MIRA INFORM REPORT

 

 

Report No. :

301838

Report Date :

17.01.2015

 

IDENTIFICATION DETAILS

 

Name :

DAITO PHARMACEUTICAL CO LTD

 

 

Registered Office :

326 Yokamachi Toyama 939-8221

 

 

Country :

Japan

 

 

Financials (as on) :

31.05.2014

 

 

Date of Incorporation :

Jun 1942

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturer of Pharmaceuticals, Pharmaceutical Ingredients.

 

 

No. of Employee :

615

 

 

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

 

Status :

Satisfactory

 

 

Payment Behaviour :

No complaints

 

 

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 – September 30, 2014

 

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

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 and address

 

DAITO PHARMACEUTICAL CO LTD

 

REGD NAME:               Daito KK

MAIN OFFICE:              326 Yokamachi Toyama 939-8221 JAPAN

Tel:                              076-421-5665    

Fax:                              076-421-6006     -

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

E-Mail address:            (thru the URL)

 

ACTIVITIES:     Mfg of pharmaceuticals, pharmaceutical ingredients, other

BRANCHES:     Tokyo, Osaka, other (Tot 5)

OVERSEAS:     USA, China, other

FACTORIES:    At the caption address

 

CHIEF EXEC:   YASUNOBU OHTSUGA, PRES

 

Yen Amount:    In million Yen, unless otherwise stated

 

SUMMARY:      FINANCES        FAIR                             A/SALES          Yen 31,196 M

                        PAYMENTS      NO COMPLAINTS          CAPITAL           Yen 3,120 M

                        TREND             UP                    `           WORTH            Yen 16,624 M

                        STARTED         1942                             EMPLOYES      615

 

COMMENT:      MFR OF PHARMACEUTICALS & INGREDIENTS 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

                        Unit: In Million Yen

Forecast figures for the 31/05/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is a specialized mfr of pharmaceuticals & pharmaceutical ingredients, set up in 1942 as control firm under prefecture’s guidance for exporting Toyama’s household medicine to S/E Asia.  Also engaged in making generic drugs/household medicine and contract mfg of pharmaceuticals. 

 

 

FINANCIAL INFORMATION

 

The sales volume for May/2014 fiscal term amounted to Yen 31,196 million, a 7.7% up from Yen 28,956 million in the previous term.  Sales grew fueled by ongoing government action to cut healthcare costs.  Sales to generic drug-makers of pharmaceutical ingredients for vasodilators and other agents rose.  The recurring profit was posted at Yen 2,290 million and the net profit at Yen 1,811 million, respectively, compared with Yen 2,541 million recurring profit and Yen 1,786 million net profit, respectively, a year ago.

 

(Jun/Nov 2014 results): Sales 16,686 million (up 8.7%), operating profit Yen 1,778 million (up 15.8%), recurring profit Yen 1,720 million (up 12.7%), net profit Yen 1,110 million (up 21.8%).  (% as compared with the corresponding period a year ago).

 

For the current term ending May 2015 the recurring profit is projected at Yen 3,450 million and the net profit at Yen 2,200 million, respectively, on a 10.6% rise in turnover, to Yen 34,500 million.  Sales of active pharmaceutical ingredients for generic drug makers will show a double-digit growth, led by those of products for antipyretic analgesics, major anti-hyperlipidemia drugs, etc, supported by the positive impact of the government’s policy of promoting generic drugs.

 

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

 

REGISTRATION

           

Date Registered:　    Jun 1942

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                   28 million shares

Issued:                         9,885,968 shares

Sum:                             Yen 3,120 million

 

Major shareholders (%): Japan Trustee Services T (5.8), Master Trust Bank of Japan T (4.1), Shinjiro Sasayama (4.0), Employees’ S/Holding Assn (3.0), Yasunobu Ohtsuga (2.7), BNP Paribas Sec. Service (Lux) FIM (2.0), Naigai Estate Co (1.8), State Street Bank & Trust 505019 (1.1), BONY GCM Client JPRDDISGFEAC (1.1), Chase London SL Omnibus Acct (1.0); foreign owners (13.9)

 

No. of shareholders: 2,147

 

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

 

Managements: Yoshihiro Narai, ch; Yasunobu Ohtsuga, pres; Hideyuki Kato, s/mgn dir; Jun’ichi Kikuta, s/mgn dir

 

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

 

Related companies: Daiwa Pharmaceutical, Daito Pharmaceutical America Inc, other.

