MIRA INFORM REPORT

 

 

Report Date :

22.12.2012

 

IDENTIFICATION DETAILS

 

Name :

KOHNAN SHOJI CO LTD

 

 

Registered Office :

6-637-1 Otori-Higashimachi Sakai Osaka-Pref 593-8324

 

 

Country :

Japan

 

 

Financials (as on) :

29.02.2012

 

 

Date of Incorporation :

September 1978

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Home improvement chain store operator

 

 

No. of Employees :

2555 employees

 

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

 

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 30th, 2012

                                                   

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

japan - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

 

 

Source : CIA

 

Company name

 

KOHNAN SHOJI CO LTD

 

 

REGD NAME 

 

Kohnan Shoji KK

 

 

MAIN OFFICE

 

6-637-1 Otori-Higashimachi Sakai Osaka-Pref 593-8324 JAPAN

Tel: 072-274-1621  

 

URL:                 http://www.hc-kohnan.com/

E-Mail address:            info@hc-kohnan.com

 

 

ACTIVITIES

 

Home improvement chain store operator

 

 

STORES

 

Nationwide (total 100 locations)

 

 

CHIEF EXEC

 

KOZO HIKITA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 281,926 M

PAYMENTSNo Complaints    CAPITAL           Yen 17,658 M

TREND STEADY                       WORTH            Yen 76,370 M

STARTED         1978                             EMPLOYES      2,555

 

COMMENT    

 

HOME IMPROVEMENT CHAIN STORE OPERATOR. 

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.-

 

 

                        Notes: Unit: In Million Yen

Forecast (or estimated) figures for 28/02/2006 fiscal term

 

 

HIGHLIGHTS

 

The subject company is the second largest home improvement center operator, originating in Sakai City.  It has expanded rapidly to operate now a total of 195 stores, extending into nationwide locations.  The pace of new store openings has been on an average 30 stores per year.  The firm will slow down the pace to about 20 stores due to the slow recovery of consumer spending.  Handles a wide range of home improvement items (DIY goods), dining utensils, gardening tools, other (see OPERATION).  Competition among the trade is getting severer and the firm now focusing on imports from China and other S/E Asian countries.

 

 

FINANCIAL INFORMATION

 

The sales volume for Feb/2012 fiscal term amounted to Yen 281,926 million, a 2.2% up from Yen 275,835 million in the previous term.  New store openings contributed.  The recurring profit was posted at Yen16,022 million and net profit at Yen 9,299 million, respectively, compared with Yen 13,151 million recurring profit and Yen 6,6227 million net profit, respectively, a year ago.  T

 

(Mar/Aug/2012 results): Sales Yen 141211 million (down 3.6%), operating profit en 9,988 million (down 16.3%), recurring profit Yen 9,083 million (down 15.1%), net profit Yen 4,699 million (down 22.7%),.  (% compared with the corresponding period a year ago.

 

For the current term ending Feb 2006 the recurring profit is projected at Yen 16,100 million and net profit at Yen 28,620 million, respectively, on a 1.3% fall in turnover, to Yen 278,250 million.  Demand for disaster-preventive products will peak out at existing stores.  Market development in Tohoku with specialty constructions and agriculture stores is slow.  But the company will open 7 home centers including four. in Kanto compared with ten in the preceding term.

 

The financial situation is considered maintained FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

 

Date Registered:  Sept 1978

Legal Status:       Limited Company (Kabushiki Kaisha)

Authorized:         60 million shares

Issued:                34,682,113 shares

Sum:                Yen 11,497 million

 

Major shareholders (%): Japan Trustee Service T (9.3), Kozo Hikita (9.3), Kohnan Co (5.8), Naotaro Hikita (5.1)Kozo Hikita (12.3), Naotaro Hikita (7.4), Master Trust Bank of Japan T (4.5), Japan Trustee Service T (4.0), Customers’ Stock Holding Assn (2.7), Hideka Umebayashi (1.1), Northern Trust Co (0.8)State Street Bank Trust (0.8); foreign owners (15.7),

 

No. of shareholders: 16,575

 

Listed on the S/Exchange (s) of: Tokyo, Osaka

 

Managements: Kozo Hikita, pres; Naotaro Hikita, v pres; Ryoichi Shinagawa, v pres; Yoshiyuki Uchimura, s/mgn dir/ Mitsuhiro Terada, mgn dir; s/mgn dir;

 

Nothing detrimental is known as to the commercial morality of executives.

