MIRA INFORM REPORT

 

 

Report Date :

07.03.2013

 

IDENTIFICATION DETAILS

 

Correct Name  :

HUA FONG TRADING SDN. BHD.

 

 

Registered Office :

D3a-M(Suite B), Jalan Selaman 1, Dataran Palma, Off Jalan Ampang, 68000 Ampang, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

28.11.2002

 

 

Com. Reg. No.:

600197-w

 

 

Legal Form :

Private limited (limited by share)

 

 

Line of Business :

Trading in plywood, mdf board for furniture & hardware

 

 

No. of Employees :

Not available 

 

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 :

Satisfactory 

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 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

malaysia - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The central bank maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

 

Source : CIA

 

 

* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

 

 

N/A - Not Applicable

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

600197-W

COMPANY NAME

:

HUA FONG TRADING SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

28/11/2002

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

D3A-M(SUITE B), JALAN SELAMAN 1, DATARAN PALMA, OFF JALAN AMPANG, 68000 AMPANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 889, JALAN SUBANG 9, TAMAN PERINDUSTRIAN SUBANG, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

TEL.NO.

:

03-80233471

FAX.NO.

:

03-80233470

CONTACT PERSON

:

CHEE AH BOON ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

46631

PRINCIPAL ACTIVITY

:

TRADING IN PLYWOOD, MDF BOARD FOR FURNITURE & HARDWARE

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,500,000.00 DIVIDED INTO
ORDINARY SHARES 650,000 CASH AND 850,000 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 22,679,795 [2011]

NET WORTH

:

MYR 2,911,138 [2011]

 

 

 

STAFF STRENGTH

:

N/A

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

N/A

CURRENCY EXPOSURE

:

N/A

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

 

The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The SC is principally engaged in the (as a / as an) trading in plywood, mdf board for furniture & hardware.

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

 

The major shareholder(s) of the SC are shown as follows :

Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. CHEE AH BOON +

20, JALAN BK 2/2, BANDAR KINRARA, 47100 PUCHONG, SELANGOR, MALAYSIA.

571019-01-6061

750,000.00

50.00

MS. TEE WAN +

20, JALAN BK 2/2, BANDAR KINRARA, 47100 PUCHONG, SELANGOR, MALAYSIA.

621106-01-5844 6927722

750,000.00

50.00

 

 

 

---------------

------

 

 

 

1,500,000.00

100.00

 

 

 

============

=====

+ Also Director

 

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. CHEE AH BOON

Address

:

20, JALAN BK 2/2, BANDAR KINRARA, 47100 PUCHONG, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

571019-01-6061

Date of Birth

:

19/10/1957

 

 

 

Nationality

:

MALAYSIAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MS. TEE WAN

Address

:

20, JALAN BK 2/2, BANDAR KINRARA, 47100 PUCHONG, SELANGOR, MALAYSIA.

IC / PP No

:

6927722

New IC No

:

621106-01-5844

Date of Birth

:

06/11/1962

 

 

 

Nationality

:

MALAYSIAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




MANAGEMENT

 

 

 

1)

Name of Subject

:

CHEE AH BOON

 

Position

:

DIRECTOR

   

                                

 

AUDITOR

 

Auditor

:

CHONG WAI & ASSOCIATES

Auditor' Address

:

D3A-M(SUITE A), JALAN SELAMAN 1, DATARAN PALMA, OFF JALAN AMPANG, 68000 AMPANG, SELANGOR, MALAYSIA.

 

 

 

 

                              

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. SOO MEE LENG

 

 

 

 

 

New IC No

:

640722-10-7236

 

Address

:

60, JALAN BUKIT INDAH 1/9, TAMAN BUKIT INDAH, 68000 AMPANG, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

BANKING


No Banker found in our databank.

ENCUMBRANCE (S)



ENCUMBRANCE 1

Date of Creation

:

13/10/2003

Description Of Charge

:

N/A

Amount Secured

:

MYR1,000,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BERHAD

 

 

 

 

 

 

 

Form 40 Dated 20/10/2003

Registered and Numbered 1 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

11/11/2008

Description Of Charge

:

N/A

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

ALLIANCE ISLAMIC BANK BERHAD

 

 

 

 

 

 

 

Form 40 Dated 14/11/2008

Registered and Numbered 2 In The Register of Charges



ENCUMBRANCE 3

Date of Creation

:

18/11/2009

Description Of Charge

:

N/A

Amount Secured

:

MYR500,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BERHAD

 

 

 

 

 

 

 

Form 40 Dated 24/11/2009

Registered and Numbered 3 In The Register of Charges



ENCUMBRANCE 4

Date of Creation

:

27/09/2011

Description Of Charge

:

N/A

Amount Secured

:

MYR1,000,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

RHB BANK BERHAD

 

 

 

 

 

 

 

Form 40 Dated 03/10/2011

Registered and Numbered 4 In The Register of Charges



LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SC


* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.

