MIRA INFORM REPORT

 

 

Report Date :

13.10.2014

 

IDENTIFICATION DETAILS

 

Name :

OTSUKA HOLDINGS CO LTD

 

 

Registered Office :

Shinagawa Grand Central Tower, 2-16-4 Konan Minatoku Tokyo 198-8241

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

July 2008

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Subject is a Holding Company: Medical Equipment-Related (71%), Nutraceuticals-Related (19%), Consumer Products-Related (3%), Others (6%)

 

 

No of Employees :

28,288

 

 

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 :

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 & address

 

OTSUKA HOLDINGS CO LTD

 

 

REGD NAME

 

Otsuka Holdings KK

 

 

MAIN OFFICE

 

Shinagawa Grand Central Tower, 2-16-4 Konan Minatoku Tokyo 198-8241 Japan

Tel: 03-6717-1410          -

 

URL:                 http://www.otsuka.com

E-Mail address: (thru the URL)

 

ACTIVITIES:     Holding Company of Otsuka Group firms

BRANCHES:     Osaka, Nagoya, other

 

CHIEF EXEC:   TATSUO HIGUCHI, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 1,452,759 M

PAYMENTSREGULAR               CAPITAL           Yen 81,690 M

TREND UP                                WORTH            Yen 1,510,759 M

STARTED         2008                             EMPLOYES      28,288

 

COMMENT:      HOLDING COMPANY OF OTSUKA GROUP FIRMS  FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

                        MAX CREDIT LIMIT: YEN 27,410.8 MILLION, 30 DAYS NORMAL TERMS

 

 

 

Unit: In Million Yen

Forecast figures for the 31/12/2014 fiscal term.  Accounting term is changed to Jan/Dec from Apr/Mar (The growth rate Is adjusted on a 12-month basis)

 

 

HIGHLIGHTS

 

This is a holding company of Otsuka Group 112 firms (subsidiaries & affiliated).  This is the fifth-ranked pharmaceutical maker, with antipsychotic drugs including enormous-seller “Abilify” as mainline.  Also makes nutraceuticals such as “Pocari Sweat” & “Calorie Mate”.  Has Taiho Pharmaceutical, maker of anticancer agent as group firm.  Aggressively engaged in global operations.     .

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 1,452,759 million, a 19.3% up from Yen 1,218,055 million in the previous term.  Mainstay US sales of antipsychotic drug grew strongly due to price hikes and the weak Yen.  The recurring profit was posted at Yen 215,735 million and the net profit at Yen 150,989 million, respectively, compared with Yen 184,462 million recurring profit and Yen 122,429 million net profit, respectively, a year ago.

 

For the current term ending Dec 2014 (Accounting term changed to Jan/Dec) the recurring profit is projected at Yen 195,000 million and the net profit at Yen 130,000 million, respectively, on a 10% rise (as adjusted on a 12-month basis) in turnover, to Yen 1,200,000 million. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 27,410.8 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:　    Jul 2008

Legal Status:                Limited Company (Kabushiki Kaisha

Authorized:                              1,600 million shares

Issued:                         557,835,617 shares

Sum:                            Yen 81,690 million

 

Major shareholders (%): Nomura T (Ohtsuka Founders T) (11.2), Otsuka Estate Ltd (4.5), Group Employees’ S/Holding Assn (3.4), Company’s Treasury Stock (2.9), Master Trust Bank of Japan T (2.7), Japan Trustee Services T (2.6), Awa Bank (1.9), Goldman Sachs (Regular) Acct (1.4), Ohtsuka Asset (1.3), Toho Holdings (1.3); foreign owners (25.9)

 

No. of shareholders: 52,344

 

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

 

Managements: Akihiko Ohtsuka, ch; Ichiro Ohtsuka, v ch; Tatsuo Higuchi, pres; Tatsuro Higuchi, rep dir; Atsumasa Makise, s/mgn dir; Yoshiro Matsuo, mgn dir; Sadanobu Tobe, dir; Tatsuro Watanabe, dir

 

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

 

Related companies: Otsuka Pharmaceutical, Taiho Pharmaceutical, Otsuka Chemical, other (Tot 112; 95 consolidated subsidiaries, 17 affiliated firms).

 

 

OPERATION

           

Activities: Holding Company: medical equipment-related (71%), Nutraceuticals-related (19%), consumer products-related (3%), others (6%)

Overseas Sales Ratio (57%)

           

Clients: [Mfrs, wholesalers] Otsuka Pharmaceutical, and Group firms

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Pharmaceuticals, other

 

Payment record: Regular

 

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

 

Bank References:

MUFG (H/O)

SMBC (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

　

1,452,759

1,218,055

　

  Cost of Sales

441,632

393,830

　

      GROSS PROFIT

1,011,126

824,224

　

  Selling & Adm Costs

812,424

654,564

　

      OPERATING PROFIT

198,702

169,660

　

  Non-Operating P/L

16,533

14,802

　

      RECURRING PROFIT

215,235

184,462

　

      NET PROFIT

150,989

122,429

BALANCE SHEET

　

　

  Cash

　

455,298

414,380

　

  Receivables

327,294

318,087

　

  Inventory

151,862

132,351

　

  Securities, Marketable

117,974

137,768

　

  Other Current Assets

116,413

78,056

　

      TOTAL CURRENT ASSETS

1,168,841

1,080,642

　

  Property & Equipment

315,185

275,967

　

  Intangibles

192,263

73,850

　

  Investments, Other Fixed Assets

352,110

348,748

　

      TOTAL ASSETS

2,028,399

1,779,207

　

  Payables

132,900

97,523

　

  Short-Term Bank Loans

53,426

51,789

　

　

　

　

　

  Other Current Liabs

251,094

197,160

　

      TOTAL CURRENT LIABS

437,420

346,472

　

  Debentures

　

　

　

  Long-Term Bank Loans

14,281

6,251

　

  Reserve for Retirement Allw

8,131

40,570

　

  Other Debts

　

57,808

60,843

　

      TOTAL LIABILITIES

517,640

454,136

　

      MINORITY INTERESTS

　

　

Common stock

81,690

81,690

　

Additional paid-in capital

512,895

510,423

　

Retained earnings

891,615

768,314

　

Evaluation p/l on investments/securities

13,819

8,284

　

Others

58,668

(25,248)

　

Treasury stock, at cost

(47,928)

(18,392)

　

      TOTAL S/HOLDERS` EQUITY

1,510,759

1,325,071

　

      TOTAL EQUITIES

2,028,399

1,779,207

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

226,461

119,340

　

Cash Flows from Investment Activities

-108,514

-91,228

　

Cash Flows from Financing Activities

-66,695

-71,889

　

Cash, Bank Deposits at the Term End

　

417,538

347,571

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

Net Worth (S/Holders' Equity)

1,510,759

1,325,071

　

Current Ratio (%)

267.21

311.90

　

Net Worth Ratio (%)

74.48

74.48

　

Recurring Profit Ratio (%)

14.82

15.14

　

Net Profit Ratio (%)

10.39

10.05

　

　

Return On Equity (%)

9.99

9.24

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.16

UK Pound

1

Rs.98.62

Euro

1

Rs.77.67

 

 

INFORMATION DETAILS

 

Analysis Done by :

SUM

 

 

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.