MIRA INFORM REPORT

Report Date :

01.12.2012

IDENTIFICATION DETAILS

Name :	NEW HOPE HOCHIMINH CITY CO., LTD

Registered Office :	Plot B17/I - B18/II - B19/II B20/II, Road 2A, Vinh Loc Industrial Zone Binh Hung Hoa Ward, Binh Tan District, Ho Chi Minh City

Country :	Vietnam

Financials (as on) :	31.12.2011

Date of Incorporation :	1999

Reg. No.:	412043000173

Legal Form :	Limited liability company

Line of Business :	Producing and Trading in feed for animal and fishery.

No. of Employees :	200

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Vietnam

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

vietnam - ECONOMIC OVERVIEW

Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. While Vietnam's economy remains dominated by state-owned enterprises, which still produce about 40% of GDP, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive export-driven industries. Vietnam joined the World Trade Organization in January 2007 following more than a decade-long negotiation process. Vietnam became an official negotiating partner in the developing Trans-Pacific Partnership trade agreement in 2010. Agriculture's share of economic output has continued to shrink from about 25% in 2000 to about 22% in 2011, while industry's share increased from 36% to 40% in the same period. Deep poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. The global recession has hurt Vietnam's export-oriented economy, with GDP in 2009-11 growing less than the 7% per annum average achieved during the last decade. In 2011, exports increased by more than 33%, year-on-year, and the trade deficit, while reduced from 2010, remained high, prompting the government to maintain administrative trade measures to limit the trade deficit. Vietnam's managed currency, the dong, continues to face downward pressure due to a persistent trade imbalance. Since 2008, the government devalued it in excess of 20% through a series of small devaluations. Foreign donors pledged nearly $8 billion in new development assistance for 2011. However, the government's strong growth-oriented economic policies have caused it to struggle to control one of the region's highest inflation rates, which reached as high as 23% in August 2011 and averaged 18% for the year. In February 2011, Vietnam shifted its focus away from economic growth to stabilizing its economy and tightened fiscal and monetary policies. In early 2012 Vietnam unveiled a broad "three pillar" economic reform program, proposing the restructuring of public investment, state-owned enterprises and the banking sector. Vietnam's economy continues to face challenges from low foreign exchange reserves, an undercapitalized banking sector, and high borrowing costs. The near-bankruptcy and subsequent default of the state-owned-enterprise Vinashin, a leading shipbuilder, led to a ratings downgrade of Vietnam's sovereign debt, exacerbating Vietnam's borrowing difficulties.

Source : CIA

SUBJECT IDENTIFICATION & LEGAL FORM

Current legal status
Registered English Name		NEW HOPE HOCHIMINH CITY CO., LTD
Registered Vietnamese Name		CONG TY TRACH NHIEM HUU HAN NEW HOPE THANH PHO HO CHI MINH
Trade name		NEW HOPE HOCHIMINH CITY CO., LTD
Type of Business		Limited liability company
Year Established		1999
Investment Certificate No		412043000173
Date Of Issuance		27 Jun 2008
Place of Issuance		Hochiminh City Export Processing and Industrial Zones Authority
Registered Investment Capital		USD 4,970,000
Chartered capital		USD 3,638,000
Investment Duration		48 years (since 27 Aug 1999)
Tax code		0301809154
Total Employees		200
Size		Medium

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Investment Certificate No: No. 32/GP-KCN-HCM Changed to: No. 32/GPDC1-KCN-HCM	N/A
2	Subject has got former Investment Certificate No: 32/GPDC1-KCN-HCM Changed to: No. 32/GPDC2-KCN-HCM	08 Oct 2004
3	Subject has got former Investment Certificate No. 32/GPDC2-KCN-HCM Changed to: No. 32/GPDC4-KCN-HCM	12 Jan 2007
4	Subject has got former Investment Certificate No. 32/GPDC4-KCN-HCM Changed to: 412043000173	27 Jun 2008

ADDRESSES

Head Office
Address		Plot B17/I - B18/II - B19/II B20/II, Road 2A, Vinh Loc Industrial Zone Binh Hung Hoa Ward, Binh Tan District, Ho Chi Minh City, Vietnam
Telephone		(84-8) 3765 0622 - 3765 0627 - 3765 0628 - 3765 0629
Fax		(84-8) 3765 0623
Email		newhope@hcm.vnn.vn
Occupied Area		20,000 m2
Land-use Right		Leased

