MIRA INFORM REPORT

 

 

Report Date :

03.09.2014              

 

IDENTIFICATION DETAILS

 

Name :

OBARA GROUP INC

 

 

Registered Office :

3-2-10 Chuorinkan Yamato City Kanagawa-Pref 242-0007

 

 

Country :

Japan

 

 

Financials (as on) :

30.09.2013

 

 

Date of Incorporation :

December 1958

 

 

Com. Reg. No.:

0210-01-027278

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacture of resistance welding machinery, other.

 

 

No. of Employees :

1,652

 

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

 

Maximum Credit Limit :

Yen 1,482.6 Million

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 – June 01, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 and address

 

OBARA GROUP INC

REGD NAME:    Obara Group KK

MAIN OFFICE:  3-2-10 Chuorinkan Yamato City Kanagawa-Pref 242-0007 JAPAN

Tel: 055-266-5432     Fax: 055-266-5444       -

 

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

E-Mail address: adm@obara.co.jp

 

 

ACTIVITIES  

 

Mfg of resistance welding machinery, other

 

 

BRANCHES   

 

Utsunomiya, Toyoda, Ikeda, Kitakyushu, other (Tot 7)

 

 

OVERSEAS

 

Australia, China, Czech, France, India, Korea, Malaysia, Mexico,

Russia, Thailand, USA, other (-- subsidiaries)

 

 

FACTORIES  

 

At the caption address, other; USA, China (-- subsidiaries)

 

 

CHIEF EXEC 

 

YASUSHI OBARA

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY

 

FINANCES        FAIR                 　A/SALES       Yen 38,582 M

PAYMENTSNo complaints         　CAPITAL        Yen 1,925 M

TREND UP                    　WORTH         Yen 32,812 M

STARTED         1958                 　EMPLOYES   1,652

 

 

COMMENT    

 

MFR OF RESISTANCE WELDING MACHINERY, OTHER 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 1,482.6 MILLION, 30 DAYS NORMAL TERMS

 

                        Unit: In Million Yen

Forecast figures for the 30/09/2014 fiscal term.

 

 

HIGHLIGHTS

 

This is the mfr of resistance welding machinery in use for welding line at automakers.  Holds more than 50% market share.  Supplies products to all domestic automakers.  Established new welding machine company and split up to form holding company in Oct 2011, with welding and surface polishing businesses as core operating companies.  Group consists of 22 companies/subsidiaries (both domestic and overseas).

 

 

FINANCIAL INFORMATION

 

            The sales volume for Sept/2013 fiscal term amounted to Yen 38,582 million, a 19.6% up from Yen 32,259 million in the previous term.  Sales of mainstay welders grew more sharply than expected in China and S/E Asia, backed by active capital investment by automakers.  The recurring profit was posted at Yen 7,343 million and the net profit at Yen 4,593 million, respectively, compared with Yen 4,604 million recurring profit and Yen 2,716 million net profit, respectively, a year ago. 

           

            (Oct/2013-Jun/2014 results): Sales Yen 36,644 million (up 32.1%), operating profit Yen 7,297 million (up 57.3%), recurring profit Yen 7,578 million (up 33.7%), net profit Yen 4,885 million (up 30.3%).  (% compared with the corresponding period a year ago)

 

For the current term ending Sept 2014 the recurring profit is projected at Yen 8,150 million and the net profit at Yen 5,150 million, on a 15.3% rise in turnover, to Yen 44,500 million.  Sales of welders will remain at a high level.  Orders for surface grinders for smartphone parts processing are remaining steady. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 1,482.6 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　Dec 1958

Regd No.:         0210-01-027278 (Kanagawa-Yamato)

Legal Status:      Limited Company (Kabushiki Kaisha

Authorized:       38 million shares

Issued:                20,869,380

Sum:                   Yen 1,925 million

 

Major shareholders (%): Magome Kosan (17.7), Yasushi Obara (10.8), Company’s Treasury Stock (7.5), Master Trust Bank of Japan T (6.2), Japan Trustee Services T (5.5), CMBL SA Re Mutual Funds (2.6), MUFG (1.7), Nomura Trust Inv T (1.6), Hiroshi Obara (1.4), Noriko Obara (1.4); foreign owners (17.0)

 

No. of shareholders: 2,052

 

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

 

Managements: Yasushi Obara, pres; Norifumi Obara, dir; Ken Suzawa, dir; Mitsuhisa Yamashita, dir

 

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

 

Related companies: Obara Corp, Speedfam Inc, Obara (Nanking) Machinery & Electric Co, other.

