MIRA
INFORM REPORT
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Report Date : |
04.12.2014 |
IDENTIFICATION DETAILS
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Name : |
SANHE YANYUXIANG INDUSTRY CO., LTD. |
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Registered Office : |
On the East of |
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Country : |
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Financials (as on) : |
31.12.2013 |
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Date of Incorporation : |
30.09.2002 |
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Com. Reg. No.: |
131082000009546 |
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Legal Form : |
Limited Liabilities Company |
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Line of Business : |
Engaged in processing and selling diamond products,
cutting machinery spare parts; photovoltaic products; installing
electromechanical equipment; network engineering; selling household
appliances, daily necessaries, textiles, office products, office furniture,
hardware machine; decorative materials, building materials, communication
device; maintenance of household appliances as well as importing and
exporting commodities. |
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No of Employees : |
70 (Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
No Complaints |
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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 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
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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, growth of the
private sector, development of stock markets and a modern banking system, 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 considered important to "economic
security," explicitly looking to foster globally competitive industries.
After keeping its currency tightly linked to the US dollar for years, in July
2005 China 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 and expanded the daily trading band within which the RMB
is permitted to fluctuate. 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 2013 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 consumption; (b) facilitating higher-wage job
opportunities for the aspiring middle class, including rural migrants and
increasing numbers of college graduates; (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. Several factors are converging to slow China's growth, including
debt overhang from its credit-fueled stimulus program, industrial overcapacity,
inefficient allocation of capital by state-owned banks, and the slow recovery
of China's trading partners. The government's 12th Five-Year Plan, adopted in
March 2011 and reiterated at the Communist Party's "Third Plenum"
meeting in November 2013, emphasizes continued economic reforms and the need to
increase domestic consumption in order to make the economy less dependent in
the future on fixed investments, exports, and heavy industry. However, China
has made only marginal progress toward these rebalancing goals. The new
government of President XI Jinping has signaled a
greater willingness to undertake reforms that focus on China's long-term
economic health, including giving the market a more decisive role in allocating
resources.
|
Source : CIA |
Company name & address
SANHE
YANYUXIANG INDUSTRY CO., LTD.
NO. 8, SOUTH OF YINGBIN ROAD, YANJIAO ECONOMIC
DEVELOPMENT ZONE,
SANHE, HEBEI PROVINCE 101601 PR CHINA
TEL: 86 (0) 316-3313890 FAX: 86 (0) 316-3317271
EXECUTIVE SUMMARY
INCORPORATION DATE : SEP. 30, 2002
REGISTRATION NO. :
131082000009546
REGISTERED LEGAL FORM : LIMITED LIABILITIES CO.
CHIEF EXECUTIVE :
MR. GAO CONGRONG (CHAIRMAN)
STAFF STRENGTH :
70
REGISTERED CAPITAL : CNY 15,000,000
BUSINESS LINE :
MANUFACTURING & TRADING
TURNOVER : CNY 53,080,000 (AS OF DEC. 31, 2013)
EQUITIES :
CNY 15,690,000 (AS OF DEC. 31, 2013)
PAYMENT :
No Complaints
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION :
FAIRLY STABLE
OPERATIONAL TREND :
STEADY
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE : CNY 6.15= 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
Note: The “On the East of Yanjiao
Hospital,
SC was registered as a Limited liabilities co. at local
Administration for Industry & Commerce (AIC - The official body of issuing
and renewing business license) on Sep. 30, 2002.
Company Status: Limited
liabilities co. This form of business in PR
China is defined as a legal person. No more than fifty shareholders contribute its
registered capital jointly. Shareholders bear limited liability to the
extent of shareholding, and the co. is liable for its debts only to extent
of its total assets. The characteristics of this form of co. are as
follows: Upon the establishment of
the co., an investment certificate is issued to the each of shareholders. The board of directors is
comprised of three to thirteen members. The minimum registered
capital for a co. is CNY 30,000. Shareholders may take their
capital contributions in cash or by means of tangible assets or intangible
assets such as industrial property and non-patented technology. Cash contributed by all
shareholders must account for at least 30% of the registered capital. Existing shareholders have
pre-exemption right to purchase shares of the co. offered for sale by the
other shareholders and to subscribe for the newly increased registered
capital of the co.
SC’s registered business scope includes processing and selling
diamond products, cutting machinery spare parts; photovoltaic products;
installing electromechanical equipment; network engineering; selling household
appliances, daily necessaries, textiles, office products, office furniture,
hardware machine; decorative materials, building materials, communication
device; maintenance of household appliances as well as importing and exporting
commodities.