SUBSIDIARIES AND RELATED COMPANIES

PARENT COMPANY - SICHUAN NEW HOPE AGRIBUSINESS CO., LTD
Business Registration		20188767-2
Date of Registration		04 Mar 1998
Place of Registration		China
Address		No. 376 Jinshi Road, Jinjiang Industrial Park, Chengdu City, China
Tel		+86 (028) 8666 6298
Fax		+86 (028) 8667 3344
Website		http://www.newhopeagri.com

DIRECTORS

1. NAME		Mr. SHAO JUN
Position		General Director
Date of Birth		11 Jul 1969
ID Number/Passport		P6419207
ID Issue Date		21 Jul 2005
ID Issue Place		China
Resident		No. 376 Jinshi Road, Jinjiang Industrial Park, Chengdu City, China
Nationality		Chinese
Qualification		Management

2. NAME		Mr. WU MAO LIN
Position		Deputy General Director
Resident		Ho Chi Minh City, Vietnam
Nationality		Chinese
Qualification		Management

3. NAME		Mr. BAO YONG CAI
Position		Chief Accountant
Current resident		Ho Chi Minh City, Vietnam
Nationality		Chinese
Qualification		Accounting

4. NAME		Ms. DUONG THI HAI ANH
Position		Accountant
Resident		Ho Chi Minh City, Vietnam
Nationality		Vietnamese
Qualification		Accounting

BUSINESS NATURE AND ACTIVITIES

The subject is specialized in producing and trading in feed for animal and fishery.

IMPORT & EXPORT ACTIVITIES

IMPORT:
Market		India, Singapore, and Thailand.
Ratio		80%

EXPORT:
Market		N/A

BANKERS

1. JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM VINH LOC BRANCH
Address		Road No. 7 Vinh Loc Industrial Zone-Binh Hung Hoa Ward, Binh Tan District, Ho Chi Minh City, Vietnam
Telephone		(84-8) 3765 1328
Fax		(84-8) 3765 1329

2. BANK OF CHINA
Address		No. 115 Nguyen Hue Street, District 1, Ho Chi Minh City, Vietnam
Telephone		(84-8) 3821 9949
Fax		(84-8) 3821 9948

3. VIET NAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BINH PHU BRANCH - PHU THINH TRANSACTION
Address		No. 231 Binh Phu Street - Ward 11, District 6, Ho Chi Minh City, Vietnam
Telephone		(84-8) 3755 4673
Fax		(84-8) 3755 4674

SHAREHOLDERS

NAME		SICHUAN NEW HOPE AGRIBUSINESS CO., LTD
Business Registration		20188767-2
Date of Registration		04 Mar 1998
Place of Registration		CHINA
Address		No. 376 Jinshi Road, Jinjiang Industrial Park, Chengdu City, China
Tel		+86 (028) 8666 6298
Fax		+86 (028) 8667 3344
Website		http://www.newhopeagri.com
Representative		Mr. Liu, Jong Hao Date of birth: 30^th Sep 1951; Nationality: Chinese; Passport: G13631755; Resident: No.45 - Sec 4 - Renmin South Avenue – Chengdu – Sichuan - China
Value of shares		USD 3,638,000
Percentage		100%
Note: SICHUAN NEW HOPE AGRIBUSINESS CO., LTD changed its name to NEW HOPE LIUHE CO., LTD in December 2011. As confirmation of Ms. Duong Thi Hai Anh, the registered shareholder of the subject was still SICHUAN NEW HOPE AGRIBUSINESS CO., LTD.

