loss) Before Tax

:

Decreased

[

2005 - 2007

]

Return on Shareholder Funds

:

Favourable

[

55.05%

]

Return on Net Assets

:

Favourable

[

78.57%

]


The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years. The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. Generally the SC was profitable. The favourable return on shareholders' funds and return on net assets indicate that the SC's management was efficient in utilising the assets to generate returns.

Working Capital Control:

Stock Ratio

:

Favourable

[

50 Days

]

Debtors Ratio

:

Favourable

[

30 Days

]

Creditors Ratio

:

Favourable

[

1 Days

]


The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the SC. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity:

Liquid Ratio

:

Unfavourable

[

0.50 Times

]

Current Ratio

:

Unfavourable

[

1.09 Times

]


A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

Solvency

Interest Cover

:

Favourable

[

10.23 Times

]

Gearing Ratio

:

Favourable

[

0.01 Times

]


The interest cover showed that the SC was able to service the interest. The favourable interest cover could indicate that the SC was making enough profit to pay for the interest accrued. The SC had no gearing and hence it had virtually no financial risk. The SC was financed by its shareholders' funds and internally generated fund. During the economic downturn, the SC, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

Overall Accessment:

Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. The SC's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the SC : FAIR

ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2005

2006

2007

2008*

2009**

 

 

 

 

 

 

Population ( Million)

26.13

26.64

27.17

27.73

28.31

Gross Domestic Products ( % )

5.3

5.8

6.3

5.0

3.5

Domestic Demand ( % )

7.3

7.0

9.0

6.1

6.0

Private Expenditure ( % )

9.5

7.0

8.6

6.6

6.4

Consumption ( % )

9.2

7.1

9.0

6.8

6.5

Investment ( % )

8.5

7.0

7.1

6.2

5.8

Public Expenditure ( % )

3.6

6.8

10.1

4.7

5.1

Consumption ( % )

5.4

5.0

10.8

5.7

4.0

Investment ( % )

1.9

8.9

9.3

3.6

6.4

 

 

 

 

 

 

Balance of Trade ( MYR Million )

99,760

108,192

100,340

115,563

126,650

Government Finance ( MYR Million )

<18,684>

<19,109>

<19,948>

<34,462>

<28,450>

Government Finance to GDP / Fiscal Deficit ( % )

<3.8>

<3.3>

<3.2>

<4.8>

<4.8>

Inflation ( % Change in Composite CPI)

3.1

3.9

2.0

4.4

5.0

Unemployment Rate

3.5

3.4

3.2

3.3

3.2

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

266

290

336

388

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

5.13

4.21

3.04

1.91

-

Average 3 Months of Non-performing Loans ( % )

13.63

12.91

13.30

13.24

-

Average Base Lending Rate ( % )

6.00

6.61

6.72

6.72

-

Business Loans Disbursed( % )

8.7

<2.5>

9.1

-

-

Foreign Investment ( MYR Million )

17,882.9

20,228.0

33,426.0

23,261.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

37,474

38,293

43,337

-

-

Registration of New Companies ( % )

<2.9>

2.2

13.2

-

-

Liquidation of Companies ( No. )

3,069

8,647

22,629

-

-

Liquidation of Companies ( % )

<7.9>

181.8

161.5

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

193,095

216,147

227,410

-

-

Registration of New Business ( % )

2.1

11.9

5.2

-

-

Business Dissolved ( No. )

73,355

52,879

20,431

-

-

Business Dissolved ( % )

43.0

<27.9>

<61.4>

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

400.8

446.2

442.9

-

-

Cellular Phone Subscribers ( Million )

18.5

19.5

23.3

25.1

-

Tourist Arrival ( Million Persons )

16.7

17.5

20.9

21.5

-

Hotel Occupancy Rate ( % )

63.6

64.8

70.0

68.0

-

 

 

 

 

 

 

Credit Cards Spending ( % )

13.9

15.4

20.1

-

-

Bad Cheque Offenders (No.)

57,316

36,555

30,004

-

-

Individual Bankruptcy ( No.)

