MIRA INFORM REPORT

 

 

Report Date :

13.02.2014

 

IDENTIFICATION DETAILS

 

Name :

KUNG LONG BATTERIES INDUSTRIAL CO., LTD.

 

 

Registered Office :

No.244, Nan Kang 3 Rd., Nan Tou City, Nan Tou Hsien

 

 

Country :

Taiwan

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

25.01.1990

 

 

Com. Reg. No.:

23556563

 

 

Legal Form :

Joint Stock Company

 

 

Line of Business :

Manufacturing and sale of batteries

 

 

No. of Employees :

200

 

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 – September 30, 2013

 

Country Name

Previous Rating

(30.06.2013)

Current Rating

(30.09.2013)

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. 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 1.8%, due primarily to a 13.1% year-on-year decline in exports. In 2010 GDP grew 10.7%, as exports returned to the level of previous years, and in 2011, grew 4.0%. In 2012, however, growth fell to 1.3%, 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 except for the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010, so far Taiwan has been excluded from this greater economic integration in part because of its diplomatic status. Negotiations continue on such follow-on components of ECFA regarding trade in goods and services. The MA administration has said that the ECFA will serve as a stepping stone toward trade pacts with other key trade partners, which Taiwan subsequently launched with Singapore and New Zealand. 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 11.2% of the island's total population as of 2012. The island runs a large trade surplus largely because of its surplus with China, and its foreign reserves are the world's fifth largest, behind China, Japan, Saudi Arabia, and Russia. In 2006 China overtook 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. In August 2012, Taiwan Central Bank signed a memorandum of understanding on cross-Strait currency settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese RMB and the New Taiwan dollar across the Strait, which could help develop Taiwan into a local RMB hub. 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

 

 

 

 


Company name and address

 

Company Name:

KUNG LONG BATTERIES INDUSTRIAL CO., LTD.

Supplied Name:

Kung Long Batteries Industrial Co. Ltd.

Trading Address:

No.244, Nan Kang 3 Rd., Nan Tou City, Nan Tou Hsien, Taiwan

Supplied Address:

Le Long Vietnam Co Ltd

Telephone Number:

+886-49 225-4777

Fax Number:

+886-49-225-5139

 

Notes: Subject’s exact name and address are as above and the supplied address is subject’s subsidiary company name.

 

 

Company Identification Details

 

Registered Name:

Kung Long Batteries Industrial Co., Ltd.

Registered Address:

No.244, Nan Kang 3 Rd., Nan Tou City, Nan Tou Hsien, Taiwan

Date of Foundation:

1990-01-25

Registration Number:

23556563

Registry:

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

Registered Capital:

NTD 1,000,000,000 (USD 32,900,000)

(As of 2014.02, 1 NTD = 0.0329 USD)

Paid-up Capital:

NTD 815,853,940 (USD 26,841,595)

Legal Representatives:

Yaoming Li

Legal Form:

Joint Stock Company

Principal Activities:

Manufacturing and sale of batteries, etc.

Staff:

About 200 Employees (Taiwan)

Listed at Stock Exchange:

Yes; Stock Code: 1537

Date of Last Annual Return:

2013-07-22

 

 

History

 

Subject was incorporated on 1990-01-25 with registered number 23556563 as Joint Stock Company in Taiwan.

 

Subject listed on Taiwan stock exchange on 2002-01-22.

 

Change of Name

Current Company Name (in Chinese)

廣隆光電科技股份有限公司

Former Company Name (in Chinese)

廣隆電池工業股份有限公司

 

 

Shareholders

 

Name

Subscription Shares

Yaoming Li

3,604,951         

 

Ruixun Li

 

8,242,802

 

Jingyi Li

645,263

Maolong Investment Co., Ltd. (Literal Translation)

1,277,469

Changshou Cai

29,000

Lee Large Co., Ltd.

1,000,000

 

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

 

Shareholder Information:

1

Registered Name:

Maolong Investment Co., Ltd. (Literal Translation)

Registered Address:

No. 269, Jen Ai St., Tsaotun Town, Nantou Hsien, Taiwan, R.O.C.

