MIRA INFORM REPORT

 

 

Report Date :

31.03.2011

 

IDENTIFICATION DETAILS

 

Name :

CHINA ELECTRONICS ZHEJIANG COMPANY

 

 

Registered Office :

No. 408 Wen San Road, Xihu District, Hangzhou City, Zhejiang Province

 

 

Country :

China

 

 

Financials (as on) :

31.12.2009

 

 

Date of Incorporation :

11.03.1986

 

 

Com. Reg. No.:

3300001002243

 

 

Legal Form :

State-Owned Enterprise

 

 

Line of Business :

Sales of electronic communication products

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

2,000,000 Chinese yuan

Status :

Satisfactory

Payment Behaviour :

Regular

Litigation :

Clear

 

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – December 31, 2010

 

Country Name

Previous Rating

(30.09.2010)

Current Rating

(31.12.2010)

China

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

Name and address

 

CHINA ELECTRONICS ZHEJIANG COMPANY

No. 408 Wen San Road, Xihu District, Hangzhou City, Zhejiang Province

310012

Tel :

86 571 88915666/88869558

Fax

86 571 88864333/88864844

Website

http://china.pages.com.cn/intro/busi/b2/ceiec/index.html

   

Currency in this report is Chinese Yuan unless otherwise stated.

Exchange Rate: 1 USD=6.56 Chinese Yuan

"--"in this report indicates "unavailable" due to insufficient information or "no comments"

 

 

EXECUTIVE SUMMARY

 

DATE OF establishment              : mar.11th, 1986

Aic Registration No.                    : 3300001002243

REGISTERED LEGAL FORM             : State-owned enterprise

REGISTERED CAPITAL                     : 13,767,571.00

main BUSINESS                                 : sales of electronic communication products

Main business income                 : 438,221,000 (2009)

Net profit                                        : 1,706,000 (2009)

Total asset                                    : 187,157,000 (dec.31st, 2009)

Net asset                                         : 84,352,000 (dec.31st, 2009)

employees                                     : 100

CHIEF EXECUTIVE                                                                                                : Tang Wei

import and export permits       : yes

base CREDIT limit                          : 2,000,000 Chinese yuan

EXCHANGE RATE                             : 1 Usd=6.56 CNY (Mar.28TH, 2011)

 

 

Registered Address:                             Gudang Lane, Gudang Wan, West of Wen San Road, Xuhu District, Hangzhou City, Hangzhou Province

Zip Code:                                              310006

Business Address:                               No.408 Wen San Road, Xihu District, Hangzhou City, Zhejiang Province

Zip Code:          310012

Telephone:                                            86 571 88915666/88869558

Fax:                                                        86 571 88864333/88864844

SIC Code (China):                               6379 wholesale of machinery and electronic products

           

       

REGISTRATION

 

Date of Establishment

mar.11th, 1986

Registry

Administration Bureau of Industry and Commerce -Zhejiang

Legal Representative

Tang Wei

AIC Registration Number

3300001002243

Registered Legal Form

State-owned enterprise

Registered Capital

13,767,571.00

Operating Period

From mar.11th, 1986 to --

Business Scope

Import and export of agricultural tools, instruments, light industry products, ferous metal, non-ferrous metal, chemical products, rubber, medical instruments, machinery,china etc.

Export of special arts crafts, non-metal minerals and textile fiber.

Import and export agent

Processing trade, sales of imported goods.

Changes in Registration

1.       Oct.8th, 1997

Subject’s business scope was changed to the present scope...

 

2.       Feb.26th, 2004

Subject’s registered capital was increased from 22,500,000 to 13,767,571 Chinese Yuan.

 

3.       Feb.26th, 2004

Subject’s shareholder was changed from CHINA NATIONAL IMP. & EXP. CORP to

CHINA NATIONAL ELECTRONICS IMP. & EXP. CORP.

 

4.       Feb.22nd, 2011

Subject’s address was changed to the present address from

Room 527 No.86-1 Hubin Road, Wuxi City.

 

State-owned enterprise

This form of business in PR China is defined as a commodity production or an operational unit of a socialist character which in accordance with the law, has autonomy in management, takes full responsibility for its profits and losses and practices independent business accounting. It is a legal person established directly by central / local government or enterprise owned by central or local government. In theory, the liabilities of this form of enterprise are ultimately borne by the government, since the adoption of company law in mid-1994, the Chinese government has planned to separate the ownership from management and liabilities bearing.

 

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE             

        

FIELD INVESTIGATION

 

1.     Subject’s income comes mainly from sales of electronic component and accessories. Its products are all purchased from domestic suppliers. Subject sells its products directly to the end users which are mostly overseas users. The industry of electronic communication products is an industry with fierce competition, and subject is facing with many competitors. With very long history, strong shareholder background and enough capital, subject has developed into a large scale and has built up stable customer network, enjoying high popularity in the industry. Generally speaking, subject’s competitiveness is above average in the local place.

