MIRA INFORM REPORT

 

 

 

 

Report No. :

322742

Report Date :

14.05.2015

 

IDENTIFICATION DETAILS

 

Name :

MIECO MANUFACTURING SDN. BHD.

 

 

Registered Office :

Menara Brdb, 285,Jalan Maarof, Bukit Bandaraya, Level 11, 59000 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

04.07.2003

 

 

Com. Reg. No.:

620690-T

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

·         Engaged in Manufacturing, Developing & Marketing MIECO Decorative MFC, Electron Beam Foil Chipboard ('EBFC') and Polymer Faced Chipboard ('PFC') products, MIECO Worktop, MIECO DPF Board & DIY Furniture Series under the MIECO brand name.

·         Manufacturer of other products of wood, cane, articles of cork, straw and plaiting materials

 

 

No. of Employees

735 [2014]

 

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, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 


 

Malaysia ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

 

Source : CIA

 

 

 


           


* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

 

N/A - Not Applicable

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

620690-T

COMPANY NAME

:

MIECO MANUFACTURING SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

04/07/2003

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

MENARA BRDB, 285,JALAN MAAROF, BUKIT BANDARAYA, LEVEL 11, 59000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 74, KAWASAN PERINDUSTRIAN GEBENG, 26080 KUANTAN, PAHANG, MALAYSIA.

TEL.NO.

:

09-5835120

FAX.NO.

:

09-5833408

EMAIL

:

MKTG@MIECO.COM.MY

WEB SITE

:

WWW.MIECO.COM.MY

CONTACT PERSON

:

YONG SENG YEOW ( MANAGING DIRECTOR )

INDUSTRY CODE

:

16292

PRINCIPAL ACTIVITY

:

·         Engaged in Manufacturing, Developing & Marketing MIECO Decorative MFC, Electron Beam Foil Chipboard ('EBFC') and Polymer Faced Chipboard ('PFC') products, MIECO Worktop, MIECO DPF Board & DIY Furniture Series under the MIECO brand name

 

·         Manufacturer of other products of wood, cane, articles of cork, straw and plaiting materials

AUTHORISED CAPITAL

:

MYR 100,000,000.00 DIVIDED INTO 
ORDINARY SHARE 100,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 50,000,000.00 DIVIDED INTO 
ORDINARY SHARES 2 CASH AND 49,999,998 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 304,083,122 [2012]

NET WORTH

:

MYR 8,155,036 [2012]

M1000 OVERALL RANKING

:

806[2009]

M1000 INDUSTRY RANKING

:

47[2009]

STAFF STRENGTH

:

735 [2014]

BANKER (S)

:

PUBLIC BANK BHD
RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

 

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

 

The Subject is principally engaged in the (as a / as an) manufacturing and marketing of chipboards and other related products.

 

The Subject is not listed on Bursa Malaysia (Malaysia Stock Exchange).

 

According to the Malaysia 1000 publication, the Subject's ranking are as follows:

YEAR

2009

2008

OVERALL RANKING

806

797

INDUSTRY RANKING

47

52

 

The immediate holding company of the Subject is MIECO CHIPBOARD BERHAD, a company incorporated in MALAYSIA.

 

The ultimate holding company of the Subject is BANDAR RAYA DEVELOPMENTS BERHAD, a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

15/02/2013

MYR 100,000,000.00

MYR 50,000,000.00

04/07/2003

MYR 100,000.00

MYR 2.00

 

The major shareholder(s) of the Subject are shown as follows :


Name

Address

IC/PP/Loc No

Shareholding

(%)

MIECO CHIPBOARD BERHAD

MENARA BRDB, 285, JALAN MAAROF, BUKIT BANDARAYA, LEVEL 11, 59000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

12849K

50,000,000.00

100.00

---------------

------

50,000,000.00

100.00

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

=====

+ Also Director

 

DIRECTORS

 

DIRECTOR 1

Name Of Subject

:

DATO' YONG SENG YEOW

Address

:

21, JALAN PENGATUCARA U1/51C, SAUJANA O-LOT, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

IC / PP No

:

4446189

New IC No

:

530409-04-5123

Date of Birth

:

09/04/1953

Nationality

:

MALAYSIAN

Date of Appointment

:

04/07/2003

 

DIRECTOR 2

 

Name Of Subject

:

DATO' JAGANATH DEREK STEVEN SABAPATHY

Address

:

NO.98 LORONG SETAIBISTARI SATU, BUKIT DAMANSARA, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

K671584

New IC No

:

570415-10-6419

Date of Birth

:

15/04/1957

Nationality

:

