MIRA
INFORM REPORT
|
Report Date : |
29.11.2012 |
IDENTIFICATION DETAILS
|
Name : |
SHANGHAI MINGYA JEWELRY CO., LTD. |
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Registered Office : |
Rm B708b, South Tower Of China Diamond Exchange Center, No.
1701, Century Avenue, Pudong New District,
Shanghai, 200120 Pr |
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Country : |
China |
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Financials (as on) : |
31.10.2012 |
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Date of Incorporation : |
28.07.2009 |
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Com. Reg. No.: |
310115001142422 |
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Legal Form : |
Limited Liabilities Company |
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Line of Business : |
Subject
is engaged in selling imported jewellery |
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No. of Employees : |
10 employees |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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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 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
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 & address
Shanghai Mingya Jewelry Co., Ltd.
rm b708b, south tower
of china diamond exchange center,
no. 1701, century
avenue,
pudong new
district, shanghai, 200120 PR CHINA
TEL: 86 (0)
21-33921137 FAX: 86 (0) 21-33921137
EXECUTIVE SUMMARY
INCORPORATION DATE : july 28, 2009
REGISTRATION NO. : 310115001142422
REGISTERED LEGAL
FORM : LIMITED LIABILITIES
COMPANY
STAFF STRENGTH : 10
REGISTERED CAPITAL : CNY 1,000,000
BUSINESS LINE :
TRADING
TURNOVER :
CNY 72,620,000 (JAN. 1 TO OCT.
31, 2012)
EQUITIES :
CNY 1,180,000 (AS OF OCT. 31, 2012)
PAYMENT :
AVERAGE
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION : FAIRLY STABLE
OPERATIONAL TREND : FAIRLY STEADY
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY
6.22=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 Limited Liabilities Company at local Administration for industry & commerce (AIC - the official body of issuing and renewing business license) on July 28, 2009.
Company Status: Limited
Liability Company This form of business in PR
China is defined as a legal person. No more than fifty shareholders contribute
its registered capital jointly. Shareholders bear limited liability to the
extent of shareholding, and the co. is liable for its debts only to extent
of its total assets. The characteristics of this form of co. are as
follows: Upon the establishment of the
co., an investment certificate is issued to the each of shareholders. The board of directors is
comprised of three to thirteen members. The minimum registered capital
for a co. is CNY 30,000. Shareholders may take their
capital contributions in cash or by means of tangible assets or intangible
assets such as industrial property and non-patented technology. Cash contributed by all
shareholders must account for at least 30% of the registered capital. Existing shareholders have
pre-exemption right to purchase shares of the co. offered for sale by the
other shareholders and to subscribe for the newly increased registered
capital of the co.
SC’s registered
business scope includes processing and selling jewellery, arts & crafts; import
and export goods and technology.
SC is
mainly engaged in selling imported jewellery.
Ms.
Meng Biyang is the legal representative and chairman of SC at present.
SC is
known to have approx. 10 employees at present.
SC
is currently operating at the above stated address, and this address houses its
operating office in the commercial zone of Shanghai. The detailed premise
information is unknown.
SC is not known to host website of its own at present.
SC started its normal business in April of 2011.
No significant changes were found during our checks with local AIC.
MAIN SHAREHOLDERS:
Name %
of Shareholding
Meng Biyang 39
He Yan 61
Legal
representative, Chairman & General Manager:
Ms. Meng Biyang, in her
Working
Experience(s):
At present Working in SC as legal representative, chairman and general manager
SC started its normal business in April of 2011.
SC is
mainly engaged in selling imported jewellery.
SC’s products mainly include diamond, etc.
SC
sources its merchandise 100% from overseas market, mainly India. SC sells 100%
of its products in domestic market.
The buying terms of SC include Check, T/T, L/C, and Credit
of 30-60 days. The payment terms of SC include T/T, Check, and Credit of 30-60
days.
Note:
SC declined to release its major suppliers and clients.
SC
is not known to have any subsidiary at present.
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.
