MIRA
INFORM REPORT
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Report Date : |
06.09.2014 |
IDENTIFICATION DETAILS
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Name : |
LETONG
CHEMICAL CO., LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
30.06.2014 |
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Date of Incorporation : |
13.11.1996 |
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Com. Reg. No.: |
440400000015734 |
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Legal Form : |
SHARES LIMITED COMPANY |
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Line of Business : |
Manufacturing and Selling various Inks, Coatings and Related Ancillary
Products. |
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No of Employees : |
730 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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) |
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China |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderate Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderate High Risk |
C1 |
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High Risk |
C2 |
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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
LETONG CHEMICAL
CO., LTD.
LETONG
INDUSTRIAL PARK, GUANTANG, JINDING, ZHUHAI
GUANGDONG
PROVINCE 519085 PR CHINA
TEL: 86 (0) 756-3383338/6886888
FAX: 86 (0)
756-3383339/6886000
EXECUTIVE SUMMARY
Date of Registration : NOVEMBER 13, 1996
REGISTRATION NO. : 440400000015734
LEGAL FORM : SHARES LIMITED COMPANY
CHIEF EXECUTIVE :
ZHANG
BINXIAN (LEGAL REPRESENTATIVE)
REGISTERED CAPITAL : cny
200,000,000
staff :
730
BUSINESS CATEGORY : manufacturing & TRADING
REVENUE :
CNY 297,308,000 (JAN. 1, 2014 TO JUN. 30, 2014)
EQUITIES :
CNY 586,865,000 (AS OF JUN. 30, 2014)
WEBSITE : www.letongink.com
E-MAIL :
lt@letongink.com
PAYMENT :
AVERAGE
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : FAIRLY stable
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 shares limited company of PRC with State
Administration of Industry & Commerce (SAIC) under registration No.:
440400000015734 on November 13, 1996.
SC’s Organization Code Certificate No.:
63280402-3
SC’s registered capital: cny 200,000,000
SC’s paid-in capital: cny 200,000,000
Registration Change Record:-
|
Date |
Change of Contents |
Before the change |
After the change |
|
-- |
Registered Capital |
cny 75,000,000 |
cny 200,000,000 |
Current Co search indicates SC’s shareholders & chief executives are
as follows:-
|
Name of Shareholder (s) (As
of Jun. 30, 2014) |
% of Shareholding |
|
Xinjiang Zhiming Equity Investment Co., Ltd. |
13 |
|
Zhu Dehong |
1.02 |
|
Peng Yongsong |
0.51 |
|
Sun Yuxing |
0.4 |
|
Lin Guqin |
0.39 |
|
Tu Jinglin |
0.33 |
|
Wang Fang |
0.32 |
|
Zheng Hong |
0.32 |
|
Li Bin |
0.28 |
|
China Foreign Economy And Trade Trust Co., Ltd.-Huijin Jufu (VI)
Collection Plan |
0.28 |
|
Other shareholders |
83.15 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative, Chairman and General Manager |
Zhang Binxian |
|
Deputy General Manager |
Liu Ming |
|
Li Hua |
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|
Zeng Songhua |
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Director |
Jia Shaohua |
|
Sha Zhenquan |
|
|
Wan Liangyou |
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Supervisor |
Kuai Shuhong |
|
Zhang Xuemei |
RECENT
DEVELOPMENT
SC is listed in Shenzhen Stick Exchange with code 002319.
SHAREHOLDER
CHART & BACKGROUND
Name (As of As of
Jun. 30, 2014) %
of Shareholding
Xinjiang Zhiming Equity Investment Co., Ltd. 13
Zhu Dehong 1.02
Peng Yongsong 0.51
Sun Yuxing 0.4
Lin Guqin 0.39
Tu Jinglin 0.33
Wang Fang 0.32
Zheng Hong 0.32
Li Bin 0.28
China Foreign Economy And Trade Trust Co., Ltd.-Huijin Jufu (VI)
Collection Plan 0.28
Other shareholders 83.15
Xinjiang Zhiming Equity Investment Co., Ltd.