2.     Hangzhou, SC’s location is on the east coastline of China. Being the second largest city in Changjiang Delta, it is the political, economical and cultural center of Zhejiang Province, and an important traffic hub in Southeast China. The advanced economic development condition provides enterprises with wide room for development. However, this also brings great challenges to enterprises. As a government-owned enterprise in ordinary electronic industry, subject shares no favorable policies provided by the local government.

        

SHAREHOLDERS AND SHARES

As indicated in the following table:

     

Shareholder

Capital Subscribed

Percentage

CHINA NATIONAL ELECTRONICS IMP. & EXP. CORP.

13,767,571

100%

Total

13,767,571

100%

     

Shareholder

Way of investment

Paid-up Percentage

CHINA NATIONAL ELECTRONICS IMP. & EXP. CORP.

Capital

100%

        

  Background of major shareholder

Name

CHINA NATIONAL ELECTRONICS IMP. & EXP. CORP.

Address

Electronic Building, No. Jia 23 Fuxing Road, Haidian District, Beijing

Tel.

86 10 68219550

Website

http://www.ceiec.com.cn/

Main business

Import and export of electronic products and technology

Other information

This company is a large import and export company in the electronic industry. It holds 16 departments including technology, equipments, bidding, transportation, law, financial and enterprise management department etc. The company has passed Level 1 of international bidding and purchasing agent certificates. With long history, this company enjoys high popularity in the industry in and out of China.

        

 

HISTORY

 

Mar.11th, 1986

SC was established.

Feb. 26th, 2004

Subject's registered capital was decreased from 22,500,000 to 13,767,571 Chinese Yuan.

Dec.31st, 2007

Subject's main business income reached 492,036,000, representing a net profit of 57,000 Chinese Yuan.

Dec.31st, 2008

Subject's main business income reached 579,472,000, representing a net profit of 1,013,000 Chinese Yuan.

Dec.31st, 2009

Subject's main business income reached 438,221,000, representing a net profit of 1,706,000 Chinese Yuan.

        

        

MANAGEMENT

 

Name

Tang Wei

Title

Legal representative and vice general manager

Gender

Female

        

 

NUMBER OF EMPLOYEES

 

Employees: 100

Recent Recruitment：Yes

Sales staff

 

BANKERS INFORMATION

 

Bank Name

Bank of China – Zhejiang Branch

Account No. for Chinese Yuan

800100024508091001

Telephone

86 571 85011888

Comment

SC was confirmed to have opened an account in this bank and the account number belongs to SC.

 

 

Bank Name

Industrial and Commercial Bank of China – Zhejiang Branch

Account No. for Chinese Yuan

1202021309002109746

Telephone

86 571 87227050

Comment

SC was confirmed to have opened an account in this bank, but the account was cancelled.

 

 

Bank Name

CITIC Industrial Bank – Hangzhou Branch

Account No. for Chinese Yuan

63101223000263

Telephone

86 571 87032888

Comment

SC was confirmed to have opened an account in this bank. The account number above was said to be SC’s old account number, but the interviewee refused to disclose SC’s new account number.

 

OFFICE FACILITIES

 

Geographic Location:                  SC is located in NO. 408, Wenshan Road, Xihu District, Hangzhou City, Zhejiang Province. The environment is good and the traffic is convient.

Property Ownership:                         Not known.

        

TRADEMARKS

 

Registration No.

1165521

Image

Registration Date

Mar 31st, 1997

 

 

Registration No.

6238972

Image

Registration Date

Aug 24th, 2007

 

 

Registration No.

6412116

Image

Registration Date

Dec 3rd, 2005

    

 

PATENTS

 

After check with the National Patent Information Center, no patent record of subject is found.

 

        

MAIN PRODUCTS & SERVICES

 

Main business

Sales of electronic communications equipment

Products and services

SC mainly deals with the sales business of electronic communications equipment. Its products involve the sectors of electron components, electric light source, electronic appliances accessories etc. Its main products include electroacoustic device, electric resistance device, semiconductor device, antenna, electronic materials, loudspeaker, electric wire and cable, etc. SC’s products are sold both domestically and internationally.

        

SALES INFORMATION

                                      

Percentage of domestic sales

5%

Regions

All over China

Major domestic clients

Enterprises in electronic machinery industry

Sales Terms:

Prompt payment; on credit

 

 

Percentage of overseas sales

95%

Regions

South America, Eastern Europe, Middle East, Southeast Asia etc.

Overseas customers

--

Sales Terms:

L/C;  T/T

Subject’s products are sold both domestically and internationally. With a long history, SC is a large-scale enterprise in its industry. It has built a fixed customer base and cooperates well with some of its clients.

