MIRA INFORM REPORT

 

 

Report No. :

302646

Report Date :

20.01.2015

 

IDENTIFICATION DETAILS

 

Name :

JOHNSON ELECTRIC INDUSTRIAL MANUFACTORY  LTD.

 

 

Registered Office :

6/F., 12 Science Park East Avenue, Hong Kong Science Park, Shatin, New Territories

 

 

Country :

Hong Kong

 

 

Date of Incorporation :

25.04.1960

 

 

Com. Reg. No.:

01001497

 

 

Legal Form :

Private Limited Company

 

 

LINE OF BUSINESS :

MANUFACTURER AND EXPORTER, DESIGN, AND MARKETING OF SMALL, HIGH QUALITY AC AND DC MOTORS SPECIFICALLY TO MEET CUSTOMERS’ REQUIREMENTS FOR A BROAD RANGE OF APPLICATIONS IN HOUSEHOLD APPLIANCES, PERSONAL CARE ITEMS, AUTOMOBILE COMPONENTS AND ACCESSORIES, CORDLESS TOOLS TO HOBBY PRODUCTS AND BUSINESS AND OFFICE EQUIPMENT.

 

 

No. of Employee :

Approx. 36,000.  (As at 30-09-2014)

 

 

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 :

--

 

 

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)

Hong Kong

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 


 

HONG KONG ECONOMIC OVERVIEW

 

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 12% of total system deposits in Hong Kong by the end of 2013. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies.

 

Source : CIA

 

Company name and address

 

JOHNSON  ELECTRIC  INDUSTRIAL  MANUFACTORY  LTD.

 

 

ADDRESS:       6/F., 12 Science Park East Avenue, Hong Kong Science Park, Shatin, New Territories, Hong Kong.

 

PHONE:            852-2663 6688,  2556 8211

 

FAX:                 852-2663 6121,  2897 2054

 

E-MAIL:            salessupport@johnsonelectric.com

 

MANAGEMENT:

 

Chairman & Chief Executive Officer:  Mr. Wang Shui Chung, Patrick

 

 

SUMMARY

 

Incorporated on:            25th April, 1960.

 

Organization:                 Private Limited Company.

 

Issued Share Capital:     HK$154,000,000.00

 

Business Category:       Manufacturer of micromotors.

 

Group Turnover:            US$2,097,618,000  (Year ended 31-03-2014)

 

Group Employees:        Approx. 36,000.  (As at 30-09-2014)

 

Main Dealing Bankers:   The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standard Chartered Bank (HK) Ltd., Hong Kong.

 

Banking Relation:          Good.

 

 

ADDRESS

 

Registered Head Office & Factory:-

6/F., 12 Science Park East Avenue, Hong Kong Science Park, Shatin, New Territories, Hong Kong.

 

China Factory:-

Sin Er Village, Shajing Town, Baoan, Shenzhen, Guangdong Province, PRC.   [Tel: (86-755) 2990 0197;  Fax: (86-755) 2990 0203]

 

 

Holding Company

 

Johnson Electric Holdings Ltd., Bermuda/Hong Kong.

 

 

Associated Companies

 

Changchun Ri Yong JEA Gate Electric Co. Ltd.,China.

Chengdu Ri Yong JEA Gate Electric Co. Ltd., China.

Easy Fortune (H.K.) Ltd., British Virgin Islands.

Gate do Brasil Ltda., Brazil.

Gate France SAS, France.

Harbour Sky (BVI) Ltd., British Virgin Islands.

Hwa Sun (Guangdong) Co. Ltd., China.

Johnson Electric (Beihai) Co. Ltd., China.

Johnson Electric (Guangdong) Co. Ltd., China.

Johnson Electric (Shanghai) Co. Ltd., China.

Johnson Electric (Shenzhen) Co. Ltd., China.

Johnson Electric Asti S.r.l., Italy.

Johnson Electric Doo Beograd, Serbia.

Johnson Electric Germany GmbH & Co. KG, Germany.

Johnson Electric Group Mexico S. de R.L. de C.V., Mexico.

Johnson Electric Hatvan Kft., Hungary.

Johnson Electric International (IT) S.r.l., Itlay.

Johnson Electric International AG, Switzerland.

Johnson Electric International Ltd., Hong Kong.

Johnson Electric Nanjing Co. Ltd., China.

Johnson Electric North America Inc., USA.

Johnson Electric Ózd Kft, Hungary.

Johnson Electric Poland Sp.zo.o., Poland.

Johnson Electric Private Ltd., India.

Johnson Electric Services Italia S.r.l., Itlay.