Date of Foundation:

2004-07-16

Registration Number:

27400129

Registry:

MOEA Central Office

Registered Capital:

NTD 20,000,000 (USD 658,000)

(As of 2014.02, 1 NTD = 0.0329 USD)

Legal Representatives:

Donghua Zhong

Legal Form:

Private Limited Liability Company

Principal Activities:

General Investment

2

Registered Name:

Lee Large Co., Ltd.

Registered Address:

No.61, Jen Ai St., Tsaotun Town, Nantou Hsien, Taiwan, R.O.C.

Date of Foundation:

1999-10-21

Registration Number:

70646236

Registry:

MOEA Central Office

Registered Capital:

NTD 59,070,000 (USD 1,943,403)

(As of 2014.02, 1 NTD = 0.0329 USD)

Legal Representatives:

Yingyu Zhang

Legal Form:

Private Limited Liability Company

Principal Activities:

wholesale and retail of batteries, etc.

Date of Last Annual Return:

2011-08-02

 

 

Subsidiaries & Branches

 

Factories

1

Name:

Kung Long Batteries Industrial Co., Ltd. Kung Long Factory

Address:

No. 244, Nan Kang, 3Rd Rd., Nan Tou City, Nan Tou Hsien, Taiwan

Date of Foundation:

1990-04-27

Date of Registration:

1990-05-19

Factory Registration Number:

99652016

Factory Manager:

Yaoming Li

Status:

In Production

Date of Last Annual Return:

2001-06-13

Major Products:

271 Computer and its peripheral equipment

269 Other electronic components

282 Battery

2

Name:

Kung Long Batteries Industrial Co., Ltd. Lee Long Factory

Address:

No. 6, Zili 3Rd Rd., Yongfeng Li, Nan Tou City, Nan Tou Hsien, Taiwan

Date of Foundation:

1995-06-08

Date of Registration:

1995-09-23

Factory Registration Number:

99652018

Factory Manager:

Yaoming Li

Status:

In Production

Date of Last Annual Return:

2013-09-13

Major Products:

271 Computer and its peripheral equipment

269 Other electronic components

282 Battery

 

Subsidiary Company

Name:

Le Long Vietnam Co., Ltd.

Address:

Cum Cong Nghiep Duc My-Xa Duc Hoa Dong-Huyen Duc Hoa-Tinh Long An Vietnam

Telephone Number:

+84-72-377-9666

Fax Number:

+84-72-377-9476

Principal Activities:

Manufacturing and sale of batteries, etc.

Staff:

About 3000 Employees

 


 

Personnel Information

 

Core Management

 

Directors

1

Name

Yaoming Li

Position

Board Chairman

2

Name

Ruixun Li

Position

Director

3

Name

Jingyi Li

Position

Director

4

Name

Zhengzhong Chen

Position

Director

5

Name

Donghua Zhong

Position

Director

6

Name

Zhiyuan Xu

Position

Director

7

Name

Yanhong Jiang

Position

Director

8

Name

Changshou Cai

Position

Supervisor

9

Name

Shouxin Chen

Position

Supervisor

10

Name

Lee Large Co., Ltd.

Position

Supervisor

 

Personnel Structure

 

Total Employees

About 200 Employees (Taiwan)

 

 

Operation Information

 

Offices & Factories

 

 

Headquarters

Add

No.244, Nan Kang 3 Rd., Nan Tou City, Nan Tou Hsien Taiwan

 

Production Information

 

Subject is engaged in manufacturing of batteries, etc.

Subject has factories in Nan Tou Hsien, Taiwan for production.

Subject has a subsidiary company in Vietnam for production.

It is introduced that subject’s total annual production capacity is over 1,500,000 KAVH.

Subject obtained the certification of ISO9001, ISO 9002, ISO14001, OHSAS18001 and TL9000.

