MIRA INFORM REPORT

Report Date :

01.03.2013

IDENTIFICATION DETAILS

Name :	CHAU GIANG-HUNG YEN JOINT STOCK COMPANY
Formerly Known as:	CHAU GIANG COMPANY LIMITED
Registered Office :	Dong Ket Commune, Khoai Chau District, Hung Yen Province
Country :	Vietnam
Financials (as on) :	31.12.2009
Year of Establishments:	2003
Com. Reg. No.:	0900214484
Legal Form :	Joint stock company
Line of Business :	Manufacture and trade of extracts
No. of Employees :	400

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	No Complaints
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 30^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
Vietnam	B1	B1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

vietnam - ECONOMIC OVERVIEW

Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. While Vietnam's economy remains dominated by state-owned enterprises, which still produce about 40% of GDP, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive export-driven industries. Vietnam joined the World Trade Organization in January 2007 following more than a decade-long negotiation process. Vietnam became an official negotiating partner in the developing Trans-Pacific Partnership trade agreement in 2010. Agriculture's share of economic output has continued to shrink from about 25% in 2000 to about 22% in 2011, while industry's share increased from 36% to 40% in the same period. Deep poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. The global recession has hurt Vietnam's export-oriented economy, with GDP in 2009-11 growing less than the 7% per annum average achieved during the last decade. In 2011, exports increased by more than 33%, year-on-year, and the trade deficit, while reduced from 2010, remained high, prompting the government to maintain administrative trade measures to limit the trade deficit. Vietnam's managed currency, the dong, continues to face downward pressure due to a persistent trade imbalance. Since 2008, the government devalued it in excess of 20% through a series of small devaluations. Foreign donors pledged nearly $8 billion in new development assistance for 2011. However, the government's strong growth-oriented economic policies have caused it to struggle to control one of the region's highest inflation rates, which reached as high as 23% in August 2011 and averaged 18% for the year. In February 2011, Vietnam shifted its focus away from economic growth to stabilizing its economy and tightened fiscal and monetary policies. In early 2012 Vietnam unveiled a broad "three pillar" economic reform program, proposing the restructuring of public investment, state-owned enterprises and the banking sector. Vietnam's economy continues to face challenges from low foreign exchange reserves, an undercapitalized banking sector, and high borrowing costs. The near-bankruptcy and subsequent default of the state-owned-enterprise Vinashin, a leading shipbuilder, led to a ratings downgrade of Vietnam's sovereign debt, exacerbating Vietnam's borrowing difficulties.

Source : CIA

SUBJECT IDENTIFICATION & LEGAL FORM

Current legal status
English Name		CHAU GIANG-HUNG YEN JOINT STOCK COMPANY
Vietnamese Name		CONG TY CO PHAN CHAU GIANG-HUNG YEN
Short name		CHAU GIANG-HUNG YEN J.S.C
Type of Business		Joint stock company
Year Established		2003
Business Registration No.		0900214484
Date of Registration		26 May 2010
Place of Registration		Planning and Investment Department of Hung Yen Province
Chartered capital		VND 25,000,000,000
Status		Unlisted
Tax code		0900214484
Total Employees	`	400
Size		Medium

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Registered English Name: CHAU GIANG COMPANY LIMITED Changed to: CHAU GIANG-HUNG YEN JOINT STOCK COMPANY	28 Sep 2012
2	Subject has got former Registered Vietnamese Name: CONG TY TNHH CHAU GIANG Changed to: CONG TY CO PHAN CHAU GIANG-HUNG YEN	28 Sep 2012
3	Subject has got former Abbreviated Name: CGI Changed to: CHAU GIANG-HUNG YEN J.S.C	28 Sep 2012
4	Subject has got former Type of Business: Limited liability company Changed to: Joint stock company	28 Sep 2012
5	Subject has got former Business Registration No: 0502000132 (dated 28 March 2003) Changed to: 0900214484	26 May 2010
6	Subject has got former Chartered capital: 7,150,000,000 VND Changed to: 25,000,000,000 VND	N/A

company ADDRESSES

Head Office
Address	Dong Ket Commune, Khoai Chau District, Hung Yen Province, Vietnam
Telephone	(84-321) 3929817
Fax	(84-321) 3928776
Email	sales@chaugiang.com.vn

DIRECTORS

1. NAME	Mr. NGUYEN VAN KIEM
Position	Director
Date of Birth	06 Jan 1971
ID Number/Passport	145631444
ID Issue Date	22 Jul 2010
ID Issue Place	Police Office of Hung Yen province
Resident	No. 16B, Tan Thi street, Minh Khai ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
2. NAME	Ms. DO THI NHUONG
Position	Former Director
Date of Birth	02 Oct 1960
ID Number/Passport	145473252
ID Issue Date	20 Mar 2008
ID Issue Place	Hung Yen Police Department
Resident	Dong Ket Hamlet Dong Ket Commune, Khoai Chau District, Hung Yen Province, Vietnam
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject is specialized in two business fields:
- Manufacture and trade of extracts
- Processing garment products

