MIRA INFORM REPORT

 

 

Report Date :

03.09.2014

 

IDENTIFICATION DETAILS

 

Name :

SHENZHEN TONGHUI JEWELLERY CO., LTD.

 

 

Registered Office :

5/F Building 3 Pacific Industrial Zone, Shenyan Road, Yantian District, Shenzhen, Guangdong Province 518081 PR

 

 

Country :

China

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

13.11.2001

 

 

Com. Reg. No.:

440301102798040

 

 

Legal Form :

Limited Liabilities Company

 

 

Line of Business :

Manufacturing, processing and selling gold jewelry, silver, platinum gold, diamonds, inlaid jewelry, arts and crafts; importing and exporting commodities and technology; manufacturing jewelry oil processing mould.

 

 

No of Employees :

371

 

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 :

Slow but correct

 

 

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 01, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

China

A2

A2

 

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

 

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, growth of the private sector, development of stock markets and a modern banking system, 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 considered important to "economic security," explicitly looking to foster globally competitive industries. After keeping its currency tightly linked to the US dollar for years, in July 2005 China 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 and expanded the daily trading band within which the RMB is permitted to fluctuate. 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 2013 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 consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (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. Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources.

 

Source : CIA

 

COMPANY NAME & ADDRESS

 

SHENZHEN TONGHUI JEWELLERY CO., LTD.

5/F BUILDING 3 PACIFIC INDUSTRIAL ZONE, SHENYAN ROAD

YANTIAN DISTRICT, SHENZHEN, GUANGDONG PROVINCE 518081 PR CHINA

TEL: 86 (0) 755-82365999/25229702/13824302455

FAX: 86 (0) 755-25539609/25227876

 

***Note: SC locates in the above, and SC’s subsidiary-Shenzhen Jinyatai Jewellery Co., Ltd. Locates in the given address (6/F, Building 1, Shihua Industrial Par Cuizhu North Road, Luohu Shenzhen).

 

 

EXECUTIVE SUMMARY

 

Date of Registration          : november 13, 2001

REGISTRATION NO.                  : 440301102798040

LEGAL FORM                           : Limited liabilities company

CHIEF EXECUTIVE                    : hu zengjian (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL             : cny 50,000,000

staff                                      : 371

BUSINESS CATEGORY             : manufacturing & processing & trading

Revenue                                : CNY 3,415,760,000 (AS OF DEC. 31, 2013)

EQUITIES                                 : CNY 62,990,000 (AS OF DEC. 31, 2013)

WEBSITE                                 : www.thss.cn

E-MAIL                                     : tonghui@thss.cn

PAYMENT                                : AVERAGE

MARKET CONDITION                : competitive

FINANCIAL CONDITION             : fairly GOOD

OPERATIONAL TREND              : FAIRLY STEADY

GENERAL REPUTATION           : AVERAGE

EXCHANGE RATE                     : CNY 6.15 = 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 with State Administration of Industry & Commerce (SAIC) under registration No.: 440301102798040 on November 13, 2001.

 

SC’s Organization Code Certificate No.: 73307282-9

 

SC’s Tax No.: 440301733072829

 

SC’s registered capital: cny 50,000,000

 

SC’s paid-in capital: cny 50,000,000

 

Registration Change Record:-

 

Date

Change of Contents

Before the change

After the change

2003-09-12

Shareholder (s) (% of Shareholding)

Chen Chusheng

12%

Zhan Yanhe

13%

Hu Chuguang

51%

Hu Chuhui

12%

Liu Yuxiang

12%

Hu Chuguang

57.9530%

Chen Chusheng

13.6367%

Hu Chuhui

13.6367%

Zhan Yanhe

14.7736%

2003-12-29

Legal Representative

Hu Chuguang

Hu Jiansheng

Shareholder (s) (% of Shareholding)

Hu Chuguang

57.9530%

Chen Chusheng

13.6367%

Hu Chuhui

13.6367%

Zhan Yanhe

14.7736%

Hu Chuguang

57.9530%

Hu Jiansheng

13.6367%

Hu Chuhui

13.6367%

Zhan Yanhe

14.7736%

2004-04-12

Registered Capital

CNY 680,000

CNY 3,000,000

% of Shareholding

Hu Chuguang

57.9530%

Hu Jiansheng

13.6367%

Hu Chuhui

13.6367%

Zhan Yanhe

14.7736%

Hu Chuguang

57.9506%

Hu Jiansheng

13.6393%

Hu Chuhui

13.6393%

Zhan Yanhe

14.7708%

2007-07-18

Registered Capital

CNY 3,000,000

CNY 10,000,000

Shareholder (s) (% of Shareholding)

Hu Chuguang

57.9506%

Hu Jiansheng

13.6393%

Hu Chuhui

13.6393%

Zhan Yanhe

14.7708%

Hu Chuguang

57.9502%

Hu Jiansheng

13.6398%

Lin Liehao

13.6398%

Zhan Yanhe

14.7702%

2007-08-21

Registration No.

4403012077265

440301102798040

2008-10-20

Company Name

Shenzhen Dongyi Jewellery Co., Ltd.

Shenzhen Tonghui Jewellery Co., Ltd.