 

 

Purchase Information

 

The registered activities of subject:

Business Code

Details

--

Manufacturing, buying and selling, import and export of all kinds of batteries

--

Manufacturing, assembling, processing, buying and selling of vehicle battery and closed lighting battery

--

Buying and selling of the materials referred to in the preceding paragraph

--

General import and export trade business (Besides licensed business)

--

Processing, buying and selling of all kinds of computer and its peripheral equipment and parts

--

Price bidding and distribution business related to domestic and foreign manufacturers products agent

CC01010

Manufacturing of electricity generation, transmission and power machinery

CC01030

Manufacturing of electric appliance

CC01040

Manufacturing of lighting equipment

CC01050

Manufacturing of the data storage and processing equipment

CC01060

            Manufacturing of cable machinery equipment

CC01080

Manufacturing of electronic components

CC01090

Manufacturing of batteries

ZZ99999

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

 

The components and raw materials for production are purchased from home and abroad.

 

Sales Information

 

Subject is engaged in sale of batteries, etc.

The major products sold by subject include electric vehicle battery, golf car battery, automotive battery, motorcycle battery and so on.

Subject’s sales regions include Taiwan domestic market, Hong Kong, Mainland China, Japan, South Korea, Singapore, India, Australia, Germany, US, Canada, Argentina, New Zealand, etc.

The general delivery lead time of subject is about 80 days.

Subject’s major customers are Advanced Battery Systems Inc. and Advanced Battery Systems Llc., etc.

 

Import and export right:

Import right

Yes

Export right

Yes

 

 

Settlements

 

Purchase

 

Domestic Purchase (Taiwan)

Product

Terms

Proportion

Components and raw materials, etc

T/T, Cash, Credit Sale, etc

100%

 

Foreign Purchase

Product

Terms

Proportion

Components and raw materials, etc

L/C, T/T, etc

100%

 

Sales

 

Domestic Markets

Product

Terms

Proportion

Batteries, etc.

T/T, Cash, Credit Sale, etc

100%

 

Export

Product

Terms

Proportion

Batteries, etc.

L/C, T/T, etc

100%

 

Balance sheet

 

Unit: NTD/000

 

2012-12-31

2011-12-31

Assets

 

 

Current Assets

 

 

Cash and cash equivalents

178,029.00

223,349.00

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

5,016.00

0.00

Notes receivable - net

47,927.00

34,938.00

Accounts receivable - net

664,997.00

446,855.00

Other financial assets - current

978.00

0.00

Inventories

178,921.00

274,268.00

Other current assets

11,192.00

24,207.00

Current assets

1,087,060.00

1,003,617.00

Funds and Investments

 

 

Available-for-sale financial assets - non current

16,801.00

16,889.00

Financial assets carried at cost - non current

0.00

0.00

Equity investments under equity method

1,774,217.00

1,529,157.00

Investments

1,774,217.00

1,529,157.00

Funds and long-term investments

1,791,018.00

1,546,046.00

Fixed Assets

 

 

Cost

 

 

Land

87,272.00

87,272.00

Buildings and structures

87,936.00

89,474.00

Machinery and equipment

17,952.00

30,396.00

Other facilities

10,264.00

14,400.00

Fixed assets cost

203,424.00

221,542.00

Accumulated depreciation

-59,796.00

-76,188.00

Fixed assets

143,628.00

145,354.00

Intangible Assets

 

 

Other assets

 

 

Rental assets

56,006.00

56,443.00

Guarantee deposits paid

160.00

160.00

Other assets - other

1,480.00

17,676.00

Other assets

57,646.00

74,279.00

Assets

3,079,352.00

2,769,296.00

Liabilities and Stockholders' Equity

 

 

Liabilities

 

 

Current Liabilities

 

 

Short-term borrowings

113,256.00

0.00

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

245.00

229.00

Notes payable

13,594.00

20,200.00

Accounts payable

81,196.00

92,111.00

Accounts payable - related parties

34,710.00

232,246.00

Income tax payable

60,275.00

58,940.00

Accrued expenses

104,757.00

71,609.00

Other current liabilities

58,028.00

67,046.00

Current liabilities

466,061.00

542,381.00

Long term Liabilities

 

 

Reserves

 

 

Other Liabilities

 

 

Pension reserve / accrued pension liability

5,771.00

0.00

Guarantee deposits received

107.00

900.00

Deferred income tax liabilities

147,131.00

105,575.00

Other liabilities - other

8,514.00

9,034.00

Other liabilities

161,523.00

115,509.00

Liabilities

627,584.00

657,890.00

Stockholders' Equity

 

 

Capital

 

 

Common stock

815,854.00

815,854.00

Capital Surplus

 

