MIRA INFORM REPORT

 

 

Report Date :

14.12.2012

 

IDENTIFICATION DETAILS

 

Name :

DUCGIANG - LAO CAI CHEMICAL JOINT STOCK COMPANY

 

 

Registered Office :

Tang Loong Industrial Park, Bao Thang District, Lao Cai Province

 

 

Country :

Vietnam

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

15.04.2009

 

 

Reg. No.:

5300299830

 

 

Legal Form :

Joint stock company

 

 

Line of Business :

The subject is specializing in manufacturing and trading chemical products.

 

 

No. of Employees :

250

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

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 30th, 2012

 

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Vietnam

B1

B1

 

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

English Registered Name

 

DUCGIANG - LAO CAI CHEMICAL JOINT STOCK COMPANY

Vietnamese Registered Name

 

CONG TY CO PHAN HOA CHAT DUC GIANG - LAO CAI

Short Registered name

 

DLC

Type of Business

 

Joint stock company

Year Established

 

2009

Business Registration No.

 

5300299830

Date of Registration

 

15 Apr 2009

Place of Registration

 

Lao Cai Planning and Investment Department

Chartered capital

 

VND 250,000,000,000

Status

 

Unlisted

Tax code

 

5300299830

Total Employees

 

250

Size

 

Medium

Note: The subject's exact name is above.

 

Historical Identification & Legal form

 

List

Changed Items

Date of changes

1

Subject has got former Chartered capital: VND 150 billion

Changed to: VND 250 billion

13 Nov 2012

2

Subject has got former Chartered capital: VND 100 billion

Changed to: VND 150 billion

13 May 2011

 

 

 

ADDRESSES

 

Head Office

Address

 

Tang Loong Industrial Park, Bao Thang District, Lao Cai Province, Vietnam

Telephone

 

(84-20) 3774556

Fax

 

(84-20) 3867214

 

 

 

SUBSIDIARIES AND RELATED COMPANIES

 

1. PARENT COMPANY - DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY

Business Registration

 

0101452588

Date of Registration

 

22 Dec 2011

Place of Registration

 

Hanoi Department of Planning and Investment

Registered Capital

 

VND 66,000,000,000

Tax code

 

0101452588

Address

 

No. 18, Lane 44, Duc Giang Str., Thuong Thanh Ward, Long Bien District, Ha Noi City, Vietnam

Tel

 

(84-4) 38271620

Fax

 

(84-4) 38271068

Website

 

http://www.ducgiangchem.vn

 

 

 

DIRECTORS

 

1. NAME

 

Mr. NGUYEN QUOC TRUNG

Position

 

Director

Date of Birth

 

18 Dec 1971

ID Number/Passport

 

125449967

ID Issue Date

 

16 Jun 2008

ID Issue Place

 

Bac Ninh Police Department

Resident

 

Quarter II, Dong Nguyen Ward, Tu Son District, Bac Ninh Province, Vietnam

Nationality

 

Vietnamese

 

2. NAME

 

Mr. HO MANH LINH

Position

 

Deputy Director

Nationality

 

Vietnamese

 

3. NAME

 

Mr. PHAM VAN HUNG

Position

 

Deputy Director

Nationality

 

Vietnamese

 

 

 

BUSINESS NATURE AND ACTIVITIES

 

The subject is specializing in manufacturing and trading chemical products.

 

 

 

IMPORT & EXPORT ACTIVITIES

 

IMPORT:

Types of products

 

Machinery, equipment and materials

Market

 

China

Mode of payment

 

T/T, L/C

 

EXPORT:

Market

 

India, Japan, Korea, and some EU countries

Mode of payment

 

T/T, L/C

 

 

 

BANKERS

 

1. JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM

Address

 

No. 198, Tran Quang Khai Street, Hoan Kiem District, Ha Noi City, Vietnam

Telephone

 

(84-4) 3934 3137 / 3814 8919

Fax

 

(84-4) 3826 9067 / 3825 1322

 

2. VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK LAO CAI BRANCH

Address

 

No.10 Hoang Lien, Lao Cai City, Lao Cai Province, Vietnam

Telephone

 

(84-20) 3822 595

Fax

 

(84-20) 3822 598

 

3. HONG KONG & SHANGHAI BANKING CORP LTD

Address

 

Pacific Place, 83B Ly Thuong Kiet Str., Hoan Kiem District, Ha Noi City, Vietnam

Telephone

 

(84-4) 39333189

Fax

 

(84-4) 39460207

 

4. ASIA COMMERCIAL BANK HOANG CAU TRANSACTION

Address

 

6-7-8 Hoang Cau Area O Cho Dua Ward, Dong Da District, Ha Noi City, Vietnam

Telephone

 

(84-4) 35379736

Fax

 

(84-4) 35379739

 

 

 

SHAREHOLDERS

 

1. NAME

 

DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY

Business Registration

 

0101452588

Date of Registration

 

22 Dec 2011

Place of Registration

 

