MIRA INFORM REPORT

 

 

Report Date :

31.03.2011

 

IDENTIFICATION DETAILS

 

Name :

HENAN KANGTAI PHARMACEUTICAL GROUP CORPORATION

 

 

Registered Office :

No.338 Kangtai Road, Sishui Town, Xingyang City, Zhengzhou, Henan Province

 

 

Country :

China

 

 

Financials (as on) :

31.12.2009

 

 

Date of Incorporation :

15.01.1994

 

 

Com. Reg. No.:

410183000003793

 

 

Legal Form :

Collectively-Owned Enterprise

 

 

Line of Business :

Manufacture and sales of chemical raw material

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Maximum Credit Limit :

1,500,000 Chinese Yuan

Status :

Moderate

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

 

HENAN KANGTAI PHARMACEUTICAL GROUP CORPORATION

No.338 Kangtai Road, Sishui Town, Xingyang City, Zhengzhou, Henan Province

450100

Tel :

86 371 64899411/64899527

Fax

86 371 64899316

Website

http://www.ktpharm.com/

 

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"

   

Note: the name and address of subject company provided in the order are not accurate. The accurate name and

address of subject should be as listed in the report.

       

       

EXECUTIVE SUMMARY

 

DATE OF establishment             : jan.15th, 1994

Aic Registration No.                   : 410183000003793

REGISTERED LEGAL FORM     : collectively-owned enterprise

REGISTERED CAPITAL : 52,230, 000.00

main BUSINESS                         : manufacture and sales of chemical raw material

TURNOVER                              : 78,183,000.00 (As of 2009)

net profit                                    : -535,000.00 (As of Dec.31th, 2009)

total assets                               : 64,119,000.00 (As of Dec.31th, 2009)

net worth                                      : 29,798,000.00 (As of Dec.31th, 2009)

employees                                : 400

CHIEF EXECUTIVE                    : Zhou Zhenjiang

import and export permits           : yes

base CREDIT limit                      : 1,500,000 Chinese Yuan

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

           

Registered Address:                 Sishui Town, Xingyang City, Henan Province

Zip Code:                                  450100

Business Address:                   No.338 Kangtai Road, Sishui Town, Xingyang City, Zhengzhou, Henan Province

Zip Code:          450100

Telephone:                                86 371 64899411/64899527

Fax:                                              86 371 64899316

SIC Code (China):                      2710 manufacture of chemical raw material

   

       

REGISTRATION

 

Date of Establishment

jan.15th, 1994

Registry

Administration Bureau of Industry and Commerce – Xingyang

Legal Representative

Zhou Zhenjiang

AIC Registration Number

410183000003793

Registered Legal Form

collectively-owned enterprise

Registered Capital

52,230, 000.00

Operating Period

From jan.15th, 1994 to apr.26th, 2019

Business Scope

Manufacture and sale of chemical raw materials (norfloxacin, mesylate rescriptor gatifloxacin  ) (with certificate); export of self-produced products and related technology; import of needed raw material, equipments, machinery and accessory and related technology (excluding the items prohibited by the government).

Changes in Registration

1.       Aug.12th, 2001

Subject’s registered capital was increased from 12,000,000 to 52,230,000 Chinese Yuan.

 

2.       May 17th, 2005

Subject’s name was changed from HENAN KANGTAI PHARMACEUTICAL (GROUP) CORPORATION to the present name.

 

 

Collectively-owned enterprise

This form of business in PR China is defined as a legal person. It is a private held entity owned by a set number of private individuals (usually employees of the co., residents of a village or town), domestic business organizations or domestic institutions. The co. is managed by the general manager who was appointed by the employees representative meeting.

 

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE

           

      FIELD INVESTIGATION

 

1.     Subject’s predecessor is Sishui Fine Chemical Factory which was firstly established in 1985.In 1994, subject was established.

2.     Subject’s income mainly comes from sales of norfloxacin. Its products are sold to pharmaceutical manufacturers in and out China. The sales business is developed directly to the end users. The industry of chemical raw material is a traditional industry with fierce competition. However, with a certain scale, fame and amount of clients, SC’s competitiveness in the local industry is average.

3.     Xingyang, where Subject Company is located, is an advantageous place with a long history and profound culture. The traffic is convenient with Longhai Railway and Kailuo Highway passing Sishui town. The geographic advantage and economic development in Xingyang city provides SC with many development opportunities, but also brings a certain amount of pressure to it. As a domestic enterprise, SC mainly deals with the producing and marketing business of chemical medicine materials. The local government doesn’t give them any supporting policies.

