MIRA INFORM REPORT

 

 

Report No. :

355509

Report Date :

16.12.2015

 

IDENTIFICATION DETAILS

 

Name :

HITACHI METALS LTD

 

 

Registered Office :

1-2-1 Shibaura Minatoku Tokyo 105-8614

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

April, 1956

 

 

Com. Reg. No.:

0104-01-038783

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturer of High-Quality Special Steel, Electronics & IT Device.

 

 

Employees:

29342

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

 

Status :

Excellent Company 

 

 

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 – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

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 an 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. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil 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 impressive - 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 aftereffects 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 four times since 2008. 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 of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) 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 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

company name and address

 

HITACHI METALS LTD

 

REGD NAME:               Hitachi Kinzoku KK

MAIN OFFICE:              1-2-1 Shibaura Minatoku Tokyo 105-8614 JAPAN

Tel: 03-5765-4000          Fax: 03-5765-8311     -

 

URL:                             http://www.hitachi-metals.co.jp

E-Mail address:            (thru the URL)

 

 

ACTIVITIES

 

Mfg of high-quality special steel, electronics & IT device

 

 

BRANCHES

 

Osaka, Nagoya, Fukuoka, Kumagaya, other (Tot 17)

 

 

OVERSEAS

 

USA, Germany, Italy, UK, France, Canada, Thailand, China, Taiwan, Korea, Singapore, other (--subsidiaries)

 

 

FACTORIES

 

Fukuoka, Shimane, Osaka, Tottori, Saitama, other (Tot 13 works & 6 R&D bases)

 

 

CHIEF EXEC

 

HIDEAKI TAKAHASHI, PRES

 

Yen Amount:    

 

In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 　         A/SALES          Yen 1,006,301 M

PAYMENTS      REGULAR         　         CAPITAL           Yen 26,284 M

TREND STEADY           　         WORTH            Yen 459,727 M

STARTED         1956                 　         EMPLOYES      29342

 

 

COMMENT

 

MFR OF HIGH-QUALITY SPECIAL STEEL, ELECTRONICS & IT DEVICE.

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

Unit: In Million Yen

Forecast figures for the 31/03/2016 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established on the basis of an iron & steel division separated from Hitachi Ltd.  This is a major mfr of high-quality special steel.  Now this is the leading strategic company of Hitachi group.  Expanded into diverse electronic materials and new materials.  World’s top maker of magnetic materials.  Also engaged in overseas production.  The parent firm, Hitachi Ltd, controls 50%-plus of voting right, but the firm rather enjoys independent corporate management from the parent.  It merged with Hitachi Cable, a Hitachi Group firm, in July 2013.  It is accelerating set-up of overseas bases on automobile products, which account for more than 40% of all sales.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 1,006,301 million, a 24.5% up from Yen 807,952 million in the previous term.  The recurring profit was posted at Yen 74,874 million and the net profit at Yen 66,553 million, respectively, compared with Yen 60,898 million recurring profit and Yen 39,417 million net profit, respectively, a year ago.

 

(Apr/Sept/2015 results): Sales Yen 524,970 million (up 17.0%), operating profit Yen 62,581 million (up 55.1%), recurring profit Yen 60,700 million (up 48.3%), net profit Yen 44,079 million (up 37.9%).  (% as compared with the corresponding period a year ago).

 

For the current term ending Mar 2016 the recurring profit is projected at 97,000 million and the net profit at Yen 68,000 million, respectively, on a 3.4% rise in turnover, to Yen 1,040,000 million.  The business scope will expand, backed by full-term contribution of M&A.  Automobile-use products sales will continue expansion.

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

 

Date Registered:　        Apr 1956

Regd No.:                                 0104-01-038783 (Tokyo-Minatoku)

Legal Status:                 Limited Company (Kabushiki Kaisha

Authorized:                               500 million shares

Issued:                         428,904,352 shares

Sum:                            Yen 26,284 million

 

Major shareholders (%): Hitachi Ltd (52.7), Japan Trustee Services Bank (2.7), Master Trust Bank of Japan (2.6), JP Morgan Chase Bank 385078 (1.0), State Street Bank & Trust (1.0), Nippon Life Ins (0.6), Pictel & Cie (Europe) (0.6), Mellon Bank (0.5), HSBC Kuwait investment Authority (0.5), JP Morgan Chase Bank 380634 (0.5); foreign owners (22.8)

 

No. of shareholders: 10,896

 

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

 

Managements: Kazuyuki Konishi, ch; Hideaki Takahashi, pres; Akitoshi Hiraki, rep dir; Ken’ichi Saika, rep dir; Shoji Sousa, dir; Masahiro Otsuka, dir; Hiroyuki Okada, dir; Fumio Kanaya, dir; Yasuhiko Sakamoto, dir; Shigekazu Suwabe, dir; Eiji Nakano, dir; Masahito Hasegawa, dir; Jun’ichi Kamata, dir

 

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

 

Related companies: Hitachi Metals Techno Ltd, Hitachi Tool, Hitachi Metals Admet Ltd, other.