Hanoi Department of Planning and Investment

Registered Capital

 

VND 66,000,000,000

Tax code

 

0101452588

Address

 

No. 18 Lane 44 Duc Giang Str. - Thuong Thanh Ward, Long Bien District, Ha Noi City, Vietnam

Tel

 

(84-4) 38271620

Fax

 

(84-4) 38271068

Email

 

ducgiangchemco@hn.vnn.vn

Website

 

http://www.ducgiangchem.vn

Number of shares

 

15,420,902

Value of shares

 

VND 154,209,020,000

Percentage

 

61.68%

 

2. NAME

 

372 OTHER SHAREHOLDERS

Number of shares

 

9,579,098

Value of shares

 

VND 95,790,980,000

Percentage

 

38.32%

 

 

 

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

Audit Status

Unknown

Unknown

Unknown

ASSETS

A – CURRENT ASSETS

247,206,000,000

98,867,501,821

33,445,118,202

I. Cash and cash equivalents

402,000,000

8,229,644,859

290,634,170

1. Cash

402,000,000

8,229,644,859

290,634,170

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

135,397,000,000

46,075,453,690

109,200,000

1. Receivable from customers

127,938,000,000

32,900,786,880

13,200,000

2. Prepayments to suppliers

4,915,000,000

12,229,362,820

96,000,000

3. Inter-company receivable

0

0

0

4. Receivable according to the progress of construction

0

0

0

5. Other receivable

2,544,000,000

945,303,990

0

6. Provisions for bad debts

0

0

0

IV. Inventories

90,034,000,000

38,863,813,916

31,128,797,353

1. Inventories

90,034,000,000

38,863,813,916

31,128,797,353

2. Provisions for devaluation of inventories

0

0

0

V. Other Current Assets

21,373,000,000

5,698,589,356

1,916,486,679

1. Short-term prepaid expenses

0

0

0

2. VAT to be deducted

21,373,000,000

4,931,421,466

1,913,486,679

3. Taxes and other accounts receivable from the State

0

325,000,000

0

4. Other current assets

0

442,167,890

3,000,000

B. LONG-TERM ASSETS

195,029,000,000

138,552,924,841

127,557,001,302

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

194,781,000,000

137,470,264,256

125,671,463,162

1. Tangible assets

163,560,000,000

86,663,116,365

98,992,383,821

- Historical costs

212,358,000,000

107,698,707,352

100,685,764,647

- Accumulated depreciation

-48,798,000,000

-21,035,590,987

-1,693,380,826

2. Financial leasehold assets

0

0

0

- Historical costs

0

0

0

- Accumulated depreciation

0

0

0

3. Intangible assets

29,693,000,000

26,123,794,838

26,679,079,341

- Initial costs

31,256,000,000

27,094,540,635

27,094,540,635

- Accumulated amortization

-1,563,000,000

-970,745,797

-415,461,294

4. Construction-in-progress

1,528,000,000

24,683,353,053

0

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

248,000,000

1,082,660,585

1,885,538,140

1. Long-term prepaid expenses

248,000,000

1,082,660,585

1,885,538,140

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

442,235,000,000

237,420,426,662

161,002,119,504

 

LIABILITIES

A- LIABILITIES

252,067,000,000

124,950,874,287

66,496,715,360

I. Current liabilities

252,067,000,000

124,950,874,287

66,496,715,360

1. Short-term debts and loans

45,047,000,000

22,863,193,592

13,197,649,331

2. Payable to suppliers

76,270,000,000

54,912,831,823

7,435,992,031

3. Advances from customers

2,000,000

0

0

4. Taxes and other obligations to the State Budget

10,149,000,000

67,280,281

0

5. Payable to employees

6,486,000,000

3,086,572,823

339,990,708

6. Accrued expenses

69,000,000

105,690,110

48,923,843

7. Inter-company payable

0

0

0

8. Payable according to the progress of construction contracts

0

0

0

9. Other payable

114,044,000,000

43,915,305,658

45,474,159,447

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

190,168,000,000

112,469,552,375

94,505,404,144

I. OWNER’S EQUITY

179,762,000,000

108,709,945,164

94,505,404,144

1. Capital

150,000,000,000

100,000,000,000

100,000,000,000

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

363,000,000

-1,060,758,347

0

7. Business promotion fund

19,970,000,000

6,745,462,294

0

8. Financial reserved fund

0

3,025,241,217

0

9. Other funds

0

0

0

10. Retained earnings

9,429,000,000

0

-5,494,595,856

11. Construction investment fund

0

0

0

12. Business arrangement supporting fund

0

0

0

II. Other sources and funds

10,406,000,000

3,759,607,211

0

1. Bonus and welfare funds

10,406,000,000

3,759,607,211

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

442,235,000,000

237,420,426,662

161,002,119,504

 

 

 

PROFIT & LOSS STATEMENT

 