        

SHAREHOLDERS AND SHARES

 

As indicated in the following table:

     

Shareholder

Capital Subscribed

Percentage

XINGYANG KANGTAI MEDICINAL PLANT

6,751,200.00

12.92%

XINGYANG CHEMICAL RESEARCH INSTITUTE

145,800.00

0.28%

HENAN FINE CHEMICAL FACTORY

45,333,000.00

86.8%

Total

52,230,000.00

100%

     

Shareholder

Way of investment

Paid-up Percentage

XINGYANG KANGTAI MEDICINAL PLANT

Capital

100%

XINGYANG CHEMICAL RESEARCH INSTITUTE

Capital

100%

HENAN FINE CHEMICAL FACTORY

Capital

100%

        

  Background of major shareholder

Name

XINGYANG KANGTAI MEDICINAL PLANT

Address

Kangtai Road, Sishui Town, Xingyang City, Zhengzhou City, Henan Province

Main business

Producing and marketing of medicines

 

 

Name

XINGYANG CHEMICAL RESEARCH INSTITUTE

Address

Kangtai Road, Sishui Town, Xingyang City, Zhengzhou City, Henan Province

Main business

Research and development

Other important information

The company mainly deals with product quality testing, research and development of  new technology, technological transformation of the products in produce

 

 

Name

HENAN FINE CHEMICAL FACTORY

Address

Kangtai Road, Sishui Town, Xingyang City, Zhengzhou City, Henan Province

Main business

Producing and marketing of  chemical raw materials

Other important information

This company mainly deals with the producing and marketing business of chemical products.

      

HISTORY

 

Jan 15th, 1994

SC was established.

Aug 12th, 2001

SC’s registered capital was increased from 12,000,000 Chinese Yuan to 52,230,000 Chinese Yuan.

Dec 31st, 2008

SC’s main business income and total profit were respectively 65,336,000 Chinese Yuan and 3,770,000 Chinese Yuan.

2009

SC’s main business income and total profit were respectively 78,183,000 Chinese Yuan and 28,000 Chinese Yuan.

        

MANAGEMENT

 

Name

Zhou Zhenjiang

Title

Chairman

ID No.

410121530314431

Date of birth

Mar 14th, 1953

        

NUMBER OF EMPLOYEES

Employees: 400

Recent Recruitment：No

        

BANKERS INFORMATION

 

    No bank information of subject is found through the public channels.

           

OFFICE FACILITIES

 

Geographic Location:                  SC is located in NO. 338, Kangtai Road, Sishui Town, Xingyang City, Zhengzhou City, Henan Province. The environment around it is average, the traffic is convenient.

Property Ownership:                      unknown 

        

      TRADEMARKS

 

Registration No.

780347

Image

Registration Date

Mar 15th, 1995

    

        

PATENTS

 

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

 

 

MAIN PRODUCTS & SERVICES

 

Main business

Manufacture and sales of  chemical raw materials

Products and services

SC mainly deals with manufacture and sales of chemical raw materials. Its main products are raw materials norfloxacin. SC can produce 60 tons of norfloxacin per month. Its products are sold domestically and internationally.

           

 

SALES INFORMATION

                                      

Percentage of domestic sales

95%

Regions

All over China

Major domestic clients

GUANGZHOU BAIYUNSHAN PHARMACEUTICAL CO.,LTD.

Sales Terms:

Prompt payment; on credit

 

 

Percentage of overseas sales

5%

Regions

India, European countries and regions, etc.

Sales Terms:

Prompt payment; on credit

Subject company’s products are sold both domestically and internationally. Its clients are mainly pharmaceutical factories. Although with a long history and a stable customer base, SC’s business scale is still average. Its marketing network still needs to be further developed. 

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

 

  

PURCHASE INFORMATION

 

Main Commodities Purchased

Chemical raw materials, production equipment, etc.

Number of Major Suppliers

More than 5

Major Suppliers

ZHENGZHOU AOMEI PRINTING CO. LTD

Main Terms of Payment

Prompt payment; on credit (domestic)

L/C, T/T (import)

Subject company’s raw materials are purchased from both domestic and overseas. SC has no fixed suppliers. Its employees refused to disclose their suppliers’ name.

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

                                      

CREDIT

 

Supplier

ZHENGZHOU AOMEI PRINTING CO. LTD

Supplied product and service

Printing

Post of person interviewed

Sales staff

Telephone of person interviewed

86 371 60959001

Comment

The interviewee confirmed that SC is one of this company’s clients.  But he is not clear about SC’s payment behavior.

           

LITIGATION RECORDS

 

After checking with China court website, local court website and other major searching websites no litigation records related to subject in the recent 3 years was found.

        

INANCE

 

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

        

                              

Dec. 31st, 2008

  Dec. 31st, 2009

Current assets

   

 

Money capital

   1,129

10,208

Notes receivable

       3,262

    2,205

Net ball of account receivable

    -1,606

1,614

Payment in advance

        8,670

11,870

Account receivable

-1,606

1,614

Other account receivable

        970

    2,285

Inventory

      12,297

    8,156

Expenses to be deferred

308

65

Total current Assets

  25,030

36,403

Long term investment

 

 

Long term investment

 

 

Fix assets

 

 

Original value of fixed assets

42355     

   43,740 

Accumulated depreciation

      21,554 

    24,512 

Net value of Fixed Assets

    20,801

19,228

Project being constructed

      5

     

Total fixed assets

20,806

19,228

Intangible assets

 

 

