MIRA
INFORM REPORT
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Report Date : |
02.01.2014 |
IDENTIFICATION DETAILS
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Name : |
PIRELLI TYRE CO., LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
13.07.2005 |
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Com. Reg. No.: |
370000400002765 |
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Legal Form : |
Chinese-Foreign Equity Joint Venture |
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Line of Business : |
engaged in manufacturing and selling of tires including car tires, motorcycle tires, truck & bus tires. |
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No. of Employees : |
1,288 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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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 – September 30, 2013
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Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
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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, creation of a
diversified banking system, development of stock markets, rapid growth of the
private sector, 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 it considers important to
"economic security," explicitly looking to foster globally
competitive national champions. After keeping its currency tightly linked to
the US dollar for years, in July 2005 China revalued its currency by 2.1%
against the US dollar and 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. 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 2012 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
demand; (b) sustaining adequate job growth for tens of millions of migrants and
new entrants to the work force; (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. In 2010-11, China
faced high inflation resulting largely from its credit-fueled stimulus program.
Some tightening measures appear to have controlled inflation, but GDP growth
consequently slowed to under 8% for 2012. An economic slowdown in Europe
contributed to China's, and is expected to further drag Chinese growth in 2013.
Debt overhang from the stimulus program, particularly among local governments,
and a property price bubble challenge policy makers currently. The government's
12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms
and the need to increase domestic consumption in order to make the economy less
dependent on exports in the future. However, China has made only marginal
progress toward these rebalancing goals.
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Source : CIA |
Company name & address
Pirelli Tyre Co., Ltd.
huaqin
industrial park, yanzhou
shandong
PROVINCE 272000 PR CHINA
TEL: 86
(0) 537-5179153/5179063/5179091
FAX: 86
(0) 537-3898277
EXECUTIVE SUMMARY
Date of Registration : july 13, 2005
REGISTRATION NO. : 370000400002765
LEGAL FORM : Chinese-foreign equity joint venture
enterprise
CHIEF EXECUTIVE :
niu yishun (LEGAL REPRESENTATIVE)
REGISTERED CAPITAL : CNY 1,721,150,000
staff : 1,288
BUSINESS CATEGORY : MANUFACTURING & TRADING
Revenue : CNY 3,513,270,000 (AS OF DEC. 31, 2012)
EQUITIES : CNY 1,633,412,000 (AS OF DEC. 31, 2012)
WEBSITE : www.pirelli.cn
E-MAIL :
mingzhu.cai@pirelli.com
PAYMENT : AVERAGE
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : fairLY GOOD
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : FAIRLY GOOD
EXCHANGE RATE : CNY 6.07 = USD 1
Adopted
abbreviations (as follows)
SC - Subject Company
(the company inquired by you)
N/A – Not available
CNY – China Yuan Ren
Min Bi
OPERATIONAL TREND & GENERAL
REPUTATION
This section aims at indicating the relative positions of SC in respect
of its operational trend & general reputation
Operational Trend:- General
Reputation:-
Upward Excellent
Steady Good
Fairly Steady Fairly
Good
Ordinary Average
Fair Fair
Stagnant Detrimental
Downward Not
known
Not known Not
yet be determined
LEGAL STATUS & HISTORY
SC was
established as a Chinese-foreign equity joint venture enterprise of PRC with
State Administration of Industry & Commerce (SAIC) under registration No.: 370000400002765 on July 13, 2005.
SC’s Organization Code Certificate No.:
77634476-7
SC’s Tax No.: 370882776344767
SC’s registered capital: CNY 1,721,150,000
SC’s paid-in capital: CNY 1,721,150,000
Registration Change Record:-
No significant changes of SC have
been noted in SAIC since its incorporation.
Current Co search indicates SC’s shareholders & chief
executives are as follows:-
|
Name of Shareholder (s) |
% of Shareholding |
|
Pirelli China Tyre N.V
(Holland) |
90 |
|
Yanzhou Ruiyuan Rubber &
Plastic Co., Ltd. |
10 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative,
Chairman, and General Manager |
Niu Yishun |
RECENT DEVELOPMENT
No recent development was found during our checks at present.
SHAREHOLDER CHART & BACKGROUND
Name
%
of Shareholding
Pirelli China Tyre N.V (Holland) 90
Yanzhou Ruiyuan Rubber & Plastic Co.,
Ltd. 10
Yanzhou Ruiyuan Rubber & Plastic Co.,
Ltd.
Registration No.: 370882228006970
Date of Registration: November 19, 2003
Registered Capital: CNY 464,671,085.38
Legal Representative: Niu Teng
MANAGEMENT
Niu Yishun, Legal Representative, Chairman and General Manager
---------------------------------------------------------------------------------------------------
Ø
Gender: M
Ø
Qualification:
University
Ø
Working
experience (s):
At present, working in SC as legal representative, chairman and
general manager
BUSINESS
OPERATION
SC’s
registered business scope includes manufacturing and selling all-steel radial
tires, semi-steel radial tires, steel cord and related products; wholesaling
non-self produced radial tire, commission agency, import & export and other
related service; manufacturing and selling high-grade radial tires of
motorcycle.
SC is mainly
engaged in manufacturing and selling tires.
SC’s
products mainly include:
Car
tires
Motorcycle tires
Truck
& Bus tires.
Brand:
PIRELLI.