Description

FY2011

FY2010

FY2009

1. Total Sales

1,020,732,000,000

500,443,316,845

8,396,007,997

2. Deduction item

36,823,000,000

0

0

3. Net revenue

983,909,000,000

500,443,316,845

8,396,007,997

4. Costs of goods sold

790,652,000,000

401,710,950,271

15,280,832,953

5. Gross profit

193,257,000,000

98,732,366,574

-6,884,824,956

6. Financial income

14,322,000,000

1,407,443,260

4,400,731

7. Financial expenses

7,175,000,000

4,690,239,296

349,444,246

- In which: Loan interest expenses

0

2,683,452,381

321,665,196

8. Selling expenses

44,992,000,000

16,113,351,440

0

9. Administrative overheads

10,791,000,000

6,311,011,584

2,853,589,600

10. Net operating profit

144,621,000,000

73,025,207,514

-10,083,458,071

11. Other income

1,000,000

55,122,884

4,656,162,215

12. Other expenses

230,000,000

335,447,909

67,300,000

13. Other profit /(loss)

-229,000,000

-280,325,025

4,588,862,215

14. Total accounting profit before tax

144,392,000,000

72,744,882,489

-5,494,595,856

15. Current corporate income tax

16,318,000,000

6,745,462,294

0

16. Deferred corporate income tax

0

0

0

17. Interest from subsidiaries/related companies

0

0

0

18. Profit after tax

128,074,000,000

65,999,420,195

-5,494,595,856

 

 

 

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS

 

Description

FY2011

FY2010

FY2009

Average Industry

Current liquidity ratio

0.98

0.79

0.50

1.72

Quick liquidity ratio

0.62

0.48

0.03

1.06

Inventory circle

8.78

11.48

0.49

13.62

Average receive period

50.23

33.61

4.75

78.59

Utilizing asset performance

2.22

2.11

0.05

1.55

Liability by total assets

57.00

52.63

41.30

52.62

Liability by owner's equity

132.55

111.10

70.36

163.63

Ebit / Total assets (ROA)

32.65

31.77

-3.21

13.16

Ebit / Owner's equity (ROE)

75.93

67.07

-5.47

29.85

Ebit / Total revenue (NPM)

14.15

15.07

-61.61

7.13

Gross profit / Total revenue (GPM)

18.93

19.73

-82.00

19.87

Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

 

 

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

 

Trade Morality

 

Fair

Liquidity

 

Low/Medium

Payment status

 

Normal

Financial Situation

 

Above Average

Development trend

 

Uptrend

Litigation data

 

No Record

Bankruptcy

 

No Record

Payment Methods

 

T/T, L/C

Sale Methods

 

Retailer and Wholesaler

Public opinion

 

Well-known

 

 

 

 

INTERPRETATION ON THE SCORES

 

DLC is a joint stock company which was established in 2009. It was granted the business registration No. 5300299830 Lao Cai Department of Planning and Investment. Its chartered capital has been increased to VND 250 billion on November 13th 2012.

Locating at Tang Loong Industrial Park, Bao Thang District, Lao Cai Province, the subject focuses on manufacturing and trading chemical products, mainly yellow phosphorus. It is subsidiary of DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY which has many experience years in the chemical products trading industry, so the subject has been received a lot of support and inherited traditional partners from the parent company. Current, the subject imports machinery, equipment and materials from China. Its products are supplied for domestic market and exported to India, Japan, Korea and some EU countries.

The subject just went on test producing in 2009. However, recently, the phosphorus yellow factory No.4 of the firm breached of environmental regulations. Besides, on 16 July 2012, the company was fined 200 million VND for administrative violation in securities and stock market field. Simultaneously, it was fined 30 million VND for filing public company registration overdue prescribed period of 12 months

Financially, looking at the balance sheet, we see that total assets increase year by year, reflecting that the firm had an expanded business scale more. In 2011, the subject gained VND 1,020.7 billion in total sales that over doubled in comparison with 2010. Profit after tax increased from VND 65.9 billion in 2010 to VND 128 billion in 2011. These figures bring good signal for the development of the subject. However, liquidity was not good. It was improved in 2011 but was still lower than industry average. Profitability indicators were fairly good in comparison with the average industry index due to the considerable amount in profit generated at the end of 2011.

In general, the subject is a medium company in the industry and it is on the way of development. Although it is a newly established company, its business activities are effective. Now, it has capacity to meet small and normal transactions.

 

 

INDUSTRY DATA

 

Industry code

Growth speed by price compared with 1994 (%)

Total enterprises 2010

Total employees 2011

(Thous.pers.)

Annual average capital of enterprises 2010

(billion dongs)

2011

2010

Agriculture, Forestry and Fishing

4.00

2.78

8,887

24,362.9

95,227

Industry and Construction

5.53

7.70

95,217

10,718.9

3,641,376

Trade and Services

6.69

7.52

187,195

15,270.2

6,957,082

 

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.54.23

UK Pound

1

Rs.87.53

Euro

1

Rs.70.94

 

 

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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