MIRA INFORM REPORT

Report No. :	327944
Report Date :	18.06.2015

IDENTIFICATION DETAILS

Name :	WUXI HUAYOU SPECIAL STEEL CO., LTD.
Registered Office :	Zhenhu Road, Hudai Industrial Park, Binhu District, Wuxi, Jiangsu Province, 214000 Pr
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	21.02.2006
Com. Reg. No.:	320200000131533
Legal Form :	Limited Liabilities Company
Line of Business :	Subject is selling seamless steel pipes.
No. of Employees :	55

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^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
China	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
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, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, 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 it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and 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. 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 2012 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (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 2011 more than 250 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. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals

Source : CIA

Company name and address

WUXI HUAYOU SPECIAL STEEL CO., LTD.

ZHENHU ROAD, HUDAI INDUSTRIAL PARK, BINHU DISTRICT,

WUXI, JIANGSU PROVINCE, 214000 PR CHINA

TEL: 86 (0) 510-83073056/83073096

FAX: 86 (0) 510-83073079

EXECUTIVE SUMMARY

INCORPORATION DATE : FEBRUARY 21, 2006

REGISTRATION NO. : 320200000131533

REGISTERED LEGAL FORM : LIMITED LIABILITIES COMPANY

CHIEF EXECUTIVE : MR. NI HONGHU (CHAIRMAN)

STAFF STRENGTH : 55

REGISTERED CAPITAL : CNY 80,000,000

BUSINESS LINE : TRADING

TURNOVER : CNY 1,841,400,000 (AS OF DEC. 31, 2012)

EQUITIES : CNY 59,560,000 (AS OF DEC. 31, 2012)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 250,000 (PERIODICAL REVIEW)

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.12 = USD 1

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan Renminbi

SC was registered as a limited liabilities company at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on February 21, 2006.

Company Status: Limited Liabilities Co.

This form of business in PR China is defined as a legal person. No more than fifty shareholders contribute its registered capital jointly. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to extent of its total assets. The characteristics of this form of co. are as follows:

Upon the establishment of the co., an investment certificate is issued to the each of shareholders.

The board of directors is comprised of three to thirteen members.

The minimum registered capital for a co. is CNY 30,000.

Shareholders may take their capital contributions in cash or by means of tangible assets or intangible assets such as industrial property and non-patented technology.

Cash contributed by all shareholders must account for at least 30% of the registered capital.

Existing shareholders have pre-exemption right to purchase shares of the co. offered for sale by the other shareholders and to subscribe for the newly increased registered capital of the co.

SC’s registered business scope includes permit business items: general cargo. General business items: selling metal materials, machine equipment, building materials, hardware, chemical raw materials and products (excluding hazardous chemicals); importing and exporting commodities and technologies, excluding the items limited or prohibited by the state. **(with permit if needed)**

SC is mainly engaged in selling seamless steel pipes.

Mr. Ni Honghu has been legal representative, chairman and general manager of SC since 2006.

SC is known to have approx. 55 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and head office in the industrial zone of Wuxi. Detailed information of the premise is unknown.

http://www.wxhytg.com/ The design is professional and the content is well organized. At present it is in both Chinese and English versions.

E-mail: huayou@wxhytg.com

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2008-01	Registered capital	CNY 10,000,000	CNY 20,000,000
Unknown	Registered capital	CNY 20,000,000	CNY 30,000,000
	Shareholders and % of Shareholdings	Ni Honghu 95% Yu Zhen’gang 5%	Ni Honghu 95% Xia Meiying 5%
2011	Registered capital	CNY 30,000,000	CNY 50,000,000
2013		CNY 50,000,000	Present amount

Certificate: ISO9001: 2000

Honors:

See below for SC as executive party (defendant).

Executed Party	Wuxi Huayou Special Steel Co., Ltd.
Court	Nanjing City Xiaguan District People's Court
Date of Case	Dec. 29, 2011
Case Number	(2012) 00004
Claim Amount	RMB 10,000
Case Status	Completed

Remark: Due to the lack of information, we are unable to provide the cause of action, judgment or other information.

MAIN SHAREHOLDERS:

Name % of Shareholding

Ni Honghu 95

ID# 320222196603046018

Xia Meiying 5

ID# 321028194008250822

Legal representative, chairman and general manager:

Mr. Ni Honghu ID# 320222196603046018, born in 1966. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2006 to present Working in SC as legal representative, chairman and general manager.

