MIRA INFORM REPORT

 

 

Report No. :

356227

Report Date :

19.12.2015

 

IDENTIFICATION DETAILS

 

Name :

HANWA CO LTD

 

 

Registered Office :

4-3-9 Fushimi-machi Chuoku Osaka

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

April 1947

 

 

Com. Reg. No.:

1200-01-077530 (Osaka-Chuoku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

A trading house for import, export and wholesale of:

(Sales Breakdown by Divisions)

  • Steel Div
  • Steel Materials Div
  • Non-Ferrous Metal Div
  • Foods Div
  • Petroleum & Chemicals Div
  • Other Div

 

 

No. of Employee :

2,987

 

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

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 – 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

 

HANWA CO LTD

 

REGD NAME:               Hanwa Kogyo KK

MAIN OFFICE:              3-6-1 Kitakyuhonji-machi Chuoku Osaka 541-8585 JAPAN

                                                Tel: 06-7525-5000     Fax: 06-7525-5365

 

                                                *.. Registered at: 4-3-9 Fushimi-machi Chuoku Osaka

                                                **.. The is its Tokyo Office

 

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

E-Mail address:             info@hanwa.co.jp

 

 

ACTIVITIES

 

Import, export, wholesale of steel products, nonferrous metals, foods, chemicals, petroleum products, machinery, lumber, other.

 

 

BRANCHES

 

Tokyo, Nagoya, Sendai, Kitakyushu, Sapporo, Sendai, Fukuoka, other (Tot 58)

 

 

OVERSEAS

 

North & South Americas (15), Asia (19), China (10), Europe & Mid East (10)

 

 

CHIEF EXEC

 

HIRONARI FURUKAWA, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 A/SALES          Yen 1,737,397 M

PAYMENTSREGULAR   CAPITAL           Yen 45,651 M

TREND UP                    WORTH            Yen 142,749 M

STARTED         1947                 EMPLOYES      2,987

 

 

COMMENT

 

TRADING HOUSE SPECIALIZING IN STEEL PRODUCTS. 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARYBUSINESS ENGAGEMENTS.

 

Unit: In million Yen

Forecast (or estimated) figures for 31/03/2016 fiscal term

 

 

HIGHLIGHTS

 

This is a time-honored trading house originating in Osaka specializing in steel products as mainline.  Aiming to become general trading firm by boosting seafood imports.  Advanced into electronics field.  OA equipment developed in-house is growing rapidly.  Strong and active in China operations, having 9 offices in China.  Expanding into general trading house operations from the original steel products business.  Coil center in San Diego (US), acquired in Sept 2009, expanding sales of products for microwave ovens and flat-screen, TVs in Mexico, thanks to customs-free advantage.  In China, developing new markets thru units in inland provinces, including Chorigging.  In Apr 2008, established Hanwa India Private Ltd in Mumbai, with office in New Delhi to focus in automobiles, shipbuilding, gas & petroleum, energy markets in India. . The company formed a comprehensive tie-up with Bohai Iron and Steel Group, China’s leading steelmaker, and aims to expand business in China and abroad, including in processed steel products and materials development.  The company aims to strengthen sales-force with buyouts of regional processing businesses and the startup of a large-scale warehouse.

           

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 1,737,397 million, a 3.3% up from Yen 1,682,503 million in the previous term.  Sales of steel plates increased steadily.  The recurring profit was posted at Yen 14,264 million and the net profit at Yen 9,086 million, respectively, compared with Yen 14,698 million recurring profit and Yen 7,896 million net profit, respectively, a year ago.

 

(Apr/Sept/2015 results): Sales Yen 788,216 million (down 8.5%), operating profit Yen 8,170 million (down 9.4%), recurring profit Yen 6,953 million (up 1.3%), net profit Yen 6,053 million (up 52.0%).  (% as compared with the corresponding period a year ago).

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 18,000 million and the net profit at Yen 12,000 million, respectively, on a 5.0% fall in turnover, to Yen 1,650,000 million.  The steel wholesaling business will be dampened by softening prices, but sales volume will remain at a high level.  Oil prices were down, affecting downward sales earnings in Yen terms.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 30,707.7 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:                       Apr 1947

Regd No.:                                 1200-01-077530 (Osaka-Chuoku)

Legal Status:                Limited Company (Kabushiki Kaisha)

Authorized:                  570 million shares

Issued:                         211,663,200 shares

Sum:                            Yen 45,651 million

           

Major shareholders (%): Japan Trustee Services T (6.7), Master Trust Bank of Japan T (5.0), SMBC (3.6), Customers’ S/Holding Assn (3.5), Employees’ S/Holding Assn (2.3), Company’s Treasury Stock (2.1), CBNY Government of Norway (1.9), CBNYDFA Int’l Small Cap Value P (1.4), Nippon Steel & Sumitomo Metal (1.4), Japan Trustee Services T9 (1.3); foreign owners (21.5)

