MIRA INFORM REPORT

 

 

Report Date :

30.09.2014

 

IDENTIFICATION DETAILS

 

Name :

DAIDO STEEL CO LTD

 

 

Registered Office :

Urbannet Nagoya Bldg, 1-1-10 Higashisakura Higashiku Nagoya 461-8581

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

February 1950

 

 

Com. Reg. No.:

1800-01-037514

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturer of special steel for Automobiles

 

 

No. of Employees :

10,709

 

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 15,616.3 Million

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

 

DAIDO STEEL CO LTD

 

 

REGD NAME

 

Daido Tokushuko KK

 

 

MAIN OFFICE

 

Urbannet Nagoya Bldg, 1-1-10 Higashisakura Higashiku Nagoya 461-8581 JAPAN

Tel: 052-963-7501    

Fax: 052-963-4386     -

 

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

E-Mail address: (thru the URL)

 

 

ACTIVITIES

 

Mfg of special steel for automobiles

 

 

BRANCHES

 

Tokyo, Osaka, Fukuoka, other (Tot 10)

 

 

OVERSEAS

 

USA , China, Hong Kong, Singapore, Thailand, Germany, India, Indonesia,

Korea, Taiwan, Philippines, other (--Offices & subsidiaries)

 

 

FACTORIES

 

Tokai (3), Kimitsu, Shibukawa, Nagoya, other (Tot 8)

 

 

CHIEF EXEC

 

TADASHI SHIMAO, PRES

 

Yen Amount:    In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 A/SALES          Yen 457,731 M

PAYMENTS      REGULAR         CAPITAL           Yen 37,172 M

TREND             UP                    WORTH            Yen 267,625 M

STARTED         1950                 EMPLOYES      10,709

 

 

COMMENT

 

MFR OF SPECIAL STEEL FOR AUTOMOBILES 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 15,616.3 MILLION, 30 DAYS NORMAL TERMS

 

 

                        Unit: In Million Yen

Forecast figures for the 31/03/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is a top-ranked mfr of special steel, with strong sales to automakers including main client Nissan & Honda Motors.  Expanding sales ratio of new lines, including machinery, magnetic materials and environmental equipment like industrial furnaces.  Has association with Nippon Steel & Sumitomo Metal.  Streamlining China Plant. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 457,731 million, a 3.9% up from Yen 440,428 million in the previous term.  Sales of special steel and iron casting for automobiles and industrial machinery rebounded.  Sales of magnetic products for HDDs recovered.  The recurring profit was posted at Yen 20,287 million and the net profit at Yen 12,616 million, respectively, compared with Yen 16,475 million recurring profit and Yen 10,983 million net profit, respectively, a year ago.

 

(Apr/Jun/2014 results): Sales Yen 119,819 million (up 9.1%), operating profit Yen 4,177 million (down 175%), recurring profit Yen 4,572 million (down 12.5%), net profit Yen 2,582 million (down 30.8%).  (% compared with the corresponding period a year ago).

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 25,000 million and the net profit at Yen 16,000 million, respectively, on a 7.0% rise in turnover, to Yen 490,000 million.  Automobile-related products will suffer stagnant demand at home, but overseas sales are likely to expand.  Sales of industrial machinery-related products will continue an upward trend. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 15,616.3 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　         Feb 1950

Regd No.:                      1800-01-037514 (Nagoya-Higashiku)

Legal Status:                 Limited Company (Kabushiki Kaisha

Authorized:                    1,160 million shares

Issued:                          434,487,693

Sum:                            Yen 2237,172 million

 

Major shareholders (%): Nippon Steel Sumitomo Metal (7.1), Meiji Yasuda Life Ins (4.7), Japan Trustee Services T (4.2), Mizuho Bank (3.5), Master Trust Bank of Japan T (3.5), NHK Spring (3.3), MUFG (3.2), Honda Motor (3.0), Toyota Motor (2.0), Zenkyoren (1.9); foreign owners (12.2)

 

No. of shareholders:       18,197

 

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

 

Managements: Masatoshi Ozawa, ch; Tadashi Shimao, pres; Michio Okabe, v pres; Motoshi Shinkai, v pres; Takeshi Ishiguro, v pres; Akira Miyajima, mgn dir; Yasuhiro Itazuri,mgn dir; Hajime Takahashi, mgn dir; Kazuo Tachibana, mgn dir; Tsukasa Nishimura, mgn dir

 

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

 

Related companies: Nippon Seisen Co, Fuji OOZX Inc, Daido Kogyo Co, other.

 

 

OPERATION

           

Activities: Manufactures special steel producs (40%), high performance materials & magnetic materials (31%), engineering (5%), others (2%).

Overseas Sales Ratio (17%)

           

Clients: [Mfrs, wholesalers] Daido Kogyo, Daido Special Metal, Okaya & Co, Hino Motor, Toyota Motor, UEX, other

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Daido Kogyo, Chubu Electric Power, Metal One, other

 

Payment record: Regular

 

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

 

Bank References:

Mizuho Bank (H/O)

MUFG (Nagoya)

Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

457,731

440,428

　

  Cost of Sales

390,387

377,793

　

      GROSS PROFIT

67,344

62,634

　

  Selling & Adm Costs

48,366

47,208

　

      OPERATING PROFIT

18,978

15,426

　

  Non-Operating P/L

1,309

1,049

　

      RECURRING PROFIT

20,287

16,475

　

      NET PROFIT

12,616

10,983

BALANCE SHEET

 

 

　

　

  Cash

　

40,674

52,020

　

  Receivables

 

100,719

87,842

　

  Inventory

 

97,746

94,036

　

  Securities, Marketable

　

　

　

  Other Current Assets

8,922

8,186

　

      TOTAL CURRENT ASSETS

248,061

242,084

　

  Property & Equipment

184,900

161,919

　

  Intangibles

 

5,925

4,165

　

  Investments, Other Fixed Assets

118,636

102,991

　

      TOTAL ASSETS

557,522

511,159

　

  Payables

 

76,895

66,233

　

  Short-Term Bank Loans

41,876

42,006

　

　

 

　

　

　

  Other Current Liabs

37,689

35,762

　

      TOTAL CURRENT LIABS

156,460

144,001

　

  Debentures

 

30,000

30,000

　

  Long-Term Bank Loans

70,692

63,430

　

  Reserve for Retirement Allw

7,312

6,865

　

  Other Debts

　

25,433

21,122

　

      TOTAL LIABILITIES

289,897

265,418

　

      MINORITY INTERESTS

 

　

　

Common stock

37,172

37,172

　

Additional paid-in capital

28,542

28,542

　

Retained earnings

146,079

134,789

　

Evaluation p/l on investments/securities

16,642

10,512

　

Others

 

39,560

35,073

　

Treasury stock, at cost

(370)

(347)

　

      TOTAL S/HOLDERS` EQUITY

267,625

245,741

　

      TOTAL EQUITIES

557,522

511,159

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

28,567

33,607

　

Cash Flows from Investment Activities

-34,313

-28,471

　

Cash Flows from Financing Activities

-7,633

-17,356

　

Cash, Bank Deposits at the Term End

　

39,905

51,643

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

267,625

245,741

　

 

Current Ratio (%)

158.55

168.11

　

 

Net Worth Ratio (%)

48.00

48.08

　

 

Recurring Profit Ratio (%)

4.43

3.74

　

 

Net Profit Ratio (%)

2.76

2.49

　

　

Return On Equity (%)

4.71

4.47


 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.43

UK Pound

1

Rs.99.73

Euro

1

Rs.77.93

 

INFORMATION DETAILS

 

Analysis Done by :

SUM

 

 

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.