Supervisor:

Xia Meiying ID# 321028194008250822

SC is mainly engaged in selling seamless steel pipes.

Main Products: seamless steel pipe.

SC sources its materials 100% from domestic market. SC sells 85% of its products in domestic market, and 15% to overseas market, mainly North America and Brazil.

The buying terms of SC include Check, T/T and Credit of 30-60 days. The payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.

Note: SC refused to release its major suppliers and customers.

According to SC’s website:

Wuxi Special Steel Pipe Manufacture Co., Ltd.

Wuxi Pulisaisi Pipe Manufacture Co., Ltd.

Wuxi Huamo Steel Pipe Co., Ltd. (in Chinese Pinyin)

Offices:

======

Jiangyin Office

Phone/fax: 0510-86259795

Changzhou Office

Phone: 0519-88830678

Fax: 0519-88830658

Shanghai Office

Phone: 021-65314822

Fax: 021-65314918

Hangzhou Office

Phone: 0571-88296106

Fax: 0571-88296108

Suzhou Office

Phone/fax: 0512-67238146

Nanjing Office

Phone: 025-85501056

Fax: 025-58809694

Overall payment appraisal:

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet 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.

Wuxi Rural Commercial Bank

AC#：N/A

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2011	as of Dec. 31, 2012
Cash & bank	92,020	40,220
Notes receivable	7,440	15,850
Inventory	90,990	210,090
Accounts receivable	306,510	-37,610
Advances to suppliers	0	0
Prepaid expenses	2,570	2,130
Other receivables	8,780	209,480
Other current assets	0	0
	------------------	------------------
Current assets	508,310	440,160
Long-term investments	0	0
Fixed assets net value	6,260	5,870
Projects under construction	0	0
Intangible assets	450	220
Other assets	0	0
	------------------	------------------
Total assets	515,020	446,250
	=============	=============
Short loans	303,220	164,170
Notes payable	52,500	191,000
Accounts payable	-25,330	-2,540
Advances from customers	0	0
Accrued payroll	0	640
Taxes payable	-4,840	-28,120
Dividends payable	3,520	3,520
Other payable	180	220
Other accounts payable	85,790	38,080
Other current liabilities	0	0
	-----------------	-----------------
Current liabilities	415,040	366,970
Long term liabilities	41,960	19,720
	------------------	------------------
Total liabilities	457,000	386,690
Shareholders equities	58,020	59,560
	------------------	------------------
Total liabilities & equities	515,020	446,250
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2012
Turnover	1,841,400
Cost of goods sold	1,765,190
Taxes and additional of main operation	130
Sales expense	22,240
Management expense	25,430
Finance expense	25,260
Non-operating income	1,210
Non-operating expense	1,650
Profit before tax	2,710
Less: profit tax	690
Net profit	2,020

Important Ratios

=============

	as of Dec. 31, 2011	as of Dec. 31, 2012
*Current ratio	1.22	1.20
*Quick ratio	1.01	0.63
*Liabilities to assets	0.89	0.87
*Net profit margin (%)	/	0.11
*Return on total assets (%)	/	0.45
*Inventory /Turnover ×365	/	42 days
*Accounts receivable/Turnover ×365	/	/
*Turnover/Total assets	/	4.13
* Cost of goods sold/Turnover	/	0.96

PROFITABILITY: AVERAGE

· The turnover of SC appears good in its line in 2012.

· SC’s net profit margin is average in 2012.

· SC’s return on total assets is average in 2012.

· SC’s cost of goods sold is high in 2012, comparing with its turnover.

LIQUIDITY: FAIR

· The current ratio of SC is maintained in a normal level in both years.

· SC’s quick ratio is maintained in a normal level in 2011 but fair in 2012.

· The inventory of SC appears average in 2011 but fairly large in 2012.

· The accounts receivable of SC appears large in 2011.

· The short-term loan of SC appears large in both years.

· SC’s turnover is in a fairly good level in 2012, comparing with the size of its total assets.

LEVERAGE: FAIR

· The debt ratio of SC is high.

· The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly stable.

SC is considered medium-sized in its line with fairly stable financial conditions. The large amount of inventory and short-term loan could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.64.11
UK Pound	1	Rs.100.32
Euro	1	Rs.72.17

INFORMATION DETAILS

Report Prepared by :

NIT

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