MIRA
INFORM REPORT
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Report Date : |
20.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
HANDAN LONGRUN TEXTILE CO LTD |
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Registered Office : |
No. 119, Lingyuan Road, Handan City,
Hebei Province 056023 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
Nov. 20, 2000 |
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Com. Reg. No.: |
1304001000566 |
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Legal Form : |
Limited Liabilities Company |
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Line of Business : |
Producing and
selling textiles. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
usd 400000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
name & Address
handan longrun textile co. ltd.
NO. 119, LINGYUAN ROAD, HANDAN CITY
HEBEI province 056023 PR CHINA
119
TEL: 86 (0) 310-6268500
FAX: 86 (0) 310-3080214
EXECUTIVE SUMMARY
INCORPORATION DATE : nov. 20, 2000
REGISTRATION NO. : 1304001000566
REGISTERED LEGAL FORM : Limited
liabilities company
STAFF STRENGTH :
4,500
REGISTERED CAPITAL : CNY 21,100,000
BUSINESS LINE :
manufacturing
TURNOVER :
CNY 260,110,000 (AS OF DEC. 31, 2006)
EQUITIES :
CNY 78,300,000 (AS OF DEC. 31, 2006)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : UP TO usd 400,000 (periodical review)
MARKET CONDITION : competitive
FINANCIAL CONDITION : fairly stable
OPERATIONAL TREND : FAIRLY STEADY
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY 7.16 = US$1
Adopted abbreviations
ANS - amount not stated
NS - not stated
C - subject company (the company inquired by you)
NA - not available
CNY - China Yuan Renminbi
SC was registered as a limited liabilities company at local
Administration for Industry & Commerce (AIC - The official body of issuing
and renewing business license) on Nov. 20, 2000.
Company Status: Limited liabilities co. This form of business in PR
China is defined as a legal person. No more than fifty shareholders
contribute its registered capital jointly. Shareholders bear limited
liability to the extent of shareholding, and the co. is liable for its
debts only to extent of its total assets. The characteristics of this form
of co. are as follows: Upon the establishment of the
co., an investment certificate is issued to the each of shareholders. The board of directors is
comprised of three to thirteen members. The minimum registered capital
for a co. is CNY 30,000. Shareholders may take their
capital contributions in cash or by means of tangible assets or intangible
assets such as industrial property and non-patented technology. Cash contributed by all
shareholders must account for at least 30% of the registered capital. Existing shareholders have pre-exemption
right to purchase shares of the co. offered for sale by the other
shareholders and to subscribe for the newly increased registered capital of
the co.
SC’s registered
business scope includes producing and selling textiles and garments; processing
with imported materials; developing computer software and hardware; selling
textile equipment, groceries, hardware, plastic products, and steel; exporting
its self-made products and relevant technologies; importing raw materials,
accessories, instruments & apparatus, machinery, components, and relevant
technologies needed by manufacture and scientific research; leasing own houses;
selling cotton; transporting, loading & unloading services; and selling
polyester fibers and artificial cotton.
SC is mainly
engaged in producing and selling textiles.
Mr. Zhang Weixian
has been chairman of SC since 2000.
SC is known to
have approx. 4,500 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 Handan. Our checks
reveal that SC rents the total premise about 190,000 square meters.
No significant events or changes were found during our checks with the
local AIC.
No significant events or changes were found during our checks with the
local AIC.
MAIN SHAREHOLDERS:
Name % of
Shareholding
Shareholder’s
Union of Staff 97.16
Other shareholders 2.84
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Chairman and
General Manager:
Mr. Zhang Weixian, in his 50’s with university education. He is
currently responsible for the overall management of SC.
Working Experience(s):
From 2000 to present Working
in SC as chairman and general manager.
SC is mainly
engaged in producing and selling textiles.
SC’s products
mainly include: loom stare, and cotton yarns, etc.
SC sources its materials 100% from domestic
market, mainly Hebei and Shandong province. SC sells 15% of its products in
domestic market, mainly Hebei province, and 85% to overseas market, mainly
European and American countries.
The buying terms of SC include Check, T/T, and Credit of 30-60 days. The
payment terms of SC include Check, L/C, T/T and Credit of 30-60 days.
SC is
known to have a subsidiary at present, as follows:
Handan
Taida Textile Co., Ltd.
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.
Industrial and
Commercial Bank of China Xiangyang Sub-branch
AC#0405001109221012094
Relationship:
Normal.
Balance Sheet (as of Dec. 31, 2006)
Unit: CNY’000
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Cash & bank |
17,010 |
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Inventory |
9,520 |
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Accounts
receivable |
950 |
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Other Accounts
receivable |
3,990 |
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Advances to
suppliers |
53,420 |
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To be
apportioned expense |
0 |
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Other current
assets |
33,090 |
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------------------ |
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Current assets |
117,980 |
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Fixed assets net
value |
84,160 |
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Projects under
construction |
50,860 |
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Long term
investment |
18,880 |
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Other assets |
116,240 |
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Total assets |
388,120 |
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Short loans |
19,150 |
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Accounts payable |
15,180 |
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Advances from
clients |
65,080 |
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Other Accounts
payable |
25,650 |
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Withdraw the
expenses in advance |
0 |
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Other current
liabilities |
1,510 |
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Current
liabilities |
126,570 |
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Long term
liabilities |
183,250 |
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Other
liabilities |
0 |
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Total
liabilities |
309,820 |
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Equities |
78,300 |
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Total
liabilities & equities |
388,120 |
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Income Statement (as of Dec. 31, 2006)
Unit: CNY’000
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Turnover |
260,110 |
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Cost of goods
sold |
264,250 |
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Sales expense |
3,210 |
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Management expense |
24,860 |
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Finance expense |
2,350 |
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Profit before
tax |
-35,810 |
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Less: profit tax |
0 |
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Profits |
-35,810 |
Important Ratios (as of Dec. 31, 2006)
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*Current ratio 0.93
*Quick ratio 0.86
*Liabilities to
assets 0.80
*Net profit
margin (%) -13.77
*Return on total
assets (%) -9.23
*Inventory
/Turnover ×365 13days
*Accounts
receivable/Turnover ×365 1day
*Turnover/Total
assets 0.67
*Cost of goods
sold/Turnover 1.02
PROFITABILITY:
FAIR
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The turnover of SC appears fairly good 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 fair.
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SC’s cost of goods sold is too high, comparing with its turnover.
LIQUIDITY: AVERAGE
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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 normal level.
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The inventory of SC is maintained in an average level.
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The accounts receivable of SC appears average.
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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: FAIR
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The debt ratio of SC is high.
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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. A credit line up to USD 400,000 appears 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%)