The above information was confirmed by SC’s employee in March, 2011.

  

PURCHASE INFORMATION

 

Main Commodities Purchased

Electric wire and cable, electronic equipment, telecommunication products.

Number of Major Suppliers

More than 10

Major Suppliers

HANGZHOU GUODING ENTERPRISE MANAGEMENT CONSULTING CO LTD

Main Terms of Payment

Prompt payment; on credit

Subject mainly purchases its products from domestic suppliers. It has fixed suppliers and establishes good relationship with some of its suppliers.

The above information was confirmed by SC’s employee in March, 2011.

  

CREDIT

 

Supplier name

HANGZHOU GUODING ENTERPRISE MANAGEMENT CONSULTING CO LTD

Items supplied

Business training

Title of the interviewee

Training staff

Tel.

86 571 85464369

Comment

SC was confirmed to be one of this company’s clients. They cooperate well and SC always makes payments in time.

           

LITIGATION RECORDS

 

Plaintiff

CHINA CINDA ASSET MANAGEMENT CO. LTD HANGZHOU BRANCH

Defendant

ZHEJIANG MACHINERY & EQUIPMENT IMPORT & EXPORT CO LTD ;

CHINA ELECTRONICS ZHEJIANG COMPANY

Litigation detail

Bank of China – Zhejiang Branch provided a loan of 44,400,000 Chinese Yuan to   ZHEJIANG MACHINERY & EQUIPMENT IMPORT & EXPORT CO LTD, SC offered to assume joint guarantee responsibility of related interest and fees. On June 25th, 2004, Bank of China – Zhejiang Branch signed and transferred the Creditor’s Rights to CHINA CINDA ASSET MANAGEMENT CO. LTD HANGZHOU BRANCH. ZHEJIANG MACHINERY & EQUIPMENT IMPORT & EXPORT CO LTD failed to pay off debt on time. The plaintiff then prosecuted SC and ZHEJIANG MACHINERY & EQUIPMENT IMPORT & EXPORT CO LTD.

Result

The court didn’t support the plaintiff’s proposal to let SC assume the responsibility to pay off the debt. SC was judged innocent.

Source of information

http://www.hzcourt.cn/cpws/ms/20101020/154105664.html

           

FINANCE

Balance Sheet (Unit: 1,000 Chinese Yuan):

                              

Dec. 31st, 2007

Dec. 31st, 2008

  Dec. 31st, 2009

Current assets

 

 

 

Money capital

19,523

17,204

20,643

Notes receivable

 

 

 

Net ball of account receivable

25,631

26,330

20,324

Payment in advance

2,607

2,034

2,056

Account receivable

 

 

 

Other account receivable

8,370

536

365

Inventory

5,715

3,228

2,549

Expenses to be deferred

 

 

 

Total current Assets

61,846

49,332

45,937

Long term investment

 

 

 

Long term investment

248,437

55,600

120,246

Fix assets

 

 

 

Original value of fixed assets

33,764

32,652

　

Accumulated depreciation

23,703

23,982

　

Net Fixed Assets

10,061

8,670

7,395

Net value of Fixed Assets

 

 

 

Project being constructed

　

1,878

　

Total fixed assets

10,061

10,548

11,543

Intangible assets

 

 

 

Intangible assets

869

849

829

Deferred assets

 

 

 

Total intangible assets and deferred assets

869

849

829

Other long-term assets

 

 

 

Deferred assets debits

 

 

 

 

 

 

 

Total assets

329,927

125,085

187,157

Current liabilities

 

 

 

Short term loans

50,000

37,000

30,000

Notes payable

 

 

 

Account payable

28,533

21,357

33,163

Deposit received

22,844

31,362

20,734

Other account payable

945

1,407

1,743

Wages payable

279

268

278

Tax unpaid

-10,260

-12,858

-11,710

Accrued expenses

 

 

 

Other current liabilities

 

 

 

Total current liabilities

92,341

78,536

74,208

L/T liabilities

 

 

 

L/T account payable

 

 

 

Total L/T liabilities

0

0

0

Total liabilities

152,593

90,876

102,805

Owner’s interest

 

 

 

Paid-up capital

13,768

13,768

13,768

Contributed surplus

182,636

38,898

87,670

Surplus reserves

5,250

5,250

5,117

Undistributed profits

-24,320

-23,707

-22,203

Total owner’s interest

177,334

34,209

84,352

Liabilities and owner’s interest

329,927

125,085

187,157

 

         Income Statement (Unit: 1,000):

                                     

Dec. 31st, 2007

Dec. 31st, 2008

Dec. 31st, 2009

Main business income

492,306

579,472

438,221

Main business cost

473,240

562,834

419,841

Tax and associate charge

　

　