MALAYSIAN

Date of Appointment

:

15/03/2005

 

DIRECTOR 3

 

Name Of Subject

:

MR. LOW KIM SENG

Address

:

NO.32,JALAN BU 2/4, BANDAR UTAMA, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8220737

New IC No

:

550423-10-5231

Date of Birth

:

23/04/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

15/03/2005

Profile

:

A MEMBER OF THE MALAYSIAN INSTITUTE OF ACCOUNTANTS AND AN ASSOCIATE OF THE CHARTERED INSTITUTE OF MANAGEMENT ACCOUNTANTS. FROM 1979 TO 1982:WAS WITH GENTING BHD AS A MANAGEMENT TRAINEE. FROM 1982 TO 1989:WAS WITH MULTI-PURPOSE HOLDINGS BHD AS AN ASSISTANT ACCOUNTANT. NOVEMBER 1989:JOINED BANDAR RAYA AS FINANCIAL CONTROLLER AND WAS PROMOTED TO GROUP FINANCIAL CONTROLLER IN 1991. HE WAS FURTHER PROMOTED TO GROUP GENERAL MANAGER IN OCTOBER 1992. HE WAS ALSO THE GROUP GENERAL MANAGER OF BANDAR RAYA.

 

DIRECTOR 4

 

Name Of Subject

:

MR. CHRISTOPHER MANIVANNAN

Address

:

67 JALAN SS 23/5, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

7446813

New IC No

:

640923-10-5851

Date of Birth

:

23/09/1964

Nationality

:

MALAYSIAN

Date of Appointment

:

16/10/2013



MANAGEMENT

 

 

 

1)

Name of Subject

:

YONG SENG YEOW

Position

:

MANAGING DIRECTOR

 

2)

Name of Subject

:

ABDUL WAHAB BIN MOHAMAD

Position

:

HUMAN RESOURCE MANAGER

 

3)

Name of Subject

:

JUNAINI BINTI IBRAHIM

Position

:

REGIONAL HUMAN RESOURCE MANAGER

 

4)

Name of Subject

:

NUR AZMAN

Position

:

ASSISTANT HUMAN RESOURCES DIRECTOR

 

 

 

 

AUDITOR

 

Auditor

:

PRICEWATERHOUSECOOPERS

Auditor' Address

:

1 SENTRAL, JALAN TRAVERS, KUALA LUMPUR SENTRAL, LEVEL 10, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. HO SWEE LING

IC / PP No

:

5730323

New IC No

:

590808-10-5992

Address

:

NO. 60, JALAN BUNGA KEMBOJA 1, TAMAN MUDA CHERAS, 56100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

2)

Company Secretary

:

MS. YAP CHOON FON

IC / PP No

:

A2940034

New IC No

:

741215-14-5222

Address

:

25B, JALAN LAGENDA 14, TAMAN LAGENDA MAS, 43200 CHERAS, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

PUBLIC BANK BHD

 

2)

Name

:

RHB BANK BHD

 

 

 

ENCUMBRANCE (S)


No encumbrance was found in our databank at the time of investigation. 

 

LEGAL CHECK AGAINST SUBJECT


* A check has been conducted in our databank against the Subject whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank. 

No winding up petition was found in our databank. 

DEFAULTER CHECK AGAINST SUBJECT


* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. 

No blacklisted record & debt collection case was found in our defaulters' databank. 



PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

60%

Overseas

:

YES

Percentage

:

40%

Import Countries

:

GERMANY,CHINA,ITALY



The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

33%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

67%

Export Market

:

SOUTH EAST ASIA

INDIA

TAIWAN

JAPAN

CHINA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

FURNITURE INDUSTRY

 

OPERATIONS

 

Products manufactured

:

CHIPBOARDS

Product Brand

:

MIECO

Award

:

1 ) PRODUCT CERTIFICATION GRANT Year :2002

Competitor(s)

:

EKOWOOD INTERNATIONAL BHD

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2014

2013

2011

2010

2009


GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

735

800

807

857

917

 

Branch

:

YES

No of Branches

:

2

 

Other Information:

The Subject is principally engaged in the (as a / as an) manufacturing and marketing of chipboards and other related products. 

The Subject's particleboards, or sometimes known as chipboards, conform to international quality standards such as the European Community's BS EN 312 standard, applicable for both moisture-resistant and non-moisture resistant boards with E1 and E2 formaldehyde emission levels.

The Particleboard production begins with the Upstream process. Using state of the art German technology, MIECO has two production lines that are capable of producing over 280,000 cubic meters annually.