IMPORT & EXPORT ACTIVITIES

IMPORT:
Note: Currently, the subject does not import
EXPORT:
· Types of products	Garment products
· Market	China

BANKERS

1. VIET NAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE MY HAO BRANCH
Address	Ban Yen Nhan ward, My Hao District, Hung Yen Province, Vietnam
Telephone	(84-321) 3942285
Fax	(84-321) 3942387

SHAREHOLDERS

1. NAME	HUNG YEN GARMENT JOINT STOCK COMPANY
Business Registration	0900108038
Date of Registration	02 Mar 2009
Place of Registration	Planning and Investment Department of Hung Yen Province
Representative	Mr. NGUYEN XUAN DUONG
Registered Capital	VND 31,000,000,000
Tax code	0900108038
Address	No. 83 Trung Trac Str., Minh Khai Ward , Hung Yen City, Hung Yen Province, Vietnam
Tel	(84-321) 3 862 314
Fax	(84-321) 3 862 500
Email	Hugaco@hn.vnn.vn
Website	http://www.hugaco.com.vn/
Number of shares	795,000
Value of shares	VND 7,950,000,000
Percentage	31.8%
2. NAME	Ms. DO THI NHUONG
Position	Former Director
Date of Birth	02 Oct 1960
ID Number/Passport	145473252
Issued on	20 Mar 2008
Issued Place	Hung Yen Police Department
Resident	Dong Ket Hamlet Dong Ket Commune, Khoai Chau District, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	297,000
Value of shares	VND 2,970,000,000
Percentage	11.88%
3. NAME	Mr. DO QUANG HIEU
ID Number/Passport	011801628
Resident	No. 97 - Block A - Group 10 Dong Ngac Commune, Tu Liem District, Ha Noi City, Vietnam
Nationality	Vietnamese
Number of Shares	341,000
Value of shares	VND 3,410,000,000
Percentage	13.64%
4. NAME	Mr. DO PHAN QUANG NAM
ID Number/Passport	012612601
Resident	Group 28 - Cluster 4 Tu Lien Commune, Tay Ho District, Ha Noi City, Vietnam
Nationality	Vietnamese
Number of Shares	44,000
Value of shares	VND 440,000,000
Percentage	1.76%
5. NAME	Ms. TRAN THU HUONG
ID Number/Passport	B1358900
Resident	Dong Ket Commune, Khoai Chau District, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	33,000
Value of shares	VND 330,000,000
Percentage	1.32%
6. NAME	Mr. NGUYEN XUAN DUONG
Date of Birth	02 Nov 1954
ID Number/Passport	145067551
Issued on	08 Oct 1998
Issued Place	Hung Yen Police
Resident	No 83, Trung Trac Str Minh Khai Ward, Hung Yen City, Hung Yen Province, Vietnam
Work phone	(84) 3213 862214
Mobile phone	++84 913280062
Number of Shares	225,000
Value of shares	VND 2,250,000,000
Percentage	9%
7. NAME	Ms. PHAM THI PHUONG HOA
ID Number/Passport	145278636
Resident	No. 54 Vu Trong Phung street, Le Loi ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	225,000
Value of shares	VND 2,250,000,000
Percentage	9%
8. NAME	Ms. PHAM THI LAN HUONG
ID Number/Passport	145410209
Resident	No. 4, Le Lai street Le Loi ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	125,000
Value of shares	VND 1,250,000,000
Percentage	5%
9. NAME	Mr. NGUYEN VAN TRUNG
ID Number/Passport	145229356
Resident	No. 56, Dong Thanh Quang Trung ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	125,000
Value of shares	VND 1,250,000,000
Percentage	5%
10. NAME	Ms. TONG THI HOA
ID Number/Passport	012695466
Resident	No. 3, Lane 18 Nguyen Hong street, Lang Ha ward, Dong Da District, Ha Noi City, Vietnam
Nationality	Vietnamese
Number of Shares	125,000
Value of shares	VND 1,250,000,000
Percentage	5%
11. NAME	Ms. DUONG THI LOAN
ID Number/Passport	145410056
Resident	No. 11/46, Trung Trac street Quang Trung ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	125,000
Value of shares	VND 1,250,000,000
Percentage	5%
12. NAME	Mr. CHU HUU NGHI
ID Number/Passport	145274917
Resident	Tay Thanh street Quang Trung ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	20,000
Value of shares	VND 200,000,000
Percentage	0.8%
13. NAME	Mr. HOANG XUAN NAM
ID Number/Passport	145032826
Resident	No. 73, Bac Thanh Quang Trung ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	10,000
Value of shares	VND 100,000,000
Percentage	0.4%
14. NAME	Mr. CAP ANH NINH
ID Number/Passport	145210459
Resident	No. 21, Tran Binh Trong street, Quang Trung ward, Hung Yen City, Hung Yen Province, Vietnam
Nationality	Vietnamese
Number of Shares	10,000
Value of shares	VND 100,000,000
Percentage	0.4%

