MIRA
INFORM REPORT
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Report Date : |
04.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
LU THAI TEXTILE CO LTD |
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Registered Office : |
No. 81, East Songling Road, Zichuan District,ZIBO, Shandong Province
255100 PR |
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Country : |
China |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
16.10.1993 |
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Com. Reg. No.: |
000066 |
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Legal Form : |
Shares Limited Company |
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Line of Business : |
Manufacturing and Selling Textiles |
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 3,000,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
Name and Address
LU THAI TEXTILE CO., LTD.
NO. 81 EAST SONGLING ROAD, ZICHUAN DISTRICT, ZIBO,
SHANDONG province, 255100 PR CHINA
TEL: 86 (0) 533-5285166 FAX: 86 (0) 533- 5418833
EXECUTIVE SUMMARY
INCORPORATION DATE : OCT. 16, 1993
REGISTRATION NO. : 000066
REGISTERED LEGAL FORM : shares limited
co.
STAFF STRENGTH :
13,962
REGISTERED CAPITAL : CNY 844,864,800
BUSINESS LINE :
MANUFACTURING
TURNOVER :
CNY 1,736,684,000 (AS OF JUN. 30, 2007)
EQUITIES :
CNY 2,011,935,000 (AS OF JUN. 30, 2007)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : UP TO USD 3,000,000 (periodical review)
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : FAIRly stable
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : weLL known
EXCHANGE RATE :
CNY 7.19 = US$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 shares limited co. at local
Administration for Industry & Commerce (AIC - The official body
of issuing and
renewing business license) on Oct. 16, 1993.
Company Status: Shares limited co. This form of business in PR China
is defined as a legal person. Its registered capital is divided into shares
of equal par value and the co. raises capital by issuing share certificates
by promotion or by public offer. Shareholders bear limited liability to the
extent of shareholding, and the co. is liable for its debts only to the
extent of its total assets. The co has independent property of legal person
and enjoys property rights of legal person. The characteristics of
the shares limited co. are as follows: The establishment of the co.
requires at least two promoters and no more than 200, half of whom shall be domiciled
in China.. Natural person are allowed to
serve as promoters. The minimum registered capital
of a co. is CNY 5M. while that of the co. with foreign investment is CNY 5M.
The total capital of a co. which propose to apply for publicly listed must
be no less than CNY 30M. The board of directors must
consist of five to nineteen directors. If the co.
raises capital by public offer, the promoters must not subscribe less than
35% of the total shares. the promoters’ shares are restricted to transfer-
within one year of the offer. A state-owned enterprise that
is restructured into a shares limited co. must comply with the conditions
& requirements specified under the law & administrative rule
SC’s registered
business scope includes manufacturing and selling cotton, terylene yarn,
yarn-dyed fabric, shirts, garment decorations, health care underclothes, other textiles
and series products; selling its products in domestic and foreign markets;
providing the after sale services.
SC is mainly
engaged in manufacturing and selling textiles.
Mr. Liu
Shizhen has been chairman of SC since
1993.
SC is known
to have approx. 13,962 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 Zibo.
Our checks reveal that SC owns the total premise about 120,000 square meters.
http://www.lttc.com.cn The design is professional and the content
is well organized. At present, the web is in both Chinese and English versions.
SC listed in Shenzhen Stock Exchange in Dec. 2000 with the stock number
of 000726.
SC has already got the certificates: ISO9000, ISO14000 and OHSAS18000.
MAIN SHAREHOLDERS: (as of Jun. 30, 2007)
Name
% of Shareholding
Zibo Lucheng Textile Investment Co., Ltd. 14.21
Tailun Co., Ltd. 13.99
DBS VICKBRS (HONG KONG) LTD A/C CLIENTS 4.93
Zhu Shengdi 0.95
DAIWA SECS EMBC AC ITOCHU HONG KONG LTD 0.71
GoldmanSachs Asset Management International-
GoldmanSachs China Fund 0.71
TOYO SECURITIES ASIA LIMITED-A/C CLIENT 0.59
Rongtong Shenzheng 100 Security Investment
Fund 0.45
Naito Securities Corp. 0.43
DAIWA SECS SMBC HONG KONG LTD-CLIENTS 0.40
Other shareholders 62.63
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Chairman and General Manager:
Mr. Liu Shizhen in his 60’s with university education. He is currently responsible for the overall management of SC.
Working Experience(s):
From 1993 to present Working in SC as chairman and general manager.
Also working in Lufeng Textile-dyeing Co., Ltd., ZiBo Luqun
Textile Co., Ltd., Shandong Luthai-huanzhong Pharmaceutical Co., Ltd., and
Xinjiang Luthai Foison Cotton Co., Ltd., as chairman.
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Vice General Manager:
Mr. Liu Zibin in his 40’s with university education. He is currently responsible for the daily management of SC.
Working Experience(s):
From 1999 to 2004 Worked in Zibo Lucheng Textile Co., Ltd., as general manager.
From 2004 to present Working in SC as vice general
manager and Zibo Lucheng Textile Investment Co., Ltd., as chairman.
SC is mainly
engaged in manufacturing and selling textiles.
SC’s products
mainly include: Yarn-dyed fabric, Apparel and Yarn.