           

 

OPERATION

 

Activities: Operates home improvement center chains (DIY goods stores) (--100%).

           

(Handling items):

Home improvement division: lumber/building materials, tools, metal building supplies,  painting equipment, plants & gardening supplies, interior & exterior decorating materials, housing & plumbing equipment, remodeling & renovating materials including kitchen & bathroom supplies;

 

Housekeeping division: dining ware, interior furnishings, electrical & lighting fixtures, pharmaceuticals, clothing, footwear, household items, electrical appliances, storage cabinets & other household furniture, such as bookshelves, wardrobes, dining & lounge suites, beds, bedroom suites, other;

 

Car & leisure division: automotive accessories, pet supplies, stationary & office supplies, cycling & leisure equipment, other.

 

Clients: Consumers

            No. of accounts: Unavailable

            Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Trusco Nakayama, Osaka HC, Iris Oyama, Yamazen, Kao Hambai, other.  Also imports from China, etc.

 

Payment record: No Complaints              

 

Location: Business area in Sakai City, adjacent to Osaka City.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

Mizuho Corporate Bank (Osaka)

Kiyo Bank (Sakai)

Relations: Satisfactory

 

 

FINANCIALS

 

FINANCES: (Consolidated in million yen)

　

　

Terms Ending:

29/02/2012

28/02/2011

INCOME STATEMENT

  Annual Sales

　

281,926

275,835

  Cost of Sales

182,076

102,475

      GROSS PROFIT

99,850

93,360

  Selling & Adm Costs

81,167

76,744

      OPERATING PROFIT

18,683

16,616

  Non-Operating P/L

-2,661

-345

      RECURRING PROFIT

16,022

13,151

　

      NET PROFIT

9,299

6,627

BALANCE SHEET

  Cash

　

2,714

6,195

  Receivables

3,041

2,944

  Inventory

62,608

54,021

  Securities, Marketable

　

　

  Other Current Assets

7,835

7,275

      TOTAL CURRENT ASSETS

76,198

70,435

  Property & Equipment

112,437

103,837

  Intangibles

5,116

5,094

  Investments, Other Fixed Assets

48,532

242,283

      TOTAL ASSETS

242,283

226,714

  Payables

20,181

21,231

  Short-Term Bank Loans

8,000

1,000

　

　

　

  Other Current Liabs

49,810

46,917

      TOTAL CURRENT LIABS

77,991

69,148

  Debentures

1,406

5,531

  Long-Term Bank Loans

59,156

62,149

  Reserve for Retirement Allw

　

　

  Other Debts

　

27,360

26,316

      TOTAL LIABILITIES

165,913

163,144

      MINORITY INTERESTS

Common stock

17,658

15,909

Additional paid-in capital

17,917

16,167

Retained earnings

41,067

32,668

Evaluation p/l on investments/securities

28

27

Others

(186)

(1,091)

Treasury stock, at cost

(114)

(111)

      TOTAL S/HOLDERS` EQUITY

76,370

63,569

　

      TOTAL EQUITIES

242,283

226,713

CONSOLIDATED CASH FLOWS

Terms ending:

29/02/2012

29/02/2011

Cash Flows from Operating Activities

　

6,428

15,083

Cash Flows from Investment Activities

-16,597

-8,357

Cash Flows from Financing Activities

6,687

-5,597

　

Cash, Bank Deposits at the Term End

　

2,695

6,176

ANALYTICAL RATIOS            Terms ending:

29/02/2012

28/02/2011

Net Worth (S/Holders' Equity)

76,370

63,569

Current Ratio (%)

97.70

101.86

Net Worth Ratio (%)

31.52

28.04

Recurring Profit Ratio (%)

5.68

4.77

Net Profit Ratio (%)

3.30

2.40

Return On Equity (%)

12.18

10.42

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.55.07

UK Pound

1

Rs.89.54

Euro

1

Rs.72.77

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

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.