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2011	31/12/2010	31/12/2009
Number of weeks	52	52	52
ASSETS
A – CURRENT ASSETS	237,382,492,002	179,153,000,000	77,979,000,000
I. Cash and cash equivalents	73,073,312,995	50,021,000,000	24,061,000,000
1. Cash	73,073,312,995	50,021,000,000	24,061,000,000
2. Cash equivalents	0	0	0
II. Short-term investments	0	0	0
1. Short-term investments	0	0	0
2. Provisions for devaluation of short-term investments	0	0	0
III. Accounts receivable	78,710,453,862	294,000,000	8,249,000,000
1. Receivable from customers	0	0	0
2. Prepayments to suppliers	63,011,070,704	291,000,000	4,502,000,000
3. Inter-company receivable	15,699,383,158	3,000,000	3,747,000,000
4. Receivable according to the progress of construction	0	0	0
5. Other receivable	0	0	0
6. Provisions for bad debts	0	0	0
IV. Inventories	85,598,725,145	85,860,000,000	45,669,000,000
1. Inventories	85,598,725,145	85,860,000,000	45,669,000,000
2. Provisions for devaluation of inventories	0	0	0
V. Other Current Assets	0	42,978,000,000	0
1. Short-term prepaid expenses	0	0	0
2. VAT to be deducted	0	1,593,000,000	0
3. Taxes and other accounts receivable from the State	0	0	0
4. Other current assets	0	41,385,000,000	0
B. LONG-TERM ASSETS	38,278,618,835	37,121,000,000	40,871,000,000
I. Long term accounts receivable	0	0	0
1. Long term account receivable from customers	0	0	0
2. Working capital in affiliates	0	0	0
3. Long-term inter-company receivable	0	0	0
4. Other long-term receivable	0	0	0
5. Provisions for bad debts from customers	0	0	0
II. Fixed assets	38,278,618,835	37,121,000,000	40,871,000,000
1. Tangible assets	32,286,847,875	30,965,000,000	34,393,000,000
- Historical costs	55,847,726,141	51,396,000,000	52,511,000,000
- Accumulated depreciation	-23,560,878,266	-20,431,000,000	-18,118,000,000
2. Financial leasehold assets	0	0	0
- Historical costs	0	0	0
- Accumulated depreciation	0	0	0
3. Intangible assets	5,991,770,960	6,156,000,000	6,416,000,000
- Initial costs	7,879,589,156	7,879,000,000	7,880,000,000
- Accumulated amortization	-1,887,818,196	-1,723,000,000	-1,464,000,000
4. Construction-in-progress	0	0	62,000,000
III. Investment property	0	0	0
Historical costs	0	0	0
Accumulated depreciation	0	0	0
IV. Long-term investments	0	0	0
1. Investments in affiliates	0	0	0
2. Investments in business concerns and joint ventures	0	0	0
3. Other long-term investments	0	0	0
4. Provisions for devaluation of long-term investments	0	0	0
V. Other long-term assets	0	0	0
1. Long-term prepaid expenses	0	0	0
2. Deferred income tax assets	0	0	0
3. Other long-term assets	0	0	0
VI. Goodwill	0	0	0
1. Goodwill	0	0	0
TOTAL ASSETS	275,661,110,837	216,274,000,000	118,850,000,000

LIABILITIES
A- LIABILITIES	82,315,360,148	70,283,000,000	53,662,000,000
I. Current liabilities	82,315,360,148	70,283,000,000	53,662,000,000
1. Short-term debts and loans	0	0	0
2. Payable to suppliers	65,782,015,307	33,302,000,000	4,503,000,000
3. Advances from customers	497,361,601	252,000,000	934,000,000
4. Taxes and other obligations to the State Budget	3,419,615,560	70,000,000	1,391,000,000
5. Payable to employees	0	0	327,000,000
6. Accrued expenses	0	0	0
7. Inter-company payable	12,425,796,876	36,491,000,000	0
8. Payable according to the progress of construction contracts	0	0	0
9. Other payable	190,570,804	168,000,000	46,507,000,000
10. Provisions for short-term accounts payable	0	0	0
II. Long-Term Liabilities	0	0	0
1. Long-term accounts payable to suppliers	0	0	0
2. Long-term inter-company payable	0	0	0
3. Other long-term payable	0	0	0
4. Long-term debts and loans	0	0	0
5. Deferred income tax payable	0	0	0
6. Provisions for unemployment allowances	0	0	0
7. Provisions for long-term accounts payable	0	0	0
8. Unearned Revenue	0	0	0
9. Science and technology development fund	0	0	0
B- OWNER’S EQUITY	193,345,750,689	145,991,000,000	65,188,000,000
I. OWNER’S EQUITY	193,345,750,689	145,991,000,000	65,188,000,000
1. Capital	53,873,007,586	53,873,000,000	53,873,000,000
2. Share premiums	0	0	0
3. Other sources of capital	0	0	0
4. Treasury stocks	0	0	0
5. Differences on asset revaluation	0	0	0
6. Foreign exchange differences	0	0	0
7. Business promotion fund	0	0	0
8. Financial reserved fund	0	0	0
9. Other funds	0	0	0
10. Retained earnings	139,472,743,103	92,118,000,000	11,315,000,000
11. Construction investment fund	0	0	0
12. Business arrangement supporting fund	0	0	0
II. Other sources and funds	0	0	0
1. Bonus and welfare funds	0	0	0
2. Sources of expenditure	0	0	0
3. Fund to form fixed assets	0	0	0
MINORITY’S INTEREST	0	0	0
TOTAL LIABILITIES AND OWNER’S EQUITY	275,661,110,837	216,274,000,000	118,850,000,000

