MIRA INFORM REPORT
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Report No. : |
354257 |
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Report Date : |
16.12.2015 |
IDENTIFICATION DETAILS
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Name : |
LAIWU FORGING CO., LTD. |
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Registered Office : |
Zhaili Town, Laicheng District, Laiwu, Shandong Province 271121 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2014 |
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Date of Incorporation : |
16.05.2006 |
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Com. Reg. No.: |
913712007892506390 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Subject is engaged in forging processing; wholesale and retail of auto
parts, hardware, and chemical products. |
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No. of Employees : |
286 |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but correct |
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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 – March 31, 2015
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Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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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 |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
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. 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 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.
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. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate.
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 2014 more than 274 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. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.
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Source
: CIA |
Company
Name & address
LAIWU FORGING CO., LTD.
ZHAILI TOWN, LAICHENG DISTRICT, LAIWU
SHANDONG PROVINCE 271121 PR CHINA
TEL: 86 (0) 634-6512388/6511323/6506701
FAX: 86 (0) 634-6512388/6512399
EXECUTIVE
SUMMARY
Date of Registration : MAY 16, 2006
UNIFIED SOCIAL CREDIT CODE : 913712007892506390
LEGAL FORM : LIMITED LIABILITY
COMPANY
CHIEF EXECUTIVE :
LV GUITING (LEGAL REPRESENTATIVE)
REGISTERED CAPITAL : CNY 50,000,000
staff :
286
BUSINESS CATEGORY : PROCESSING
Revenue :
CNY 118,610,000 (AS OF DEC. 31,
2014)
EQUITIES :
CNY 20,260,000 (AS OF DEC. 31, 2014)
WEBSITE : www.laiwuforging.com
E-MAIL :
lujun@laiwuforging.com
PAYMENT :
AVERAGE
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION : fair
OPERATIONAL TREND : ordinary
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY 6.42 = 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 unified social credit
code: 913712007892506390.
SC’s Organization Code Certificate No.:
78925063-9
SC’s Tax No.: 371202789250639
SC’s registered capital: CNY 50,000,000
SC’s paid-in capital: CNY 16,000,000
Registration Change Record:-
|
Date |
Change of Contents |
Before the change |
After the change |
|
2015-10-27 |
Legal Form |
One-Person Limited Liabilities Company |
Limited Liabilities Company |
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Registered Capital |
CNY 16,000,000 |
CNY 50,000,000 |
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Registration No./ Unified
Social Credit Code |
371200228039357 |
913712007892506390 |
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Shareholder (s) (% of Shareholding) |
Lv Guiting 100% |
Lv Bin 0.5% Lv Guili 1% Lv Guisheng 1% Lv Jun 1% Lv Guiting 96.5% |
Current Co search indicates SC’s shareholders & chief executives are
as follows:-
|
Name of Shareholder (s) |
% of Shareholding |
|
Lv Bin |
0.5 |
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Lv Guili |
1 |
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Lv Guisheng |
1 |
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Lv Jun |
1 |
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Lv Guiting |
96.5 |
SC’s Chief Executives:-
|
Position |
Name |
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Legal Representative, Chairman and General Manager |
Lv Guiting |
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Supervisor |
Lv Guisheng |
RECENT DEVELOPMENT
No recent development was found during our checks at present.
SHAREHOLDER CHART & BACKGROUND
Name %
of Shareholding
Lv Guiting
96.5
Lv Guili
1
Lv Guisheng
1
Lv Jun
1
Lv Bin
0.5
MANAGEMENT
Lv Guiting, Legal Representative, Chairman and General
Manager
--------------------------------------------------------------------------------------------------
Gender: M
Age: 61
Qualification: University
Working experience (s):
From 2006 to present, working in SC as legal representative, chairman
and general manager
Supervisor
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Lv Guisheng
BUSINESS OPERATION
SC’s registered business scope includes forging
processing; wholesale and retail of auto parts, hardware, and chemical
products.
SC is mainly engaged in forging processing.
SC’s products mainly include: pipe mould, petrochemical forgings, and
forgings.
SC sources its materials 100% from domestic market, mainly Shandong. SC
sells 80% of its products in domestic market, and 20% to overseas market.
The buying terms of SC include Check, T/T and Credit of 30-60 days. The payment
terms of SC include T/T, L/C and Credit of 30-60 days.
*Major Customer*
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Tri Wave, LLC.
Staff &
Office:
--------------------------
SC is known to have approx. 286
staff at present.
SC owns an area as its operating office & factory of approx. 60,000
sq. meters at the heading address.
RELATED COMPANY
SC is not known to have any subsidiary at present.
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
Basic Bank:
Industrial
and Commercial Bank of China Laiwu Laicheng Sub-branch
AC#: 1617010709024901862
FINANCIALS
Balance Sheet
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Unit: CNY’000 |
As of Dec. 31,
2014 |
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Cash |
5,110 |
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Notes receivable |
0 |
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Accounts receivable |
1,200 |
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Advances to suppliers |
0 |
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Other receivable |
30,620 |
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Inventory |
74,280 |
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Non-current assets within one year |
0 |
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Other current assets |
820 |
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------------------ |
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Current assets |
112,030 |
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Fixed assets |
80,570 |
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Long-term prepaid expenses |
0 |
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Deferred income tax assets |
0 |
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Other non-current assets |
0 |
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------------------ |
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Total assets |
192,600 |
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============= |
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Short-term loans |
100,000 |
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Notes payable |
0 |
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Accounts payable |
25,830 |
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Advances from clients |
0 |
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Other payable |
37,390 |
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Other current liabilities |
700 |
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------------------ |
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Current liabilities |
163,920 |
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Non-current liabilities |
8,420 |
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------------------ |
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Total liabilities |
172,340 |
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Equities |
20,260 |
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------------------ |
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Total liabilities & equities |
192,600 |
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============= |
Income Statement
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Unit: CNY’000 |
As of Dec. 31,
2014 |
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Revenue |
118,610 |
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Cost of sales |
106,550 |
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Sales expense |
690 |
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Management expense |
6,010 |
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Finance expense |
8,650 |
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Profit before tax |
-3,120 |
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Less: profit tax |
0 |
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Profits |
-3,120 |
Important Ratios
=============
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As of Dec. 31,
2014 |
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*Current ratio |
0.68 |
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*Quick ratio |
0.23 |
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*Liabilities to assets |
0.89 |
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*Net profit margin (%) |
-2.63 |
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*Return on total assets (%) |
-1.62 |
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*Inventory / Revenue ×365 |
229 days |
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*Accounts receivable/ Revenue ×365 |
4 days |
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*Revenue/Total assets |
0.62 |
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*Cost of sales / Revenue |
0.90 |
FINANCIAL COMMENTS
PROFITABILITY:
FAIR
The revenue of SC appears fairly good in its line.
SC’s net profit margin is fair.
SC’s return on total assets is fair.
SC’s cost of sales is average, comparing with its revenue.
LIQUIDITY: FAIR
The current ratio of SC is maintained in a fair level.
SC’s quick ratio is maintained in a poor level.
The inventory of SC appears large.
The accounts receivable of SC is maintained in an average level.
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: FAIR
The debt ratio of SC is fairly high.
The risk for SC to go bankrupt is above average.
Overall financial
condition of the SC: Fair.
CONCLUSIONS
SC is considered small-sized in its line with fair financial conditions.
The large amount of inventory and short-term loans may be a threat to SC’s
financial condition.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.67.04 |
|
|
1 |
Rs.101.67 |
|
Euro |
1 |
Rs.73.93 |
|
CNY |
1 |
Rs.10.30 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
KAS |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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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 |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
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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.