MIRA
INFORM REPORT
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Report Date : |
10.11.2012 |
IDENTIFICATION DETAILS
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Name : |
Jiangxi
Hongdu Steelworks Co., Ltd. |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.12.2011 |
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Date of Incorporation : |
01.09.1958 |
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Com. Reg. No.: |
360100010009388 |
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Legal Form : |
One-Person Limited Liabilities
Company |
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Line of Business : |
Engaged in processing and selling steel materials |
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No. of Employees : |
1,277 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but correct |
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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) |
|
China |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
CHINA - ECONOMIC OVERVIEW
Since the late 1970s China has moved from a closed,
centrally planned system to a more market-oriented one that plays a major
global role - in 2010 China became the world's largest exporter. Reforms began
with the phasing out of collectivized agriculture, and expanded to include the
gradual liberalization of prices, fiscal decentralization, increased autonomy
for state enterprises, creation of a diversified banking system, development of
stock markets, rapid growth of the private sector, and opening to foreign trade
and investment. China has implemented reforms in a gradualist fashion. In
recent years, China has renewed its support for state-owned enterprises in
sectors it considers important to "economic security," explicitly
looking to foster globally competitive national champions. After keeping its
currency tightly linked to the US dollar for years, in July 2005 China revalued
its currency by 2.1% against the US dollar and moved to an exchange rate system
that references a basket of currencies. From mid 2005 to late 2008 cumulative
appreciation of the renminbi against the US dollar was more than 20%, but the
exchange rate remained virtually pegged to the dollar from the onset of the
global financial crisis until June 2010, when Beijing allowed resumption of a
gradual appreciation. The restructuring of the economy and resulting efficiency
gains have contributed to a more than tenfold increase in GDP since 1978.
Measured on a purchasing power parity (PPP) basis that adjusts for price
differences, China in 2010 stood as the second-largest economy in the world
after the US, having surpassed Japan in 2001. The dollar values of China's
agricultural and industrial output each exceed those of the US; China is second
to the US in the value of services it produces. Still, per capita income is
below the world average. The Chinese government faces numerous economic
challenges, including: (a) reducing its high domestic savings rate and
correspondingly low domestic demand; (b) sustaining adequate job growth for
tens of millions of migrants and new entrants to the work force; (c) reducing
corruption and other economic crimes; and (d) containing environmental damage
and social strife related to the economy's rapid transformation. Economic
development has progressed further in coastal provinces than in the interior,
and by 2011 more than 250 million migrant workers and their dependents had
relocated to urban areas to find work. One consequence of population control
policy is that China is now one of the most rapidly aging countries in the
world. Deterioration in the environment - notably air pollution, soil erosion,
and the steady fall of the water table, especially in the North - is another
long-term problem. China continues to lose arable land because of erosion and
economic development. The Chinese government is seeking to add energy
production capacity from sources other than coal and oil, focusing on nuclear
and alternative energy development. In 2010-11, China faced high inflation
resulting largely from its credit-fueled stimulus program. Some tightening
measures appear to have controlled inflation, but GDP growth consequently
slowed to near 9% for 2011. An economic slowdown in Europe is expected to
further drag Chinese growth in 2012. Debt overhang from the stimulus program,
particularly among local governments, and a property price bubble challenge
policy makers currently. The government's 12th Five-Year Plan, adopted in March
2011, emphasizes continued economic reforms and the need to increase domestic
consumption in order to make the economy less dependent on exports in the
future. However, China has made only marginal progress toward these rebalancing
goals
|
Source
: CIA |
Company name and address
Jiangxi Hongdu Steelworks Co., Ltd.
no. 1188
baishui lake road
Economic &
Technological development Zone
nanchang,
jiangxi province 330013 PR CHINA
TEL: 86
(0) 791-83870706/83870815/83870557
FAX: 86
(0) 791-83870513
EXECUTIVE SUMMARY
Date of Registration : SEPTEMBER 1, 1958
REGISTRATION NO. : 360100010009388
LEGAL FORM :
ONE-PERSON Limited liabilities company
REGISTERED CAPITAL :
CNY 514,247,407.61
staff : 1,277
BUSINESS CATEGORY :
processing & trading
Revenue : CNY 1,373,310,000 (AS OF DEC. 31, 2011)
EQUITIES : CNY 472,690,000 (AS OF DEC. 31, 2011)
WEBSITE : www.hongdutube.com
E-MAIL : hyx@hongdutube.com
PAYMENT : AVERAGE
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION : fairly stable
OPERATIONAL TREND : fairly steady
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE : CNY 6.24 = USD
Adopted abbreviations (as follows)
SC - Subject
Company (the company inquired by you)
N/A – Not
available
CNY –
China Yuan Ren Min Bi
OPERATIONAL TREND & GENERAL
REPUTATION
This section aims at indicating the relative positions of SC
in respect of its operational trend & general reputation
Operational Trend:- General
Reputation:-
Upward Excellent
Steady Good
Fairly Steady Fairly
Good
Ordinary Average
Fair Fair
Stagnant Detrimental
Downward Not
known
Not known Not
yet be determined
Not yet be determined
LEGAL STATUS & HISTORY
SC was
established as one-person limited liabilities company of PRC with State
Administration of Industry & Commerce (SAIC) under registration No.:
360100010009388.