 

 

OPERATION

           

Activities: Manufactures resistance welding equipment (68%), surface grinders-related (32%)

Overseas Sales Ratio (81%)

 

(Mfg Items)

Resistance welder-related): guns, electrodes, changers, controllers, cables, transformers, dressers, other;

Arc Welder: semi-automatic torches, robot torches, consumable parts, flexible cables, automatic torches, extension cables;

Laser: YAG laser, optical system equipment, other

           

Clients: [Mfrs, wholesalers] Obara Corp USA, Obara Korea, Obara India Pvt Ltd, Obara Thailand Co Ltd, Obara shanghai Ltd, Speedfam Nagano, other

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Obara Shanghai, Kuramitsu Gokin Kogyo, Techno Associe  Co, Ishikawa Metal Finishing Co, Ishii Kikai Seisakusyo, other

 

Payment record: No complaints

 

Location: Business area in Yamato City, Kanagawa-Pref.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

MUFG (Atsugi)

Mizuho Bank (Kamata)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

30/09/2013

30/09/2012

INCOME STATEMENT

 

　

　

  Annual Sales

　

38,582

32,259

　

  Cost of Sales

25,734

22,154

　

      GROSS PROFIT

12,847

10,104

　

  Selling & Adm Costs

6,566

5,635

　

      OPERATING PROFIT

6,280

4,469

　

  Non-Operating P/L

1,063

135

　

      RECURRING PROFIT

7,343

4,604

　

      NET PROFIT

4,593

2,718

BALANCE SHEET

 

 

　

　

  Cash

　

14,433

8,558

　

  Receivables

 

13,466

9,773

　

  Inventory

 

7,431

3,662

　

  Securities, Marketable

　

157

　

  Other Current Assets

2,850

4,135

　

      TOTAL CURRENT ASSETS

38,180

26,285

　

  Property & Equipment

7,291

7,200

　

  Intangibles

 

278

234

　

  Investments, Other Fixed Assets

1,712

1,384

　

      TOTAL ASSETS

47,461

35,103

　

  Payables

 

4,667

2,973

　

  Short-Term Bank Loans

1,120

1,744

　

　

 

　

　

　

  Other Current Liabs

6,389

4,356

　

      TOTAL CURRENT LIABS

12,176

9,073

　

  Debentures

 

　

　

　

  Long-Term Bank Loans

6

11

　

  Reserve for Retirement Allw

173

136

　

  Other Debts

　

2,294

1,735

　

      TOTAL LIABILITIES

14,649

10,955

　

      MINORITY INTERESTS

 

　

　

Common stock

1,925

1,925

　

Additional paid-in capital

2,373

2,373

　

Retained earnings

26,317

26,317

　

Evaluation p/l on investments/securities

302

76

　

Others

 

2,974

(5,467)

　

Treasury stock, at cost

(1,079)

(1,077)

　

      TOTAL S/HOLDERS` EQUITY

32,812

24,147

　

      TOTAL EQUITIES

47,461

35,103

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

30/09/2013

30/09/2012

　

Cash Flows from Operating Activities

　

5,655

2,439

　

Cash Flows from Investment Activities

-285

-485

　

Cash Flows from Financing Activities

-1,664

-660

　

Cash, Bank Deposits at the Term End

　

12,126

6,692

ANALYTICAL RATIOS            Terms ending:

30/09/2013

30/09/2012

　

 

Net Worth (S/Holders' Equity)

32,812

24,147

　

 

Current Ratio (%)

313.57

289.71

　

 

Net Worth Ratio (%)

69.13

68.79

　

 

Recurring Profit Ratio (%)

19.03

14.27

　

 

Net Profit Ratio (%)

11.90

8.43

　

　

Return On Equity (%)

14.00

11.26

 

           

 

           


 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.61

UK Pound

1

Rs.100.48

Euro

1

Rs.79.56

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

PDT

 

               

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.