MIRA INFORM REPORT

 

 

Report Date :

12.09.2012

 

IDENTIFICATION DETAILS

 

Name :

SERCOMM CORPORATION

 

 

Registered Office :

8F, No. 3-1, Yuanqu St., Nankang, Taipei 115, Taiwan, R.O.C.

 

 

Country :

Taiwan

 

 

Financials (as on) :

30.06.2012

 

 

Date of Incorporation :

29.07.1992

 

 

Com. Reg. No.:

86690573

 

 

Legal Form :

Joint Stock Company

 

 

Line of Business :

Research, development, manufacture and distribution of wireless network products and wire line network products

 

 

No. of Employees :

3,977

 

 

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 :

Good

Payment Behaviour :

Regular

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 – March 31st, 2012

 

Country Name

Previous Rating

(31.12.2011)

Current Rating

(31.03.2012)

Taiwan

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 


 

TAIWAN - ECONOMIC OVERVIEW

 

Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. In keeping with this trend, some large, state-owned banks and industrial firms have been privatized. Exports, led by electronics, machinery, and petrochemicals have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to fluctuations in world demand. In 2009, Taiwan's GDP contracted 1.9%, due primarily to a 20% year-on-year decline in exports. In 2010 GDP grew 10.9%, as exports returned to the level of previous years, and in 2011, grew 5.2%. However, 2012 growth will likely be less, according to most forecasters, because of softening global demand. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are major long-term challenges. Free trade agreements have proliferated in East Asia over the past several years, but so far Taiwan has been excluded from this greater economic integration largely because of its diplomatic status with the exception of the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010. The MA administration has said that the ECFA will serve as a stepping stone toward trade pacts with other regional partners, and negotiations on a deal with Singapore began this year. Follow-on components of ECFA, including deals on trade in goods, services, and investment, have yet to be completed. Taiwan's Total Fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 accounting for 10.9% of the island's total population as of 2011. The island runs a large trade surplus, and its foreign reserves are the world's fourth largest, behind China, Japan, and Russia. Since 2005 China has overtaken the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Three financial memorandums of understanding, covering banking, securities, and insurance, took effect in mid-January 2010, opening the island to greater investments from the mainland's financial firms and institutional investors, and providing new opportunities for Taiwan financial firms to operate in China. Closer economic links with the mainland bring greater opportunities for the Taiwan economy, but also poses new challenges as the island becomes more economically dependent on China while political differences remain unresolved.

Source : CIA


Contact Points

 

Company Name:

Sercomm Corporation

Supplied Name:

SerComm Corporation

Trading Address:

8F, No. 3-1, Yuanqu St., Nankang, Taipei 115, Taiwan, R.O.C.

Supplied Address:

8F, No. 3-1 YuanQu St.Nankang, Taipei 115

Telephone Number:

+886-2-2655-3988

Fax Number:

+886-2-6615-8898

E-mail:

market@sercomm.com 

Notes: Subject’s exact name and address are as above.

 

 

Company Identification Details

 

Registered Name:

SERCOMM CORPORATION

Registered Address:

8F, No. 3-1, Yuanqu St., Nankang, Taipei 115, Taiwan, R.O.C.

Date of Foundation

1992-7-29

Registration Number:

86690573

Registry:

Department of Commerce, Ministry of Economic Affairs, R.O.C.

Registered Capital:

NTD 2,500,000,000 (USD 84,250,000)

(As of 2012.09, 1 NTD = 0.0337 USD)

Paid-up Capital:

NTD 1,953,706,040 (USD 65,839,894)

Legal Representatives:

Boyuan Wang

Legal Form:

Joint Stock Company

Principal Activities:

Research, development, manufacture and distribution of wireless network products and wire line network products.

Staff:

3,977 employees (as 2012-6-30)

Listed at Stock Exchange:

Yes (Public, TPE:5388)  

Date of Last Annual Return:

2012-8-27

 


History

 

Subject was incorporated on 1992-7-29 with registered number 86690573 as Joint Stock Company in Taiwan.