Intangible assets

8,905

8,488

Deferred assets

        

 

Total intangible assets and deferred assets

       8,905

      8,488

Total assets

54,741

64,119

Current liabilities

 

 

Short term loans

1,590

300

Notes payable

 

 

Account payable

432

2,755

Deposit received

 

 

Other account payable

18,281

21,547

Wages payable

144

516

Welfare payable

1

 

Tax unpaid

166

242

Accrued expenses

13

6

Other current liabilities

 

 

Total current liabilities

20,627

25,366

L/T liabilities

 

 

L/T loan

950

 

L/T account payable

1,800

8,955

Total L/T liabilities

2,750

8,955

Total liabilities

23,377

34,321

Owner’s interest

 

 

Paid-up capital

52,230

52,230

Contributed surplus

2,090

2,090

Surplus reserves

556

556

Undistributed profits

-23,512

-25,078

Total owner’s interest

31,364

29,798

Liabilities and owner’s interest

54,741

64,119

                    

    Income Statement (Unit: 1,000):

                                     

Dec. 31st, 2008

Dec. 31st, 2009

Main business income

65,336

78,183

Main business cost

53,965

68,621

Tax and associate charge

206

283

Main business profit

11,165

9,279

Other business profit

557

28

Asset depreciation

 

 

Operation expenses

1,410

2,456

- management expenses

6,596

7,013

Financial expenses

597

389

Operation profit

3,119

-551

Subsidy income

 

 

Non business income

689

605

-Non business expenses

38

26

Total profit

3,770

28

-Income tax

1,143

563

Net profit

2,627

-535

      

Important Ratios:                                  

 

2008

2009

Return on net assets (%)   

8.38

-1.80

Return on total assets (%)   

4.80

-0.83

Net profit margin (%)

4.02

-0.68

Turnover of total assets

1.19

1.22

Turnover of current assets  

2.61

2.15

Turnover of account receivable

-40.68

48.44

Inventory turnover

4.39

8.41

Asset liability ratio (%)

42.70

53.53

Current ratio

1.21

1.44

Quick ratio

0.62

1.11

 

Major Financial Information

 

2008

2009

Main business income

65,336

78,183

Total profit

3,770

28

Net profit

2,627

-535

Total assets

 54,741

 54,741  

Total liabilities

23,377

34,321

Total owner’s interest

31,364

29,798

Source from

government

government

Whether audited or not

Yes

Yes

                    


INDUSTRIAL COMPARISON

 

SIC Code (China): 2710 manufacture of chemical raw material

Indicators (2009)

SC

Industry average

Return on net assets (%)   

-1.80

21.93

Return on total assets (%)   

-0.83

12.26

Net profit margin (%)

-0.68

15.43

Turnover of total assets

1.22

0.79

Turnover of current assets  

2.15

1.59

Turnover of account receivable

48.44

5.88

Asset liability ratio (%)

8.41 

43.63

Current ratio

53.53

1.58

Quick ratio

1.44

1.10

        

ANALYSIS

 

We mainly analyze Subject company’s indicators in 2009.  SC’s indicators in 2009 were all negative and below industry average which indicates that SC’s profitability was poor. SC’s turnover of total assets and turnover of current assets were all above industry average which indicates that its debt recovery speed is good. SC’s asset liability was low which indicates that its long-term solvency was strong. Also, SC’s current ratio and quick ration indicates that its short-term solvency was strong. 

        

INDUSTRY PROFILE

           

Industry

SIC Code (China): 2710 manufacture of chemical raw materials

Description: manufacture of raw materials that are needed for further processing of pharmaceuticals.

        

Status Quo & Trend

As the government is intensifying structural adjustment, the strategic reorganization trend of this industry is becoming more and more obvious. Local and foreign capitals will take advantage of local governments’ policies which are used to deal with economic crisis to enter into pharmaceutical sector. This will affect and change the situation of this industry. Also, the environmental protection problem of this industry’s will become more serious.

China is a large producer of chemical raw materials which can produce more than 1500 kinds of raw materials. This industry plays a very important role in the development of national economy.  In 2009, there were 1172 enterprises in this industry with a total assets of 200.648 billions and a sales income of 177.676 billions which increased 15.04% year/year. The total profit reached 14.765 billions increasing 14.18% year/year.

 

GENERAL COMMENTS

 

Subject was established in January 1994 with a registered capital of 52,230,000 Chinese Yuan. Subject Company mainly deals with the producing and marketing business of chemical raw materials. Despite its long history, SC’s business scale is average and it reputation and influence power in local industry still needs to be improved.

SC’s financial data shows that its main business income in 2009 increased a lot compared with that of 2008. That indicates that its business condition in 2009 was good. SC’s prepayment in 2009 is high which indicates that its suppliers take more strict payment measures to it. SC’s money capital is sufficient which is favorable to its capital turnover. In addition, SC’s inventory and account receivable were all within reasonable range which is favorable to its capital turnover and capital operation efficiency. SC has much other account payable in 2008 and 2009 which indicates that it has close business relationship with its related companies.

        

           

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.