No blacklisted record & debt collection case was found in our defaulters' databank.

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

N/A

Overseas

:

N/A

 

 

 


The SC refused to disclose its suppliers.

The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

 

]

 

Good 31-60 Days

[

 

]

 

Average 61-90 Days

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

N/A

 

 

 

Overseas

:

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The SC refused to disclose its clientele.

OPERATIONS

 

Goods Traded

:

PLYWOOD, MDF BOARD FOR FURNITURE & HARDWARE

 

 

 

 

Branch

:

NO

Other Information:


The SC is principally engaged in the (as a / as an) trading in plywood, mdf board for furniture & hardware.

The SC sells plywood and other related products.

 

PROJECTS


No projects found in our databank

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

00603 7785 0113

Current Telephone Number

:

03-80233471

Match

:

NO

 

 

 

Address Provided by Client

:

NO. 27 & 28, JALAN PJS 3/1 (JALAN MEDAN 1), TAMAN MEDAN PETALING JAYA, SELANGOR, DARUL EHSAN 46000

Current Address

:

LOT 889, JALAN SUBANG 9, TAMAN PERINDUSTRIAN SUBANG, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


we contacted one of the staff from the SC and she provided some information on the SC.

The SC is not aware of the address provided.

The contact number provided is left unanswered despite contacting on numerous ocassions.

The SC refused to disclose its number of employees.


FINANCIAL ANALYSIs

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Increased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Acceptable

[

11.81%

]

 

Return on Net Assets

:

Acceptable

[

21.53%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.The higher profit could be attributed to the increase in turnover. The SC's management had generated acceptable return for its shareholders using its assets.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

42 Days

]

 

Debtor Ratio

:

Unfavourable

[

114 Days

]

 

Creditors Ratio

:

Unfavourable

[

89 Days

]

 

 

 

 

 

 

 

 

The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The SC's debtors ratio was high. The SC should tighten its credit control and improve its collection period. The unfavourable creditors' ratio could be due to the SC taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Favourable

[

1.02 Times

]

 

Current Ratio

:

Unfavourable

[

1.30 Times

]

 

 

 

 

 

 

 

 

A minimum liquid ratio of 1 should be maintained by the SC in order to assure its creditors of its ability to meet short term obligations and the SC was in a good liquidity position. Thus, we believe the SC is able to meet all its short term obligations as and when they fall due.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Acceptable

[

4.14 Times

]

 

Gearing Ratio

:

Favourable

[

0.18 Times

]

 

 

 

 

 

 

 

 

The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. The SC was lowly geared thus it had a low financial risk. The SC was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the SC being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Although the turnover was erratic, the SC had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. The SC had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment. The SC as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

 

 

 

 

 

 

 

Overall financial condition of the SC : FAIR

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Population ( Million)

27.73

28.13

28.35

28.70

29.10

Gross Domestic Products ( % )

4.6

<0.5>

7.2

5.5

5.3

Domestic Demand ( % )

6.9

2.9

6.3

4.8

7.6

Private Expenditure ( % )

7.1

<2.7>

8.1

7.0

8.7

Consumption ( % )

8.4

0.7

6.7

6.3

7.1

Investment ( % )

1.5

<17.2>

17.7

16.2

15.9

Public Expenditure ( % )

6.5

5.2

3.8

7.6

4.7

Consumption ( % )

11.6

3.1

0.2

8.9

3.0

Investment ( % )

0.7

8.0

2.8

0.6

7.0

 

 

 

 

 

 

Balance of Trade ( MYR Million )

129,563

89,650

118,356

116,058

-

Government Finance ( MYR Million )

<34,462>

<28,450>

<40,482>

<45,511>

<43,021>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<4.8>

<5.6>

<5.4>

<4.7>

Inflation ( % Change in Composite CPI)