Subject was listed in Taiwan Stock Exchange on 2007-12-3 with the stock symbol: 5388

 

Awards

Year

Awards

2008

Blue chip importer and exporter

2009

Blue chip importer and exporter

2010

Blue chip importer and exporter

 

Standard of Blue chip importer and exporter

Unit: USD

Year

Amount

2008

19,000,000

2009

15,000,000

2010

20,000,000

 

 

Shareholders

 

Name

Subscription Shares

Boyuan Wang

3,684,577         

 

Wei Wang

 

1,957,006

 

Bin Lin

1,487,201

Yingda Liu

207,999

Pacific Venture Partners Co. Ltd.

3,680,926

Ruisong Guo

2,468,281

 

The information above is that of subject’s major shareholders.

 

 

Subsidiaries & Branches

 

Offices and Related Companies

SerComm ChuNan Manufacturing Center

3F, No.81, YuYi Road (GuangYuan Technology Park) Chu-Nan Miao-Li, Taiwan 350 R.O.C.

Phone: +886-37-585899

Fax:  +886-37-58000

 

SerNet (SuZhou) Technologies Corporation - (China Engineering and Manufacturing Center)

No. 26 Xinghai Street, SuZhou Industrial Park Jiangsu, China

Phone: +86-512-67613993

Fax: +86-512-67624500

 

SerComm California Office, USA

42808 Christy St. STE 231 Fremont, CA 94538

Phone: +1-510-870-1598

Fax: +1-510-870-2320

 

SerComm New Jersey Office, USA

5205 Blue Jay Way, West Windsor, NJ 08550

Phone: +1-609-750-1986

 

SerComm Tokyo Office, Japan

Tennozu Yusen Bldg. 21F, 2-2-20 Higashi-shinagawa, Shinagawa-Ku, Tokyo 140-0002 JAPAN

Phone: +81-3-6433-0061

Fax:  +81-3-6433-0062

 

SerComm Paris Office, France

Immeuble Pentagone Plaza 381 Avenue du Général de Gaulle, 92140 Clamart FRANCE

Phone: +33 (0) 1 7117 6938

 

 

 

 

 

Personnel Information

 

Core Management

 

Directors

1

Name

Boyuan Wang

Position

Director

2

Name

Wei Wang

Position

Director & Manager

Date of Appointment

2000-1-24

3

Name

Bin Lin

Position

Director

4

Name

Yingda Liu

Position

Director

5

Name

Xiaobo Xu

Position

Director

6

Name

Chuiyuan Qiu

Position

Independent Director

7

Name

Hongshou Chen

Position

Independent Director

8

Name

Ruisong Guo

Position

Supervisor

9

Name

Yongdu Wei

Position

Supervisor

10

Name

Binbin Xue

Position

Supervisor

 

 

Operation Information

 

Offices & Factories

 

 

Headquarters

Add

8F, No. 3-1, Yuanqu St., Nankang, Taipei 115, Taiwan, R.O.C.

 

Production Information

 

l         Subject is engaged in the research, development, manufacture and distribution of wireless network products and wire line network products.

l         It is introduced that subject has been certificated by ISO9001ISO14001TL9000OHSAS18001and RoHS, etc

 

Purchase Information

 

l         The registered activities of subject:

Business Code

Details

CC01050

Manufacture of Data storage and processing equipment

CC01080

Manufacture of electronic components

F119010

Wholesales of electronic materials

F401010

International Trading Business

I301010

Information software services

F401021

 

Import of Controlled telecommunications radio-frequency devices

CC01101

Manufacture of Controlled telecommunications radio-frequency devices

ZZ99999

 

Besides licensed business, all other business items those are not banned or restricted.

Sales Information

 

l         The subject is mainly engaged in sales of wireless network products and wire line network products.

l         Subject also supplies solutions of fixed mobile convergence, wireless and home networking, IP surveillance and home security and enterprise VoIP Solutions.

l         Subject’s major products include routers, asymmetrical digital subscriber loop (ADSL) gateways, integrated access devices, access points, wireless local area network (LAN) cards, print servers, print servers, Internet protocol (IP) cameras, home plug audiovisual (AV) products, voice-over-Internet-protocol (VoIP) products, network attached storage (NAS) products, cable broadband products, as well as intelligent home monitoring products and others.

l         Subject’s products are both sold in domestic and overseas markets, subject exports to other Asian countries, the Americas and Europe.

