MIRA INFORM REPORT

 

 

Report Date :

30.07.2014

 

IDENTIFICATION DETAILS

 

Name :

HITACHI CONSTRUCTION MACHINERY CO LTD

 

 

Registered Office :

Sumitomo Fudosan Iidabashi First Bldg 8F, 2-5-1 Koraku Bunkyoku Tokyo 112-0004

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

October 1970

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturer of Construction Machinery and Equipment

 

 

No of Employees :

20,911

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

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

 

HITACHI CONSTRUCTION MACHINERY CO LTD

 

 

REGD NAME

 

Hitachi Kenki KK

 

 

MAIN OFFICE

 

Sumitomo Fudosan Iidabashi First Bldg 8F, 2-5-1 Koraku Bunkyoku Tokyo 112-0004 JAPAN

Tel: 03-3830-8060    

Fax: 03-3830-8224     -

URL:                 http://www.hitachi-kenki.co.jp

E-Mail address: (thru the URL)

 

 

ACTIVITIES

 

Mfg of construction machinery & equipment

 

 

BRANCHES

 

Ibaraki (5)

 

 

OVERSEAS

 

China, other (34 consolidated subsidiaries)

 

 

FACTORIES

 

baraki (5), Tsuchira, Kasumigaura

 

 

CHIEF EXEC

 

YUICHI TSUJIMOTO, PRES

 

Yen Amount:    In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 A/SALES          Yen 802,988 M

PAYMENTS      REGULAR         CAPITAL           Yen 81,577 M

TREND             UP                    WORTH            Yen 447640 M

STARTED         1970                 EMPLOYES      20,911

 

 

COMMENT

 

MFR OF CONSTRUCTION MACHINERY 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

                       

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

773,769

41,912

11,088

(%)

348,986

(Consolidated)

31/03/2012

817,143

51,711

23,036

5.61

368,777

 

31/03/2013

772,355

36,391

23,464

-5.48

416,671

 

31/03/2014

802,988

53,671

28,939

3.97

447,640

 

31/03/2015

800,000

75,000

45,000

-0.37

..

                        Unit: In Million Yen

Forecast figures for the 3103/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is a second-ranked mfr of hydraulic shovels, and globally ranked 3rd group.  Produces tunnel excavating machinery, wheel loaders, bulldozers, and ultrasonic flaw detectors.  Aiming to become comprehensive maker of construction machinery.  Strengthening tie with Hitachi Ltd.  The company will concentrate storage functions for maintenance parts for mining machines to a new plant in Tsukuba, Ibaraki-Pref in Apr 2014, and entrust its management to Hitachi Transport System to speed up parts supply.  It aims to commercialize unmanned dump trucks by accelerating development of operating technology.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 802,988 million, a 4.0% up from Yen 772,355 million in the previous term.  Domestic sales of mining machines to rental firms grew steadily.  Orders recovered in China and Europe.  Operating profits bounced back sharply, aided by the weaker Yen.  The recurring profit was posted at Yen 53,671 million and the net profit at Yen 28,939 million, respectively, compared with Yen 36,391 million recurring profit and Yen 23,464 million net profit, respectively, a year ago.

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 75,000 million and the net profit at Yen 45,000 million, respectively, on a 0.4% fall in turnover, to Yen 800,000 million.  Sales will recover sluggishly in resource-rich countries, but will slightly grow in Europe.

 

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

 

 

REGISTRATION

           

Date Registered:　         Oct 1970

Legal Status:                 Limited Company (Kabushiki Kaisha

Authorized:                    700 million shares

Issued:                          215,115,038 shares

Sum:                            Yen 81,577 million

 

Major shareholders (%): Hitachi Ltd (50.2), Master Trust Bank of Japan T (6.0), Japan Trustee Services T (4.1), BNP Paribas Securities (1.4), Company’s Treasury Stock (12), Trust & Custody Services Inv. T (1.1), Societe Generale Sec N Pacific (0.6), Bank of New York 133522 (0.6), Hitachi Urban Investment (0.6), State Street Bank West Treaty (0.5); foreign owners (12.4)

 

No. of shareholders:       47,154

 

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

 

Managements: Takashi Kawamura, ch; Yuichi Tsujimoto, pres; Mitsuhiro Tabei, s/mgn dir; Yukio Arima, s/mgn dir; Tsutomu Miutani, s/mgn dir; Shigeru Ozuhata, dir; shigeto Mitamura, dir; Satoru Okada, dir; Hiroshi Tokushige, dir

 

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

 

Related companies: Hitachi Construction Machinery Tierra Co, Hitachi Sumitomo Heavy Machinery Crane, other (tot 12 domestic and 34 overseas consolidated subsidiaries).

