MIRA
INFORM REPORT
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Report Date : |
17.11.2012 |
IDENTIFICATION DETAILS
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Name : |
DANYANG LIANSHENG CHEMICAL CO., LTD. |
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Registered Office : |
Longyuan Industrial Zone, No. 98 Xingang Road, Economical
Development Zone, Danyang City,
Jiangsu, 212300 Pr |
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Country : |
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Financials (as on) : |
31.12.2011 |
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Date of Incorporation : |
01.09.2003 |
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Com. Reg. No.: |
321181400002780 |
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Legal Form : |
Chinese-Foreign Equity Joint Venture |
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Line of Business : |
manufacturing and trading of dyes and
intermediates |
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No. of Employees : |
85 employees |
RATING & COMMENTS
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MIRA’s Rating : |
Ca |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Status : |
Poor |
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Payment Behaviour : |
Slow and delayed |
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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
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Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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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.
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Source : CIA |
Company name & address
danyang liansheng chemical CO., LTD.
LONGYUAN INDUSTRIAL ZONE, NO. 98 XINGANG
ROAD, ECONOMICAL DEVELOPMENT ZONE, DANYANG
CITY, JIANGSU, 212300 PR CHINA
TEL: 86 (0) 511-86595378/86595789 FAX: 86 (0) 511-86595996
EXECUTIVE SUMMARY
INCORPORATION DATE :
SEP. 1, 2003
REGISTRATION NO. :
321181400002780
REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE
ENTERPRISE
STAFF STRENGTH :
85
REGISTERED CAPITAL : USD 800,000
BUSINESS LINE :
MANUFACTURING AND TRADING
TURNOVER :
CNY 28,680,000 (AS OF DEC. 31, 2011)
EQUITIES :
CNY 600,000 (AS OF DEC. 31, 2011)
PAYMENT :
AVERAGE
MARKET CONDITION :
AVERAGE
FINANCIAL CONDITION :
POOR
OPERATIONAL TREND : FAIR
GENERAL REPUTATION :
AVERAGE
EXCHANGE RATE :
CNY 6.2283= USD 1
Adopted
abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY - China Yuan Renminbi
SC was registered as a Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on
Sep. 1, 2003.
Company Status: Chinese-foreign equity joint venture
enterprise This form of business in PR
China is defined as a legal person. It is a limited co. jointly invested by
one or more foreign companies and one or more PR China controlled companies
within the territories of PR China according to a certain proportion of
capital investment. The investing parties exercise business management,
share profits and bear all risks and liabilities of the co. together. The
equity joint venture law requires that foreign party contribute not less
than 25% of the registered capital, with no maximum. The investing parties
are free to agree on method of profit distribution and liabilities bearing
according to the proportion of capital investment. Each investing parties
contributes funds, tangible assets, technology & etc. The board of
directors excises the high authority. The joint venture usually has a
limited duration of 10 to 50 years. Enterprise with large investment, long
construction periods, low investment returns, introducing of advanced
technology & advanced technology products that have good competition
position in international market may extend beyond the 50 years limit.
SC’s registered business scope includes manufacturing dyes (only including
active yellow
SC is mainly
engaged in manufacturing and trading of dyes and
intermediates.
Mr. Chao Jishun is
legal representative and chairman of SC at present.
SC is known
to have approx. 85 employees at present.
SC
is currently operating at the above stated address, and this address houses its
operating office and factory in the economical development zone of Danyang. Our checks reveal that SC owns the total
premise, but the gross area is unspecified.
http://js-liansheng.com The design
is professional and the content is well organized. At present it is in Chinese
and English versions.
Email: liansheng_ljh@163.com
No significant changes were found during our checks with the local
Administration for Industry and Commerce.
MAIN SHAREHOLDERS:
Name %
of Shareholding
Danyang
Beijiate Chemical Co., Ltd. 65
Hongkong Huilong International Investment
Limited 35
Danyang Beijiate Chemical Co.,
Ltd.
-------------------------------------------
Registration no.:
321181400001818
Hongkong Huilong International
Investment Limited
----------------------------------------------------------------
Registration no.: 1146513
Date of incorporation: July 4,
2007
Legal form: Private company
Note: its former name was Hongkong Zhengxin
International Investment Limited, and changed to the current one on Oct. 10,
2012
l
Legal Representative and
Chairman:
Mr. Chao Jishun, ID# 321119194707230432, born in 1947, he is currently
responsible for the overall management of SC.
Working Experience(s):
At present Working in SC as legal representative and chairman.
l
Vice Chairman:
Ms. Yang Qian, ID# 320102198210091641, born in 1982
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General Manger and
Director:
Mr. Li Junhua, ID# 321181197907060417, born in 1979, he is currently responsible for the daily management of SC.
