MIRA INFORM REPORT

Report Date :

28.02.2014

IDENTIFICATION DETAILS

Name :	DAH HWA LEATHER & TRADING CO. LTD.

Registered Office :	1/F., Hillwood Mansion, 45-47 Hillwood Road, Tsimshatsui, Kowloon

Country :	Hong Kong

Date of Incorporation :	1959. (Sole Proprietorship)

Com. Reg. No.:	06021935

Legal Form :	Private Limited Company

Line of Business :	Importer, Exporter, Wholesaler and Distributor; Commission Agent of all types of soft finished leathers such as sheep nappa and suede; pig skin; cowhide and other fashionable printed and embossed leathers.

No. of Employees :	25. (Including Showroom)

RATING & COMMENTS

MIRA’s Rating :

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)

Hong Kong

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

HONG KONG - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 12% of total system deposits in Hong Kong by the end of 2013. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies.

Source : CIA

Company name & address

DAH HWA LEATHER & TRADING CO. LTD.

ADDRESS: 1/F., Hillwood Mansion, 45-47 Hillwood Road, Tsimshatsui, Kowloon, Hong Kong.

PHONE: 852-2367 7317

FAX: 852-2721 8979

E-MAIL: enquiry@dahhwaleather.com.hk

admin@dahhwaleather.com.hk

MANAGEMENT

Managing Director: Dr. Lee Sam Yuen, John

SUMMARY

Establishment: 1959. (Sole Proprietorship)

Incorporated on: 6th March, 1979.

Organization: Private Limited Company.

Capital: Nominal: HK$1,000,000.00

Issued: HK$500,000.00

Business Category: Finished Leather Trader.

Employees: 25. (Including Showroom)

Main Dealing Bankers: DBS Bank (Hong Kong) Ltd., Hong Kong.

The Bank of East Asia Ltd., Hong Kong.

Banking Relation: Good.

Company name

DAH HWA LEATHER & TRADING CO. LTD.

ADDRESS

Registered Head Office:-

1/F., Hillwood Mansion, 45-47 Hillwood Road, Tsimshatsui, Kowloon, Hong Kong.

Sales Office & Showroom:-

G/F. & 1/F., Tshun Ngen Building, 43 Hillwood Road, Tsimshatsui, Kowloon, Hong Kong.

[Tel: 852-2366 5898, 852-2366 7711

Fax: 852-2721 8979

E-mail: sales@dahhwaleather.com.hk]

Holding Company:-

D. H. I. Ltd., Hong Kong. (Same address)

Associated Companies:-

D. H. International Ltd., Cook Islands.

Da Ya Leather Co. Ltd., PRC.

Dah Hwa International (Holdings) Ltd., Hong Kong.

Guangdong Faith Investment Ltd., Hong Kong.

Inter Leather Ltd., Hong Kong.

Parkway International Ltd., Brisitsh Virgin Islands.

Zhong Da Hangbag Co. Ltd., PRC.

BUSINESS REGISTRATION NUMBER

06021935

COMPANY FILE NUMBER

0067994

MANAGEMENT

Deputy Chairman: Mrs. Lee Shiao Yu Cho [Mother]

Managing Director: Dr. Lee Sam Yuen, John [Son]

CAPITAL

Nominal Share Capital: HK$1,000,000.00 (Divided into 10,000 shares of HK$100.00 each)

Issued Share Capital: HK$500,000.00

SHAREHOLDER

(As per registry dated 06-03-2013)

Name		No. of shares
D. H. I. Ltd., Hong Kong.		5,000 ====

Name

No. of shares

D. H. I. Ltd., Hong Kong.

5,000

====

DIRECTORS

(As per registry dated 06-03-2013)

Name (Nationality)	Address
LEE Sam Yuen, John (British)	Apartment 6B, Takshing Terrace, 1 Cox’s Road, Kowloon, Hong Kong.
LEE SHIAO Yu Cho	1/F., 34K Braga Circuit, Kowloon, Hong Kong.
LEE Kwong Yee, Jason Joseph	Apartment 6B, Takshing Terrace, 1 Cox’s Road, Kowloon, Hong Kong.