 

 

OPERATION

           

Activities: Manufactures construction machinery & equipment: wheel loaders, cranes, shovels, tracked excavators, tracked dozers & carriers, dump trucks, rollers, tunnelors, crushers, soil & wood recyclers, aerial platforms, others (--100%)

Overseas Sales Ratio (71%)

           

Clients: [Mfrs, wholesalers] Hitachi Construction Machinery Japan, Marubeni Corp, Hitachi Construction Machinery Africa, Deere Hitachi Construction Machinery, Tadano Crane, Yanmar Co, other

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Hitachi Construction Machinery Tierra Co, KYB Co, Hitachi Ltd, Isuzu Motor, Yamato Engine Sales, Iwafuji Industrial, Maeda Road Construction, other

 

Payment record: Regular

 

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

 

 

Bank References

 

Mizuho Bank (H/O)

MUFG (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

　

802,988

772,355

 

  Cost of Sales

573,501

566,180

 

      GROSS PROFIT

229,487

206,175

 

  Selling & Adm Costs

160,324

154,679

 

      OPERATING PROFIT

69,163

51,496

 

  Non-Operating P/L

-15,492

-15,105

 

      RECURRING PROFIT

53,671

36,391

　

      NET PROFIT

28,939

23,464

BALANCE SHEET

 

 

 

 

  Cash

　

53,353

62,640

 

  Receivables

 

212,585

204,918

 

  Inventory

 

331,272

314,911

 

  Securities, Marketable

　

　

 

  Other Current Assets

121,727

151,350

 

      TOTAL CURRENT ASSETS

718,937

733,819

 

  Property & Equipment

288,947

271,195

 

  Intangibles

 

22,727

32,661

 

  Investments, Other Fixed Assets

56,580

62,226

 

      TOTAL ASSETS

1,087,191

1,099,901

 

  Payables

 

143,134

149,128

 

  Short-Term Bank Loans

181,801

192,821

 

　

 

　

　

 

  Other Current Liabs

122,025

105,306

 

      TOTAL CURRENT LIABS

446,960

447,255

 

  Debentures

 

20,000

50,000

 

  Long-Term Bank Loans

131,610

150,281

 

  Reserve for Retirement Allw

12,563

8,913

 

  Other Debts

　

28,418

26,781

 

      TOTAL LIABILITIES

639,551

683,230

 

      MINORITY INTERESTS

 

 

 

Common stock

81,577

81,577

 

Additional paid-in capital

84,893

84,500

 

Retained earnings

220,122

199,779

 

Evaluation p/l on investments/securities

3,746

3,056

 

Others

 

60,539

51,741

 

Treasury stock, at cost

(3,237)

(3,982)

 

      TOTAL S/HOLDERS` EQUITY

447,640

416,671

　

      TOTAL EQUITIES

1,087,191

1,099,901

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2014

31/03/2013

 

Cash Flows from Operating Activities

　

92,324

59,965

 

Cash Flows from Investment Activities

-36,724

-37,080

 

Cash Flows from Financing Activities

-72,174

-42,700

　

Cash, Bank Deposits at the Term End

　

53,676

66,622

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

 

 

Net Worth (S/Holders' Equity)

447,640

416,671

 

 

Current Ratio (%)

160.85

164.07

 

 

Net Worth Ratio (%)

41.17

37.88

 

 

Recurring Profit Ratio (%)

6.68

4.71

 

 

Net Profit Ratio (%)

3.60

3.04

 

 

Return On Equity (%)

6.46

5.63

 

 

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 :

KAR

 

 

Report Prepared by :

SHG

 

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.