<3.3>

<5.2>

5.1

3.1

-

Unemployment Rate

3.7

4.5

3.9

3.3

-

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

388

331

329

415

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

1.91

2.87

2.20

3.50

-

Average 3 Months of Non-performing Loans ( % )

13.24

11.08

15.30

14.80

-

Average Base Lending Rate ( % )

6.72

5.53

6.30

6.60

-

Business Loans Disbursed( % )

11.6

10.5

14.7

15.3

-

Foreign Investment ( MYR Million )

23,261.4

22,156.8

22,517.9

23,546.1

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,599

41,578

44,148

-

-

Registration of New Companies ( % )

<4.0>

<0.1>

6.2

-

-

Liquidation of Companies ( No. )

27,992

39,075

25,585

-

-

Liquidation of Companies ( % )

23.7

39.6

<34.5>

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

269,866

312,581

271,414

-

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

18,885

19,345

19,738

-

-

Business Dissolved ( % )

<7.6>

2.4

2.0

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

497.5

486.3

543.6

363.0

-

Cellular Phone Subscribers ( Million )

25.1

30.1

32.8

35.3

-

Tourist Arrival ( Million Persons )

21.5

23.6

24.6

25.3

-

Hotel Occupancy Rate ( % )

68.0

58.0

63.0

51.3

-

 

 

 

 

 

 

Credit Cards Spending ( % )

17.1

12.8

14.1

15.6

-

Bad Cheque Offenders (No.)

34,834

36,667

33,568

27,208

-

Individual Bankruptcy ( No.)

13,907

16,228

18,119

16,155

-

Individual Bankruptcy ( % )

5.1

16.7

11.7

<10.8>

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Agriculture

3.6

0.4

2.1

4.7

4.1

Palm Oil

7.0

<1.1>

<3.4>

7.3

-

Rubber

<1.1>

<19.8>

9.9

6.4

-

Forestry & Logging

<1.5>

<5.9>

<3.3>

<4.7>

-

Fishing

4.0

5.5

5.6

2.8

-

Other Agriculture

5.9

9.0

7.9

8.5

-

Industry Non-Performing Loans ( MYR Million )

393.0

413.7

508.4

634.1

-

% of Industry Non-Performing Loans

<2.0>

1.3

2.1

3.2

-

 

 

 

 

 

 

Mining

<0.8>

<3.8>

0.2

<2.4>

2.5

Oil & Gas

12.7

2.1

0.5

<1.7>

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

36.0

44.2

49.7

46.5

-

% of Industry Non-performing Loans

0.1

0.1

0.1

0.1

-

 

 

 

 

 

 

Manufacturing #

1.3

<9.4>

11.4

5.6

4.5

Exported-oriented Industries

2.7

<19.0>

12.1

2.8

-

Electrical & Electronics

2.4

<30.3>

28.4

<4.9>

-

Rubber Products

4.2

<10.1>

25.3

15.4

-

Wood Products

<6.0>

<24.1>

20.1

<7.3>

-

Textiles & Apparel

1.9

<19.5>

<0.4>

14.8

-

Domestic-oriented Industries

9.9

<9.8>

16.3

6.3

-

Food, Beverages & Tobacco

9.5

0.2

3.0

4.2

-

Chemical & Chemical Products

1.4

<7.7>

16.2

5.6

-

Plastic Products

6.5

<9.1>

2.4

3.8

-

Iron & Steel

16.8

<32.7>

29.3

2.4

-

Fabricated Metal Products

14.7

<2.5>

14.9

25.2

-

Non-metallic Mineral

8.3

<15.5>

20.2

16.3

-

Transport Equipment

27.1

<13.5>

36.5

<9.4>

-

Paper & Paper Products

8.6

<5.0>

18.7

15.6

-

Crude Oil Refineries

7.8

0.2

<11.4>

9.3

-

Industry Non-Performing Loans ( MYR Million )

5,729.4

6,007.3

6,217.5

6,537.2

-

% of Industry Non-Performing Loans

16.8

18.3

23.8

25.7

-

 

 

 

 

 

 

Construction

2.1

5.8

5.1

4.4

7.0

Industry Non-Performing Loans ( MYR Million )

4,149.8

3,241.8

4,038.5

3,856.9

-

% of Industry Non-Performing Loans

12.2

9.9

10.7

10.2

-

 

