MIRA
INFORM REPORT
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Report Date : |
01.10.2012 |
IDENTIFICATION DETAILS
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Name : |
IKEA DISTRIBUTION SERVICES (SHANGHAI) CO., LTD. |
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Registered Office : |
No. 399, Gangwen Road, Fengxian District,
Shanghai 201413 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2011 |
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Date of Incorporation : |
22.06.2006 |
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Com. Reg. No.: |
310000400470380 |
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Legal Form : |
Wholly Foreign-Owned Enterprise |
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Line of Business : |
Engaged in logistics distribution and import & export business mainly include furniture, household items, etc |
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No. of Employees : |
300 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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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
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Country Name |
Previous Rating (31.03.2011) |
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.
Source : CIA
Company name and address
IKEA
DISTRIBUTION SERVICES (SHANGHAI) CO., LTD.
NO. 399, GANGWEN
ROAD, FENGXIAN DISTRICT,
SHANGHAI 201413 PR
CHINA
TEL: 86 (0)
21-33955705 FAX: 86 (0) 21-33955606
EXECUTIVE SUMMARY
INCORPORATION DATE : JUN. 22, 2006
REGISTRATION NO. : 310000400470380
REGISTERED LEGAL FORM : Wholly foreign-owned
enterprise
STAFF STRENGTH :
300
REGISTERED CAPITAL : USD 27,000,000
BUSINESS LINE :
LOGISTICS DISTRIBUTION & TRADE
TURNOVER :
CNY 2,212,830,000 (AS OF DEC.
31, 2011)
EQUITIES :
CNY 168,740,000 (AS OF DEC. 31, 2011)
PAYMENT :
AVERAGE
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION :
FAIRLY STABLE
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY 6.29= 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
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image001.gif){kind=small}
SC was registered as a wholly foreign-owned enterprise at
local Administration for Industry & Commerce (AIC - The official body of
issuing and renewing business license) on Jun. 22, 2006.
Company Status: Wholly foreign-owned enterprise This form of business in PR
China is defined as a legal person. It is a limited co. established within
the territories of PR China with capital provided totally by the foreign
investors. More than one foreign investor may jointly invest in a wholly
foreign-owned enterprise. The investing party/parties solely exercise
management, reap profit and bear risks and liabilities by themselves. This
form of companies usually have a limited duration is extendible upon
approval of Examination and Approval Authorities.
SC’s
registered business scope includes wholesaling, importing and exporting
furniture, household items, appliances and toys, green plant, large household
electrical appliances, equipment packaging and related materials, spare parts
and raw materials of the above products; leasing and managing warehouse and
property; storage service; designing and testing the above products; installing
the above products, providing after-sale service (including maintenance,
information consultation and training services). (with permit if needed).
SC is mainly
engaged in logistics distribution and import & export business.
Mr. Jan Bertel
Gardberg is legal representative and chairman of SC at present.
SC is known to
have approx. 300 employees at present.
SC is currently operating at the above stated address, and this address
houses its operating office and warehouse in Shanghai. The detailed premise
information is unknown.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image002.gif){kind=small}
SC
is not known to host web site of its own at present.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image003.gif){kind=small}
No significant events or changes were found during our checks with the
local Administration for Industry and Commerce.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image004.gif){kind=small}
MAIN SHAREHOLDER:
Name
% of Shareholding
Ikea (China) Investment Co., Ltd. 100
Registered no.: 310000400532165
Legal representative: Martin Hansson
Registered capital: USD 224,420,000
Legal form: wholly foreign-owned enterprise
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image005.gif){kind=small}
l
Legal representative and Chairman:
Mr. Jan Bertel Gardberg is currently responsible for the overall
management of SC.
Working Experience(s):
At present Working
in SC as legal representative and chairman.
Also working in Ikea Purchasing (Shanghai)
Co., Ltd. as legal representative.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image006.gif){kind=small}
SC is mainly
engaged in logistics distribution and import & export business.
