MIRA INFORM REPORT

 

 

Report No. :

344927

Report Date :

17.10.2015

           

IDENTIFICATION DETAILS

 

Name :

LI  &  FUNG  (TRADING)  LTD.

 

 

Registered Office :

LiFung Tower, 888 Cheung Sha Wan Road, Kowloon

 

 

Country :

Hong Kong

 

 

Date of Incorporation :

06.03.1973

 

 

Com. Reg. No.:

03835715

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Export Trading of Men’s, ladies and children’s knit and woven wears, garments, fashion accessories, handicrafts, fireworks and firecrackers, plastic flowers, electronic and metal products, toys and games, sporting goods, timepieces, sundries and Investment Holding

 

 

No. of Employee :

500.  (Including Associates)

25,065 (Group) (As at 30-06-2015)

 

 

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)

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 12.5% of total system deposits in Hong Kong by the end of 2014. 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 47.3 million in 2014, 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 2014 mainland Chinese companies constituted about 50% of the firms listed on the Hong Kong Stock Exchange and accounted for about 60.1% 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 4.4% in 2014. 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 2014, Hong Kong and China signed a new agreement on achieving basic liberalization of trade in services in Guangdong Province under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from March 2015, cover a negative list and a most-favored treatment provision, and will improve access to the mainland's service sector for Hong Kong-based companies.

 

Source : CIA

 

 

Company name

 

LI  &  FUNG  (TRADING)  LTD.

 

(Business Name: LF BEAUTY)

 

 

Address

 

LiFung Tower, 888 Cheung Sha Wan Road, Kowloon, Hong Kong.

 

PHONE:                  852-2300 2300,  2300 2333,  2300 5000,  2300 4343

 

FAX:                       852-2300 2000,  2300 2020,  2300 5767

 

E-MAIL:                  biancatang.adm@lifung.com.hk

 

 

MANAGEMENT

 

Group Chairman:     Dr. Fung Kwok Lun, William

 

 

SUMMARY

 

Incorporated on:      6th March, 1973.

 

Organization:           Private Limited Company.

 

Issued Share

Capital:                   HK$10,000,200.00

 

Business Category: Trading and Investment Holding.

 

Group Turnover:      US$19,288,499,000  (Year ended 31-12-2014)

 

Company

Employees:            500.  (Including associates)

 

Group Employees:        25,065.  (As at 30-06-2015)

 

Main Dealing

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

                                                                Citibank N.A., Hong Kong Branch.

 

Banking Relation:    Very Good.

 

Registered Head Office:-

LiFung Tower, 888 Cheung Sha Wan Road, Kowloon, Hong Kong.

 

Garment Purchasing Division:-

1/F. - 5/F., Unit A & B on 6/F. & 7/F., Hong Kong Spinners Industrial Building, Phase I & II, 800 Cheung Sha Wan Road, Kowloon, Hong Kong.

 

Mailing Address:-

P.O. Box 150 & 7988, Hong Kong.

 

Business Name:-

LF Beauty, Hong Kong.  [BR No. 03835715-006]

 

Immediate Holding Company:-

Li & Fung (B.V.I.) Ltd., British Virgin Islands.

 

Penultimate Holding Company:-

Li & Fung Ltd., Bermuda/Hong Kong.

 

Ultimate Holding Company:-

Fung Holdings (1937) Ltd., Hong Kong.

 

Associated/Affiliated Companies:-

Li & Fung Group of Companies

888 UK Ltd., England.

AGI Logistics (S) Pte Ltd., Singapore

AGI Logistics Foreign Holdings LLC, U.S.A.

Algreta Solutions Ltd., England.

Alster International Trading Co. Pte. Ltd., Singapore.

Appleton Holdings Ltd., British Virgin Islands.

B.G.S. Ltd., Thailand.

Black Cat Fireworks Ltd., England.

Blue Work Trading Co. Ltd., Hong Kong.

Bond Medical Co. Ltd., Macau.

Bossini Fashion GmbH, Germany.

BS Direct Ltd., Hong Kong.

C Group US LLC, U.S.A.

Camberley Enterprises Ltd., Hong Kong.

Camberley Trading Service (Shenzhen) Ltd., China.

Catalyst Direct Sarl, France.

Catalyst Tags Inc., U.S.A.

Centennial (Luxembourg) S.a.r.l., Luxembourg.

CGroup HK Ltd., Hong Kong.

Character Direct Ltd., Hong Kong.

Chuan Jui Chuan Logistics Co. Ltd., Taiwan.

Chuan Jui Fu Logistics Co. Ltd., Taiwan.

Colby Group Holdings Ltd., British Virgin Islands.

Colby Property Holdings Ltd., British Virgin Islands.

Colourful Express Trading Pte. Ltd., Singapore.

Comet Feuerwerk GmbH, Germany.

Concept 3 Ltd., Hong Kong.

Covo Design (Dongguan) Co. Ltd., China.

Crimzon Rose Accessories (Shenzhen) Co. Ltd., China.

Crimzon Rose Asia Ltd., Hong Kong.