The upstream department begins the process of using rubber residuals to produce high quality chipboards.

The Subject places a strong emphasis in human resource development. Factory personnels are constantly sent for training, and marketing staff also participate and visit international exhibitions and trade fairs to keep up with the latest industry trends. 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

09-5835120

Match

:

N/A

Address Provided by Client

:

0.01 30TH FLOOR MENERA MULTI PURPOSE CAPITAL SQUARE NO 8 JALAN MUNSHI ABDULLAH 50100 KUALA LUMPUR

MALAYSIA

Current Address

:

LOT 74, KAWASAN PERINDUSTRIAN GEBENG, 26080 KUANTAN, PAHANG, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations

we contacted one of the staff from the Subject and he provided some information on the Subject.

the address provided belongs to Metra Management Sdn. Bhd

 

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2008 - 2012

]

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

Return on Shareholder Funds

:

Unfavourable

[

(90.84%)

]

Return on Net Assets

:

Unfavourable

[

0.17%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The Subject incurred losses during the year due to the inefficient control of its operating costs. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Unfavourable

[

72 Days

]

Debtor Ratio

:

Favourable

[

43 Days

]

Creditors Ratio

:

Favourable

[

59 Days

]

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.28 Times

]

Current Ratio

:

Unfavourable

[

0.66 Times

]

A low liquid ratio means that the Subject may be facing working capital deficiency. If the Subject cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

Solvency

Interest Cover

:

Unfavourable

[

0.07 Times

]

Gearing Ratio

:

Unfavourable

[

6.70 Times

]

The Subject's interest cover was low. If its profits fall or when interest rate rises, it  may not be able to meet all its interest payment. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.

Overall Assessment :

Although the Subject's turnover increased its profits however showed a reverse trend. The losses could be due to the management's failure to maintain its competitiveness in the market. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : POOR

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012*

2013**

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

(0.5)

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

(2.7)

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

(17.2)

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

(1.2)

Investment ( % )

8.0

2.8

(0.3)

15.9

4.2

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

(28,450)

(40,482)

(45,511)

(42,297)

(39,993)

Government Finance to GDP / Fiscal Deficit ( % )

(4.8)

(5.6)

(5.4)

(4.5)

(4.0)

Inflation ( % Change in Composite CPI)

(5.2)

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

(0.1)

6.2

3.0

(0.0)

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

(34.5)

417.8

-

-

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

(1.1)

(3.4)

10.8

(2.8)

-

Rubber

(19.8)

9.9

6.1

(0.6)

-

Forestry & Logging

(5.9)

(3.3)

(7.6)

(2.2)

-

Fishing

5.5

5.6

2.1

(0.7)

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

Mining

(3.8)

0.2

(5.7)

1.5

2.7

Oil & Gas

2.1

0.5

(1.7)

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

Manufacturing #

(9.4)

11.4

4.7

4.2

4.9

Exported-oriented Industries

(19.0)

12.1

2.8

4.1

-

Electrical & Electronics

(30.3)

28.4

(4.9)

1.6

-

Rubber Products

(10.1)

25.3

15.4

3.6

-

Wood Products

(24.1)

20.1

(4.9)

4.6

-

Textiles & Apparel

(19.5)

(0.4)

14.8

(7.1)

-

Domestic-oriented Industries

(9.8)

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

(7.7)

16.2

5.5

9.9

-

Plastic Products

(9.1)

2.4

3.8

-

-

Iron & Steel

(32.7)

29.3

2.4

-

-

Fabricated Metal Products

(2.5)

14.9

25.2

-

-

Non-metallic Mineral

(15.5)

20.2

27.1

6.6

-

Transport Equipment

(13.5)

36.5

(10.4)

13.7

-

Paper & Paper Products

(5.0)

18.7

14.8

(7.8)

-

Crude Oil Refineries

0.2

(11.4)

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

20.2

25.7

23.4

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index 
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

INDUSTRY ANALYSIS

 

MSIC CODE

16292 : Manufacture of other products of wood, cane, articles of cork, straw and plaiting materials

INDUSTRY :

MANUFACTURING

The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domesticoriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand. 

Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.

According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion. 

Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China. 

Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country’s rising income level and the implementation of zero import duty on Malaysian made-furniture. Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.

The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries. 

Tax and non-tax incentives provided by government encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by government in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 2003, the Subject is a Private Limited company, focusing on manufacturing and marketing of chipboards and other related products. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. The Subject is well backed by a listed company shareholders which would stimulate further growth for the Subject. The Subject is a large entity with strong capital position. 

Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. Being a large entity, the Subject has a workforce of 735 personnel to support its business operations. Overall, we regard that the Subject's management capability is average. 

Despite the higher turnover, the Subject suffered pre-tax losses which reflected a highly competitive business environment. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. 

The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. 

The Subject's payment habit is average. 

The industry shows an upward trend and this trend is very likely to sustain in the near terms. However, we are of the opinion that there are a large number of other companies in the same industry. In another word, we believe that the Subject faces stiff competitions from other local players. 

As the Subject suffered huge accumulated losses, we only recommend credit be proceeded to the Subject with guarantee.

 

 

PROFIT AND LOSS ACCOUNT

 

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

MIECO MANUFACTURING SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

2009-12-31

2008-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

304,083,122

294,831,870

172,037,051

184,806,534

365,799,158

----------------

----------------

----------------

----------------

----------------

Total Turnover

304,083,122

294,831,870

172,037,051

184,806,534

365,799,158

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) FROM OPERATIONS

(9,956,864)

2,930,411

1,751,625

(13,617,139)

(33,635,188)

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) BEFORE TAXATION

(9,956,864)

2,930,411

1,751,625

(13,617,139)

(33,635,188)

Taxation

2,549,160

235,543

(2,250)

1,835,340

8,770,078

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) AFTER TAXATION

(7,407,704)

3,165,954

1,749,375

(11,781,799)

(24,865,110)

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

(33,423,610)

(37,887,294)

(39,636,669)

(27,854,870)

(2,989,760)

Prior year adjustment

-

1,297,730

-

-

-

----------------

----------------

----------------

----------------

----------------

As restated

(33,423,610)

(36,589,564)

(39,636,669)

(27,854,870)

(2,989,760)

----------------

----------------

----------------

----------------

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

(40,831,314)

(33,423,610)

(37,887,294)

(39,636,669)

(27,854,870)

DIVIDENDS - Ordinary (paid & proposed)

(1,013,650)

-

-

-

-

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(41,844,964)

(33,423,610)

(37,887,294)

(39,636,669)

(27,854,870)

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

105,947

66,920

-

388,566

4,474

Bankers' acceptance

1,891,474

1,022,212

-

-

-

Hire purchase

1,660

3,344

-

3,348

3,348

Loan from holding company

8,434,018

9,556,567

-

-

-

Revolving loans

112,548

-

-

6,800

8,009

Term loan / Borrowing

133,733

-

-

-

-

Others

2,305

-

-

11,038,157

14,388,236

----------------

----------------

----------------

----------------

----------------

10,681,685

10,649,043

-

11,436,871

14,404,067

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

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

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

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

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

 

 

BALANCE SHEET

 

 

MIECO MANUFACTURING SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

476,219,195

480,129,176

488,823,664

502,389,448

523,080,982

Others

-

219,685

-

-

-

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

219,685

-

-

-

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM ASSETS

476,219,195

480,348,861

488,823,664

502,389,448

523,080,982

Stocks

59,900,995

49,385,362

-

40,578,295

74,282,112

Trade debtors

36,136,412

42,612,940

-

22,613,767

36,721,931

Other debtors, deposits & prepayments

2,046,706

3,332,108

-

3,418,419

4,479,131

Short term deposits

-

-

-

1,301,626

24,642,728

Amount due from related companies

25,888

19,462

-

-

2,632,056

Cash & bank balances

5,345,722

5,762,687

-

921,079

7,906,522

Others

144,203

80,933

-

8,132

14,552

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT ASSETS

103,599,926

101,193,492

-

68,841,318

150,679,032

----------------

----------------

----------------

----------------

----------------

TOTAL ASSET

579,819,121

581,542,353

488,823,664

571,230,766

673,760,014

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

48,895,160

34,871,631

-

20,534,699

49,407,853

Other creditors & accruals

13,128,515

15,337,235

-

20,053,926

23,851,210

Hire purchase & lease creditors

-

-

-

30,396

30,396

Bank overdraft

1,483,583

2,817,238

-

6,830,935

-

Other borrowings

51,509,467

25,727,081

-

-

11,340,872

Bill & acceptances payable

-

-

-

20,616,681

67,496,261

Amounts owing to holding company

34,662,000

27,963,960

-

-

26,853,075

Amounts owing to related companies

8,165,516

4,937,194

-

-

2,157,136

Other liabilities

-

331,369

-

-

-

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT LIABILITIES

157,844,241

111,985,708

-

68,066,637

181,136,803

----------------

----------------

----------------

----------------

----------------

NET CURRENT ASSETS/(LIABILITIES)

(54,244,315)

(10,792,216)