SC is mainly engaged in manufacturing and
selling diamond products.
Mr.
Gao Congrong is the legal
representative, chairman and general manager of SC at present.
SC is
known to have approx. 70 employees at present.
SC is currently operating at the above stated address, and this address
houses its operating office and factory in the development zone of Sanhe City. The detailed premise
information is unknown.
http://www.yanyuxiang.net/ The
design is professional and the content is well organized. At present the web
site is in Chinese version.
Changes of its
registered information are as follows:
|
Date of change |
Item |
Before the
change |
After the change |
|
2013 |
Shareholdings |
Rong Youhe 20% Gao Congrong 60% An Jiancheng 20% |
Present ones |
|
Registered capital |
CNY 5,000,000 |
Present amount |
Organization code: 743417229
See below for SC as executive party (defendant).
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Executed
Party |
Sanhe Yanyuxiang Industry Co., Ltd. |
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Court |
Sanhe
City, Hebei Province People's Court |
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Date of Case |
2011-7-25 |
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Case
Number |
(2011) 00948 |
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Claim Amount |
RMB 16,309 |
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Case Status |
Completed |
Remark: Due to the lack of information, we are
unable to provide the cause of action, judgment or other information.
MAIN SHAREHOLDERS:
Name
Investment amount (CNY) %
of Shareholding
Rong Youhe
1,000,000 6.67
Gao Congrong
14,000,000 93.33
Legal
Representative, Chairman and General Manager:
Mr. Gao Congrong , with university education. He is currently responsible
for the overall management of SC.
Working
Experience(s):
At present Working in SC as legal representative, chairman and general manager.
Supervisor
Rong Youhe
Business operations
SC is mainly engaged in manufacturing and
selling diamond products.
SC’s products mainly include: diamond
tools
SC
sources its materials 60% from domestic market and 40% from overseas market. SC
sells 70% of its products in domestic market and 30% 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 T/T, L/C, Check and Credit of
30-60 days.
Note:
SC declined to release its major suppliers and clients.
Trademark & Patents
No record
SC is not known to have the subsidiary at present.
Overall payment appraisal:
( ) Excellent (
) Good (X) Average (
) Fair ( ) Poor
( ) Not yet determined
The appraisal serves as a reference to reveal SC's payments habits and
ability to pay. It is based on the 3
weighed factors: Trade payment
experience (through current enquiry with SC's suppliers), our delinquent
payment and our debt collection record concerning SC.
Trade payment experience: SC did not
provide any name of trade/service suppliers and we have no other sources to
conduct the enquiry at present.
Delinquent
payment record: None in our database.
Debt collection record: No overdue amount owed
by SC was placed to us for collection within the last 6 years.
The banking
information of SC is unknown.
Balance Sheet
Unit: CNY’000
|
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As
of Dec. 31, 2012 |
As
of Dec. 31, 2013 |
|
Cash & bank |
670 |
700 |
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Inventory |
6,900 |
11,000 |
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Bills receivable |
0 |
6,050 |
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Accounts
receivable |
11,340 |
9,300 |
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Other
receivables |
6,090 |
12,240 |
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Other current
assets |
230 |
50 |
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------------------ |
------------------ |
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Current assets |
25,230 |
39,340 |
|
Fixed assets net
value |
1,550 |
1,890 |
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Long term
investment |
0 |
0 |
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Projects under
construction |
0 |
0 |
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Intangible and
other assets |
10 |
6,940 |
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------------------ |
------------------ |
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Total assets |
26,790 |
48,170 |
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=========== |
=========== |
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Short loan |
0 |
0 |
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Accounts payable |
9,970 |
25,070 |
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Advances from
clients |
0 |
0 |
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Taxes payable |
-380 |
-310 |
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Other Accounts
payable |
11,560 |
220 |
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Other current
liabilities |
0 |
0 |
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------------------ |
------------------ |
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Current
liabilities |
21,150 |
24,980 |
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Long term
liabilities |
0 |
7,500 |
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------------------ |
------------------ |
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Total
liabilities |
21,150 |
32,480 |
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Equities |
5,640 |
15,690 |
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------------------ |
------------------ |
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Total
liabilities & equities |
26,790 |
48,170 |
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=========== |
=========== |
Income Statement
Unit: CNY’000
|
|
As of Dec. 31,
2012 |
As of Dec. 31,
2013 |
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Turnover |
71,870 |
53,080 |
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Cost of goods sold |
66,920 |
49,390 |
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Sales expense |
2,820 |
1,490 |
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Management expense |
1,590 |
1,480 |
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Finance expense |
310 |
520 |
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Profit before tax |
150 |
120 |
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Less: profit tax |
0 |
40 |
|
Profits |
150 |
80 |
Important
Ratios
=============
|
|
As of Dec. 31, 2012 |
As of Dec. 31, 2013 |
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*Current ratio |
1.19 |
1.57
|
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*Quick ratio |
0.87 |
1.13
|
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*Liabilities
to assets |
0.79 |
0.67
|
|
*Net profit
margin (%) |
0.21 |
0.15
|
|
*Return on
total assets (%) |
0.56 |
0.17
|
|
*Inventory
/Turnover ×365 |
36 days |
76 days |
|
*Accounts
receivable/Turnover ×365 |
58 days |
64 days |
|
*Turnover/Total
assets |
2.68 |
1.10
|
|
* Cost of
goods sold/Turnover |
0.93 |
0.93
|
PROFITABILITY:
AVERAGE
l
The turnover of SC appears average, but it
decreased in 2013.