Dana International Ltd., Hong Kong.

Definitive Sourcing (India) Private Ltd., India.

Direct SG Mexico Ltd., Mexico.

Direct Sourcing Group Holdings Ltd., British Virgin Islands.

Direct Sourcing Group Investment Ltd., British Virgin Islands.

Direct Sourcing Group Pte. Ltd., Singapore.

Dodwell (Mauritius) Ltd., Hong Kong.

Dodwell (Singapore) Pte. Ltd., Singapore.

Dongguan LF Beauty Manufacturing Services Ltd., China.

DSG (Bangladesh) Ltd., Bangladesh.

DSG (Hong Kong) Ltd., Hong Kong.

DSG (Shenzhen) Ltd., China.

DSG (US) Inc., U.S.A.

DSG Services Pte. Ltd., Singapore.

Eclat Properties Inc., British Virgin Islands.

Empire Knight Group Ltd., British Virgin Islands.

Far East Logistics (Shenzhen) Co. Ltd., China.

Fashion Design (Hong Kong) Ltd., Hong Kong.

Fashion Design NY LLC, U.S.A.

Fenix Fashion Ltd., Hong Kong.

Fireworks Management Inc., U.S.A.

Fleet Co. Ltd., Macau.

Forrestgrove Ltd., Hong Kong.

Four Star Co. Ltd., Macau.

Four Star Construction and Engineering Co. Ltd., Macau.

GB Apparel Ltd., England.

GMR (Hong Kong) Ltd., Hong Kong.

Golden Gate Fireworks Inc., U.S.A.

Golden Horn N.V., Netherlands.

Goodwest Enterprises Ltd., Hong Kong.

GSCM (HK) Ltd., Hong Kong.

GSCM LLC, U.S.A.

Gulf Coast Fireworks Sales LLC, U.S.A.

Hanson Im-und Export GmbH, Germany.

Heusel Textilhandelsgesellschaft mbH, Germany.

Homeworks Asia Ltd., Hong Kong.

HTL Fashion (UK) Ltd., England.

HTL Fashion Hazir Giyim Sanayi ve Ticaret Ltd. Sirketi, Turkey.

HTP Fashion Ltd., Hong Kong.

Icare Health Care Co. Ltd., Macau.

IDS Corporate Services (S) Pte. Ltd., Singapore.

IDS Group Ltd., British Virgin Islands.

IDS International (Shanghai) Co. Ltd., China.

IDS International USA Inc, U.S.A.

IDS Manufacturing Ltd., Thailand.

IDS Manufacturing Sdn. Bhd., Malaysia.

Imagine POS Ltd., Hong Kong.

Imagine POS UK Ltd., England

Integrated Distribution Services Group Ltd., Bermuda.

International Sources Trading Ltd., Hong Kong.

JAC TISSOT Solutions GmbH, Germany.

Jackel Cosmetics Ltd., Hong Kong.

Jackel France SAS, France.

Jackel Inc., U.S.A.

Jackel International (Asia) Ltd., Hong Kong.

Jackel International Europe SAS, France.

JDH Marketing (Thailand) Ltd., Thailand.

Just Jamie and Paulrich Ltd., England.

JV Cosmetics (Dongguan) Co. Ltd., China.

JV Cosmetics Co. Ltd., Hong Kong.

Kariya Industries Ltd., Hong Kong.

Kenas Pacific Trading (Pte.) Ltd., Singapore.

Kingsbury International Ltd., Hong Kong.

Lenci Calzature SpA, Italy.

LF (Philippines) Inc., The Philippines.

LF Asia (Borneo) Sdn Bhd, Brunei.

LF Asia (Hong Kong) Ltd., Hong Kong.

LF Asia (Malaysia) Sdn. Bhd., Malaysia.

LF Asia (Singapore) Pte. Ltd., Singapore.

LF Asia (Thailand) Ltd., Thailand.

LF Asia Distribution (Taiwan) Ltd., Hong Kong.

LF Asia Management Ltd., Hong Kong.

LF Asia Marketing (Malaysia) Sdn. Bhd., Malaysia.

LF Asia Sebor (Sabah) Holdings Sdn. Bhd., Malaysia.

LF Asia Sebor (Sabah) Sdn. Bhd., Malaysia.

LF Asia Sebor (Sarawak) Holdings Sdn. Bhd., Malaysia.

LF Asia Sebor (Sarawak) Sdn. Bhd., Malaysia.

LF Beauty (Shenzhen) Ltd., China.

LF Beauty (UK) Ltd., England.

LF Beauty Inc., U.S.A.

LF Beauty Ltd., Hong Kong.

LF Centennial Ltd., British Virgin Islands.

LF Centennial Pte. Ltd., Singapore.

LF Centennial Service (Singapore) Pte. Ltd., Singapore.

LF Centennial Services (Hong Kong) Ltd., Hong Kong.

LF Corporate Capital (I) Ltd., British Virgin Islands.

LF Credit Ltd., Bermuda.

LF Credit Pte. Ltd., Singapore.

LF Distribution Holding Inc., U.S.A.