SC’s production
capacity involves 16,000 tons of yarns, 110 million meters of yarn-dyed fabric,
12 million pieces of high-class shirts per year among which the production
ability of the fine count and high density pure cotton fabric is 70 million
meters per year.
SC sources its
materials 80% from domestic market, and 20% from the overseas market. SC sells
60% of its products in domestic market, and 40% to the overseas market
The buying terms of SC include T/T, L/C and Credit of 30-90 days. The
payment terms of SC include T/T, L/C and Credit of 15-30 days.
*Major Supplier
Zibo Lucheng Textile Co., Ltd.
*Major Client
Zibo Taimei Necktie Co., Ltd.
SC is known to have the following subsidiaries and offices,
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Lufeng Textile-dyeing Co., Ltd.,
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Xinjiang Luthai Foison Cotton Co., Ltd.,
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Shandong Luthai-huanzhong Pharmaceutical Co., Ltd.
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ZiBo Luqun Textile Co., Ltd.,
v
Luthai (HongKong) Co., Ltd.,
v
Beijing Innovative Garment Co., Ltd.
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Beijing Luthai Shirt Co., Ltd.,
v
Qingdao Free Trade Zone Luthai International Trade Co., Ltd.
v
Dongying Luxin Textile Co., Ltd.
Beijing
Branch:
Add:
No.1 Zuojiazhuang outside Dongzhi Gate if Chaoyang District, Beijing
Tel:
010-64674439
Fax:
010-64605429
Shanghai
Branch:
Add:
Rm1805 Commercial mansion at No.188 Siping Road of Shanghai
Tel:
86-021-65078310 65078312 65078313
Fax:
86-021-65078312
Qingdao
Branch:
Add:
Rm1203 B Block of International Trade Center at Hong Kong Middle Road of
Qingdao
Tel:
0532-5918643
Fax:
0532-5919560
Shenzhen
Office:
Add:
no.29 Fuhua Road of Futian District, Shenzhen
Tel:
0755-8375 2966
Fax:
0755-8375 2966
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 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.
SC refused to
release any information about its bank.
Consolidated Balance
Sheet
Unit: CNY’000
As of Jun. 30, 2007 As of Dec. 31, 2006
Cash & bank 312,081 324,339
Accounts
receivable 107,252 113,926
Accounts payable
advance 105,797 121,132
Bills receivable 137,667 120,658
Other receivables 94,436 140,376
Inventory 1,007,802 806,408
Other current assets 0 104,678
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Current assets 1,765,035 1,731,517
Fixed assets net
value 3,201,746 2,771,694
Projects under construction 345,444 360,976
Long term investment 214 12,502
Other assets 273,475 114,447
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Total assets 5,585,914 4,991,136
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Short loans 1,160,003 1,654,260
Accounts payable 558,685 226,022
Accounts
receivable advance 29,529 26,758
Bills payable 575,108 174,193
Taxes payable -5,714 10,465
Salaries payable 150,390 128,584
Other payable 108,719 110,554
Long term liabilities due within one year 77,111 100,771
Other current liabilities 446 7,774
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Current liabilities 2,654,277 2,439,381
Long term liabilities 696,689 411,050
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Total liabilities 3,350,966 2,850,431
Minority Shareholders’ equity 223,013 191,011
Equities 2,011,935 1,949,694
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Total liabilities & equities 5,585,914 4,991,136
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Consolidated Income
Statement
Unit: CNY’000
As of Jun. 30, 2007 As of Dec. 31, 2006
Turnover 1,736,684 2,857,928
Cost of goods sold 1,302,383 2,125,765
Sales expense 50,128 79,805
Management expense 86,216 232,989
Finance expense 56,925 101,787
Profit before tax 251,275 392,868
Minority Shareholders’ profit and loss 8,214 17,042
Less: profit tax 30,160 41,601
Profits 212,901 334,225
Important Ratios
as of Jun. 30, 2007 as
of Dec. 31, 2006
*Current
ratio 0.67 0.71
*Quick
ratio 0.29 0.38
*Liabilities
to assets 0.60 0.57
*Net profit
margin (%) 12.21 11.69
*Return on
total assets (%) 3.80 6.69
*Inventory
/Turnover ×365 212days 103days
*Accounts receivable/Turnover ×365 22days 14days
*Turnover/Total
assets 0.31 0.57
* Cost of
goods sold/Turnover 0.75 0.74
PROFITABILITY:
FAIRLY GOOD
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The turnover of SC appears fairly good.
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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.
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SC’s cost of goods sold is average, comparing with its turnover.
LIQUIDITY: FAIR
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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 poor level, and it was declining in
the first half of 2007.
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The accounts receivable of SC is average.
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The inventory of SC is large.
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The short term loan of SC is large.
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SC’s turnover is in an average level, comparing with the size of its
total assets.
LEVERAGE: AVERAGE
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The debt ratio of SC is average.
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The risk for SC to go bankrupt is low.
Overall financial
condition of the SC: Fairly stable.
SC is well-known in its industry with fairly stable financial
conditions. The large amount of short loans & inventory could be a threat
to SC’s financial condition. A credit line up to USD 3,000,000 would appear to
be within SC’s capacities upon a periodical review basis.
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%)