MIRA
INFORM REPORT
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Report Date : |
03.07.2008 |
IDENTIFICATION
DETAILS
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Name : |
SHANDONG LUKANG
PHARMACEUTICAL CO., LTD. |
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Registered Office : |
No. 173, West Taibailou Road, Ji’ning City Shandong Province 272021 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2007 |
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Date of Incorporation : |
15.02.1993 |
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Com. Reg. No.: |
3700001800975 |
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Legal Form : |
Shares Limited Company |
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Line of Business : |
Manufacturing and Selling Active Pharmaceutical Ingredients. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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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Maximum Credit Limit : |
USD 5,000,000 |
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Status : |
Very Good |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
name & address
SHANDONG LUKANG
PHARMACEUTICAL CO., LTD.
NO. 173, WEST TAIBAILOU ROAD, JI’NING CITY
SHANDONG PROVINCE 272021 PR CHINA
TEL: 86 (0) 537-2983174 FAX: 86 (0) 537-2983097
EXECUTIVE SUMMARY
INCORPORATION DATE : FEB.
15, 1993
REGISTRATION NO. :
3700001800975
REGISTERED LEGAL FORM : SHARES LIMITED COMPANY
STAFF STRENGTH : 4,817
REGISTERED CAPITAL : CNY 581,575,480
BUSINESS LINE : MANUFACTURING
TURNOVER :
CNY 1,462,411,000 (AS OF DEC.
31, 2007)
EQUITIES :
CNY 1,460,331,000 (AS OF DEC. 31, 2007)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : UP TO USD 5,000,000 (periodical review)
MARKET CONDITION : competitive
FINANCIAL CONDITION : fairly stable
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : well
known
EXCHANGE RATE :
CNY 6.86=US1$
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY – China Yuan Ren Min Bi
SC was registered as a shares limited company at local Administration for Industry &
Commerce (AIC-The official body of issuing and renewing business license) on Feb.
15, 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 characteristics of the shares limited co.
are as follows: The establishment of the co.
requires at least five promoters and at least three of them must be PR-
China controlled legal persons. Natural person can not be allowed to serve
as promoters. The minimum registered capital
of a co. is CNY 10M. while that of the co. with foreign investment is CNY
30M. The total capital of a co. which propose to apply for publicly listed
must not less than CNY 50M. The board of directors must
consist of an odd number 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 three
years of the offer. Directors can not transfer the shares they hold in the
co. during their terms of office. 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 antibiotic raw materials and preparation, semisynthetic antibiotic
products, animal antibiotics, medicine production resin, dextrose, amylum, and
relevant products.
SC is
mainly engaged in manufacturing and selling active pharmaceutical ingredients.
Mr. Gao Xiangyou
has been chairman of SC since June of 2008.
SC is known to
have approx. 4,817 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 Ji’ning. Our checks
reveal that SC owns the total premise about 106,612 square meters.
SC is not known to host web site of its own at present.
E-mail: lukang@lkpc.com
SC is the first big medical and pharmaceutical enterprise of stock
system in Shandong Province. Its shares got listed at Shanghai Stock Exchange
in February 1997 (code: 600789).
“Lukang” Brand is China well-known trademark and was recognized by
Shandong Province as priority cultivation world famous brand. From 2001, SC was
certified by ISO14001, OSHMS and GMP for all the workshops. In 2005, “Lukang”
brand was recognized by the Ministry of Commerce of the People’s Republic of
China as a “Chinese Export Brand for Priority Cultivation and Development”.
Changes
of its registered information are as follows:
|
Date of change |
Item |
Before the
change |
After the change |
|
2006 |
Legal representative |
Zhang Jianhui |
Liu Congde |
|
2008-6 |
Legal representative |
Liu Congde |
Gao Xiangyou |
MAIN SHAREHOLDERS: (As of Dec. 31, 2007)
Name
%
of shareholdings
National Shareholder 24.59
China Assets (Holdings) Co., Ltd. 15.46
Yuyang Fund 0.34
Huang Kai 0.18
Chen Yan 0.17
Ye Qing 0.17
Li Junzhao 0.16
Guo Xigong 0.12
Wangying Science & Technology 0.12
Zhou Juan 0.11
Other individuals 58.58
l
Chairman:
Mr. Gao Xiangyou, 40 years old with university education. He is
currently responsible for the overall management of SC.
Working Experience(s):
Worked in Shandong Xinhua Pharmaceutical Factory, and in
Shandong Xinhua Pharmaceutical Co., Ltd.;
Since June of 2008 Working in SC as chairman.
l
General Manager:
Mr. Zhang Zhenghai, 51 years old with university education. He is
currently responsible for the daily management of SC.
Working Experience(s):
Worked in Shandong Lukang Animal & Plant Pharm. Industry
Department as general manager, and in Shandong Lukang Pharmaceutical Group Co.,
Ltd. as board member;
From 2005 to present Working
in SC as general manager and board member.
SC is mainly
engaged in manufacturing and selling active pharmaceutical ingredients.
SC’s main products
include: antibiotic raw material and preparation, semisynthetic antibiotic
products, and antibiotics used for animal, etc.
SC’s brand:
“Lukang”
SC sources its
materials 70% from domestic market, mainly Shandong province, and 30% from
overseas market. SC sells 80% of its products in domestic market, mainly
Shandong province, Beijing, and Shanghai, and 20% to overseas market, mainly
European countries, and Southeast Asia.