====================================
Date of Registration: August 22, 2001
Registration No.: 440400000290812
Chief Executive: Zhang Binxian
Registered Capital: CNY 5,500,000
MANAGEMENT
Zhang Binxian,
Legal Representative, Chairman and General Manager
-------------------------------------------------------------------------------------------------------
Gender: M
Age: 53
Qualification: Master Degree Candidate
Working experience (s):
From 1996 to present, working in SC as legal representative, chairman
and general manager
Also working in Xinjiang Zhiming Equity Investment Co., Ltd. as legal
representative
Liu Ming, Deputy
General Manager
-------------------------------------------------------
Gender: M
Age: 46
Qualification: University
Working experience (s):
From 2007 to present, working in SC as deputy general manager
Li Hua , Deputy
General Manager
----------------------------------------------------
Gender: M
Age: 38
Qualification: University
Working experience (s):
Before, as director of SC
From 2013 to present, working in SC as deputy general manager
Zeng Songhua,
Deputy General Manager
----------------------------------------------------------------
Gender: M
Age: 37
Qualification: University
Working experience (s):
From 2013 to present, working in SC as deputy general manager
Director
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Jia Shaohua
Sha Zhenquan
Wan Liangyou
Supervisor
--------------
Kuai Shuhong
Zhang Xuemei
BUSINESS
OPERATION
SC’s registered business scope includes manufacturing and selling
various inks, coatings and related ancillary products.
SC is mainly engaged in manufacturing and selling inks.
Brand: LETONG
SC’s products mainly include:
Gravure Inks
Flexo Inks
Heat Transfer Inks
Water based Inks
Anti-forgery Inks
UV Inks
Plastic Spraying Inks
Etc.
SC sources its materials 100% from domestic market. SC sells 80% of its
products in domestic market, and 20% to overseas market, mainly U.S.A. and
Europe.
The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days.
The payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.
*Major Customers:
==============
Shanghai Ziquan Label Co., Ltd.
Dongguan Huayuan Package Co., Ltd.
Chongqing Dingzheng Package Materials Co., Ltd.
Foshan Sanshui Chengyuan Printing Packing Co., Ltd.
*Major Suppliers:
==============
Guangxi Yulin Dongsen Chemical Co., Ltd.
Zhongshan Xinhui Chemical Products Co., Ltd.
Zhuhai Longshun Chemical Co., Ltd.
Foshan Shunde Yutai Cotton Cellulose Co., Ltd.
Dongguan Chengtai Chemical Co., Ltd.
Staff &
Office:
--------------------------
SC is known to have approx. 730 staff at present.
SC owns an area as its operating office and factory, but the detailed
information is unknown.
RELATED
COMPANY
Subsidiaries:
==========
Shanghai Letong Package Materials Co., Ltd.
Zhuhai Letong New Materials Technology Co., Ltd.
Huzhou Letong New Materials Technology Co., Ltd.
Zhengzhou Letong New Materials Technology Co., Ltd.
Zhuhai Zhitong Investment & Development Co., Ltd.
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’s supplier refused to make any comments.
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 SAIC.