Johnson Electric Services Mexico S. de R.L. de C.V., Mexico.

Johnson Electric Switzerland AG, Switzerland.

Johnson Electric Technology Service (Shenzhen) Co. Ltd., China.

Johnson Electric Trading Mexico S. de R.L. de C.V., Mexico.

Johnson Electric World Trade Ltd., Hong Kong.

M.M.A (Manufactura de Motores Argentinos) S.r.l., Argentina.

Nanomotion Ltd., Israel.

Parlex (Shanghai) Electronics Co. Ltd., China.

Parlex Dynaflex Corporation, USA.

Parlex Pacific Ltd., Hong Kong.

Parlex USA Inc., USA.

Saia-Burgess (China) Ltd., China.

Saia-Burgess Automotive Actuators Inc., USA.

Saia-Burgess Benelux B.V., Netherlands.

Saia-Burgess Inc., USA.

Saia-Burgess Paris Sarl, France.

Shanghai Malu Ri Yong-JEA Gate Electric Co. Ltd., China.

Shenzhen SMART Micromotor Co. Ltd., China.

V Motor (China) Ltd., China.

 

 

BUSINESS REGISTRATION NUMBER

 

01001497

 

 

COMPANY FILE NUMBER

 

0005950

 

 

MANAGEMENT

 

Chairman & Chief Executive Officer:  Mr. Wang Shui Chung, Patrick  [Son]

Vice-Chairman:  Ms. Wang Wing Yee, Winnie  [Daughter]

 

 

ISSUED SHARE CAPITAL

 

HK$154,000,000.00

 

 

SHAREHOLDERS

 

(As per registry dated 25-04-2014)

Name

 

No. of shares

Johnson Electric Holdings Ltd.

Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.

 

307,999,999

Johnson Medtech (HK) Ltd., Hong Kong.

 

1

 

 

––––––––––

 

Total:

308,000,000

=========


DIRECTORS  

 

(As per registry dated 25-04-2014)

Name

(Nationality)

 

Address

WANG Shui Chung, Patrick

            (British)

House F, Country Villa, 28 Shouson Hill Road, Hogn Kong.

 

WANG Wing Yee, Winnie

            (BNO)

13/F., Repulse Bay Garden, 34 Belleview Drive, Hong Kong.

 

Christopher John HASSON

Flat C, 22/F., South Bay Towers, 59 South Bay Road, Hong Kong.

 

Jeffrey L. OBERMAYER

Flat A, 26/F., Block 1A, The Arch, 1 Austin Road West, Kowloon, Hong Kong.

 

CHOI Tung Sing, Sherman

Flat A, 5/F., Scenic Heights, 33 San Tam Road, Ngau Tam Mei, Yuen Long, New Territoreis, Hong Kong.

 

 

SECRETARY

 

(As per registry dated 25-04-2014)

Name

(Nationality)

 

Address

Cheng Lai Chu

6/F., 12 Science Park East Avenue, Hong Kong Science Park, Shatin, New Territories, Hong Kong.

 

 

HISTORY

 

The subject was incorporated on 25th April, 1960 as a private limited liability company under the Hong Kong Companies Ordinance to take over the business established by the late Wang Seng Liang and his wife Mrs. Wang Koo Yik Chun in 1959.  It became a public company in June 1984, but delisted and re-organized into a wholly-owned subsidiary of Johnson Electric Holdings Ltd. in December 1988.

 

Formerly the subject was located at G/F. - 10/F., Johnson Building, 14-16 Lee Chung Street, Chai Wan, Hong Kong, moved to ‘Johnson Building, 6-22 Dai Shun Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong’ in December 1996, and further moved to the present address in December 2009.

 

Apart from these, neither material change nor amendment has been ever traced and noted.

 

 

OPERATIONS

 

Activities:         Manufacturer and Exporter.

 

Lines:   Design, manufacture and marketing of small, high quality AC and DC motors specifically to meet customers’ requirements for a broad range of applications in household appliances, personal care items, automobile components and accessories, cordless tools to hobby products and business and office equipment.

 

Trade Mark:      “JOHNSON”.

 

Group Employees:       Approx. 36,000.  (As at 30-09-2014)

 

Raw Materials:-

Enamelled copper wire – Japan, Germany, Italy and PRC.

Cold rolled steel in strips and silicon steel strips – Japan, South Korea and Taiwan.

Plastic resins – US and Japan.

Components for micro motors (magnets, brushes, bearings, etc.) – Japan, Taiwan, Germany, and US.

Steel wires – Japan and PRC.