Registered Capital

CNY 10,000,000

CNY 25,000,000

% of Shareholding

Hu Chuguang

57.9502%

Hu Jiansheng

13.6398%

Lin Liehao

13.6398%

Zhan Yanhe

14.7702%

Hu Chuguang

56%

Hu Jiansheng

14%

Lin Liehao

14%

Zhan Yanhe

16%

2009-02-16

Shareholder (s) (% of Shareholding)

Hu Chuguang

56%

Hu Jiansheng

14%

Lin Liehao

14%

Zhan Yanhe

16%

Hu Chuguang

56%

Zhan Yanhe

16%

Hu Zengjian

20%

Lin Liehao

8%

2009-06-24

Legal Representative

Hu Jiansheng

Hu Zengjian

2012-02-17

Registered Capital

CNY 25,000,000

cny 50,000,000

Shareholder (s) (% of Shareholding)

Hu Chuguang

56%

Zhan Yanhe

16%

Hu Zengjian

20%

Lin Liehao

8%

Hu Zengjian

10%

Hu Chuguang

28%

Lin Liehao

4%

Zhan Yanhe

8%

Hu Chuhui

50%

2013-10-24

Shareholder (s) (% of Shareholding)

Hu Zengjian

10%

Hu Chuguang

28%

Lin Liehao

4%

Zhan Yanhe

8%

Hu Chuhui

50%

Hu Chuhui

82%

Hu Zengjian

10%

Zhan Yanhe

8%

 

Current Co search indicates SC’s shareholders & chief executives are as follows:-

 

Name of Shareholder (s)

% of Shareholding

Hu Chuhui

82

Hu Zengjian

10

Zhan Yanhe

8

 

SC’s Chief Executives:-

 

Position

Name

Legal Representative and Chairman

Hu Zengjian

General Manager and Director

Zhan Yanhe

Director

Hu Zaoliang

Supervisor

Lin Haiye

 

 

RECENT DEVELOPMENT

 

No recent development was found during our checks at present.

 

 

SHAREHOLDER CHART & BACKGROUND

 

Name                                                              % of Shareholding

 

Hu Chuhui                                                                     82

 

Hu Zengjian                                                                   10

 

Zhan Yanhe                                                                   8

 

 

MANAGEMENT

 

Hu Zengjian, Legal Representative and Chairman

----------------------------------------------------------------------------

Gender: M

Working experience (s):

 

At present, working in SC as legal representative and chairman

 

Zhan Yanhe, General Manager and Director

---------------------------------------------------------------------

Gender: M

Working experience (s):

 

At present, working in SC as general manager and director

 

Director

-----------

Hu Zaoliang

 

Supervisor

-------------

Lin Haiye

 

 

BUSINESS OPERATION

 

SC’s registered business scope includes manufacturing, processing and selling gold jewelry, silver, platinum gold, diamonds, inlaid jewelry, arts and crafts; importing and exporting commodities and technology; manufacturing jewelry oil processing mould.

 

SC is mainly engaged in manufacturing, processing and selling jewelry.

 

SC’s products mainly include: gold jewelry, silver, platinum gold, diamonds

SC sources its materials 100% from domestic market. SC sells 60% of its products in domestic market, and 40% to overseas market.

 

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. 371 staff at present.

 

SC owns an area as its operating office and factory, but the detailed information is unknown.

 

 

RELATED COMPANY

 

SC is known to have the following subsidiaries at present,

 

Shenzhen Jinyatai Jewellery Co., Ltd.

Registration No.: 440301106030538

Date of Registration: March 1, 2012

Legal Form: One-person Limited Liabilities Company

Registered Capital: CNY 10,000,000

Legal Representative: Zhan Junliang

 

Related company,

 

Beijing Tonghui Jewellery Co., Ltd.

Registration No.: 110113010753558

Date of Registration: January 17, 2008

Legal Form: Limited Liabilities Company

Registered Capital: CNY 30,000,000

Legal Representative: Pei Wenzhong

 

 

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

 

Financial Summary

Unit: CNY’000

As of Dec. 31, 2013

Total assets

392,140

 

-------------

Total liabilities

329,150

Equities

62,990

 

-------------

Revenue

3,415,760

Profits

6,440

 

Important Ratios

=============

 

As of Dec. 31, 2013

*Liabilities to assets

0.84

*Net profit margin (%)

0.19

*Return on total assets (%)

1.64

*Revenue / Total assets

8.71

 

 

FINANCIAL COMMENTS

 

PROFITABILITY: AVERAGE

The revenue of SC appears fairly good in its line.

SC’s net profit margin is average.

SC’s return on total assets is average.

 

LIQUIDITY: FAIRLY GOOD

SC’s revenue is in a fairly good level, comparing with the size of its total assets.

 

LEVERAGE: AVERAGE

The debt ratio of SC is high.

The risk for SC to go bankrupt is average.

 

Overall financial condition of the SC: Fairly Good.

 

 

 

 

CONCLUSIONS

 

SC is considered medium-sized in its line with fairly good financial conditions. Taking into consideration of SC’s general performance, reputation as well as market conditions

 

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.

-            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.

-            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.

-            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.60.61

UK Pound

1

Rs.100.49

Euro

1

Rs.79.56

 

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

SMN

 

 

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.