 

Import and export right:

Import right

Yes

Export right

Yes

 

 

Settlements

 

Purchase

 

Domestic Purchase

Product

Payment Terms

Proportion

Raw materials and accessories, etc

COD, Credit Sales, etc

100%

 

Foreign Purchase

Product

Payment Terms

Proportion

Raw materials and accessories, etc

CBD, Credit Sales, etc

100%

 

Sales

 

Domestic Markets

Product

Sales Terms

Proportion

Wireless network products and wire line network products.

CBD, etc

100%

 

Export

Product

Sales Terms

Proportion

Wireless network products and wire line network products.

CBD, etc

100%

 

 

Balance Sheet

 

Unit: NTD/000

 

2012-6-30

2011-6-30

Assets

 

 

Current Assets

 

 

Cash and cash equivalents

1,419,089.00

1,391,687.00

Financial assets measured at fair value through profit or loss - current

6,511.00

1,078.00

Hedging derivative assets - current

6,063.00

0.00

Accounts receivable - net

644,054.00

869,724.00

Accounts receivable - related parties - net

137,468.00

135,678.00

Other receivables

946,353.00

446,164.00

Other receivables - related parties

600,013.00

0.00

Inventories

1,426,955.00

806,461.00

Other current assets

227,351.00

137,693.00

Current assets

5,413,857.00

3,788,485.00

Funds and Investments

 

 

Financial assets measured at fair value through profit or loss - non current

0.00

2,950.00

Financial assets carried at cost - non current

40,010.00

40,010.00

Investments

2,425,211.00

1,882,128.00

Other financial assets - non current

112,111.00

0.00

Funds and long-term investments

2,577,332.00

1,925,088.00

Fixed Assets

 

 

Cost

 

 

Land

110,581.00

0.00

Buildings and structures

111,007.00

0.00

Machinery and equipment

28,596.00

9,383.00

Computer and telecommunication equipment

147,065.00

117,993.00

Office equipment

59,574.00

54,549.00

Leased assets

457,030.00

457,030.00

Fixed assets cost

913,853.00

638,955.00

Accumulated depreciation

-168,632.00

-140,063.00

Construction in process and prepayment for equipments

136,002.00

2,600.00

Fixed assets

881,223.00

501,492.00

Intangible Assets

 

 

Computer software cost

57,347.00

47,415.00

Other intangible assets

75,057.00

73,818.00

Intangible assets

132,404.00

121,233.00

OtherAssets

 

 

Idled assets

14,291.00

83,306.00

Guarantee deposits paid

8,786.00

11,750.00

Deferred charges

36,143.00

36,061.00

Other assets

59,220.00

131,117.00

Assets

9,064,036.00

6,467,415.00

Liabilities and Stockholders' Equity

 

 

Liabilities

 

 

Current Liabilities

 

 

Short-term borrowings

405,330.00

432,030.00

Financial liabilities measured at fair value through profit or loss - current

994.00

287.00

Hedging derivative liabilities - current

1,149.00

0.00

Notes payable

144,716.00

47,104.00

Accounts payable

606,131.00

640,284.00

Accounts payable - related parties

1,796,356.00

779,664.00

Income tax payable

151,750.00

104,517.00

Accrued expenses

632,086.00

432,389.00

Other payables - related parties

22,112.00

1,229.00

Other payables

468,684.00

267,816.00

Long-term liabilities - current portion

185,618.00

0.00

Other current liabilities

308,987.00

213,768.00

Current liabilities

4,723,913.00

2,919,088.00

Long term Liabilities

 

 

Bonds payable

548,701.00

456,318.00

Long-term notes and accounts payable

322,270.00

341,891.00

Long-term liabilities

870,971.00

798,209.00

Reserves

 

 

Other Liabilities

 

 

Pension reserve / accrued pension liability

5,775.00

5,688.00

 