15,868

13,596

13,238

-

-

Individual Bankruptcy ( % )

<2.4>

<14.3>

<2.6>

-

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2005

2006

2007

2008*

2009**

 

 

 

 

 

 

Agriculture

2.5

5.3

3.1

3.6

3.7

Palm Oil

7.1

5.8

<0.6>

7.0

-

Rubber

<2.9>

12.6

1.0

<1.1>

-

Forestry & Logging

2.0

<0.4>

2.8

<1.5>

-

Fishing

<0.4>

9.3

5.2

4.0

-

Other Agriculture

3.2

5.3

7.0

5.9

-

Industry Non-Performing Loans ( MYR Million )

563.7

516.5

487.3

393

0

% of Industry Non-Performing Loans

1.19

1.06

1.08

0

0

 

 

 

 

 

 

Mining

0.8

<0.4>

3.3

2.8

3.4

Oil & Gas

1.6

4.6

2.2

12.7

-

Other Mining

<1.0>

5.1

-

-

-

Industry Non-performing Loans ( MYR Million )

68.8

55.4

42.2

36.0

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

5.1

7.3

3.1

4.7

4.3

Exported-oriented Industries

3.0

11.1

<1.9>

2.7

-

Electrical & Electronics

3.6

13.4

3.0

2.4

-

Rubber Products

2.4

0.4

8.0

4.2

-

Wood Products

0.9

0.7

3.3

<6.0>

-

Textiles & Apparel

<4.4>

12.6

<10.1>

1.9

-

Domestic-oriented Industries

6.9

5.0

5.3

9.9

-

Food, Beverages & Tobacco

7.7

4.8

5.6

9.5

-

Chemical & Chemical Products

6.9

1.7

9.2

1.4

-

Plastic Products

18.6

21.3

<3.6>

6.5

-

Iron & Steel

<6.7>

<6.9>

17.5

16.8

-

Fabricated Metal Products

<7.5>

20.0

26.2

14.7

-

Non-metallic Mineral

<6.0>

<1.9>

6.6

8.3

-

Transport Equipment

10.4

5.3

<19.0>

27.1

-

Paper & Paper Products

4.6

4.1

14.9

8.6

-

Crude Oil Refineries

8.2

12.1

8.6

7.8

-

Industry Non-Performing Loans ( MYR Million )

6,035.6

6,181.3

6,366.2

5,729.4

-

% of Industry Non-Performing Loans

 

 

 

 

 

 

 

 

 

 

 

Construction

<1.6>

<0.5>

4.6

4.0

3.1

Industry Non-Performing Loans ( MYR Million )

5,172.7

5,527.3

5,116.7

4,149.8

-

% of Industry Non-Performing Loans

10.9

11.4

11.3

-

-

 

 

 

 

 

 

Services

6.6

7.2

9.7

7.7

6.9

Electric, Gas & Water

5.5

5.2

4.6

5.0

4.3

Transport, Storage & Communication

6.3

5.2

7.6

7.8

7.3

Wholesale, Retail, Hotel & Restaurant

8.0

7.1

11.6

10.0

7.4

Finance, Insurance & Real Estate

7.0

7.7

10.7

9.2

8.1

Government Services

7.6

9.8

4.6

8.6

4.0

Other Services

5.0

4.7

5.0

5.9

5.4

Industry Non-Performing Loans ( MYR Million )

8,716.8

11,593.2

10,207.8

8,281.4

-

% of Industry Non-Performing Loans

18.4

23.9

22.6

-

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)


INDUSTRY COMMENTS

 

MSIC CODE

25191 : Rubber remilling and latex processing

 

 

INDUSTRY :

RUBBER PRODUCTS

 

 

 


Rubber continues to be an important source of export earnings for Malaysia as well as a vital raw material for the rubber products manufacturing industries. Malaysia's rubber products industry covers four sectors, namely latex, tyre and tyre-related products, industrial and general rubber products and footwear. Growth in rubber-based industries was supported by the booming automotive industry, particularly in China.


According to Malaysian Rubber Glove Manufacturers' Association (MARGMA), the latex prices have started to come down at October 2008. The Malaysia's rubber glove makers are looking at lowering glove price due to sharp fall in the price of latex. Buyers are tempted to delay accepting delivery in the hope of paying a lower price. Despite the impending price cut, local glove makers are optimistic of maintaining 8% growth in exports to RM6.35 billion in 2008. Malaysia exported RM4.4 billion worth of gloves from January to August 2008, up 13% from the previous corresponding period.