FINANCIAL DATA

Note: Despite trying best, the latest financial data is not available.
BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2009
Number of weeks	52
ASSETS
A – CURRENT ASSETS	10,239,000,000
I. Cash and cash equivalents	478,000,000
1. Cash	478,000,000
2. Cash equivalents	0
II. Short-term investments	0
1. Short-term investments	0
2. Provisions for devaluation of short-term investments	0
III. Accounts receivable	876,000,000
1. Receivable from customers	574,000,000
2. Prepayments to suppliers	0
3. Inter-company receivable	0
4. Receivable according to the progress of construction	0
5. Other receivable	302,000,000
6. Provisions for bad debts	0
IV. Inventories	8,885,000,000
1. Inventories	8,885,000,000
2. Provisions for devaluation of inventories	0
V. Other Current Assets	0
1. Short-term prepaid expenses	0
2. VAT to be deducted	0
3. Taxes and other accounts receivable from the State	0
4. Other current assets	0
B. LONG-TERM ASSETS	4,352,000,000
I. Long term accounts receivable	0
1. Long term account receivable from customers	0
2. Working capital in affiliates	0
3. Long-term inter-company receivable	0
4. Other long-term receivable	0
5. Provisions for bad debts from customers	0
II. Fixed assets	4,334,000,000
1. Tangible assets	4,334,000,000
- Historical costs	5,601,000,000
- Accumulated depreciation	-1,267,000,000
2. Financial leasehold assets	0
- Historical costs	0
- Accumulated depreciation	0
3. Intangible assets	0
- Initial costs	0
- Accumulated amortization	0
4. Construction-in-progress	0
III. Investment property	0
Historical costs	0
Accumulated depreciation	0
IV. Long-term investments	0
1. Investments in affiliates	0
2. Investments in business concerns and joint ventures	0
3. Other long-term investments	0
4. Provisions for devaluation of long-term investments	0
V. Other long-term assets	18,000,000
1. Long-term prepaid expenses	0
2. Deferred income tax assets	0
3. Other long-term assets	18,000,000
VI. Goodwill
1. Goodwill
TOTAL ASSETS	14,591,000,000
LIABILITIES
A- LIABILITIES	7,916,000,000
I. Current liabilities	7,916,000,000
1. Short-term debts and loans	7,522,000,000
2. Payable to suppliers	22,000,000
3. Advances from customers	0
4. Taxes and other obligations to the State Budget	0
5. Payable to employees	0
6. Accrued expenses	7,000,000
7. Inter-company payable	0
8. Payable according to the progress of construction contracts	0
9. Other payable	365,000,000
10. Provisions for short-term accounts payable	0
II. Long-Term Liabilities	0
1. Long-term accounts payable to suppliers	0
2. Long-term inter-company payable	0
3. Other long-term payable	0
4. Long-term debts and loans	0
5. Deferred income tax payable	0
6. Provisions for unemployment allowances	0
7. Provisions for long-term accounts payable	0
8. Unearned Revenue
9. Science and technology development fund
B- OWNER’S EQUITY	6,675,000,000
I. OWNER’S EQUITY	6,675,000,000
1. Capital	5,955,000,000
2. Share premiums	0
3. Other sources of capital	0
4. Treasury stocks	0
5. Differences on asset revaluation	0
6. Foreign exchange differences	0
7. Business promotion fund	0
8. Financial reserved fund	0
9. Other funds	0
10. Retained earnings	720,000,000
11. Construction investment fund	0
12. Business arrangement supporting fund
II. Other sources and funds	0
1. Bonus and welfare funds	0
2. Sources of expenditure	0
3. Fund to form fixed assets	0
MINORITY’S INTEREST
TOTAL LIABILITIES AND OWNER’S EQUITY	14,591,000,000