           

No. of shareholders: 10,783

 

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

 

Managements: Shuji Kita, ch; Hironari Furukawa, pres; Hideo Kawanishi, v pres; Hiroshi Serizawa, v pres; Akihiko Ogaswara, dir; Atsuhiro Moriguchi, dir; Naoyuki Togawa, dir

 

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

 

Related companies: Hanwa Logistics, Hanwa (Hong Kong) Ltd, Halows Co, other

           

 

OPERATION

 

Activities: A trading house for import, export and wholesale of:

(Sales Breakdown by Divisions)

Steel Div (49%): steel bars, shapes, construction materials, wire rods, steel sheets, other;          

Steel Materials Div (7%); forged iron, cast iron, special steel wires, screws;

Non-Ferrous Metal Div (5%): aluminum, copper, nickel, chromium, zinc (recycling);

Foods Div (5%): prawns, crab, other seafoods;

Petroleum & Chemicals Div (24%): fuels, petrochemicals, other;

Other Div (10%): lumber, plywood, logs, building materials, other.

Overseas sales ratio (26%)

 

Clients: [Mfrs, wholesalers, general contractors] JX Nippon Oil & Energy Corp, Mitsui-OSK Lines, K Lines, NYK Lines, Idemitsu Kosan, Obayashi Corp, Takenaka Corp, Shimizu Corp, Sumitomo Metal Ind, Oji Paper Mills, Osaka Uoichiba, NYK Lines, K Lines, Multi Trade Enterprises, China Ordins Group Co, Daewoo Shipbuilding & Marine Engineering, Seojoo Global Corporation, Nippon Metal Ind, Ministry of Defense, other.

            No. of accounts: 1,000

            Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Nippon Steel & Sumitomo Metal Corp, Nisshin Steel, JFE Steel, JXX Nippon Oil & Energy Corp, Tonen General Sekiyu, Kobe Steel, Double Rich Ltd, Aegean Marine Petroleum, other.

Imports from; USA, Canada, Chile, Finland, Sweden, Norway, Russia, China, Indonesia, other

 

Payment record: Regular

 

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

 

Bank References:

SMBC (Bingomachi)

Mizuho Bank (Osaka)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

  Annual Sales

　

1,737,397

1,682,503

  Cost of Sales

1,681,667

1,631,138

      GROSS PROFIT

55,729

51,365

  Selling & Adm Costs

36,622

35,112

      OPERATING PROFIT

19,107

16,252

  Non-Operating P/L

-4,843

-1,554

      RECURRING PROFIT

14,264

14,698

　

      NET PROFIT

9,086

7,896

BALANCE SHEET

  Cash

　

24,542

16,007

  Receivables

321,642

317,846

  Inventory

133,055

114,694

  Securities, Marketable

2,610

2,000

  Other Current Assets

28,528

17,778

      TOTAL CURRENT ASSETS

510,377

468,325

  Property & Equipment

60,946

61,574

  Intangibles

2,019

1,858

  Investments, Other Fixed Assets

78,114

61,594

      TOTAL ASSETS

651,456

593,351

  Payables

180,155

180,363

  Short-Term Bank Loans

82,155

95,605

　

　

　

  Other Current Liabs

79,886

43,393

      TOTAL CURRENT LIABS

342,196

319,361

  Debentures

30,000

30,000

  Long-Term Bank Loans

122,352

104,280

  Reserve for Retirement Allw

412

4,482

  Other Debts

　

13,746

9,866

      TOTAL LIABILITIES

508,706

467,989

      MINORITY INTERESTS

Common stock

45,651

45,651

Additional paid-in capital

4

4

Retained earnings

82,110

76,520

Evaluation p/l on investments/securities

11,621

7,484

Others

4,808

(2,856)

Treasury stock, at cost

(1,445)

(1,442)

      TOTAL S/HOLDERS` EQUITY

142,749

125,361

　

      TOTAL EQUITIES

651,456

593,351

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2015

31/03/2014

Cash Flows from Operating Activities

　

1,790

343

Cash Flows from Investment Activities

-13,692

-5,244

Cash Flows from Financing Activities

19,339

-4,927

　

Cash, Bank Deposits at the Term End

　

24,515

15,919

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

Net Worth (S/Holders' Equity)

142,749

125,361

Current Ratio (%)

149.15

146.64

Net Worth Ratio (%)

21.91

21.13

Recurring Profit Ratio (%)

0.82

0.87

Net Profit Ratio (%)

0.52

0.47

Return On Equity (%)

6.37

6.30

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.66.42

UK Pound

1

Rs.99.17

Euro

1

Rs.72.14

YEN

1

Rs.0.55

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

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

ANK

 

 

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%)

 

 

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.