SC’s Organization Code Certificate
No.: 15836404-X
SC’s registered capital: CNY 514,247,407.61
SC’s paid-in capital: CNY 514,247,407.61
Registration Change Record:-
|
Date |
Change of Contents |
Before the change |
After the change |
|
2011 |
Company Name |
Jiangxi Hongdu Steelworks |
Jiangxi Hongdu Steelworks Co.,
Ltd. |
Current Co search indicates SC’s shareholders & chief
executives are as follows:-
|
Name of Shareholder (s) |
% of Shareholding |
|
Xinyu Iron & Steel Group
Co., Ltd. |
100 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative,
Chairman, and General Manager |
Ge Zhigang |
RECENT DEVELOPMENT
SC was awarded: the advanced enterprise for safe production,
the advanced unit for saving energy and reducing consumption, the energy-saving
advanced enterprise, the green garden style factory and the advanced unit for
industrial injury insurance, etc by the Government of Nanchang City and Jiangxi
Province.
SHAREHOLDER CHART &
BACKGROUND
Name %
of Shareholding
Xinyu Iron & Steel Group
Co., Ltd.
100
------------------------------
Registration No.:
360500110002165
Legal Form: Limited Liabilities
Company
Registered Capital: CNY
4,106,490,000
Legal Representative: Xiong
Xiaoxing
Address: Xinyu city, jiangxi
province
Post code: 338001
Tel: 86 (0790) 6292925
Fax: 86 (0790) 6294999
Web: www.xinsteel.com.cn
MANAGEMENT
Ge
Zhigang, Legal Representative, Chairman, and General Manager
----------------------------------------------------------------------------------------------------
Ø
Gender: M
Ø
Working experience (s):
At present, working in SC as legal
representative, chairman, and general manager
Also working in Nanchang Dahongren Tubes Co., Ltd. as legal
representative
BUSINESS OPERATION
SC’s
registered business scope includes processing steel materials; exporting its
products and technology; importing raw materials & accessories, instruments
& meters, machinery, components & technology; processing with imported
materials, processing with imported samples, assemblying with imported parts,
and compensation trade in agreement; (the following items is operated by SC’s
subsidiaries)repairing automobile & motorcycle; selling automobile
components, auto parts, and motorcycle parts; decorating & cleaning, and
selling automobiles.
SC is
mainly engaged in processing and selling steel materials.
SC’s
products mainly include:
Steel
tubes and strips
Steel
pipe
Seamless
steel pipe
Welded
pipe (square, rectangle)
Etc.
SC has 4 sets of piecing and hot-rolling
mill for seamless steel tubes, 40 sets of cold-drawing bench and cold-rolling
mill, 9 production lines for welded steel pipes, 4 slitting lines, 1 complete
production line for hot-rolled steel strips, 1 pickling line for cold-rolled
steel strips, 1 set of three stand tandem rolling mill, 3 sets of six-high
(four-high) reversing mill for cold-rolled steel strips, extensive auxiliary
equipment and inspection (test) equipment. The annual comprehensive production
capacity of steels is 650,000 tons.
SC sources its materials 100% from domestic market. SC sells
60% of its merchandises in domestic market and 40% to overseas market, mainly Southeast Asia, etc.
The buying terms of SC include Check, T/T and Credit of
30-60 days. The payment terms of SC include Check, T/T, L/C and Credit of 30-60
days.
Staff & Office:
--------------------------
SC is
known to have approx. 1,277 staff
at present.
SC
owns an area as its operating office and factory, but the detailed information
is unknown.
RELATED
COMPANY
SC is known to
have the following subsidiaries at present,
Nanchang Dahongren Tubes Co., Ltd.
