MIRA
INFORM REPORT
|
Report Date : |
14.01.2014 |
IDENTIFICATION DETAILS
|
Name : |
SHENZHEN ROYAL DECOR INDUSTRY CO., LTD. |
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Registered Office : |
Room H, 22/F, Building B, Honglong Century Plaza,
No. 3001 Heping Road, Luohu District, Shenzhen, Guangdong Province 518001 PR |
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Country : |
China |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
11.10.2000 |
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Com. Reg. No.: |
440301503242645 |
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Legal Form : |
Wholly Foreign-Owned Enterprise |
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Line of Business : |
Subject is engaged in manufacturing, processing and selling jewelry. |
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No. of Employees : |
265 (Including
Sc’s branch) |
RATING & COMMENTS
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MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 : |
Slow but correct |
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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
|
Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
|
China |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
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.
|
Source
: CIA |
Company name & address
SHENZHEN
ROYAL DECOR INDUSTRY CO., LTD.
ROOM H, 22/F, BUILDING B, HONGLONG CENTURY PLAZA
NO. 3001 HEPING ROAD, LUOHU DISTRICT, SHENZHEN
GUANGDONG PROVINCE 518001 PR CHINA
TEL: 86 (0) 755-25818018/25727678/25811334
FAX: 86 (0) 755-25737833
EXECUTIVE SUMMARY
Date of Registration : october 11, 2000
REGISTRATION NO. : 440301503242645
LEGAL FORM : Wholly foreign-owned enterprise
CHIEF EXECUTIVE :
he baozhu (LEGAL REPRESENTATIVE)
REGISTERED CAPITAL : hkd
10,000,000
staff :
265 (including sc’s branch)
BUSINESS CATEGORY :
manufacturing & processing & trading
Revenue :
CNY 115,500,000 (AS OF DEC. 31,
2012)
EQUITIES :
CNY 10,380,000 (AS OF DEC. 31, 2012)
WEBSITE : www.rd-jewelry.com
E-MAIL :
royaldecor_rdj@163.com
PAYMENT :
AVERAGE
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION : FAIRLY STABLE
OPERATIONAL TREND : FAIRLY STEADY
GENERAL REPUTATION : average
EXCHANGE RATE :
CNY 6.05 = 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
Not yet be determined
LEGAL STATUS & HISTORY
SC was established as a limited liabilities company of PRC on October 11, 2000. However, SC changed to
present legal form, and was registered as a wholly foreign-owned enterprise of
PRC with State Administration for Industry & Commerce (SAIC) under
registration No.: 440301503242645 on March 23, 2007.
SC’s Organization Code Certificate No.:
72471434-0
SC’s Tax No.: 440301724714340
SC’s registered capital: HKD 10,000,000
SC’s paid-in capital: HKD 10,000,000
Registration Change Record:-
|
Date |
Change of Contents |
Before the change |
After the change |
|
|
Registered Capital |
CNY 500,000 |
CNY 1,000,000 |
|
|
Legal Form |
Limited Liabilities Company |
Wholly Foreign-Owned Enterprise |
|
Registered Capital |
CNY 1,000,000 |
HKD 3,000,000 |
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Shareholder (s) (% of Shareholding) |
He Baozhu 90% Yamg Xuemei 10% |
He Hancai (Hong Kong) 100% |
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Registration No. |
321237 |
440301503242645 |
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Registered Capital |
HKD 3,000,000 |
HKD 10,000,000 |
Current Co search indicates SC’s shareholders & chief executives are
as follows:-
|
Name of Shareholder (s) |
% of Shareholding |
|
He Hancai (Hong Kong) |
100 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative, Chairman and General Manager |
He Baozhu |
|
Director |
He Songhui |
|
He Younan |
|
|
Supervisor |
Su Shaojuan |
RECENT DEVELOPMENT
No recent development was found during our checks at present.
SHAREHOLDER CHART & BACKGROUND
Name %
of Shareholding
He Hancai (Hong Kong) 100
MANAGEMENT
He Baozhu, Legal Representative, Chairman and General
Manager
--------------------------------------------------------------------------------------------------
Gender: F
Working experience
(s):
At present, working in SC as legal representative, chairman and general
manager
Director
-----------
He Songhui
He Younan
Supervisor
--------------
Su Shaojuan
BUSINESS OPERATION
SC’s registered business scope includes wholesaling,
importing and exporting jewelry, emerald, gold & silver crafts, gold, white
gold and platinum jewelry; processing and manufacturing the above products,
limited to be operated by SC’s branches.