PROFIT & LOSS STATEMENT

Description	FY2011	FY2010	FY2009
1. Total Sales	906,644,995,265	810,779,000,000	161,988,000,000
2. Deduction item	52,352,109,840	38,588,000,000	25,117,000,000
3. Net revenue	854,292,885,425	772,191,000,000	136,871,000,000
4. Costs of goods sold	794,626,468,564	724,163,000,000	123,193,000,000
5. Gross profit	59,666,416,861	48,028,000,000	13,678,000,000
6. Financial income	3,354,375,456	3,136,000,000	439,000,000
7. Financial expenses	1,013,132,454	657,000,000	12,000,000
- In which: Loan interest expenses	679,977,374
8. Selling expenses	7,476,314,137	6,979,000,000	1,698,000,000
9. Administrative overheads	3,694,219,249	3,556,000,000	962,000,000
10. Net operating profit	50,837,126,477	39,972,000,000	11,445,000,000
11. Other income	898,968,822	77,000,000	34,119,000,000
12. Other expenses	569,219,804	38,000,000	34,062,000,000
13. Other profit /(loss)	329,749,018	39,000,000	57,000,000
14. Total accounting profit before tax	51,166,875,495	40,011,000,000	11,502,000,000
15. Current corporate income tax	3,812,026,783	1,165,000,000	185,000,000
16. Deferred corporate income tax	0	-562,000,000	0
17. Interest from subsidiaries/related companies	0	0	0
18. Profit after tax	47,354,848,712	39,408,000,000	11,317,000,000

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS

Description	FY2011	FY2010	FY2009	Average Industry
Current liquidity ratio	2.88	2.55	1.45	1.21
Quick liquidity ratio	1.84	1.33	0.60	0.41
Inventory circle	9.28	8.43	2.70	4.09
Average receive period	33.63	0.14	22.00	35.22
Utilizing asset performance	3.10	3.57	1.15	1.99
Liability by total assets	29.86	32.50	45.15	64.75
Liability by owner's equity	42.57	48.14	82.32	199.02
Ebit / Total assets (ROA)	18.81	18.50	9.68	12.59
Ebit / Owner's equity (ROE)	26.82	27.41	17.64	36.14
Ebit / Total revenue (NPM)	5.72	4.93	7.10	6.48
Gross profit / Total revenue (GPM)	6.58	5.92	8.44	12.11
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

CASH FLOW STATEMENT

(Indirect method)
Items	FY2011
I. Cash flows from operating activities
1. Profit before tax	51,166,875,495
2. Adjustments
- Depreciation and amortization	3,847,006,989
- Provisions
- Unrealized foreign exchange difference
- Gain/loss from investing activities	-1,670,954,886
- Interest expense	679,977,374
3. Operating profit before movements in working capital	54,022,904,972
- (Increase)/Decrease in receivables	-35,438,520,825
- (Increase)/Decrease in inventories	261,540,974
- Increase/(Decrease) in accounts payable	10,218,576,466
- (Increase)/Decrease in prepaid expenses
- Interest paid	-679,977,374
- Corporate income tax paid	-2,018,916,347
- Other cash inflows
- Other cash outflows
Net cash from (used in) operating activities	26,365,607,866
II. Cash flows from investing activities
1. Acquisition of fixed assets and other long - term assets	-5,004,401,591
2. Proceeds from fixed assets and long - term assets disposal	225,000,000
3. Cash outflow for lending, buying debt instruments of other companies
4. Cash recovered from lending, selling debt instruments of other companies
5. Investment in other entities
6. Cash recovered from investments in other entities
7. Interest income, dividend and profit paid	1,466,409,431
Net cash from (used in) investing activities	-3,312,992,160
III. Cash flows from financing activities
1. Proceeds from issuing stocks, receiving capital from owners
2. Capital withdrawal, buying back issued stocks
3. Proceeds from borrowings	41,595,331,414
4. Repayment of borrowings	-41,595,331,414
5. Repayment of obligations under finance leased
6. Dividends paid
Net cash from (used in) financing activities	0
Net increase/(decrease) in cash and cash equivalents	23,052,615,706
Cash and cash equivalents at beginning of year	50,020,697,289
Effect from changing foreign exchange rate
Cash and cash equivalents at end of year	73,073,312,995