PROFIT & LOSS STATEMENT
Description	FY2009
1. Total Sales	32,361,000,000
2. Deduction item	0
3. Net revenue	32,361,000,000
4. Costs of goods sold	30,190,000,000
5. Gross profit	2,171,000,000
6. Financial income	0
7. Financial expenses	1,116,000,000
- In which: Loan interest expenses	1,116,000,000
8. Selling expenses	0
9. Administrative overheads	695,000,000
10. Net operating profit	360,000,000
11. Other income	30,000,000
12. Other expenses	0
13. Other profit /(loss)	30,000,000
14. Total accounting profit before tax	390,000,000
15. Current corporate income tax	37,000,000
16. Deferred corporate income tax	0
17. Interest from subsidiaries/related companies
18. Profit after tax	353,000,000

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2009	Average Industry
Current liquidity ratio	1.29	1.74
Quick liquidity ratio	0.17	1.02
Inventory circle	3.40	3.74
Average receive period	9.88	76.97
Utilizing asset performance	2.22	1.31
Liability by total assets	54.25	49.32
Liability by owner's equity	118.59	129.21
Ebit / Total assets (ROA)	10.32	8.55
Ebit / Owner's equity (ROE)	22.56	18.02
Ebit / Total revenue (NPM)	4.65	6.82
Gross profit / Total revenue (GPM)	6.71	21.89
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Fair
Liquidity	Low
Payment status	Average
Financial Situation	Average
Development trend	Stable
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	T/T
Sale Methods	Retailer and Wholesaler
Public opinion	Well-known

INTERPRETATION ON THE SCORES

The subject was established in 2003 under the name CHAU GIANG COMPANY LIMITED. In 2012, there were changes in subject’s name and management board. It became a joint stock company with increased chartered capital to 25 billion VND and increased number of shareholders from originally 4 shareholders to 14 ones including HUNG YEN GARMENT JOINT STOCK COMPANY holding majority ownership. Mr. NGUYEN VAN KIEM holds director position in replacement for Ms. DO THI NHUONG although Ms. DO THI NHUONG is still a major shareholder.

Initially, the company took part in manufacturing and trading types of extracts such as Artemisia annual extract, mint extract and other herbal products. The subject does not import. It purchases kinds of herbal plants such as mint, Artemisia from farmers in the province and in some other provinces such as Thanh Hoa, Thai Binh, etc, who are invested seedlings and guided for planting techniques, care, protection, harvesting by the subject. Extracts are supplied for domestic market or exported through some pharmaceutical companies in Vietnam such as MEDIPLANTEX NATIONAL PHARMACEUTICAL JOINT STOCK COMPANY. Now, subject’s business also includes garment processing. It receives garment outsourcing orders abroad, then processes and exports back to ordered countries.

Updated financial data is currently not available in our source. In 2009, the subject’s total sales were VND 32,361 million and the profit after tax was VND 353 million. In 2010, it reached about VND 70 billion of the turnover and over VND 300 million of the profit (according to Ms. Huong, the subject’s administrative office). The subject’s current liquidity ratio was bigger than 1 because the current assets was higher than the current liabilities. Like this, theoretically the subject was ensured the principle of financial balance. However, a deeply look at the balance sheet, the subject’s inventories were too high; it occupied nearly 87% in the current assets and hold approximately 61% in the total assets. So in fact, that ratio still was not really satisfactory, reflecting the low liquidity in transferring inventory into cash to finance the business needs. ROA, ROE also were better than the industry average. The subject had high turnover and turnover growth annually, however, high expenses eroded turnover, thus, NPM, GPM stayed low.

In general, the subject is operating normally. Development prospect seems bright. It got high turnover growth annually. The subject is reliable for small transactions.

APPENDIX

INDUSTRY DATA
Industry code	Growth speed by price compared with 1994 (%)		Total enterprises 2010		Total employees 2011 (Thous.pers.)	Annual average capital of enterprises 2010 (billion dongs)
	2011	2010
Agriculture, Forestry and Fishing	4.00	2.78	8,887		24,362.9	95,227
Industry and Construction	5.53	7.70	95,217		10,718.9	3,641,376
Trade and Services	6.69	7.52	187,195		15,270.2	6,957,082
ECONOMIC INDICATORS
			2011	2010		2009
Population (Million person)			87.84	86.93		86.02
Gross Domestic Products (USD billion)			119	102.2		91
GDP Growth (%)			5.89	6.78		5.32
GDP Per Capita (USD/person/year)			1,300	1,160		1,080
Inflation (% Change in Composite CPI)			18.58	11.75		6.88
State Budget Deficit compared with GDP (%)			4.9	5.8		6.9
SERVICE TRADE PERFORMANCE
Billion USD			2011	2010		2009
Exports			96.3	72.2		57.1
Imports			105.8	84.8		69.9
Trade Balance			-9.5	-12.6		-12.8

Source: General Statistics Office

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.77
UK Pound	1	Rs.81.57
Euro	1	Rs.70.68

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%)

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