SC’s products mainly include furniture, household items, etc.
SC sources its
materials 50% from domestic market and 50% from overseas market. SC sells 40%
of its products in domestic market and 60% to overseas market.
The buying terms of SC include Check, T/T, L/C 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 declined to release its major suppliers and clients.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image007.gif){kind=small}
Ikea Purchasing (Shanghai) Co., Ltd.
Registered
no.: 310000400269245
Legal
representative: Jan Bertel Gardberg
Registered
capital: USD 32,420,000
Establishment
date:
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image008.gif){kind=small}
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.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image009.gif){kind=small}
SC’s accountant
refused to release the bank details.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image010.gif){kind=small}
Balance Sheet
Unit: CNY’000
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As
of Dec. 31, 2011 |
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Cash & bank |
15,030 |
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Inventory |
827,400 |
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Accounts
receivable |
232,650 |
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Other
receivables |
45,340 |
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Other current
assets |
4,540 |
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Current assets |
1,124,960 |
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Fixed assets net
value |
409,690 |
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Long term
investment |
0 |
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Projects under
construction |
0 |
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Intangible and
other assets |
70,420 |
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Total assets |
1,605,070 |
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=========== |
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Short loan |
809,090 |
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Accounts payable |
232,110 |
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Advances from
clients |
0 |
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Taxes payable |
360 |
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Other Accounts
payable |
35,350 |
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Other current
liabilities |
19,420 |
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Current
liabilities |
1,096,330 |
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Long term
liabilities |
340,000 |
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Total
liabilities |
1,436,330 |
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Equities |
168,740 |
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Total
liabilities & equities |
1,605,070 |
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Income Statement
Unit: CNY’000
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As
of Dec. 31, 2011 |
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Turnover |
2,212,830 |
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Cost of goods sold |
2,021,500 |
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Sales expense |
29,320 |
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Management expense |
90,860 |
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Finance expense |
55,250 |
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Profit before tax |
14,150 |
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Less: profit tax |
3,760 |
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Profits |
10,390 |
Important
Ratios
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As
of Dec. 31, 2011 |
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*Current ratio |
1.03 |
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*Quick ratio |
0.27 |
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*Liabilities
to assets |
0.89 |
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*Net profit
margin (%) |
0.47 |
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*Return on
total assets (%) |
0.65 |
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*Inventory
/Turnover ×365 |
137 days |
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*Accounts
receivable/Turnover ×365 |
39 days |
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*Turnover/Total
assets |
1.38 |
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* Cost of
goods sold/Turnover |
0.91 |
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image011.gif){kind=small}
PROFITABILITY:
AVERAGE
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The turnover of SC appears good.
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SC’s net profit margin is average.
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SC’s return on total assets is average.
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SC’s cost of goods sold is fairly high, comparing
with its turnover.
LIQUIDITY: FAIR
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The current ratio of SC is maintained in a normal
level.
l
SC’s quick ratio is maintained in a poor level.
l
The inventory of SC appears large.
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The accounts receivable of SC appears average.
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The short-term loan of SC appears large.
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SC’s turnover is in an average level, comparing
with the size of its total assets.
LEVERAGE: FAIR
l
The debt ratio of SC is high.
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The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly stable.
%20CO%20,%20LTD%20%20-%20195400%2001-Oct-2012_files/image012.gif){kind=small}
SC is considered medium-sized in its line with fairly stable financial
conditions. The large amount of inventory and short-term loan could be a threat
to SC’s financial condition.
FOREIGN EXCHANGE RATES
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Currency |
Unit
|
Indian Rupees |
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US Dollar |
1 |
Rs.52.69 |
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1 |
Rs.85.71 |
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Euro |
1 |
Rs.68.15 |
INFORMATION DETAILS
|
Report
Prepared by : |
PRL |
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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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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 |
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<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.