Production of rubber-based industry grew 4.2% in first half year 2008 (January - June 2007: 9.5%), contributing 3.7% share to total manufacturing output. Rubber tyres and tubes expanded 7.2% in first half year 2008 (January - June 2007: 4.9%) due to increase demand for high-end tyres and tubes. Meanwhile, output of rubber gloves, the largest component of the rubber-based industry, grew 3.5% in first half year 2008 (January - June 2007: 5.0%) as external demand for rubber gloves continued to rise partly on account of increasing mandatory use of rubber gloves for health workers. Production of latex-based catheters continued to expand 21.3% due to increase in external demand boosted by global expansion in medical services.


The buoyant rubber price is expected to be sustained due to strong demand following the rapid expansion of the automobile markets in China and India. Exports of rubber products recorded high growth of 25.0% during the first six months of 2008 (January - June 2007: 16.7%). This was backed by strong growth in exports of rubber materials and rubber tyres, which grew 54.1% to RM1,955 million and 33.2% to RM521 million, respectively (January - June 2007: 14.0%; RM1,269 million and 63.2%; RM391 million). Meanwhile, exports of rubber gloves, the main contributor to the industry, grew 10.9% to RM3,158 million (January - June 2007: 15.2%; RM2,848 million), attributed to higher demand for medical purposes and rising prices. Malaysia remains the largest exporter of rubber gloves.


The Government continues to promote the development of Malaysia's resourced-based industries to diversify the country's sources of growth. In addition to fiscal incentives which are currently available for promoted products and activities, the government has further fine-tuned the incentives to promote specific activities among which is the rubber products industry. To further encourage investments in resource-based industries, local companies in the rubber industry that reinvest to expand their projects are eligible for Pioneer Status or Investment Tax Allowance. The rubber-based products industry needs to diversify into automated manufacturing of value-added high technology, industrial and engineering inputs for the automotive, construction, petroleum and transport industries to sustain the momentum of its growth.


Malaysia is the world's leading producer and exporter of rubber products, mainly consisting of catheters, latex thread and natural rubber medical gloves. Malaysia is also the fifth largest consumer of natural rubber, after People's Republic of China, USA, Japan and India. Malaysian exporters should take advantage of the close relationship with OIC countries to grow their exports. Other emerging markets are South Africa and South America, particularly Brazil and Chile. The rubber products industry is dominated by Malaysians and many Malaysian companies have developed into global players, such as in rubber gloves and rubber thread. The future development of the industry will depend on its ability to diversify and deepen the range of products, especially with more synthetic rubber materials becoming available.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



COMMENTS

 


Formed in 1969, the SC is primarily involved in the processing, selling of rubber and latex as well as cultivation and sale of palm oil. The SC is a private limited company with total paid up capital of RM5 million. With this adequate share capital and strong shareholder's backing, allows the SC to expand its business more comfortably. With its long track record in the industry coupled with its vast experience, the SC should have established its own image and reputation over times.


Over its years of establishment, the SC has built up a good reputation for itself. Its performance is in good shape as it has established a wide and stable marketing network both locally and internationally such as Australia, Singapore, Brazil, Taiwan, Japan and etc. We noted that the SC concentrates more on overseas market as exports contribute to approximately 80% of its total sales. In line with the SC's global market penetration, its commercial risk is minimised. However, being export oriented, the SC's forex exposure is high. The SC is a large entity with a work force of 220. Its business operation is considered stable. Overall, the management capability of the SC is good.


Financially, the group registered a higher turnover of RM688.2 million in 2007 compared to RM620.58 million previously. However, its pre-tax profit has moderated to RM30.93 million. Return on shareholders' funds was high, indicating that the management was efficient in utilising its funds to generate returns. However, the group's liquidity ratio was slightly low at 0.50 times, which demonstrates that the group was not be able to repay all its short term obligations. Being a lowly geared company, the group faces low financial risk. Given a huge net worth of RM42.79 million, the group should be able to maintain its business in the near term.


To reduce the risk of component shortages, the SC sources its raw materials locally and imported from overseas countries especially Japan and Thailand. Thus, it is subjected to the currency fluctuation risk.


Based on our historical financial data, we concluded that the SC's pattern of payment habit is good. This implies good credit control and the SC could be taking advantage of the cash discounts while maintaining a good reputation with its creditors.


The industry remains robust with continuing strong global demand for its products as rubber continues to be an important source of export earnings for Malaysia as well as a vital raw material for the rubber products manufacturing industries. With the promising outlook of the industry performance, the SC business potential should be favourable.


