MIRA INFORM REPORT

 

 

Report Date :

21.07.2014

 

IDENTIFICATION DETAILS

 

Name :

HANWA CO LTD

 

 

Registered Office :

3-6-1 Kitakyuhonji-machi Chuoku Osaka 541-8585

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014 (Consolidated)

 

 

Date of Incorporation :

01.04.1947

 

 

Com. Reg. No.:

1200-01-077530 (Osaka-Chuoku)

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Subject is a Trading House

 

Subject operates through following divisions:

 

Steel Division

(Steel Bars, Shapes, Construction Materials, Wire Rods, Steel Sheets)    

 

Steel Materials Division

(Forged Iron, Cast Iron, Special Steel Wires, Screws)

 

Non-Ferrous Metal Division

(Aluminum, Copper, Nickel, Chromium, Zinc (Recycling)

 

Foods Division

(Prawns, Crab, Other Seafoods)

 

Petroleum & Chemicals Division

(Fuels, Petrochemicals)

 

Other Division

(Lumber, Plywood, Logs, Building Materials)

 

 

No of Employees :

2,566

 

 

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 – March 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

 

D

 

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy

 

Source : CIA

 

COMPANY NAME

 

HANWA CO LTD

 

 

REGD NAME

 

Hanwa Kogyo KK

 

 

MAIN OFFICE

 

3-6-1 Kitakyuhonji-machi Chuoku Osaka 541-8585 JAPAN

Tel: 06-7525-5000     Fax: 06-7525-5365

 

E-Mail address:            info@hanwa.co.jp

 

Tokyo Office Address

6-18-2 Ginza, Chuo-ku, Tokyo 104-8429, Japan

Tel. No.:            03-3544-2171

Fax No.             03-3544-2351

 

ACTIVITIES

 

Subject is a Trading House

 

Subject operates through following divisions:

 

Steel Division

(Steel Bars, Shapes, Construction Materials, Wire Rods, Steel Sheets)    

 

Steel Materials Division

(Forged Iron, Cast Iron, Special Steel Wires, Screws)

 

Non-Ferrous Metal Division

(Aluminum, Copper, Nickel, Chromium, Zinc (Recycling)

 

Foods Division

(Prawns, Crab, Other Seafoods)

 

Petroleum & Chemicals Division

(Fuels, Petrochemicals)

 

Other Division

(Lumber, Plywood, Logs, Building Materials)

BRANCHES   

 

Tokyo, Nagoya, Sendai, Kitakyushu, Sapporo, Sendai, Fukuoka, other (Tot 15)

 

 

OVERSEAS   

 

N America (6), Asia (13), China (10), Europe & Mid East (8)

 

 

CHIEF EXEC 

 

HIRONARI FURUKAWA, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                             A/SALES          Yen 1,682,503 M

PAYMENTS      NO COMPLAINTS          CAPITAL           Yen 45,651 M

TREND UP                                WORTH            Yen 125,361 M

STARTED         1947                             EMPLOYES      2,566

 

 

COMMENT    

 

TRADING HOUSE SPECIALIZING IN STEEL PRODUCTS. 

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

1,396,103

13,490

5,793

(%)

110,458

(Consolidated)

31/03/2012

1,564,250

13,116

4,632

12.04

115,956

 

31/03/2013

1,511,324

8,871

4,720

-3.38

120,674

 

31/03/2014

1,682,503

14,698

7,896

11.33

125,361

 

31/03/2015

1,750,000

17,500

10,600

4.01

..

Notes: Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2015 fiscal term

 

 

HIGHLIGHTS

 

This is a time-honored trading house originating in Osaka specializing in steel products as mainline.  Aiming to become general trading firm by boosting seafood imports.  Advanced into electronics field.  OA equipment developed in-house is growing rapidly.  Strong and active in China operations, having 9 offices in China.  Expanding into general trading house operations from the original steel products business.  Coil center in San Diego (US), acquired in Sept 2009, expanding sales of products for microwave ovens and flat-screen, TVs in Mexico, thanks to customs-free advantage.  In China, developing new markets thru units in inland provinces, including Chorigging.  In Apr 2008, established Hanwa India Private Ltd in Mumbai, with office in New Delhi to focus in automobiles, shipbuilding, gas & petroleum, energy markets in India. . The company formed a comprehensive tie-up with Bohai Iron and Steel Group, China’s leading steelmaker, and aims to expand business in China and abroad, including in processed steel products and materials development.  The company aims to strengthen sales-force with buyouts of regional processing businesses and the startup of a large-scale warehouse.

           

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 1,682,503 million, an 11.3% up from Yen 1,511,324 million in the previous term.  Sales volume of mainline steel rose, thanks to robust public works.  Prices improved more than anticipated in the second half.  The recurring profit was posted at Yen 14,698 million and the net profit at Yen 7,896 million, respectively, compared with Yen 8,871 million recurring profit and Yen 4,720 million net profit, respectively, a year ago.

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 17,500 million and the net profit at Yen 10,600 million, respectively, on a 4.0% rise in turnover, to Yen 1,750,000 million.  Steel sales volume will continue to grow.  No foreign exchange gain is anticipated.  Imported steel prices are rising due to the weaker Yen, and domestic steel materials prices are also increasing due to the high material prices.  Steel materials wholesaling will rapidly expand, backed by an upturn in construction demand.