 

 

OPERATION

           

Activities: Manufactures pharmaceuticals & pharmaceutical ingredients: drug materials (63%), formulations (36%), health foods & others (1%)

           

Clients: [Mfrs, wholesalers] Nichi-Iko Pharmaceutical, Sawai Pharmaceutical, Nisshin

Pharmaceutical, Daiichi-Sankyo Healthcare, Kaken Pharmaceutical, Kyowa Pharmaceutical Ind, Dainippon Sumitomo Pharma Co, Zeria Pharmaceutical, other

No. of accounts: 600

Domestic areas of activities: Nationwide

Supplers: [Mfrs, wholesalers] Kyowa Hakko Bio, Daiwa Pharmaceutical, Kewpie Corp,

Mitsui & Co, other

 

 

Payment record: No Complaints

 

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

 

Bank References:

Hokuriku Bank (H/O)

SMBC (Toyama)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/05/2014

31/05/2013

INCOME STATEMENT

　

　

  Annual Sales

　

31,196

28,956

　

  Cost of Sales

25,207

23,028

　

      GROSS PROFIT

5,989

5,928

　

  Selling & Adm Costs

3,050

3,249

　

      OPERATING PROFIT

2,938

2,678

　

  Non-Operating P/L

-18

-137

　

      RECURRING PROFIT

2,920

2,541

　

      NET PROFIT

1,811

1,786

BALANCE SHEET

　

　

  Cash

　

2,513

4,149

　

  Receivables

9,716

9,298

　

  Inventory

4,434

4,017

　

  Securities, Marketable

　

　

　

  Other Current Assets

3,397

1,068

　

      TOTAL CURRENT ASSETS

20,060

18,532

　

  Property & Equipment

13,445

12,992

　

  Intangibles

588

558

　

  Investments, Other Fixed Assets

2,601

2,680

　

      TOTAL ASSETS

36,694

34,762

　

  Payables

3,445

3,185

　

  Short-Term Bank Loans

3,450

4,070

　

　

　

　

　

  Other Current Liabs

7,971

6,369

　

      TOTAL CURRENT LIABS

14,866

13,624

　

  Debentures

　

　

　

  Long-Term Bank Loans

4,217

4,869

　

  Reserve for Retirement Allw

227

207

　

  Other Debts

　

760

988

　

      TOTAL LIABILITIES

20,070

19,688

　

      MINORITY INTERESTS

　

　

Common stock

3,120

3,120

　

Additional paid-in capital

3,006

3,006

　

Retained earnings

9,342

7,828

　

Evaluation p/l on investments/securities

622

646

　

Others

535

474

　

Treasury stock, at cost

(1)

(1)

　

      TOTAL S/HOLDERS` EQUITY

16,624

15,073

　

      TOTAL EQUITIES

36,694

34,762

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/05/2014

31/05/2013

　

Cash Flows from Operating Activities

　

2,744

2,541

　

Cash Flows from Investment Activities

-2,162

-2,236

　

Cash Flows from Financing Activities

-2,065

1,690

　

Cash, Bank Deposits at the Term End

　

2,285

3,698

ANALYTICAL RATIOS            Terms ending:

31/05/2014

31/05/2013

　

Net Worth (S/Holders' Equity)

16,624

15,073

　

Current Ratio (%)

134.94

136.02

　

Net Worth Ratio (%)

45.30

43.36

　

Recurring Profit Ratio (%)

9.36

8.78

　

Net Profit Ratio (%)

5.81

6.17

　

　

Return On Equity (%)

10.89

11.85

           


 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.89

UK Pound

1

Rs.93.92

Euro

1

Rs.72.01

 

 

INFORMATION DETAILS

 

Analysis Done by :

SUB

 

 

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%)

 

 

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.