SC sources its materials
80% from domestic market, and 20% from overseas market. SC sells 60% in
domestic market and 40% to overseas market, mainly U.S.A., etc.
The buying terms of SC include Check, T/T, L/C and Credit of
30-60 days. The payment terms of SC include Check, T/T, L/C and Credit of 30-60
days.
*Major Clients*
------------------
Pirelli Tire Inc.
C.T.O. (USA) International Inc.
Staff & Office:
--------------------------
SC is
known to have approx. 1,288 staff at present.
SC owns an area as
its operating office and factory, but the detailed information is unknown.
RELATED
COMPANY
Pirelli Tyre Co., Ltd. Shanghai Branch
Registration
No.: 310000500169146
Date
of Registration: February 7, 2006
Legal
Form: Branch
Principal:
Gregorio Borgo
PAYMENT
Overall payment appraisal:
( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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.
BANKING
The bank
information of SC is not filed in local SAIC.
FINANCIALS
Balance Sheet
|
Unit: CNY’000 |
As
of Dec. 31, 2011 |
As
of Dec. 31, 2012 |
|
56,609 |
80,878 |
|
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Notes receivable |
255,363 |
69,040 |
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Accounts
receivable |
451,532 |
420,881 |
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Advances to
suppliers |
141,545 |
6,536 |
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Other receivable |
44,781 |
22,396 |
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Inventory |
478,996 |
473,114 |
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Deferred
expenses |
2,837 |
4,917 |
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Other current
assets |
0 |
80,161 |
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|
------------------ |
------------------ |
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Current assets |
1,431,663 |
1,157,923 |
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Fixed assets |
1,874,793 |
2,562,267 |
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Construction in
progress |
635,637 |
62,386 |
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Intangible
assets |
53,796 |
107,457 |
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Long-term
prepaid expenses |
0 |
0 |
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Deferred income
tax assets |
0 |
0 |
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Other
non-current assets |
0 |
0 |
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------------------ |
------------------ |
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Total assets |
3,995,889 |
3,890,033 |
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|
============= |
============= |
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Short-term loans |
631,694 |
493,520 |
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Notes payable |
101,381 |
67,935 |
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Accounts payable |
577,256 |
474,341 |
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Wages payable |
32,737 |
24,108 |
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Taxes payable |
-46,081 |
-5,646 |
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Advances from
clients |
8,652 |
0 |
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Other payable |
554,362 |
260,434 |
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Accrued expense |
74,831 |
130,555 |
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Other current
liabilities |
26,117 |
0 |
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------------------ |
------------------ |
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Current
liabilities |
1,960,949 |
1,445,247 |
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Non-current
liabilities |
625,451 |
811,374 |
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------------------ |
------------------ |
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Total
liabilities |
2,586,400 |
2,256,621 |
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Equities |
1,409,489 |
1,633,412 |
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|
------------------ |
------------------ |
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Total
liabilities & equities |
3,995,889 |
3,890,033 |
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============= |
============= |
Income Statement
|
Unit: CNY’000 |
As of Dec. 31,
2012 |
|
Revenue |
3,513,270 |
|
Cost of sales |
2,724,895 |
|
Taxes and surcharges |
3,606 |
|
Sales expense |
303,015 |
|
Management expense |
193,223 |
|
Finance expense |
86,667 |
|
Investment
income |
152 |
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Non-operating
income |
1,583 |
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Non-operating expense |
1,147 |
|
Profit before
tax |
202,563 |
|
Less: profit tax |
19,510 |
|
183,053 |
Important Ratios
=============
|
|
As
of Dec. 31, 2011 |
As
of Dec. 31, 2012 |
|
*Current ratio |
0.73 |
0.80 |
|
*Quick ratio |
0.49 |
0.47 |
|
*Liabilities
to assets |
0.65 |
0.58 |
|
*Net profit
margin (%) |
-- |
5.21 |
|
*Return on
total assets (%) |
-- |
4.71 |
|
*Inventory /
Revenue ×365 |
-- |
50 days |
|
*Accounts
receivable / Revenue ×365 |
-- |
44 days |
|
*Revenue /
Total assets |
-- |
0.90 |
|
*Cost of sales
/ Revenue |
-- |
0.78 |
FINANCIAL
COMMENTS
PROFITABILITY:
FAIRLY GOOD
l
The revenue of SC appears fairly good in its line
in 2012.
l
SC’s net profit margin is fairly good in 2012.
l
SC’s return on total assets is fairly good in 2012.
l
SC’s cost of sales is average, comparing with its revenue.
LIQUIDITY:
FAIR
l
The current ratio of SC is maintained in a fair
level in both years.
l
SC’s quick ratio is maintained in a fair level in
both years.
l
The inventory of SC appears average.
l
The accounts receivable of SC is maintained in an
average level.
l
SC’s short-term loans appear average.
l
SC’s revenue is in an
average level, comparing with the size of its total assets.
LEVERAGE:
FAIRLY GOOD
l
The debt ratio of SC is average in both years.
l
The risk for SC to go bankrupt is low.
Overall financial
condition of the SC: Fairly Good.
CONCLUSIONS
SC is considered large-sized in its line with fairly good
financial conditions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.93 |
|
UK Pound |
1 |
Rs.102.39 |
|
Euro |
1 |
Rs.85.12 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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>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.