 

 

OPERATION

 

Activities: Manufactures:

High-Grade Metal Products & Materials (26%): molds & tool sheets, alloys for electronic products (display-related, semiconductor & other packages), industrial equipment & energy-related materials, rolls for steel, nonferrous & non-metal applications, injection molding machine parts, structural ceramic products, steel-flame joints for construction, cutting tools;

Electronics & IT Devices (13%): magnets (rare-earth magnets, ferrite magnetic materials, and applied products), components for information & telecommunications equipment (multilayered devices, isolators), IT components & materials, soft magnetic materials (soft ferrite cores & applied products, monocrystalline magnetic materials, and applied devices, amorphous metals, and applied products);

 

High-Grade Functional Components & Equipment (28%): high-grade casting components for automobiles (high-grade ductile iron products, heat-resistant exhaust casting components, aluminum wheels, other aluminum components), piping & infrastructure components (pipe fittings, stainless steel & plastic piping components, water cooling equipment, precision mass flow control devices), construction components (access floor systems, structural systems, material handling systems).

Cable Materials (33%)

Overseas Sales Ratio (47%)

 

Clients: [Mfrs, wholesalers] Nissan Motors, Toyota Motors, Honda Motors, Samsung Electronics Co, Tokyo Gas, Hitachi Admet, Hitachi Metals Europe, other

 

No. of accounts: 800

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Sumitomo Metal Mining, Hitachi Ltd, Advanced Materials Japan, Hitachi Hi-Tech Materials, other

 

Payment record: Regular

 

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

 

Bank References:

MUFG (Tokyo)

Mizuho Bank (H/O)

Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

Annual Sales

1,006,301

807,952

Cost of Sales

796,121

638,872

GROSS PROFIT

210,180

169,080

Selling & Adm Costs

131,964

109,544

OPERATING PROFIT

78,216

59,536

Non-Operating P/L

-3,342

1,362

RECURRING PROFIT

74,874

60,898

NET PROFIT

66,553

39,417

BALANCE SHEET

Cash

62,969

45,289

Receivables

226,707

210,503

Inventory

171,927

142,890

Securities, Marketable

683

1,058

Other Current Assets

85,418

108,038

TOTAL CURRENT ASSETS

547,704

507,778

Property & Equipment

306,801

234,666

Intangibles

154,655

46,125

Investments, Other Fixed Assets

56,830

52,173

TOTAL ASSETS

1,065,990

840,742

Payables

179,369

167,436

Short-Term Bank Loans

31,964

42,949

Other Current Liabs

109,805

107,657

TOTAL CURRENT LIABS

321,138

318,042

Debentures

35,000

35,000

Long-Term Bank Loans

158,463

53,879

Reserve for Retirement Allw

66,311

47,939

Other Debts

25,351

12,684

TOTAL LIABILITIES

606,263

467,544

MINORITY INTERESTS

Common stock

26,284

26,284

Additional paid-in capital

115,693

115,692

Retained earnings

297,412

239,530

Evaluation p/l on investments/securities

5,490

4,802

Others

15,953

(12,100)

Treasury stock, at cost

(1,105)

(1,010)

TOTAL S/HOLDERS` EQUITY

459,727

373,198

TOTAL EQUITIES

1,065,990

840,742

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2015

31/03/2014

Cash Flows from Operating Activities

111,092

100,557

Cash Flows from Investment Activities

-113,161

-30,906

Cash Flows from Financing Activities

-11,677

-30,914

Cash, Bank Deposits at the Term End

88,223

95,543

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

Net Worth (S/Holders' Equity)

459,727

373,198

Current Ratio (%)

170.55

159.66

Net Worth Ratio (%)

43.13

44.39

Recurring Profit Ratio (%)

7.44

7.54

Net Profit Ratio (%)

6.61

4.88

Return On Equity (%)

14.48

10.56

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.67.04

UK Pound

1

Rs.101.67

Euro

1

Rs.73.93

JPY

1

Rs.0.54

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

Report Prepared by :

NIT

 

 

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.