In view of the above favourable condition, we recommend a large amount credit be proceeded to the SC with favourable term.

 

CONSOLIDATED PROFIT AND LOSS ACCOUNT

 

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.

TIONG HUAT RUBBER FACTORY SDN BHD

For The Year Ended 31-December-2007



2007

2006

2005

 

MYR

MYR

MYR

 

 

 

 

 

 

 

 

TURNOVER

688,204,388

620,584,328

390,127,374

 

=========

=========

=========

PROFIT/(LOSS) FROM OPERATIONS

30,935,798

34,972,759

11,720,400

 

 

 

 

 

 

 

 

PROFIT/(LOSS) BEFORE TAXATION

30,935,798

34,972,759

11,720,400

Taxation

<7,374,719>

<7,400,506>

<2,901,185>


PROFIT/(LOSS) AFTER TAXATION

-------------
23,561,079

-------------
27,572,253

-------------
8,819,215

 

 

 

 

 

 

 

 


PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS

-------------
23,561,079

-------------
27,572,253

-------------
8,819,215

 

 

 

 


PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS
RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT FORWARD

-------------
23,561,079

-------------
27,572,253

-------------
8,819,215

As previous reported

65,574,409

38,542,156

29,902,941

 

 

 

 


As restated

-------------
65,574,409

-------------
38,542,156

-------------
29,902,941

 

-------------

-------------

-------------

PROFIT AVAILABLE FOR APPROPRIATIONS

89,135,488

66,114,409

38,722,156

 

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS – Ordinary (paid & proposed)

<51,428,500>

<540,000>

<180,000>

 

 

 

 

 

 

 

 


RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED FORWAD

-------------
37,706,988
==========

-------------
65,574,409
==========

-------------
38,542,156
==========

RETAINED BY: The Company

37,706,988

65,574,409

38,542,156

 

 

 

 

 

 

 

 

 

-------------
37,706,988
==========

-------------
65,574,409
==========

-------------
38,542,156
==========

 

 

 

 

Other interest expenses

-

-

343,669

 

 

 

 

 

 

 

 

 

 

 

 

Bank interest

3,351,925

3,004,744

846,975

 

--------------
3,351,925
===========

--------------
3,004,744
===========

--------------
1,190,644
===========

 

 

 

CONSOLIDATED BALANCE SHEET

 

 

TIONG HUAT RUBBER FACTORY SDN BHD

As At 31-December-2007



 

 

 

 

 

2007

2006

2005

 

MYR

MYR

MYR

ASSET EMPLOYED:

 

 

 

FIXED ASSETS

28,650,273

26,228,832

18,562,855

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

 

 

 

 

Investments

13,425

9,300

12,000

 

 

 

 

 

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

------------
13,425

------------
9,300

------------
12,000

TOTAL LONG TERM ASSETS

------------
28,663,698

------------
26,238,132

------------
18,574,855

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Stocks

94,748,810

50,970,664

32,436,781

 

 

 

 

 

 

Trade debtors

57,278,336

38,136,161

30,598,729

 

Other debtors, deposits & prepayments

15,554,679

12,898,673

8,708,774

 

Short term deposits

-

14,000,000

-

 

 

 

 

 

 

Amount due from related companies

100,500

3,136,602

-

 

 

 

 

 

 

 

 

 

 

 

Cash & bank balances

7,290,521

999,375

3,645,508

 

 

 

 

 

 

Tax recoverable

105,004

996,069

1,388,517

 

Amount due from ultimate holding company

-

22,079,317

-

TOTAL CURRENT ASSETS


------------
175,077,850


------------
143,216,861


------------
76,778,309

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade creditors

1,482,624

2,518,232

2,239,386

 

Other creditors & accruals

5,306,320

3,989,265

1,497,621

 

 

 

 

 

 

Bank overdraft

406,017

6,220,274

5,660,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bill & acceptances payable

80,463,000

36,714,980

11,993,881

 

 

 

 

 

 

Amounts owing to holding companies

18,582,912

360,000

-

 

 

 

 

 

 

Amounts owing to related companies

56,339

228,739

49,277

 

 

 

 

 

 

 

 

 

 

 

Provision for taxation

141,864

-

-

 

 

 

 

 

 

Export credit refinancing

53,660,840

48,000,000

29,794,163

 

 

 

 

 