FINANCIALS
Consolidated
Balance Sheet
|
Unit: CNY’000 |
As
of Dec. 31, 2013 |
As
of Jun. 30, 2014 |
|
107,607 |
84,271 |
|
|
Notes receivable |
74,161 |
37,987 |
|
Accounts receivable |
223,296 |
260,244 |
|
Advances to suppliers |
48,814 |
24,361 |
|
Interest receivable |
0 |
0 |
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Dividends receivable |
0 |
0 |
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Other receivable |
4,600 |
2,891 |
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Inventory |
91,361 |
110,171 |
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Other current assets |
7,020 |
7,591 |
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|
------------------ |
------------------ |
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Current assets |
556,859 |
527,516 |
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Long-term equity investment |
0 |
0 |
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Fixed assets |
220,837 |
285,213 |
|
Construction in progress |
219,957 |
192,921 |
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Intangible assets |
27,070 |
28,574 |
|
Goodwill |
0 |
0 |
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Long-term prepaid expenses |
595 |
510 |
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Deferred income tax assets |
7,051 |
8,554 |
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Other non-current assets |
7,358 |
4,130 |
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------------------ |
------------------ |
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Total assets |
1,039,727 |
1,047,418 |
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|
============= |
============= |
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Short-term loans |
142,432 |
178,000 |
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Held for trading financial liabilities |
0 |
0 |
|
Notes payable |
88,986 |
70,577 |
|
Accounts payable |
89,462 |
77,912 |
|
Advances from clients |
8,977 |
8,464 |
|
Payroll payable |
6,140 |
3,368 |
|
Tax payable |
7,946 |
5,078 |
|
Interest payable |
266 |
357 |
|
Other payable |
27,782 |
8,395 |
|
Other current liabilities |
14,701 |
6,777 |
|
|
------------------ |
------------------ |
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Current liabilities |
386,692 |
358,928 |
|
Non-current liabilities |
64,400 |
101,625 |
|
|
------------------ |
------------------ |
|
Total liabilities |
451,092 |
460,553 |
|
Equities |
588,635 |
586,865 |
|
|
------------------ |
------------------ |
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Total liabilities & equities |
1,039,727 |
1,047,418 |
|
|
============= |
============= |
Consolidated
Income Statement
|
Unit: CNY’000 |
As
of Dec. 31, 2013 |
Jan.
1, 2014 to Jun. 30, 2014 |
|
Revenue |
564,232 |
297,308 |
|
Cost of sales |
417,281 |
232,646 |
|
Taxes and surcharges |
3,421 |
997 |
|
Sales expense |
37,440 |
17,751 |
|
Management expense |
64,705 |
31,547 |
|
Finance expense |
3,451 |
4,293 |
|
Investment income |
0 |
0 |
|
Non-operating income |
827 |
50 |
|
Non-operating expense |
966 |
79 |
|
Profit before tax |
32,728 |
8,213 |
|
Less: profit tax |
7,691 |
1,453 |
|
Profits |
25,037 |
6,760 |
Important Ratios
=============
|
|
As
of Dec. 31, 2013 |
As
of Jun. 30, 2014 |
|
*Current ratio |
1.44 |
1.47 |
|
*Quick ratio |
1.20 |
1.16 |
|
*Liabilities to assets |
0.43 |
0.44 |
|
*Net profit margin (%) |
4.44 |
2.27 |
|
*Return on total assets (%) |
2.41 |
0.65 |
|
*Inventory / Revenue ×365/180 |
60 days |
67 days |
|
*Accounts receivable / Revenue ×365/180 |
145 days |
158 days |
|
*Revenue / Total assets |
0.54 |
0.28 |
|
*Cost of sales / Revenue |
0.74 |
0.78 |
FINANCIAL
COMMENTS
PROFITABILITY:
AVERAGE
The revenue of SC appears good in its line.
SC’s net profit margin is average.
SC’s return on total assets is average.
SC’s cost of sales is average, comparing with its revenue.
LIQUIDITY: FAIR
The current ratio of SC is maintained in a normal level.
SC’s quick ratio is maintained in a fairly good level.
The inventory of SC is maintained in an average level.
The accounts receivable of SC appears large.
The short-term loans of SC appear large.
SC’s revenue is in a fair level, comparing with the size of its total
assets.
LEVERAGE: AVERAGE
The debt ratio of SC is low.
The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly Stable.
CONCLUSIONS
SC is considered medium-sized in its line with fairly stable financial
conditions. The large amount of accounts receivable and short-term loans may be
a threat to SC’s financial condition.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.60.44 |
|
|
1 |
Rs.98.64 |
|
Euro |
1 |
Rs.78.20 |
INFORMATION DETAILS
|
Analysis Done by
: |
KAR |
|
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|
Report Prepared
by : |
TPT |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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>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%)
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.