 

Capital surplus - additional paid-in capital

592,178.00

592,178.00

Capital surplus - treasury stock transactions

4,485.00

4,485.00

Capital surplus - premium from merger

22,146.00

22,146.00

Capital surplus

618,809.00

618,809.00

Retained Earnings

 

 

Legal reserve

225,150.00

193,646.00

Special reserve

106,130.00

153,775.00

Unappropriated retained earnings

865,741.00

435,452.00

Retained earnings

1,197,021.00

782,873.00

Stockholders' Equity and Other adjustment

 

 

Cumulative translation adjustments

-159,775.00

-103,019.00

Net loss not recognized as pension cost

-16,942.00

0.00

Unrealized gains (losses) on financial instruments

-3,199.00

-3,111.00

 

0.00

0.00

Equity adjustments

-179,916.00

-106,130.00

Stockholdersˉ equity

2,451,768.00

(USD 80,663,167.20)

2,111,406.00

(USD 69,465,257.40)

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

0.00

0.00

 

0.00

0.00

(As of 2014.02, 1 NTD = 0.0329 USD)

 

 

 

 

 

 

 

 

 

 

Profit and Loss Account

 

Unit: NTD/000

 

2012

2011

Sales

4,861,138.00

(USD 159,931,440.20)

4,038,101.00

(USD 132,853,522.90)

Sales returns

8,583.00

13,455.00

Sales discounts and allowances

13,242.00

10,213.00

Sales

4,839,313.00

4,014,433.00

Other operating revenue

61,121.00

58,371.00

Operating income

4,900,434.00

4,072,804.00

Cost of sales

4,199,975.00

3,652,399.00

Operating costs

4,199,975.00

3,652,399.00

Gross profit (loss) from operations

700,459.00

420,405.00

Unrealized gains on intercompany transactions

-6,212.00

12.00

Selling expense

172,781.00

162,771.00

General and administrative expenses

71,048.00

54,590.00

Research and development expenses

6,679.00

6,934.00

Operating expenses

250,508.00

224,295.00

Operating income (loss)

456,163.00

196,098.00

Non-Operating Income

 

 

Interest income

262.00

254.00

Income from long-term equity investments under the equity method

313,441.00

143,504.00

Investment income

313,441.00

143,504.00

Gains on disposal of fixed assets

715.00

1,025.00

Foreign exchange gains

1,715.00

23,777.00

Revaluation gain on financial assets

42.00

0.00

Miscellaneous income

8,065.00

22,905.00

Non-operating revenues and gains

324,240.00

191,465.00

Non-Operating Expenses

 

 

Interest expense

2,499.00

5,045.00

Loss on sale of investments

0.00

2,816.00

Revaluation loss on financial assets

0.00

706.00

Revaluation loss on financial liabilities

42.00

229.00

Miscellaneous disbursements

436.00

493.00

Non-operating expenses and losses

2,977.00

9,289.00

Income from continuing operations before income tax

777,426.00

378,274.00

Income tax expense (benefit)

159,314.00

63,239.00

Income from continuing operations

618,112.00

315,035.00

Net income (loss)

618,112.00

(USD 20,335,884.80)

315,035.00

(USD 10,364,651.50)

Primary Earnings per Share

 

 

Income (loss) from continuing operations

7.58

3.90

Primary earnings per share

7.58

3.90

Diluted earnings per share

 

 

Income (loss) from continuing operations

7.53

3.86

Diluted earnings per share

7.53

3.86

(As of 2014.02, 1 NTD = 0.0329 USD)

 

 

Cash Flows

 

Unit: NTD/000

 

2012

2011

Cash Flows from Operating Activities - Indirect Method

 

 

Net Income (Loss)

618,112

315,035

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

 

 

Depreciation Expense

6,202

5,990

Amortization Expense

5,326

4,190

Provision (Reversal of Provision) for Bad Debts Losses

0

-1,046

Amortization of Discounts (Premiums) on Bonds Payable

0

926

Loss (Gain) on Decline (Recovery) in Market Value, Scrap and Obsolescence of Inventories