 

 

 

 

 

Services

7.3

2.6

6.5

6.4

6.5

Electric, Gas & Water

5.0

0.4

8.5

5.6

4.8

Transport, Storage & Communication

7.8

1.6

7.7

6.5

7.3

Wholesale, Retail, Hotel & Restaurant

10.0

2.8

4.7

5.2

6.9

Finance, Insurance & Real Estate

9.2

3.8

6.1

6.3

6.5

Government Services

8.6

2.0

6.7

7.6

5.6

Other Services

5.9

4.4

4.2

5.4

5.7

Industry Non-Performing Loans ( MYR Million )

8,281.4

6,631.3

7,384.6

6,825.2

-

% of Industry Non-Performing Loans

24.3

20.2

25.7

23.4

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

INDUSTRY ANALYSIS

 

MSIC CODE

46631 : Wholesale of logs, sawn timber, plywood, veneer and related products

 

 

INDUSTRY :

MANUFACTURING

 

 

 


The manufacturing sector is expected to be driven by higher value-added activities in Malaysia.The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.


The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.


The Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.


Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.


According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.


According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %).


Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

 

Incorporated in 2002, the SC is a Private Limited company, focusing on trading in plywood, mdf board for furniture & hardware . Having been in the industry for over a decade, the SC has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. With an adequate share capital, the SC has the potential of expanding its business in future.


Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC.


We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. Return on shareholders' funds of the SC was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 2,911,138, the SC should be able to maintain its business in the near terms.


The SC's payment habit is average. With its adequate working capital, the SC should be able to pay its short term debts.


The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry.


Based on the above condition, we recommend credit be granted to the SC normally.

 

 

PROFIT AND LOSS ACCOUNT

 

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

HUA FONG TRADING SDN. BHD.

 

Financial Year End

31/12/2011

31/12/2010

31/12/2009

31/12/2008

31/12/2007

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

22,679,795

19,835,104

20,916,731

18,535,476

19,284,194

 

----------------

----------------

----------------

----------------

----------------

Total Turnover

22,679,795

19,835,104

20,916,731

18,535,476

19,284,194

Costs of Goods Sold

<20,231,624>

<18,014,362>

-

-

-

 

----------------

----------------

----------------

----------------

----------------

Gross Profit

2,448,171

1,820,742

-

-

-

 

----------------

----------------

----------------

----------------

----------------

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

495,059

308,345

338,305

277,497

446,567

 

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) BEFORE TAXATION

495,059

308,345

338,305

277,497

446,567

Taxation

<151,278>

<47,175>

<89,098>

<111,504>

<144,297>

 

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) AFTER TAXATION

343,781

261,170

249,207

165,993

302,270

 

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

1,067,357

1,006,187

1,256,980

1,090,987

788,717

 

----------------

----------------

----------------

----------------

----------------

As restated

1,067,357

1,006,187

1,256,980

1,090,987

788,717

 

----------------

----------------

----------------

----------------

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

1,411,138

1,267,357

1,506,187

1,256,980

1,090,987

- General

-

-

<500,000>

-

-

DIVIDENDS - Ordinary (paid & proposed)

-

<200,000>

-

-

-

 

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

1,411,138

1,067,357

1,006,187

1,256,980

1,090,987

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

27,333

27,648

-

-

-

Fixed deposit

<39,905>

<25,756>

-

-

-

Hire purchase

11,651

7,304

-

-

-

Trust receipts

10,904

23,962

-

-

-

Others

147,518

131,179

-

-

-

 

----------------

----------------

 

 

 

 

157,501

164,337

 

 

 

 

 

 

BALANCE SHEET

 

 

HUA FONG TRADING SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

270,890

268,187

306,898

403,688

602,854

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

-

-

-

0

 

 

 

 

 

 

 

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM ASSETS

270,890

268,187

306,898

403,688

602,854

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

2,621,538

2,400,471

-

-

-

Trade debtors

7,072,338

6,747,055

-

-

-

Other debtors, deposits & prepayments

324,421

320,126

-

-

-

Deposits with financial institutions

1,793,038

1,285,134

-

-

-

Cash & bank balances

88,745

243,119

-

-

-

Others

15,200

47,725

-

-

-

 

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT ASSETS

11,915,280

11,043,630

11,493,025

10,107,317

11,663,286

 