SECRETARY

(As per registry dated 06-03-2013)

Name	Address	Co. No.
Hoey Nominees Ltd.	Unit E, 12/F., Tak Lee Commercial Building, 113‑117 Wanchai Road, Hong Kong.	0114477

HISTORY

The subject was originally founded in 1945 and established in 1959 as a sole proprietorship owned by Mr. Lee Deh under the name of Dah Hwa Leather Company. Incorporated on 6th March, 1979 as a private limited liability company under the Hong Kong Companies Ordinance.

Formerly the subject was an associated company of Dah Hwa International (Holdings) Ltd. [DHIH] which was a listed company in Hong Kong bearing stock code 600. In October 2004, DHIH was disposed while the leather division was acquired back by the Lee family. Now, the subject is still controlled by the Lee family.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter, Wholesaler and Distributor; Commission Agent.

Lines: All types of soft finished leathers such as sheep nappa and suede; pig skin; cowhide and other fashionable printed and embossed leathers.

Head Office Space: About 2,403 sq.ft. (Self-owned)

Sales Office Space: About 1,255 sq.ft. (Self-owned)

Showroom Space: About 1,325 sq.ft. (Self-owned)

Employees: 25. (Including Showroom)

Commodities Imported:-

Finished lamb nappa leather – France, Italy and Spain.

Sheep skin – Hong Kong, Italy and New Zealand.

Finished cowhide nappa leather – Brazil, U.S.A., Korea, Japan and Hong Kong.

Finished pig skin leather – Taiwan, Japan, Korea, Hong Kong and Italy.

Markets: Hong Kong, China, Australia, Singapore and Taiwan.

Terms/Sales: COD or L/C, 30-60 days credit.

Terms/Buying: As per contracted.

MEMBERSHIP: Federation of Hong Kong Industries, Hong Kong.

FINANCIAL INFORMATION

Nominal Share Capital: HK$1,000,000.00

(Divided into 10,000 shares of HK$100.00 each)

Issued Share Capital: HK$500,000.00

Alternation of Capital:-

03-03-1979	paid up	HK$ 200.00
23-03-1979	paid up	HK$ 499,800.00
		–––––––––––––
Total:	paid up	HK$ 500,000.00 ============

Profit or Loss: Making a small profit every year

Condition: Keeping in an active and satisfactory manner.

Facilities: Making rather active use of general banking facilities.

Payment: Met as required.

Commercial Morality: Good.

Bankers:-

DBS Bank (Hong Kong) Ltd., Hong Kong.

The Bank of East Asia Ltd., Hong Kong.

Hang Seng Bank Ltd., Hong Kong.

The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Bank of China (Hong Kong) Ltd., Hong Kong.

Standing: Normal.

GENERAL

Dah Hwa Leather & Trading Co. Ltd. [Dah Hwa] is a wholly-owned subsidiary of D. H. I. Ltd., a Hong Kong-registered company located at the same address.

Dah Hwa has been a leather importer and wholesaler in Hong Kong for over 50 years and was the first company importing garment leathers to Hong Kong. It imports various types of finished leathers including sheep skin, cowhide and pig skin, etc.

The history of the Group can be traced back to the early 1950’s when the founder Mr. Lee Deh, the Chairman of the Group, established a sole proprietorship under the name of Dah Hwa Leather Company [DHLC] and commenced trading in finished leather. Initially, trading in footwear leather and handbag leather formed the core of the business of DHLC. These materials were primarily supplied to local leather ware manufacturers. Through close contact with its customers and suppliers, DHLC began to build up good relationships with its customers and suppliers and a reputation in the leather industry.