18,430.00

0.00

Deferred income tax liabilities

12,760.00

42,806.00

Other liabilities

36,965.00

48,494.00

Liabilities

5,631,849.00

3,765,791.00

Stockholders' Equity

 

 

Capital

 

 

Common stock

1,949,356.00

1,784,390.00

Advance receipts for common stock

4,350.00

14,414.00

Capital Surplus

 

 

Capital surplus - additional paid-in capital

347,500.00

204,808.00

Capital surplus - employee stock option

27,666.00

26,500.00

Capital surplus - stock option

54,943.00

5,075.00

Capital surplus

430,109.00

236,383.00

Retained Earnings

 

 

Legal reserve

362,873.00

304,569.00

Unappropriated retained earnings

534,796.00

381,717.00

Retained earnings

897,669.00

686,286.00

Stockholders' Equity and Other adjustmen

 

 

Cumulative translation adjustments

145,789.00

33,539.00

Unrealized gains (losses) on financial instruments

4,914.00

0.00

 

0.00

-53,388.00

Equity adjustments

150,703.00

-19,849.00

Stockholdersˉ equity

3,432,187.00

(USD 115,664,702)

2,701,624.00

(USD 91,044,729)

Number of treasury stock acquired by the company and subsidiaries (unit: share)

0.00

4,029,000.00

 

435,000.00

1,441,384.00

(As of 2012.09, 1 NTD = 0.0337 USD)

 

 

Profit and Loss Account

 

Unit: NTD/000

 

2012-1-1

~2012-6-30

2011-1-1

~2011-6-30

Sales

7,956,143.00

(USD 268,122,019)

5,129,063.00

(USD 172,849,423)

Sales returns

12,121.00

54,335.00

Sales discounts and allowances

44,106.00

33,563.00

Sales

7,899,916.00

5,041,165.00

Operating income

7,899,916.00

5,041,165.00

Cost of sales

7,011,159.00

4,420,053.00

Operating costs

7,011,159.00

4,420,053.00

Gross profit (loss) from operations

888,757.00

621,112.00

Unrealized gains on intercompany transactions

885.00

0.00

Realized gains on intercompany transactions

671.00

2,007.00

Selling expense

219,418.00

142,995.00

General and administrative expenses

128,781.00

109,014.00

Research and development expenses

223,883.00

167,522.00

Operating expenses

572,082.00

419,531.00

Operating income (loss)

316,461.00

203,588.00

Non-Operating Income

 

 

Interest income

10,542.00

5,490.00

Investment income

158,232.00

137,889.00

Gains on disposal of fixed assets

948.00

0.00

Foreign exchange gains

0.00

2,942.00

Revaluation gain on financial assets

2,543.00

0.00

Miscellaneous income

1,276.00

2,287.00

Non-operating revenues and gains

173,541.00

148,608.00

Non-Operating Expenses

 

 

Interest expense

22,856.00

14,036.00

Loss on disposal of fixed assets

0.00

1,544.00

Foreign exchange losses

10,028.00

0.00

Revaluation loss on financial assets

0.00

721.00

Miscellaneous disbursements

53.00

0.00

Non-operating expenses and losses

32,937.00

16,301.00

Income from continuing operations before income tax

457,065.00

335,895.00

Income tax expense (benefit)

64,193.00

40,049.00

Income from continuing operations

392,872.00

295,846.00

Net income (loss)

392,872.00

(USD 13,239,786)

295,846.00

(USD 9,970,010)

Primary Earnings per Share

 

 

Primary earnings per share

2.06

1.70

Diluted earnings per share

 

 

Diluted earnings per share

1.84

1.49

(As of 2012.09, 1 NTD = 0.0337 USD)

 


 

Cash Flows

 

Unit: NTD/000

 

2012-1-1

~2012-6-30

2011-1-1

~2011-6-30

Cash Flows from Operating Activities - Indirect Method

 

 

Net Income (Loss)

392,872      

295,846

Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities

 

 

Depreciation Expense

16,805

15,697

Amortization Expense

37,519

27,690

Share-based Compensation

0

107

Amortization of Discounts (Premiums) on Bonds Payable

9,285

5,851

Investment Loss (Income) Recognized under Equity Method

(158,232)

