MIRA INFORM REPORT

 

 

Report Date :

29.07.2014

 

IDENTIFICATION DETAILS

 

Name :

DAIICHI SANKYO CO LTD

 

 

Registered Office :

3-5-1 Nihombashi-Honcho Chuoku Tokyo 103-8426

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

September 2005

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacture of Pharmaceutical Drugs.

 

 

No. of Employees :

32791

 

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 :

Good

Payment Behaviour :

Regular

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 – June 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

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

 

DAIICHI SANKYO CO LTD

 

 

REGD NAME

 

Daiichi Sankyo KK

 

 

MAIN OFFICE

 

 3-5-1 Nihombashi-Honcho Chuoku Tokyo 103-8426 JAPAN

Tel: 03-6225-1111    

 

URL:                 http://www.daiichisankyo.co.jp

E-Mail address: (thru the URL)

 

ACTIVITIES:     Mfg of pharmaceuticals (prescription drugs)

BRANCHES:     Sapporo, Sendai, Chiba, Saitama, Yokohama, Nagoya, Osaka, other (Tot 23)

OVERSEAS:     USA (3), Europe (15), China (5), Mexico, Brazil, Venezuela, India, Hong Kong

FACTORIES:     Akita, Fukushima, Gunma, Kanagawa, Osaka, other (Tot 8) (--subsidiaries)

 

CHIEF EXEC:    JOJI NAKAYAMA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY:       FINANCES        FAIR                 A/SALES          Yen 1,118,241 M

                        PAYMENTS      REGULAR         CAPITAL           Yen 50,000 M

                        TREND             UP                    WORTH                    Yen 1,007,527 M

                        STARTED         2005                 EMPLOYES      32,791

 

COMMENT:      MFR OF PHARMACEUTICALS 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

 

   Results:

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

 

31/03/2011

967,365

131,762

70,121

(%)

887,702

(Consolidated)

31/03/2012

938,677

76,217

10,383

-2.97

832,749

 

31/03/2013

994,659

95,861

64,027

5.96

935,480

 

31/03/2014

1,118,241

99,775

60,943

12.42

1,007,527

 

31/03/2015

920,000

120,000

78,000

-17.73

..

Unit: In Million Yen

Forecast figures for the 31/03/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is a third-ranked prescription drug mfr, with Sankyo & Daiichi Pharmaceuticals merged in Apr 2007.  Strong in circulatory and anti-infection drugs.  Diversifying to generic drugs thru acquisition of Indian drug maker Ranbaxy Laboratories.  Emphasis placed on cancer-related lines.  The company is seeking approval for an anti-coagulant in Japan, the US and Europe during the term, backed by relatively good results of clinical trials on the efficiency in venous thromboembolism treatment.  The results related to the efficiency in prevention of thromboembolism accompanying atrial fibrillation were available in Nov 2013.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 1,118,241 million, a 12.4% up from Yen 994,659 million in the previous term.  Sales grew steadily in Japan and benefitted from the weak Yen overseas.  A subsidiary in India added three-month sales and profits due to a change to its accounting term.  The recurring profit was posted at Yen 99,775 million and the net profit at Yen 6,621 million, respectively, compared with Yen 95,861 million recurring profit and Yen 64,027 million net profit, respectively, a year ago.  7

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 120,000 million and the net profit at Yen 78,000 million, on a 17.7% down in turnover, to Yen 920,000 million.  Ranbaxy Laboratories, its generic subsidiary in India, will be sold during the current term.  