l
SC’s net profit margin is average.
l
SC’s return on total assets is average.
l
SC’s cost of goods sold is fairly high, comparing with
its turnover.
LIQUIDITY: AVERAGE
l
The current ratio of SC is maintained in a normal
level.
l
SC’s quick ratio is maintained in a normal level.
l
The inventory of SC appears average.
l
The accounts receivable of SC appears average.
l
SC has no short-term loan in both years.
l
SC’s turnover is in an average level, comparing
with the size of its total assets.
LEVERAGE: AVERAGE
l
The debt ratio of SC is fairly high in 2012 and
average in 2013.
l
The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly stable.
SC is considered small-sized in its line with fairly stable financial
conditions.
DIAMOND INDUSTRY – INDIA
-
From time immemorial, India is well known in the world as the birthplace
for diamonds. It is difficult to trace the origin of diamonds but history
says that in the remote past, diamonds were mined only in India. Diamond
production in India can be traced back to almost 8th Century B.C.
India, in fact, remained undisputed leader till 18th Century
when Brazilian fields were discovered in 1725 followed by emergence of S.
Africa, Russia and Australia.
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The achievement of the Indian diamond industry was possible only due to
combination of the manufacturing skills of the Indian workforce and the untiring
and unflagging efforts of the Indian diamantaires,
supported by progressive Government policies.
-
The area of study of family owned diamond businesses derives its
importance from the huge conglomerate of family run organizations which operate
in the diamond industry since many generations.
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Some of the basic traits of family run business enterprises include
spirit of entrepreneurship, mutual trust lowers transaction costs, small,
nimble and quick to react, information as a source of advantage and philanthropy.
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Family owned diamond businesses need to improve on many fronts including
higher standard of corporate governance, long-term performance – focused
strategies, modern management and technology.
-
Utmost caution is to be exercised while dealing with some medium and
large diamond traders which are usually engaged in fictitious import – export,
inter-company transactions, financially assisted by banks. In the process,
several public sector banks lost several hundred million rupees. They mostly
diverted borrowed money for diamond business into real estate and capital
markets.
-
Excerpts from Times of India dated 30th October 2010 is as
under –
-
Gem & Jewellery Export Promotion Council
in its statistical data has shown the export of polished diamonds to have increase
by 28 % in February 2013. Compared to $ 1.4 bn worth
of polished diamond export in February, 2012, India exported $ 1.84 billion
worth of polished diamonds in February 2013. A senior executive of GJEPC said,
“Export of cut and polished diamonds started falling month-wise after the
imposition of 2 % of import duty on the polished diamonds. But February, 2013
has given a new ray of hope to the industry as the export of polished diamonds
has actually increased by 28 %. It means the industry is on the track of
recovery and round tripping of diamonds has stopped completely.” Demand has
started coming from the US, the UK, Japan and China. India’s polished diamond
export is expected to cross $ 21 bn in 2013-14.
-
The banking sector has started exercising restraint while following
prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel
III accord – a global voluntary regulatory standard on bank capital adequacy,
stress testing and market liquidity.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.89 |
|
UK Pound |
1 |
Rs.96.83 |
|
Euro |
1 |
Rs.76.57 |
INFORMATION DETAILS
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Analysis Done by
: |
SUM |
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Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.