-

774,681

(30,457,771)

----------------

----------------

----------------

----------------

----------------

TOTAL NET ASSETS

421,974,880

469,556,645

488,823,664

503,164,129

492,623,211

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

50,000,000

50,000,000

50,000,000

50,000,000

50,000,000

----------------

----------------

----------------

----------------

----------------

TOTAL SHARE CAPITAL

50,000,000

50,000,000

50,000,000

50,000,000

50,000,000

Retained profit/(loss) carried forward

(41,844,964)

(33,423,610)

(37,887,294)

(39,636,669)

(27,854,870)

Others

-

-

(24,370)

-

-

----------------

----------------

----------------

----------------

----------------

TOTAL RESERVES

(41,844,964)

(33,423,610)

(37,911,664)

(39,636,669)

(27,854,870)

----------------

----------------

----------------

----------------

----------------

SHAREHOLDERS' FUNDS/EQUITY

8,155,036

16,576,390

12,088,336

10,363,331

22,145,130

Long term loans

1,550,000

2,150,000

-

-

-

Hire purchase creditors

-

-

-

45,614

76,010

Deferred taxation

4,795,200

7,345,000

-

7,580,000

9,430,000

Others

407,474,644

443,485,255

476,735,328

485,175,184

460,972,071

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM LIABILITIES

413,819,844

452,980,255

476,735,328

492,800,798

470,478,081

----------------

----------------

----------------

----------------

----------------

421,974,880

469,556,645

488,823,664

503,164,129

492,623,211

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

MIECO MANUFACTURING SDN. BHD.

 

TYPES OF FUNDS

Cash

5,345,722

5,762,687

-

2,222,705

32,549,250

Net Liquid Funds

3,862,139

2,945,449

-

(25,224,911)

(34,947,011)

Net Liquid Assets

(114,145,310)

(60,177,578)

-

(39,803,614)

(104,739,883)

Net Current Assets/(Liabilities)

(54,244,315)

(10,792,216)

-

774,681

(30,457,771)

Net Tangible Assets

421,974,880

469,556,645

488,823,664

503,164,129

492,623,211

Net Monetary Assets

(527,965,154)

(513,157,833)

(476,735,328)

(532,604,412)

(575,217,964)

BALANCE SHEET ITEMS

Total Borrowings

54,655,598

30,694,319

-

27,530,426

78,951,548

Total Liabilities

571,664,085

564,965,963

476,735,328

560,867,435

651,614,884

Total Assets

579,819,121

581,542,353

488,823,664

571,230,766

673,760,014

Net Assets

421,974,880

469,556,645

488,823,664

503,164,129

492,623,211

Net Assets Backing

8,155,036

16,576,390

12,088,336

10,363,331

22,145,130

Shareholders' Funds

8,155,036

16,576,390

12,088,336

10,363,331

22,145,130

Total Share Capital

50,000,000

50,000,000

50,000,000

50,000,000

50,000,000

Total Reserves

(41,844,964)

(33,423,610)

(37,911,664)

(39,636,669)

(27,854,870)

LIQUIDITY (Times)

Cash Ratio

0.03

0.05

-

0.03

0.18

Liquid Ratio

0.28

0.46

-

0.42

0.42

Current Ratio

0.66

0.90

-

1.01

0.83

WORKING CAPITAL CONTROL (Days)

Stock Ratio

72

61

-

80

74

Debtors Ratio

43

53

-

45

37

Creditors Ratio

59

43

-

41

49

SOLVENCY RATIOS (Times)

Gearing Ratio

6.70

1.85

-

2.66

3.57

Liabilities Ratio

70.10

34.08

39.44

54.12

29.42

Times Interest Earned Ratio

0.07

1.28

-

(0.19)

(1.34)

Assets Backing Ratio

8.44

9.39

9.78

10.06

9.85

PERFORMANCE RATIO (%)

Operating Profit Margin

(3.27)

0.99

1.02

(7.37)

(9.19)

Net Profit Margin

(2.44)

1.07

1.02

(6.38)

(6.80)

Return On Net Assets

0.17

2.89

0.36

(0.43)

(3.90)

Return On Capital Employed

0.17

2.87

0.36

(0.43)

(3.90)

Return On Shareholders' Funds/Equity

(90.84)

19.10

14.47

(113.69)

(112.28)

Dividend Pay Out Ratio (Times)

0.14

0.00

-

0.00

0.00



FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.19

UK Pound

1

Rs.100.57

Euro

1

Rs.72.07

                

 

INFORMATION DETAILS

 

Report Prepared by :

TPT

               

 

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