3,676

-7,030

Investment Loss (Income) Recognized under Equity Method

-313,441

-143,504

Cash Dividends Received from Investments Accounted for under Equity Method

0

150,950

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

-715

-1,025

Loss (Gain) on Disposal of Long-term Investments under Equity Method

0

2,816

Unrealized Revaluation Loss (Gain) on Financial Assets and Liabilities

0

935

Unrealized Gain (Loss) on Intercompany Transactions

-6,211

12

Other Adjustments to Reconcile Net Income

-3,997

-5,217

Changes in Operating Assets and Liabilities

 

 

Decrease (Increase) in Financial Assets Held for Trading

-5,000

0

Decrease (Increase) in Notes Receivable

-12,989

-9,575

Decrease (Increase) in Accounts Receivable

-218,142

6,485

Decrease (Increase) in Inventories

91,671

52,350

Decrease (Increase) in Other Current Assets

12,958

1,461

Decrease (Increase) in Other Financial Assets

1,257

0

Decrease (Increase) in Deferred Tax Assets

51,003

628

Decrease (Increase) in Other Operating Assets

0

872

Increase (Decrease) in Notes Payable

-6,606

-2,745

Increase (Decrease) in Accounts Payable

-10,915

40,781

Increase (Decrease) in Accounts Payable - Related Parties

-197,536

-83,261

Increase (Decrease) in Income Tax Payable

1,335

58,940

Increase (Decrease) in Accrued Expenses

33,148

-23,329

Increase (Decrease) in Other Current Liabilities

-2,807

38,021

Increase (Decrease) in Accrued Pension Liabilities

1,129

0

Increase (Decrease) in Other Operating Liabilities

-187

-174

Net Cash Provided by (Used in) Operating Activities

47,271

403,486

Cash Flows from Investing Activities

 

 

Purchase of Property, Plant and Equipment

-4,039

-4,571

Proceeds from Disposal of Property, Plant and Equipment

382

343

Decrease (Increase) in Refundable Deposits

0

1,176

Decrease (Increase) in Other Assets

-1,430

-6,242

Net Cash Provided by (Used in) Investing Activities

-5,087

-9,294

Cash Flows from Financing Activities

 

 

Increase (Decrease) in Short-term Loans

113,256.00

-110,694.00

Increase (Decrease) in Guarantee Deposits Received

-793.00

0.00

Cash Dividends Paid

-203,964.00

-337,537.00

Net Cash Provided by (Used in) Financing Activities

-91,501.00

-448,231.00

Effect of Exchange Rate Changes

3,997.00

5,217.00

Net Increase (Decrease) in Cash and Cash Equivalents

-45,320.00

-48,822.00

Cash and Cash Equivalents, Beginning of year

223,349.00

272,171.00

Cash and Cash Equivalents, End of year

178,029.00

223,349.00

Supplemental Cash Flow Information

 

 

Interest Paid

2,458.00

4,162.00

Interest Paid- Excluding Capitalized Interest

2,458.00

4,162.00

Income Tax Paid

103,570.00

3,671.00

Non-cash Investing and Financing Activities

 

 

Conversion of Bonds to Common Stock

0.00

45,728.00

 

Bankers

 

Name

Mega International Commercial Bank Co., Ltd.

 

 

Public Record

 

Mortgage

 

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

 

Lawsuit

 

1

Trial Number:

95, Toulaojian, 3

Date of Trial:

2006-10-13

Reason:

The difference of overtime pay

Claimant:

Kung Long Batteries Industrial Co., Ltd.

Defendant:

Not Stated

2

Trial Number:

95, Toulaojian, 3

Date of Trial:

2006-09-14

Reason:

The difference of overtime pay

Claimant:

Not Stated

Defendant:

Kung Long Batteries Industrial Co., Ltd.

3

Trial Number:

95, Toubu, 7

Date of Trial:

2006-01-25

Reason:

The difference of overtime pay

Claimant:

Not Stated

Defendant:

Kung Long Batteries Industrial Co., Ltd.

 

 

Interview Details

 

Name

Mr. Zhai

Position

Salesman

Department

Overseas Sales


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.62.13

UK Pound

1

Rs.102.25

Euro

1

Rs.84.72

 

 

INFORMATION DETAILS

 

Report Prepared by :

NIS

 

 

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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