The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days.
The payment terms of SC include T/T, L/C and Credit of 30-60 days.
*Major Suppliers:
==============
Shandong Lukang Biology Pesticide Co., Ltd.
Mingzhi Lukang Pharmaceutical Co., Ltd.
Shandong Lukang Animal Pharmaceutical Co., Ltd.
*Major Customers:
==============
Shandong Lukang Pharmaceutical Import & Export Co., Ltd.
Shandong Lukang Animal Pharmaceutical Co., Ltd.
Shandong Lukang Pharm. Operation Co., Ltd.
SC is
known to have the following subsidiaries:
Shandong Lukang Zhonghe Real Estate Development Co., Ltd.
Zhonglian Guangshen Pharm. Co., Ltd.
Jining Lukang Real Estate Development Co., Ltd.
Guoyao Logistics Co., Ltd.
Mingzhi Lukang Pharmaceutical Co., Ltd.
Shandong Beiyao Lukang Co., Ltd.
Etc.
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.
Industrial and
Commercial Bank of China Ji’ning Office
AC#1608001409022102825
Relationship:
Normal.
Consolidated
Balance Sheet
Unit: CNY’000
|
|
As of Dec. 31, 2006 |
As of Dec. 31, 2007 |
|
Cash & bank |
44,948 |
117,791 |
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Bills receivable |
100,196 |
135,860 |
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Advances to
suppliers |
23,041 |
30,379 |
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Accounts
receivable |
353,869 |
282,738 |
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Inventory |
217,880 |
356,055 |
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Other accounts
receivable |
6,676 |
10,945 |
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Expenses to be
apportioned |
0 |
0 |
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Other current
assets |
0 |
0 |
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------------------ |
------------------ |
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Current assets |
746,610 |
933,768 |
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Fixed assets net
value |
1,493,672 |
1,383,993 |
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Projects under
construction |
31,732 |
4,863 |
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Long term
investment |
106,057 |
123,643 |
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Other assets |
50,670 |
62,760 |
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------------------ |
------------------ |
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Total assets |
2,428,741 |
2,509,027 |
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============= |
============= |
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Short loans |
364,400 |
406,440 |
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Bills payable |
57,950 |
100,000 |
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Accounts payable |
308,257 |
269,566 |
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Salaries payable |
42,459 |
41,098 |
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Taxes payable |
3,749 |
6,073 |
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Advances from
clients |
15,500 |
32,222 |
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Other accounts
payable |
28,843 |
49,467 |
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Drawing-expense
in advance |
0 |
0 |
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Other current
liabilities |
140,002 |
85,000 |
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------------------ |
------------------ |
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Current
liabilities |
961,160 |
989,866 |
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Long term
liabilities |
45,000 |
55,000 |
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Other
liabilities |
500 |
3,830 |
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------------------ |
------------------ |
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Total
liabilities |
1,006,660 |
1,048,696 |
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Equities |
1,422,081 |
1,460,331 |
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------------------ |
------------------ |
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Total
liabilities & equities |
2,428,741 |
2,509,027 |
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============= |
Consolidated
Income Statement
Unit: CNY’000
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|
As of Dec. 31, 2006 |
As of Dec. 31, 2007 |
|
Turnover |
1,171,101 |
1,462,411 |
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Cost of goods
sold |
1,032,159 |
1,188,153 |
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Sales expense |
65,433 |
110,376 |
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Management expense |
72,724 |
80,862 |
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Finance expense |
36,502 |
38,238 |
|
Profit before
tax |
-96,211 |
26,497 |
|
Less: profit tax |
246 |
395 |
|
Profits |
-96,457 |
26,102 |
Important Ratios
=============
|
|
As
of Dec. 31, 2006 |
As
of Dec. 31, 2007 |
|
*Current ratio |
0.78 |
0.94 |
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*Quick ratio |
0.55 |
0.58 |
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*Liabilities
to assets |
0.41 |
0.42 |
|
*Net profit
margin (%) |
-8.24 |
1.78 |
|
*Return on total
assets (%) |
-3.97 |
1.04 |
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*Inventory
/Turnover ×365 |
68days |
89days |
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*Accounts
receivable/Turnover ×365 |
110days |
71days |
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*Turnover/Total
assets |
0.48 |
0.58 |
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* Cost of
goods sold/Turnover |
0.88 |
0.81 |
PROFITABILITY:
AVERAGE
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The turnover of SC appears fairly good in its line in 2006, and it was
rising in 2007.
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SC’s net profit margin is fair in 2006 and average in 2007.
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SC’s return on total assets is fair in 2006 and average in 2007.
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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 in both 2 years.
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SC’s quick ratio is maintained in a fair level in both 2 years.
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The inventory of SC is maintained in an average level.
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The accounts receivable of SC is in an average level.
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SC’s short loans appear average in both 2 years.
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SC’s turnover is in a fair level, comparing with the size of its total
assets.
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LEVERAGE: FAIRLY
GOOD
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The debt ratio of SC is low.
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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. Taking into consideration of SC’s general performance, reputation as
well as market conditions, a credit line up to USD 5,000,000 appears to be
within SC’s capacities upon a periodical review basis.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.43.34 |
|
UK Pound |
1 |
Rs.86.53 |
|
Euro |
1 |
Rs.68.54 |
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 |
|
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 |
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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%)