 

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

 

 

REGISTRATION

           

      Date Registered:　          Sept 2005

Legal Status:               Limited Company (Kabushiki Kaisha

Authorized:                              2.8 million shares

Issued:                         709,011,343 shares

Sum:                            Yen 50,000 million

 

Major shareholders (%): Master Trust Bank of Japan T (6.3), Japan Trustee Services T (5.4), Nippon Life Ins (5.3), SSBT OD05 Omnibus Acct Treaty Cl (2.4), JP Morgan Chase Bank 385147 (1.9), SMBC (1.8), Group Employees’ S/Holding Assn (1.4), Mizuho Bank (1.4), ECSB (Mizuho Bank) (1.1), Tokio Marine & Nichido Fire Ins (1.1); foreign owners (28.7)

 

No. of shareholders: 110,831

 

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

 

Managements: Joji Nakayama, pres; Yuki Satoh, v pres; Manabu Sakai, v pres; Takeshi Ogita, s/mgn dir; Kazunori Hirokawa, s/mgn dir; Atsushi Manabe, mgn dir; Hiroshi Hirabayashi, dir; Kunio Ishihara, dir; Noritaka Uji, dir; Hiroshi Toda, dir

 

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

 

Related companies: Daiichi Sankyo Healthcase, Daiichi Sankyo Inc, other

 

 

OPERATION

           

Activities: Manufactures pharmaceutical drugs: Daiichi Sankyo Group (80%), Ranbaxy Group (20%).

Overseas Sales Ratio (529%)

           

Clients: [Mfrs, wholesalers] Alfresa Corp, Toho Pharmaceutical Co, Daiichi Sankyo Inc, Medipal Holdings Corp, Suzuken Co, other

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Daiichi Sankyo Pro Pharma, UCB Japan, Lead Chemical Co, Japan Vaccine Sales, other

 

Payment record: Regular

 

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

 

Bank References:

SMBC (Tokyo-Chuo)

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

　

1,118,241

994,659

 

  Cost of Sales

402,289

338,485

 

      GROSS PROFIT

715,952

656,173

 

  Selling & Adm Costs

604,600

557,430

 

      OPERATING PROFIT

111,552

98,743

 

  Non-Operating P/L

11,777

2,882

 

      RECURRING PROFIT

99,775

95,861

　

      NET PROFIT

60,943

64,027

BALANCE SHEET

 

 

 

 

  Cash

　

183,070

191,145

 

  Receivables

 

269,194

262,851

 

  Inventory

 

　

　

 

  Securities, Marketable

189,408

173,828

 

  Other Current Assets

1,212,365

1,057,125

 

      TOTAL CURRENT ASSETS

1,854,037

1,684,949

 

  Property & Equipment

316,304

290,648

 

  Intangibles

 

171,417

171,137

 

  Investments, Other Fixed Assets

(487,721)

(461,785)

 

      TOTAL ASSETS

1,854,037

1,684,949

 

  Payables

 

245,422

225,873

 

  Short-Term Bank Loans

160,326

66,073

 

　

 

　

　

 

  Other Current Liabs

55,440

132,610

 

      TOTAL CURRENT LIABS

461,188

424,556

 

  Debentures

 

　

　

 

  Long-Term Bank Loans

263,289

200,742

 

  Reserve for Retirement Allw

8,947

31,258

 

  Other Debts

　

113,085

89,912

 

      TOTAL LIABILITIES

846,509

746,468

 

      MINORITY INTERESTS

 

 

 

Common stock

50,000

50,000

 

Additional paid-in capital

105,267

105,194

 

Retained earnings

717,320

680,844

 

Evaluation p/l on investments/securities

　

　

 

Others

 

149,348

113,902

 

Treasury stock, at cost

(14,408)

(14,460)

 

      TOTAL S/HOLDERS` EQUITY

1,007,527

935,480

　

      TOTAL EQUITIES

1,854,037

1,681,949

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2014

31/03/2013

 

Cash Flows from Operating Activities

　

37,304

129,294

 

Cash Flows from Investment Activities

-161,268

-108,837

 

Cash Flows from Financing Activities

100,322

-58,227

　

Cash, Bank Deposits at the Term End

　

183,070

191,145

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

 

 

Net Worth (S/Holders' Equity)

1,007,527

935,480

 

 

Current Ratio (%)

402.01

396.87

 

 

Net Worth Ratio (%)

54.34

55.62

 

 

Recurring Profit Ratio (%)

8.92

9.64

 

 

Net Profit Ratio (%)

5.45

6.44

 

 

Return On Equity (%)

6.05

6.84

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.10

UK Pound

1

Rs.102.04

Euro

1

Rs.80.74

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

TPT

 

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.