(137,889)

Loss (Gain) on Disposal of Property, Plan and Equipment

(948)

1,544

Unrealized Revaluation Loss (Gain) on Financial Assets and Liabilities

(2,543)

(224)

Unrealized Gain (Loss) on Intercompany Transactions

885

0

Realized Loss (Gain) on Intercompany Transactions

(671)

(2,007)

Changes in Operating Assets and Liabilities

 

 

Decrease (Increase) in Financial Assets Held for Trading

26,409

7,796

Decrease (Increase) in Notes Receivable

(1,493)

0

Decrease (Increase) in Accounts Receivable

427,908

585,382

Decrease (Increase) in Accounts Receivable - Related Parties

52,849

(57,900)

Decrease (Increase) in Other Receivables

(676,697)

(328,717)

Decrease (Increase) in Other Receivable- Related Parties

(131,434)

0

Decrease (Increase) in Inventories

(800,035)

(134,869)

Decrease (Increase) in Other Current Assets

(29,352)

(33,665)

Decrease (Increase) in Deferred Tax Assets

30,437

(17,004)

Increase (Decrease) in Financial Liabilities Held for Trading

0

287

Increase (Decrease) in Notes Payable

67,634

4,618

Increase (Decrease) in Accounts Payable

215,242

165,064

Increase (Decrease) in Accounts Payable - Related Parties

603,597

(325,602)

Increase (Decrease) in Income Tax Payable

78,116

(8,700)

Increase (Decrease) in Accrued Expenses

136,963

18,528

Increase (Decrease) in Other Payable - Related Parties

19,031

(5,412)

Increase (Decrease) in Other Current Liabilities

(6,088)

71,487

Increase (Decrease) in Deferred Tax Liabilities

(90,967)

33,928

Increase (Decrease) in Accrued Pension Liabilities

88

15

Net Cash Provided by (Used in) Operating Activities

217,180

181,851

Cash Flows from Investing Activities

 

 

Acquisition of Investments Accounted for by Equity Method

(3,727)

(297,046)

Purchase of Property, Plant and Equipment

(234,603)

(14,500)

Proceeds from Disposal of Property, Plant and Equipment

1,972

6,000

Decrease (Increase) in Refundable Deposits

2,694

(30)

Increase in Deferred Charges

(17,031)

(1,292)

Decrease (Increase) in Restricted Assets

(92,059)

0

Purchase of Intangible Assets

(27,408)

(15,694)

Net Cash Provided by (Used in) Investing Activities

(370,162)

(322,562)

Cash Flows from Financing Activities

 

 

Increase (Decrease) in Short-term Loans

(193,850)

197,550

Increase (Decrease) in Lease Payable

(8,431)

(4,842)

Exercise of Employee Stock Options

4,350

1,540

Net Cash Provided by (Used in) Financing Activities

(197,931)

194,248

Effect of Exchange Rate Changes

0

0

Net Increase (Decrease) in Cash and Cash Equivalents

(350,913)

53,537

Cash and Cash Equivalents, Beginning of year

1,770,002

1,338,150

Cash and Cash Equivalents, End of year

1,419,089

1,391,687

Supplemental Cash Flow Information

 

 

Interest Paid

14,307

5,875

Capitalized Interest

0

0

Interest Paid- Excluding Capitalized Interest

14,307

5,875

Income Tax Paid

31,836

41,919

Non-cash Investing and Financing Activities

 

 

Current Portion of Long-term Lease Payable

19,067

18,663

Cash Dividends Payable

468,684

267,816

Other Supplemental Information

 

 

Convertible bonds - current portion

185,618

0

 

 

Bankers

 

Subject did not introduce its bank details; from other source we can not obtain the relevant information, either.

 

 

Public Record

 

Mortgage

 

No chattel mortgage record of subject has been found within the recent 3 months.

 

Lawsuit

 

Up to date of reporting, no existing or latent litigation of the subject has been found.

 

 

Interview Details

 

Department

Sales department


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.55.52

UK Pound

1

Rs.88.84

Euro

1

Rs.70.85

 

 

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%)

 

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.