761

Main business profit

19,066

16,638

17,619

Other business profit

1,979

3,037

　

Asset depreciation

　

　

-620

Operation expenses

4,884

5,697

7,413

- management expenses

12,169

13,971

12,289

Financial expenses

3,623

1,075

2,131

Operation profit

369

-1,068

-3,594

Investment profit

204

2,291

5,574

Non business income

118

110

1

-Non business expenses

68

15

131

Total profit

623

1,318

1,850

-Income tax

566

305

144

Net profit

57

1,013

1,706

      

Important Ratios:                                  

 

2007

2008

2009

Return on net assets (%)   

0.03

2.96

2.02

Return on total assets (%)   

0.02

0.81

0.91

Net profit margin (%)

0.01

0.17

0.39

Turnover of total assets

1.49

4.63

2.34

Turnover of current assets  

7.96

11.75

9.54

Turnover of account receivable

19.21

22.01

21.56

Inventory turnover

82.81

174.36

164.71

Asset liability ratio (%)

46.25

72.65

54.93

Current ratio

0.67

0.63

0.62

Quick ratio

0.61

0.59

0.58

        

        

Major Financial Information

 

2007

2008

2009

Main business income

492,306

579,472

438,221

Total profit

623

1,318

1,850

Net profit

57

1,013

1,706

Total assets

329,927

125,085

187,157

Total liabilities

152,593

90,876

102,805

Total owner’s interest

177,334

34,209

84,352

Source from

government

government

government

Whether audited or not

Yes

Yes

Yes

 

Notes to finance:

Since domestic information obtaining channels are not perfect, some account subjects are not filled in the financial statements. The cumulative number of some account subjects may be not consistent with that of the financial statements.

Subject’s tax unpaid of 2007, 2008 and 2009 was negative, because it prepaid more tax than needed in the previous years.

 

INDUSTRIAL COMPARISON

SIC Code (China): 6379 wholesale of other machinery and electric products

 

Indicators (2009)

SC

Industry average

Return on net assets (%)   

2.02

33.24

Return on total assets (%)   

0.91

13.80

Net profit margin (%)

0.39

11.35

Turnover of total assets

2.34

1.24

Turnover of current assets  

9.54

1.71

Turnover of account receivable

21.56

5.45

Asset liability ratio (%)

54.93

58.53

Current ratio

0.62

1.28

Quick ratio

0.58

1.04

 

 

ANALYSIS

 

This report mainly provides analysis of subject’s indicators in 2009. SC’s profitability indicators in 2009 are all below industry average, indicating that its profitability is poor. SC’s turnover of total assets and turnover of current assets are above industry average, indicating that its assets operation ability is good. SC’s turnover of account receivable is above industry average, indicating that its debt recovery speed is quick. SC’s asset liability ratio indicates that its long-term solvency is average. In addition, its current ratio and quick ratio are below average indicating that its short-term solvency is weak.

        


INDUSTRY PROFILE

           

Industry

SIC Code (China): 6379 wholesale of other machinery and electric products

Industry Definition: It refers to wholesale, import and export activities of metalware, special equipment, general equipment, electrical machinery, electronic products, transport equipment, instrument and meter, etc. This industry includes the wholesale of bearings, gears, valves, compressors, ventilators etc.

Status Quo & Trend

In the first half of 2010, there were a large number of investment projects coming into operation. In addition, many new projects’ operation scales were improved in 2009. These all help the engineering machinery industry keep prosperous. The data released by Customs Bureau shows, from January to April in 2010, the export amounts of machinery products reached USD 260,280,000,000, increasing by 31.3%. In addition, the export demand of bearings in our country is strong. These all indicate a hopeful outlook of this industry. The close international economic cooperation provides our economy with satisfactory development opportunities. So with the steady increase of GDP and the rapid development of equipment manufacturing industry, our country’s demand of bearings will continue increasing steadily.

       

GENERAL COMMENTS

Subject company is a state-owned enterprise which was established in March, 1986 with a registered capital of 13,767,571 Chinese yuan. SC mainly deals with the sales business of electronic communication products. With a long history and a large business scale, SC enjoys great reputation in its industry.

SC’s financial data shows that SC’s main business income in 2009 decreased to some degree compared with that of 2008, indicating that SC’s business development condition in 2009 was not good. SC had many account payables in 2009 which indicates that SC has occupied some capitals of its suppliers. That was favorable to SC’s capital turnover but would also increase SC’s debt-paying pressure. SC’s had sufficient money capitals in the recent two years which was favorable to its capital turnover. Also, SC’s inventory and account receivable were all kept within a reasonable range which was favorable to its capital turnover and capital operation.

           

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.44.77

UK Pound

1

Rs.71.69

Euro

1

Rs.63.02

 

 

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

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

--

NB

                                       New Business

 

--

 

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.