 

Markets:           Hong Kong, PRC, North America, Europe and Asia Pacific.

 

Group Sales:    US$1,740,976,000  (Year ended 31-03-2010)

US$2,104,029,000  (Year ended 31-03-2011)

US$2,140,803,000  (Year ended 31-03-2012)

US$2,059,689,000  (Year ended 31-03-2013)

US$2,097,618,000  (Year ended 31-03-2014)

US$1,079,565,000  (6 months ended 30-09-2014)

 

Terms/Sales:-

For local:  30-60 days credit.

For abroad:  L/C, D/P and D/A.

 

Terms/Buying:  L/C, D/P, D/A and open account.

 

 

MAIN JAPANESE SUPPLIERS

 

Hanwa Co. Ltd., Japan.

Marubeni Corporation, Japan.

Mitsui & Co. Ltd., Japan.

Welcon Trading Co. Ltd., Japan.

 

MEMBERSHIPS:           The Chinese Manufacturers’ Association of Hong Kong, Hong Kong.
[Membership No. 001518]

The Hong Kong General Chamber of Commerce, Hong Kong.
[Membership No. HKJ0033]

Federation of Hong Kong Industries, Hong Kong.

 

 

FINANCIAL INFORMATION

 

Issued Share Capital: HK$154,000,000.00

 

Group Net Profit:          US$  87,386,000  (Year ended 31-03-2010)

US$190,361,000  (Year ended 31-03-2011)

US$188,891,000  (Year ended 31-03-2012)

US$196,892,000  (Year ended 31-03-2013)

US$214,896,000  (Year ended 31-03-2014)

US$113,602,000  (6 months ended 30-09-2014)

 

Profit or Loss:  Operation is profitable.

 

Condition:  Business is active.

 

Facilities:  Making active use of general banking facilities.

 

Payment:  So far so good.

 

Commercial Morality:  Good.

 

 

Bankers

 

The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standard Chartered Bank (HK) Ltd., Hong Kong.

Bank of America, N.A., Hong Kong Branch.

Sumitomo Mitsui Banking Corporation, Hong Kong Branch.

 

Banking:-

One source reports they maintain an active and well conducted current account opened with them on 12th October, 1964 and on which they grant facilities against security.  They handle their import bills under documentary credits.  They negotiate their export bills both under and not under documentary credits.

 

Another source informs they maintain a very active and properly conducted current account with them on 22nd November, 1971.  Partially secured banking facilities are granted to them.  They handle their export bills on a collection basis and against L/C.

 

Standing:  Very Good.

 

 

GENERAL

 

Johnson Electric Industrial Manufactory Ltd. incorporated in Hong Kong in April 1960, is a wholly-owned subsidiary of Johnson Electric Holdings Ltd. [Johnson Electric].  Johnson Electric is a Bermuda-registered company.

 

Johnson Electric’s shares were listed on The Stock Exchange of Hong Kong Ltd. bearing stock code 179 on 11th July, 1984, and are traded over the counter in the United States in the form of American Depositary Receipts.

 

Johnson Electric was incorporated in Bermuda in October 1988 as a new holding company of the Johnson Electric Group.

 

The Johnson Electric Group is the world’s leading provider of innovative motion systems and components for automotive applications, domestic equipment, office equipment, industrial products, consumer products and medical devices.  The Group is headquartered in Hong Kong and has over 36,000 employees in 23 countries.  Innovation and product design centres are located in Hong Kong, China, Switzerland, Germany, Italy, Israel, Japan, the UK and the US.  Production centres are located in China, Switzerland, Italy, Poland, Hungary, the US, Brazil, India and other countries.

 

Johnson Electric is the technology and market leader in the design and manufacture of custom motion solutions for a broad range of industries.  Its products support improved fuel economy, lower emissions and enhanced safety in the automotive industry.  In other industries, such as building automation, home technologies and power equipment, its engineering innovation is focused on productivity and energy efficiency.  Johnson Electric is a global company with operations in Asia, Europe and the Americas. Engineering centres, manufacturing plants and customer support offices are located in 23 countries.