----------------

----------------

----------------

----------------

----------------

TOTAL ASSET

12,186,170

11,311,817

11,799,923

10,511,005

12,266,140

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

4,919,510

4,168,280

-

-

-

Other creditors & accruals

848,362

759,622

-

-

-

Hire purchase & lease creditors

59,808

54,091

-

-

-

Bank overdraft

373,346

448,617

-

-

-

Bill & acceptances payable

2,264,173

2,445,483

-

-

-

Amounts owing to director

690,103

743,919

-

-

-

 

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT LIABILITIES

9,155,302

8,620,012

9,192,897

8,161,714

9,948,050

 

----------------

----------------

----------------

----------------

----------------

NET CURRENT ASSETS/(LIABILITIES)

2,759,978

2,423,618

2,300,128

1,945,603

1,715,236

 

----------------

----------------

----------------

----------------

----------------

TOTAL NET ASSETS

3,030,868

2,691,805

2,607,026

2,349,291

2,318,090

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

1,500,000

1,500,000

1,500,000

1,000,000

1,000,000

 

----------------

----------------

----------------

----------------

----------------

TOTAL SHARE CAPITAL

1,500,000

1,500,000

1,500,000

1,000,000

1,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

1,411,138

1,067,357

1,006,187

1,256,980

1,090,987

 

----------------

----------------

----------------

----------------

----------------

TOTAL RESERVES

1,411,138

1,067,357

1,006,187

1,256,980

1,090,987

 

 

 

 

 

 

 

----------------

----------------

----------------

----------------

----------------

SHAREHOLDERS' FUNDS/EQUITY

2,911,138

2,567,357

2,506,187

2,256,980

2,090,987

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Hire purchase creditors

81,745

81,915

-

-

-

Deferred taxation

37,985

42,533

-

-

-

 

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM LIABILITIES

119,730

124,448

100,839

92,311

227,103

 

----------------

----------------

----------------

----------------

----------------

 

3,030,868

2,691,805

2,607,026

2,349,291

2,318,090

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

HUA FONG TRADING SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

88,745

243,119

-

-

-

Net Liquid Funds

<284,601>

<205,498>

-

-

-

Net Liquid Assets

138,440

23,147

2,300,128

1,945,603

1,715,236

Net Current Assets/(Liabilities)

2,759,978

2,423,618

2,300,128

1,945,603

1,715,236

Net Tangible Assets

3,030,868

2,691,805

2,607,026

2,349,291

2,318,090

Net Monetary Assets

18,710

<101,301>

2,199,289

1,853,292

1,488,133

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

514,899

584,623

-

-

-

Total Liabilities

9,275,032

8,744,460

9,293,736

8,254,025

10,175,153

Total Assets

12,186,170

11,311,817

11,799,923

10,511,005

12,266,140

Net Assets

3,030,868

2,691,805

2,607,026

2,349,291

2,318,090

Net Assets Backing

2,911,138

2,567,357

2,506,187

2,256,980

2,090,987

Shareholders' Funds

2,911,138

2,567,357

2,506,187

2,256,980

2,090,987

Total Share Capital

1,500,000

1,500,000

1,500,000

1,000,000

1,000,000

Total Reserves

1,411,138

1,067,357

1,006,187

1,256,980

1,090,987

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.01

0.03

-

-

-

Liquid Ratio

1.02

1.00

-

-

-

Current Ratio

1.30

1.28

1.25

1.24

1.17

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

42

44

-

-

-

Debtors Ratio

114

124

-

-

-

Creditors Ratio

89

84

-

-

-

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.18

0.23

-

-

-

Liabilities Ratio

3.19

3.41

3.71

3.66

4.87

Times Interest Earned Ratio

4.14

2.88

-

-

-

Assets Backing Ratio

2.02

1.79

1.74

2.35

2.32

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

2.18

1.55

1.62

1.50

2.32

Net Profit Margin

1.52

1.32

1.19

0.90

1.57

Return On Net Assets

21.53

17.56

12.98

11.81

19.26

Return On Capital Employed

18.84

14.80

12.98

11.81

19.26

Return On Shareholders' Funds/Equity

11.81

10.17

9.94

7.35

14.46

Dividend Pay Out Ratio (Times)

0.00

0.77

-

-

-

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

 

 

 


 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.71

UK Pound

1

Rs.82.79

Euro

1

Rs.71.43

 

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%)

 

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.