China
Construction Bank Shanghai Branch Pudong New District Sub-branch
AC#31001520313050022403
Relationship:
Normal
Balance Sheet
Unit: CNY’000
|
|
As
of Dec. 31, 2011 |
As of Oct. 31, 2012 |
|
Cash & bank |
1,780 |
1,220 |
|
Inventory |
7,890 |
1,320 |
|
Bills receivable |
0 |
0 |
|
Accounts
receivable |
19,110 |
7,920 |
|
Advances to
suppliers |
20,220 |
0 |
|
Other
receivables |
410 |
60 |
|
Other current
assets |
20 |
20 |
|
|
------------------ |
------------------ |
|
Current assets |
49,430 |
10,540 |
|
Fixed assets net
value |
10 |
30 |
|
Long term investment |
800 |
0 |
|
Projects under
construction |
0 |
0 |
|
Intangible and
other assets |
0 |
0 |
|
|
------------------ |
------------------ |
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Total assets |
50,240 |
10,570 |
|
|
=========== |
=========== |
|
Short loan |
0 |
0 |
|
Accounts payable |
0 |
1,330 |
|
Advances from
clients |
0 |
0 |
|
Taxes payable |
-3,520 |
-3,730 |
|
Other Accounts
payable |
51,950 |
11,790 |
|
Other current
liabilities |
0 |
0 |
|
|
------------------ |
------------------ |
|
Current
liabilities |
48,430 |
9,390 |
|
Long term
liabilities |
0 |
0 |
|
|
------------------ |
------------------ |
|
Total
liabilities |
48,430 |
9,390 |
|
Equities |
1,810 |
1,180 |
|
|
------------------ |
------------------ |
|
Total
liabilities & equities |
50,240 |
10,570 |
|
|
=========== |
=========== |
Income Statement
Unit: CNY’000
|
|
As
of Dec. 31, 2011 |
Jan. 1 to Oct. 31, 2012 |
|
Turnover |
100,240 |
72,620 |
|
Cost of goods sold |
113,430 |
80,040 |
|
Sales expense |
0 |
0 |
|
Management expense |
2,420 |
2,500 |
|
Finance expense |
-850 |
110 |
|
Non-operating income |
15,770 |
9,550 |
|
Non-operating expense |
0 |
0 |
|
Profit before tax |
1,020 |
-490 |
|
Less: profit tax |
100 |
10 |
|
Profits |
920 |
-500 |
Important
Ratios
=============
|
|
As
of Dec. 31, 2011 |
As of Oct. 31, 2012 |
|
*Current ratio |
1.02 |
1.12 |
|
*Quick ratio |
0.86 |
0.98 |
|
*Liabilities
to assets |
0.96 |
0.89 |
|
*Net profit
margin (%) |
0.92 |
-0.69 |
|
*Return on total
assets (%) |
1.83 |
-4.73 |
|
*Inventory
/Turnover ×365 |
29 days |
/ |
|
*Accounts
receivable/Turnover ×365 |
70 days |
/ |
|
*Turnover/Total
assets |
2.00 |
6.87 |
|
* Cost of
goods sold/Turnover |
1.13 |
1.10 |
PROFITABILITY:
FAIR
l
The turnover of SC appears fairly good in its line.
l
SC’s net profit margin is average in 2011 but fair
as of Oct. 31, 2012.
l
SC’s return on total assets is average in 2011 but
fair as of Oct. 31, 2012.
l
SC’s cost of goods sold is too high, comparing with
its turnover.
LIQUIDITY: AVERAGE
l
The current ratio of SC is maintained in a normal
level.
l
SC’s quick ratio is maintained in a normal level.
l
The inventory of SC appears average.
l
The accounts receivable of SC appears fairly large.
l
SC has no short-term loan in 2011.
l
SC’s turnover is in an average level in 2011 and in
a fairly good level as of Oct. 31, 2012, comparing with the size of its total
assets.
LEVERAGE: FAIR
l
The debt ratio of SC is high.
l
The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly stable.
SC is considered small-sized in its line with fairly stable financial conditions.
The large amount of accounts receivable could be a threat to SC’s financial
condition.
DIAMOND INDUSTRY –
INDIA
-
From time immemorial, India is well known in the world
as the birthplace for diamonds. It is difficult to trace the origin of
diamonds but history says that in the remote past, diamonds were mined only in
India. Diamond production in India can be traced back to almost 8th
Century B.C. India, in fact, remained undisputed leader till 18th
Century when Brazilian fields were discovered in 1725 followed by emergence of
S. Africa, Russia and Australia.
-
The achievement of the Indian diamond industry was
possible only due to combination of the manufacturing skills of the Indian
workforce and the untiring and unflagging efforts of the Indian diamantaires,
supported by progressive Government policies.
-
The area of study of family owned diamond businesses
derives its importance from the huge conglomerate of family run organizations
which operate in the diamond industry since many generations.
-
Some of the basic traits of family run business
enterprises include spirit of entrepreneurship, mutual trust lowers transaction
costs, small, nimble and quick to react, information as a source of advantage
and philanthropy.
-
Family owned diamond businesses need to improve on
many fronts including higher standard of corporate governance, long-term
performance – focused strategies, modern management and technology.
-
The diamond jewellery industry in India today may be
more than Rs 60000 mil and is rated amongst the fastest growing in the
world. Indi ranks third in the world in domestic diamond consumption.
-
Utmost caution is to be exercised while dealing with
some medium and large diamond traders which are usually engaged in fictitious
import – export, inter-company transactions, financially assisted by banks. In
the process, several public sector banks lost several hundred million rupees.
They mostly diverted borrowed money for diamond business into real estate and
capital markets.
-
Excerpts from Times of India dated 30th
October 2010 is as under –
DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT
This
could be the biggest credibility crisis the Indian diamond industry has ever
faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen
diamond firms in Surat. Until about two months ago, they had not repaid
these dues. Bankers believe many diamantaires borrowed money during the
economic downturn two years ago and diverted funds to businesses like real
estate and capital markets. Many of themselves made money from these businesses
but their diamond companies have gone sick and declared insolvency.
-
Most of the money borrowed from the banks in the name
of their diamond business has been diverted in real estate and the share
market. The banks are not in a position to seize their properties because in
many cases, these were purchased in the name of their relatives and friends.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.55.70 |
|
UK Pound |
1 |
Rs.89.34 |
|
Euro |
1 |
Rs.72.35 |
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%)
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.