As the local garment industry grew in the 1960’s, Lee believed that there existed a considerable potential for the sale of garment leather in the local market. He believed that the growing garment industry in Hong Kong would extend to the production of leather garments, which would result in an increased demand for suitable leather, and therefore purchased a large quantity of quality cowhides from Japan and sold to local garment manufacturers, paving the way for the further development of DHLC.

By the late 1960’s, garment leather trading had become the core business of DHLC. It began to develop its sourcing network in Europe. It also recruited sales and marketing staff to promote its leather sales in order to consolidate and expand its customer base. Mr. John Lee Sam Yuen, a son of Mr. Lee Deh, joined the business in 1974. As the business expanded, Dah Hwa was incorporated in 1979 to take over the operations of DHLC.

As the business of Dah Hwa grew in the 1980’s, larger shop premises were required and, in order to reduce expenditures on office and shop rentals, in 1987, the Group acquired two premises located on the ground floor and the first floor of Tshun Ngen Building, 43 Hillwood Road, Tsimshatsui, Kowloon, with a total floor area of approximately 2,580 sq.ft. Since then, the business of Dah Hwa has been expanding steadily. In 1992, Dah Hwa extended its market to China by selling leather to China enterprises.

Presently, the principal business of Dah Hwa is trading in a wide range of medium to high quality soft finished leather, which is sold mainly to leather garment manufacturers and leather traders based in Hong Kong and China. Dah Hwa sources most of its supplies from India, Italy, South Korea, Taiwan and South America.

With its established reputation and wide range of stock of the principal types of leather for the production of leather garments, Dah Hwa has become one of the leading traders in garment leather in Hong Kong. Apart from leather trading, Dah Hwa is also engaged in leather ware manufacturing.

It manufactures handbags, casual bags, as well as a wide range of leather and non leather ware products.

Now, Dah Hwa has had two associated factories in China: a leather processing plant and a leather ware production plant in Zhongshan City, Guangdong Province, China. Both plants are situated next to the another.

Da Ya Leather Co Limited, is a leather processing plant founded in 1994. The 20,000 square feet factory can process up to six million square feet of cowhide leather a year for making shoes, garments and handbags.

Zhong Da Handbag Co Limited, a leather ware and non-leather ware production plant which began operations in 1995. The Plant has an annual production capacity of 400,000 handbags and 100,000 small leather goods. The factory complex occupies a gross floor area of 10,000 sq. meters and has four production lines. Aside from manufacturing the Group’s own private labels, the factory is also an OEM/ODM plant for international labels worldwide.

Inter Leather Limited based in Hong Kong has been established since 1977. It is responsible for the control of the manufacturing facilities and international sales of the Group’s leather ware. It also has its own design team based in Hong Kong that develops products and work with designers for diverse markets. Understanding the importance of research and development. Its design team travels regularly to different parts of the world to draw inspiration and gather information.

Its manufacturing base in Zhongshan has been awarded ISO 9001:2000 Certificate issued by the SGS S&SC.

Mrs. Lee Shiao Yu Cho, aged 88, is responsible for the sales and marketing function of Dah Hwa. She has been in the business since the early 1960s. However, she is going to retire soon.

Dr. Lee Sam Yuen, John, aged 62, is the Managing Director of Dah Hwa and is responsible for the administration, operations, merchandising and marketing functions. He joined Dah Hwa in 1974 and has been a director since its incorporation in 1979. He holds a Bachelor’s Degree in Management from Purdue University, the United States, and a honourable Ph.D. Degree in Business from the Southern California University, the United States. He is the son of the founder Mr. Lee Deh and Mrs. Lee Shiao Yu Cho.

Now, the son of Lee Sam Yuen known as Mr. Jason Lee is also engaged in managing Dah Hwa. He is the third generation of the Lee family.

On the whole, in view of the history of Dah Hwa, consider it good for normal business engagements.

REMARKS

Property information of the associate company:-

1. Property Location: 1/F., Hillwood Mansion, 45-47 Hillwood Road, Kowloon, Hong Kong.

Owner: Dah Hwa International (Holdings) Ltd.

Date of Purchase: 26-10-2012