 

Custom subsystems are developed based on Johnson Electric’s technology platforms, which include actuators, motors, gears, switches, solenoids and flexible circuits. Johnson Electric has three operating divisions, the Automotive Products Group, the Industry Products Group and the Components & Services Group.  The Components & Services Group exclusively supports the Automotive and Industry Groups with custom production equipment, tooling and components.  This vertical integration ensures the highest level of product performance and production process capability.  The Automotive Products Group provides custom solutions for multiple vehicle subsystems.  Johnson Electric business units are focused on power train cooling, engine and transmission management, head lamp adjustment, HVAC actuators, power closure systems, seat adjustment and braking.  Its technology strategy is to create product platforms that can be customized to improve fuel economy, reduce emissions, and enhance passenger safety and comfort.  The Industry Products Group is focused on creating custom engineered solutions for specific industry segments, including, building automation & security, HVAC, business machines, smart meters, power tools, home technologies, food & beverage, industrial equipment, lawn & garden and medical devices.  In each segment the Group is the Technology Leader and the Safe Choice in providing energy efficient and highly reliable solutions for its customers.

 

In the medical device industry, Johnson Electric is focused on medication delivery systems and surgical device motorization.  The Johnson Medtech business provides custom engineering and manufacturing services to the medical industry’s premier companies.

 

The followings are the highlights of 2013/14 results of Johnson Electric:

 

  • For the financial year ended 31st March 2014, total sales amounted to US$2,098 million – an increase of 2% compared to the prior financial year.  Excluding the effects of non-recurring items and foreign currency changes, underlying sales increased by 3%

 

  • Gross profit margins increased to 29.5% from 28.0% in the prior year

 

  • EBITDA totalled US$322 million – up by 6%

 

  • Operating profits increased by 10% to US$233 million (11.1% of sales). Excluding the one-time gain associated with the divestiture of a non-core business and other non-recurring items recorded in the prior financial year, operating profits increased by 24%

 

  • Net profit attributable to shareholders increased to a record US$208 million, an increase of 9%

 

  • The Group’s gearing level remained low with a debt to total capital ratio declining from 7% to 6%. At the financial year end, the Group had total borrowings of US$117 million and total cash reserves of US$644 million

Johnson Electric achieved satisfactory results during the six month period ended 30th September 2014.  Against a backdrop of generally lacklustre economic conditions in many of the Group’s major markets, encouraging progress was made in winning new customer programmes and in strengthening its manufacturing footprint globally.

 

Group sales for the first half of the 2014/15 financial year totalled US$1,080 million, an increase of 4% over the first half of the prior financial year.  Net profit attributable to shareholders was essentially flat compared to the prior year period at US$109.3 million.

 

Johnson Electric is currently making significant investments in expanding its global operations and supporting infrastructure to meet increased demand. As previously forecast, this is resulting in somewhat higher overheads and other expenses in the short term as new plants go through their normal fitting out and ramp-up phases prior to full production.

 

The overall business of the Group is active and good.

 

On the whole, in view of the background, history and parentage of the subject, consider it good for normal business engagements.

 

 

REMARKS

 

Court case:-

 

Date

Plaintiff

Defendant

Cause

Amount

June 1990

Tsui Sun Wah

Johnson Electric Industrial Manufactory Ltd.

Amount due

HK$24,913

Aug. 1990

Yau Fuk Fong

Johnson Electric Industrial Manufactory Ltd.

Damages

Not stated

Oct. 1990

Cheng Yuk Mui

Johnson Electric Industrial Manufactory Ltd.

Damages

Not stated

Mar. 1991

Cheng Yuk Mui

Johnson Electric Industrial Manufactory Ltd.

Damages

Not stated

Feb. 1992

Cheng Yuk Mui

Johnson Electric Industrial Manufactory Ltd.

Personal Injury

Not stated

Dec. 1992

Mabuchi Motor KK [Also known as Mabuchi Motor Co. Ltd.]

Johnson Electric Industrial Manufactory Ltd., Johnson Electric Trading Ltd. and Johnson Electric World Trade Ltd.

Declaration

Not stated

Aug. 1994

Mabuchi Motor KK [Also known as Mabuchi Motor Co. Ltd.]

Johnson Electric Industrial Manufactory Ltd., Johnson Electric Trading Ltd. and Johnson Electric World Trade Ltd.

Declaration

Not stated

Feb. 2003

Tam Chi Shing

Johnson Electric Industrial Manufactory Ltd.

Damages

Not stated

 

Property information of director and associate:-

 

Property Location

Owner

Date of Purchase

Purchased
Price

12/F., Repulse Bay Garden, 28 Belleview Drive, Hong Kong.

Wang Kin Chung, Peter and Daisy Ting

15-05-1979

HK$1,700,000

10/F., Repulse Bay Garden, 28 Belleview Drive, Hong Kong.

Rawlinson Estates Ltd.

03-04-1979

HK$641,605 pt.

 

(No mortgage registered against all the properties)


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.70

UK Pound

1

Rs.93.41

Euro

1

Rs.71.33

 

 

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.