Working Experience(s):
At present Working in SC as general manager and director.
l
Supervisor:
Mr. Sui Tao, ID# 321181198710120214, born in 1987
SC is mainly
engaged in manufacturing and trading of dyes and
intermediates.
SC’s products
mainly include:
· Lodezen E series：Acid self-leveling dyes
Lodezen
W series：Weak (acid) dyes
Lodezen
H series：Neutral dyes (1:2 metal
complex dyes)
SC sources its materials 100% from domestic
market. SC sells 90% of its products in domestic
market, and 10% to overseas market.
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.
Note:
SC’s management declined to release its major clients and suppliers.
According to SC’s website, SC has the following related company:
Hangzhou Danyi
Trade Co., Ltd. (literal translation)
======================================
Registration no.: 330198000050483
Incorporation date: July 23, 2012
Legal Representative: Wu Qingfeng
Legal form: Limited Liabilities Company
Overall payment appraisal:
( ) Excellent (
) Good (X) Average (
) Fair ( ) Poor
( ) Not yet 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.
Industrial
& Commercial Bank of China
Danyang Rural
Commercial Bank
Account No.: N/A
Relationship:
Normal
Balance Sheet
Unit: CNY’000
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as of Dec. 31, 2011 |
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Cash & bank |
1,090 |
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Inventory |
15,070 |
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Accounts
receivable |
640 |
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Short-term
investment |
0 |
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Dividends
receivable |
0 |
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Interest
receivable |
0 |
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Subsidies
receivable |
0 |
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Advances to
suppliers |
0 |
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Notes receivable |
20 |
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Other
receivables |
1,720 |
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Prepaid expenses |
240 |
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------------------ |
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Current assets |
18,780 |
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Fixed assets net
value |
17,950 |
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Long term
investment |
0 |
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Projects under
construction |
1,080 |
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Intangible
assets |
3,360 |
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------------------ |
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Total assets |
41,170 |
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============= |
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Short loans |
1,900 |
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Accounts payable |
32,740 |
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Advances from
clients |
0 |
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Accrued payroll |
230 |
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Welfares payable |
0 |
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Dividends
payable |
260 |
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Taxes payable |
-720 |
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Accrued expenses |
0 |
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Other payable to
government |
30 |
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Other accounts
payable |
6,130 |
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Current
liabilities |
40,570 |
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Long term
liabilities |
0 |
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Total
liabilities |
40,570 |
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Equities |
600 |
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Total
liabilities & equities |
41,170 |
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============= |
Income Statement
Unit: CNY’000
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as of Dec. 31,
2011 |
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Turnover |
28,680 |
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Cost of goods
sold |
29,750 |
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Taxes
and additional of main operation |
120 |
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Sales expense |
560 |
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Management expense |
1,850 |
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Finance expense |
2,100 |
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Non-operating income |
0 |
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Non-operating expense |
550 |
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Profit from
other operations |
80 |
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Profit before
tax |
-6,170 |
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Less: profit tax |
0 |
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Profits |
-6,170 |
Important Ratios
=============
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as
of Dec. 31, 2011 |
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*Current ratio |
0.46 |
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*Quick ratio |
0.09 |
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*Liabilities
to assets |
0.99 |
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*Net profit
margin (%) |
-21.51 |
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*Return on
total assets (%) |
-14.99 |
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*Inventory
/Turnover ×365 |
192 days |
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*Accounts
receivable/Turnover ×365 |
8 days |
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*Turnover/Total
assets |
0.70 |
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* Cost of
goods sold/Turnover |
1.04 |
PROFITABILITY:
POOR
l
The turnover of SC appears average in its line.
l
SC’s net profit margin is poor.
l
SC’s return on total assets is poor.
l
SC’s cost of goods sold is too high, comparing with
its turnover.
LIQUIDITY: POOR
l
The current ratio of SC is poor.
l
SC’s quick ratio is poor.
l
SC’s inventory is large in 2011.
l
The accounts receivable of SC appears small in
2011.
l
SC’s short-term loan is large in 2011.
l
SC’s turnover is fair, comparing with the size of
its total assets.
LEVERAGE: POOR
l
The debt ratio of SC is high.
l
The risk for SC to go bankrupt is fairly high.
Overall financial
condition of the SC: Poor
SC is considered small-sized in its line with poor financial
conditions. The large amount of inventory could be the threat to SC’s financial
condition.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.99 |
|
UK Pound |
1 |
Rs.87.21 |
|
Euro |
1 |
Rs.70.22 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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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 |
|
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NB |
New Business |
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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.