TOTAL CURRENT LIABILITIES

------------
160,099,916

------------
98,031,490

------------
51,234,694

NET CURRENT ASSETS/(LIABILITIES)

------------
14,977,934

------------
45,185,371

------------
25,543,615

TOTAL NET ASSETS

------------
43,641,632
==========

------------
71,423,503
==========

------------
44,118,470
==========

 

 

 

 

 

FINANCED BY:

 

 

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

Ordinary share capital

5,000,000

5,000,000

5,000,000

 

 

 

 

 

TOTAL SHARE CAPITAL


5,000,000
------------


5,000,000
------------


5,000,000
------------

RESERVES

 

 

 

 

 

 

 

 

 

Retain profit/(Accumulated loss) carried forward

37,706,988

65,574,409

38,542,156

 

Reserve on consolidation

91,014

91,014

91,014

 

 

 

 

 


TOTAL RESERVES

------------
37,798,002

------------
65,665,423

------------
38,633,170


SHAREHOLDERS' FUNDS/EQUITY


------------
42,798,002


------------
70,665,423


------------
43,633,170


LONG TERM & DEFERRED LIABILITIES & PROVISIONS

 

 

 

 

Deferred taxation

843,630

758,080

485,300

 

 

 

 

 


TOTAL LONG TERM & DEFERRED LIABILITIES & PROVISIONS

------------
843,630

------------
758,080

------------
485,300

 

------------

------------

------------

 

43,641,632

71,423,503

44,118,470

 

==========

==========

==========

 

 

 

CONSOLIDATED FINANCIAL RATIOS

 

 

TIONG HUAT RUBBER FACTORY SDN BHD

As At 31-December-2007



 

 

 

 

 

2007

2006

2005

 

MYR

MYR

MYR

TYPES OF FUNDS

 

 

 

 

Cash

7,290,521

14,999,375

3,645,508

 

Net Liquid Funds

6,884,504

8,779,101

<2,014,858>

 

Net Liquid Assets

<79,770,876>

<5,785,293>

<6,893,166>

 

Net Current Assets/(Liabilities)

14,977,934

45,185,371

25,543,615

 

Net Tangible Assets

43,641,632

71,423,503

44,118,470

 

Net Monetary Assets

<80,614,506>

<6,543,373>

<7,378,466>

 

 

 

 

 

BALANCE SHEET ITEMS

 

 

 

 

Total Borrowings

406,017

6,220,274

5,660,366

 

Total Liabilities

160,943,546

98,789,570

51,719,994

 

Total Assets

203,741,548

169,454,993

95,353,164

 

Net Assets

43,641,632

71,423,503

44,118,470

 

Net Assets Backing

42,798,002

70,665,423

43,633,170

 

Shareholders" Funds

42,798,002

70,665,423

43,633,170

 

Total Share Capital

5,000,000

5,000,000

5,000,000

 

Total Reserves

37,798,002

65,665,423

38,633,170

 

 

 

 

 

LIQUIDITY(Times)

 

 

 

 

Cash Ratio

0.05

0.15

0.07

 

Liquid Ratio

0.50

0.94

0.87

 

Current Ratio

1.09

1.46

1.50

 

 

 

 

 

WORKING CAPITAL CONTROL (Days)

 

 

 

 

Stock Ratio

50

30

30

 

Debtors Ratio

30

22

29

 

Creditors Ratio

1

1

2

 

 

 

 

 

SOLVENCY RATIOS (Times)

 

 

 

 

Gearing Ratio

0.01

0.09

0.13

 

Liabilities Ratio

3.76

1.40

1.19

 

Times Interest Earned Ratio

10.23

12.64

10.84

 

 

 

 

 

PERFORMANCE RATIO (%)

 

 

 

 

Operating Profit Margin

4.50

5.64

3.00

 

Net Profit Margin

3.42

4.44

2.26

 

Return On Net Assets

78.57

53.17

29.26

 

Return On Capital Employed

77.84

48.91

25.94

 

Return On Shareholders' Funds/Equity

55.05

39.02

20.21

 

Dividend Pay Out Ratio (Times)

2.18

0.02

0.02

 

 

 

 

 

NOTES TO ACCOUNTS

 

 

 

 

Contingent Liabilities

0.00

0.00

0.00

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.49.90

UK Pound

1

Rs.74.30

Euro

1

Rs.63.42

 

 

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