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

 

Date Registered:                      01 Apr 1947

Regd No.:                                 1200-01-077530 (Osaka-Chuoku)

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                  570 million shares

Issued:                         211,663,200 shares

Sum:                            Yen 45,651 million

           

Major shareholders (%): Japan Trustee Services T (8.1), Master Trust Bank of Japan T (5.2), SMBC (3.6), Customers’ S/Holding Assn (2.7), Japan Trustee Services T9 (2.6), Employees’ S/Holding Assn (2.2), Company’s Treasury Stock (2.0), Trust & Custody Services Inv T (2.0), BBH for Fidelity Low Price Stock (1.6), Chase London SL Omnibus Acct (1.6); foreign owners (21.8)

           

No. of shareholders: 10,290

 

Listed on the S/Exchange (s) of: Tokyo

 

Managements: Shuji Kita, ch; Hironari Furukawa, pres; Tetsuro Akimoto, v pres; Hideo Kawanishi, v pres; Yoshifumi Nishi, s/mgn dir; Akihiko Ogasawara, s/mgn dir; Hiroshi Ebihara, s/mgn dir; Atsuhiro Moriguchi, s/mgn dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Hanwa Logistics, Hanwa (Hong Kong) Ltd, Halows Co, other

           

 

OPERATION

 

Activities: A trading house for import, export and wholesale of:

 

(Sales Breakdown by Divisions)

 

Steel Div (46%): steel bars, shapes, construction materials, wire rods, steel sheets, other;            

Steel Materials Div (6%); forged iron, cast iron, special steel wires, screws;

Non-Ferrous Metal Div (5%): aluminum, copper, nickel, chromium, zinc (recycling);

Foods Div (6%): prawns, crab, other seafoods;

Petroleum & Chemicals Div (29%): fuels, petrochemicals, other;

Other Div (8%): lumber, plywood, logs, building materials, other.

Overseas sales ratio (25%)

 

Clients: [Mfrs, wholesalers, general contractors] JX Nippon Oil & Energy Corp, Mitsui-OSK Lines, K Lines, NYK Lines, Idemitsu Kosan, Obayashi Corp, Takenaka Corp, Shimizu Corp, Sumitomo Metal Ind, Oji Paper Mills, Osaka Uoichiba, NYK Lines, K Lines, Multi Trade Enterprises, China Ordins Group Co, Daewoo Shipbuilding & Marine Engineering, Seojoo Global Corporation, Nippon Metal Ind, Ministry of Defense, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Nippon Steel & Sumitomo Metal Corp, Nisshin Steel, JFE Steel, JXX Nippon Oil & Energy Corp, Tonen General Sekiyu, Kobe Steel, Double Rich Ltd, Aegean Marine Petroleum, other.

Imports from; USA, Canada, Chile, Finland, Sweden, Norway, Russia, China, Indonesia, other

 

Payment record: No Complaints

 

Location: Business area in Osaka.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

                        SMBC (Nipponbashi)

                        Mizuho Bank (H/O)

                        Relations: Satisfactory

 

 

FINANCES (In Million Yen)

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

 

 

  Annual Sales

　

1,682,503

1,511,324

 

  Cost of Sales

1,631,138

1,466,562

 

      GROSS PROFIT

51,365

44,762

 

  Selling & Adm Costs

36,112

32,271

 

      OPERATING PROFIT

16,252

12,491

 

  Non-Operating P/L

-1,554

-3,620

 

      RECURRING PROFIT

14,698

8,871

　

      NET PROFIT

7,896

4,720

BALANCE SHEET

 

 

 

 

  Cash

　

16,007

23,285

 

  Receivables

 

317,846

293,752

 

  Inventory

 

114,694

96,609

 

  Securities, Marketable

2,000

　

 

  Other Current Assets

17,778

21,655

 

      TOTAL CURRENT ASSETS

468,325

435,301

 

  Property & Equipment

61,574

55,067

 

  Intangibles

 

1,858

736

 

  Investments, Other Fixed Assets

61,594

61,804

 

      TOTAL ASSETS

593,351

552,908

 

  Payables

 

180,363

164,301

 

  Short-Term Bank Loans

95,605

113,500

 

　

 

　

　

 

  Other Current Liabs

43,393

44,161

 

      TOTAL CURRENT LIABS

319,361

321,962

 

  Debentures

 

30,000

20,000

 

  Long-Term Bank Loans

104,280

80,625

 

  Reserve for Retirement Allw

1,482

220

 

  Other Debts

　

12,866

9,426

 

      TOTAL LIABILITIES

467,989

432,233

 

      MINORITY INTERESTS

 

 

 

Common stock

45,651

45,651

 

Additional paid-in capital

4

4

 

Retained earnings

76,520

72,867

 

Evaluation p/l on investments/securities

7,484

2,667

 

Others

 

(2,856)

919

 

Treasury stock, at cost

(1,442)

(1,434)

 

      TOTAL S/HOLDERS` EQUITY

125,361

120,674

　

      TOTAL EQUITIES

593,351

552,908

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2014

31/03/2013

 

Cash Flows from Operating Activities

　

343

19,380

 

Cash Flows from Investment Activities

-5,244

-5,106

 

Cash Flows from Financing Activities

-4,927

-16,363

　

Cash, Bank Deposits at the Term End

　

15,919

23,198

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

 

 

Net Worth (S/Holders' Equity)

125,361

120,674

 

 

Current Ratio (%)

146.64

135.20

 

 

Net Worth Ratio (%)

21.13

21.83

 

 

Recurring Profit Ratio (%)

0.87

0.59

 

 

Net Profit Ratio (%)

0.47

0.31

 

 

Return On Equity (%)

6.30

3.91

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs. 60.33

UK Pound

1

Rs. 103.18

Euro

1

Rs. 81.58

 

 

INFORMATION DETAILS

 

Analysis Done by :

KRN

 

 

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.