SC is mainly engaged in manufacturing, processing and selling jewelry.
SC’s products mainly include: jewelry
SC sources its materials 100% from domestic market. SC sells 60% of its
products in domestic market, and 40% to overseas market, mainly Southeast Asia
The buying terms of SC include Check, T/T and Credit of 30-60 days. The
payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.
Staff &
Office:
--------------------------
SC is known to have approx. 265
staff (including SC’s branches) at present.
SC rents an area as its operating office and factory, but the detailed
information is unknown.
RELATED COMPANY
Shenzhen Royal Decor Industry Co., Ltd. 1st Branch
Registration No.: 440301506685918
Date of Registration: October
23, 2012
Legal Form: Branch
Principal: He
Baozhu
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, 2012 |
|
16,570 |
|
|
Notes receivable |
0 |
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Accounts receivable |
1,660 |
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Advances to suppliers |
0 |
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Other receivable |
4,050 |
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Inventory |
74,850 |
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Non-current assets within one year |
0 |
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Other current assets |
20,750 |
|
|
------------------ |
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Current assets |
117,880 |
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Fixed assets |
15,910 |
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Construction in progress |
0 |
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Intangible assets |
0 |
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Long-term investment |
0 |
|
Deferred income tax assets |
0 |
|
Other non-current assets |
11,080 |
|
|
------------------ |
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Total assets |
144,870 |
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|
============= |
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Short-term loans |
111,500 |
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Notes payable |
0 |
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Accounts payable |
0 |
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Welfares payable |
0 |
|
Taxes payable |
0 |
|
Advances from clients |
0 |
|
Other payable |
22,800 |
|
Other current liabilities |
190 |
|
|
------------------ |
|
Current liabilities |
134,490 |
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Non-current liabilities |
0 |
|
|
------------------ |
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Total liabilities |
134,490 |
|
Equities |
10,380 |
|
|
------------------ |
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Total liabilities & equities |
144,870 |
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|
============= |
Income Statement
|
Unit: CNY’000 |
As
of Dec. 31, 2012 |
|
Revenue |
115,500 |
|
Cost of sales |
91,200 |
|
Sales expense |
9,170 |
|
Management expense |
2,310 |
|
Finance expense |
13,080 |
|
Profit before tax |
170 |
|
Less: profit tax |
40 |
|
130 |
Important Ratios
|
|
As of Dec. 31, 2012 |
|
*Current ratio |
0.88 |
|
*Quick ratio |
0.32 |
|
*Liabilities to assets |
0.93 |
|
*Net profit margin (%) |
0.11 |
|
*Return on total assets (%) |
0.09 |
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*Inventory / Revenue ×365 |
237 days |
|
*Accounts receivable / Revenue ×365 |
6 days |
|
*Revenue / Total assets |
0.80 |
|
*Cost of sales / Revenue |
0.79 |
FINANCIAL COMMENTS
PROFITABILITY:
AVERAGE
·
The revenue of SC appears average in its line.
·
SC’s net profit margin is average.
·
SC’s return on total assets is average.
·
SC’s cost of sales is average, comparing with its
revenue.
LIQUIDITY: FAIR
·
The current ratio of SC is maintained in a fair
level.
·
SC’s quick ratio is maintained in a poor level.
·
The inventory of SC appears large.
·
The accounts receivable of SC appears average.
·
The short-term loans of SC appear large.
·
SC’s revenue is in an average level, comparing with
the size of its total assets.
LEVERAGE: FAIR
·
The debt ratio of SC is fairly high.
·
The risk for SC to go bankrupt is above average.
Overall financial
condition of the SC: Fairly Stable.
CONCLUSIONS
SC is considered small-sized in its line with fairly stable financial
conditions. The large amount of inventory and short-term loans may be a threat
to SC’s financial condition.
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.
-
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.
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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.61.52 |
|
|
1 |
Rs.101.48 |
|
Euro |
1 |
Rs.84.11 |
INFORMATION DETAILS
|
Report Prepared
by : |
NNA |
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 |
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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.