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality		Fair
Liquidity		High
Payment status		Above Average
Financial Situation		Above Average
Development trend		Positive
Litigation data		No Record
Bankruptcy		No Record
Payment Methods		By cash or through the bank, L/C, T/T
Sale Methods		Retailer and Wholesaler

INTERPRETATION ON THE SCORES

The subject, NEW HOPE HOCHIMINH CITY CO., LTD was officially established in 1999. It is focuses on animal feed.

Its feed mill and warehouse locate on a 20,000 square meter area at the same place with its head office. Its production lines were equipped via two phases (01^st phase was from Nov 2009 to July 2009 and 02^nd phase was from March 2007 to Aug 2007). Capacity production of subject is about 100,000tons per year.

Up to the present time, the subject is one of feed factories (the subject, New Hope Ha Noi, New Hope Hai Phong and New Hope Dong Thap, New Hope Bac Ninh) of Chinese feed producer New Hope Group in Vietnam. Material source of the subject is mainly from India, Singapore and Thailand. Its products are for pig, chicken and aquaculture. Its main market area is Ho Chi Minh city and neighbor provinces. The subject has set up its agent network. Position of New Hope in Vietnam animal feed industry is regarded strong.

Material expenses account for 93% of product prices; therefore, material price fluctuations affect profit and revenue of the company. Subject needs to make material provision; so it has large inventories. Subject also has difficulties in collecting due payment in this period.

Recently, foreign feed firms have been racing to expand factories and business networks to fully exploit the potentials of the domestic market; New Hope group has also expanded its factory by establishing a new factory in Binh Dinh called New Hope Binh Dinh since the end of 2011. Farming areas have been narrowed because of disease and capital shortage. In the difficulties of Vietnamese breeding industry and Viet Nam economy, the subject is struggling with hard competition from other producers such as Cargill, Green Feed, CJ Vina, Anco, CP, Uni-President, Tomboy…

In summary, subject is operating fair effectively. Financial statement of subject was rather strong with well increase of revenue and profit. Liquidity of subject was above average. Subject has guarantees for small – average debt repayment. It is expected that subject would overcome difficulties; therefore, the rating outlook for the company is above average level.

INDUSTRY DATA
Industry code	Growth speed by price compared with 1994 (%)		Total enterprises 2009		Total employees 2010 *(Thous.pers.)*	Annual average capital of enterprises 2009 *(billion dongs)*
	2011	2010
Agriculture, Forestry and Fishing	4.00	2.78	8,749		23,896.3	81,559
Industry and Construction	5.53	7.70	85,115		10,630	2,751,975
Trade and Services	6.69	7.52	154,978		14,522	4,939,069

ECONOMIC INDICATORS

			2011	2010		2009
Population (Million person)			87.84	86.93		86.02
Gross Domestic Products (USD billion)			119	102.2		91
GDP Growth (%)			5.89	6.78		5.32
GDP Per Capita (USD/person/year)			1,300	1,160		1,080
Inflation (% Change in Composite CPI)			18.58	11.75		6.88
State Budget Deficit compared with GDP (%)			4.9	5.8		6.9

SERVICE TRADE PERFORMANCE

Billion USD			2011	2010		2009
Exports			96.3	72.2		57.1
Imports			105.8	84.8		69.9
Trade Balance			-9.5	-12.6		-12.8

Source: General Statistics Office

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.52
UK Pound	1	Rs.87.48
Euro	1	Rs.70.89

INFORMATION DETAILS

Report Prepared by :

SDA

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%)

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