Registration No.: 360100119300516
Date of Registration: May 8,
2001
Legal Form: One-person Limited
Liabilities Company
Registered Capital: CNY
40,000,000
Legal Representative: Ge Zhigang
Etc.
PAYMENT
Overall payment appraisal:
( ) Excellent ( )
Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be determined
The appraisal serves as a reference to reveal SC's payments
habits and ability to pay. It is based
on the 3 weighed factors: Trade payment experience (through current enquiry
with SC's suppliers), our delinquent payment and our debt collection record
concerning SC.
Trade payment experience: SC
did not provide any name of trade/service suppliers and we have no other
sources to conduct the enquiry at present.
Delinquent payment record: None
in our database.
Debt collection record: No
overdue amount owed by SC was placed to us for collection within the last 6
years.
BANKING
The bank information of SC is not filed in local SAIC.
FINANCIALS
Balance Sheet
|
Unit:
CNY’000 |
As of Dec. 31, 2011 |
|
121,860 |
|
|
Notes receivable |
0 |
|
Accounts
receivable |
19,980 |
|
Advances
to suppliers |
0 |
|
Other
receivable |
1,560 |
|
Inventory |
349,220 |
|
Non-current
assets within one year |
0 |
|
Other
current assets |
121,730 |
|
|
------------------ |
|
Current
assets |
614,350 |
|
Fixed
assets |
173,510 |
|
Construction
in progress |
141,140 |
|
Intangible
assets |
0 |
|
Long-term
investment |
68,590 |
|
Deferred
income tax assets |
0 |
|
Other
non-current assets |
60,980 |
|
|
------------------ |
|
Total
assets |
1,058,570 |
|
|
============= |
|
Short-term
loans |
226,600 |
|
Notes
payable |
0 |
|
Accounts
payable |
26,650 |
|
Welfares
payable |
0 |
|
Taxes
payable |
0 |
|
Advances
from clients |
0 |
|
Other
payable |
12,200 |
|
Other
current liabilities |
256,430 |
|
|
------------------ |
|
Current
liabilities |
521,880 |
|
Non-current
liabilities |
64,000 |
|
|
------------------ |
|
Total
liabilities |
585,880 |
|
Equities |
472,690 |
|
|
------------------ |
|
Total
liabilities & equities |
1,058,570 |
|
|
============= |
Income Statement
|
Unit:
CNY’000 |
As
of Dec. 31, 2011 |
|
Revenue |
1,373,310 |
|
Cost of sales |
1,364,040 |
|
Sales expense |
9,570 |
|
Management expense |
31,130 |
|
Finance expense |
14,250 |
|
Profit
before tax |
-42,770 |
|
Less:
profit tax |
0 |
|
-42,770 |
Important
Ratios
=============
|
|
As of Dec. 31, 2011 |
|
*Current
ratio |
1.18 |
|
*Quick
ratio |
0.51 |
|
*Liabilities
to assets |
0.55 |
|
*Net
profit margin (%) |
-3.11 |
|
*Return
on total assets (%) |
-4.04 |
|
*Inventory
/ Revenue ×365 |
93
days |
|
*Accounts
receivable/ Revenue ×365 |
6
days |
|
*
Revenue/Total assets |
1.30 |
|
*
Cost of sales / Revenue |
0.99 |
FINANCIAL
COMMENTS
PROFITABILITY:
FAIR
l
The revenue of SC appears fairly good
in its line.
l
SC’s net profit margin is fair.
l
SC’s return on total assets is fair.
l
SC’s cost of sales is high, comparing
with its revenue.
LIQUIDITY:
AVERAGE
l
The current ratio of SC is maintained
in a normal level.
l
SC’s quick ratio is maintained in a
fair level.
l
The inventory of SC appears fairly
large.
l
The accounts receivable of SC is maintained
in an average level.
l
The short-term loans of SC appear
fairly large.
l
SC’s revenue is in an average level,
comparing with the size of its total assets.
LEVERAGE:
AVERAGE
l
The debt ratio of SC is average.
l
The risk for SC to go bankrupt is low.
Overall
financial condition of the SC: Fairly Stable.
CONCLUSIONS
SC is considered large-sized in its line with fairly stable
financial conditions. The fairly large amount of inventory and short-term loans
may be a threat to SC’s financial condition..
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.34 |
|
|
1 |
Rs.86.96 |
|
Euro |
1 |
Rs.69.42 |
INFORMATION DETAILS
|
Report Prepared
by : |
PDT |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.