LF Distribution Holding Ltd., British Virgin Islands.

LF Distribution International Holding Ltd., Hong Kong.

LF Distribution International Inc., U.S.A.

LF Distribution Ltd., Bermuda.

LF Europe (Germany) GmbH, Germany.

LF Europe Ltd., England.

LF Fashion (Hong Kong) Ltd., Hong Kong.

LF Fashion Pte. Ltd., Singapore.

LF Freight (Hong Kong) Ltd., Hong Kong.

LF Freight (Singapore) Pte. Ltd., Singapore.

LF Freight (USA) LLC, U.S.A.

LF Freight (West) LLC, U.S.A.

LF Home Ltd., Hong Kong.

LF International Inc., U.S.A.

LF Logistics (Bangladesh) Ltd., Bangladesh.

LF Logistics (Cambodia) Ltd., Cambodia.

LF Logistics (China) Co. Ltd., China.

LF Logistics (Guangzhou) Co. Ltd., China.

LF Logistics (Hong Kong) Ltd., Hong Kong.

LF Logistics (India) Private Ltd., India.

LF Logistics (Taiwan) Ltd., Hong Kong.

LF Logistics (Thailand) Ltd., Thailand.

LF Logistics (UK) Ltd., England.

LF Logistics Holding Ltd., British Virgin Islands.

LF Logistics Holdings (UK) Ltd., England.

LF Logistics Korea Ltd., Korea.

LF Logistics Ltd., Bermuda.

LF Logistics Management Ltd., Hong Kong.

LF Logistics Pakistan (Private) Ltd., Pakistan.

LF Logistics Services (M) Sdn. Bhd., Malaysia.

LF Logistics Services Pte. Ltd., Singapore.

LF Men’s Group LLC, U.S.A.

LF Performance Services Sdn. Bhd., Malaysia.

LF Products (Hong Kong) Ltd., Hong Kong.

LF Products (Shanghai) Ltd., China.

LF Products Pte. Ltd., Singapore.

LF Sourcing (Millwork) LLC, U.S.A.

LF Sourcing Sportswear LLC, U.S.A.

LFCF Investment I (Europe) Ltd., British Virgin Islands.

LFCF Investment I (USA) Ltd., British Virgin Islands.

Li & Fung (Bangladesh) Ltd., Bangladesh.

Li & Fung (Brasil) Trading Importacao E Exportacao Ltda, Brazil.

Li & Fung (Cambodia) Ltd., Cambodia.

Li & Fung (Chile) Limitada, Chile.

Li & Fung (Europe) Holding Ltd., England.

Li & Fung (Exports) Ltd., Hong Kong.

Li & Fung (Guatemala) S.A., Guatemala.

Li & Fung (Honduras) Ltd., Honduras.

Li & Fung (India) Private Ltd., India.

Li & Fung (Korea) Ltd., Korea.

Li & Fung (Mauritius) Ltd., Mauritius.

Li & Fung (Morocco) SARL, Morocco.

Li & Fung (Nicaragua) Sociedad Anonima, Nicaragua.

Li & Fung (Philippines) Inc., The Philippines.

Li & Fung (Portugal) Ltd., England.

Li & Fung (Singapore) Private Ltd., Singapore.

Li & Fung (Taiwan) Ltd., Taiwan.

Li & Fung (Thailand) Ltd., Thailand.

Li & Fung (Vietnam) Ltd., Vietnam.

Li & Fung Agencia de Compras em Portugal Ltda, Portugal.

Li & Fung Mumessillik Pazarlama Ltd. Sirketi, Turkey.

Li & Fung Pakistan (Private) Ltd., Pakistan.

Li & Fung South Africa (Proprietary) Ltd., South Africa.

Li & Fung Taiwan Holdings Ltd., Taiwan.

Li & Fung Trading (Italia) S.r.l., Italy.

Li & Fung Trading (Shanghai) Ltd., China.

Li & Fung Trading Service (Guangzhou) Ltd., China.

Li & Fung Trading Service (Shanghai) Co. Ltd., China.

Li & Fung Trading Service (Shenzhen) Ltd., China.

Lighthouse Asia Ltd., Hong Kong.

Lion Rock (Hong Kong) Ltd., Hong Kong.

Lion Rock Far East (1972) Ltd., Hong Kong.

Lion Rock International Trading & Co., Hong Kong.

Lion Rock Services (Far East) & Co., Hong Kong.

Lion Rock Services (Switzerland) AG, Switzerland.

Lloyd Textile Trading Ltd., Hong Kong.

Lornamead Acquisitions Ltd., England.

Lornamead GmbH, Germany.

Lornamead Group Ltd., England.

Lornamead Inc., U.S.A.

Lornamead UK Ltd., England.

Marshall Fireworks Inc., U.S.A.

Mercury (BVI) Holdings Ltd., British Virgin Islands.

Meredith Associates Ltd., Hong Kong.

Mighty Hurricane Holdings Inc., U.S.A.

Miles Fashion Asia Pte. Ltd., Singapore.

Miles Fashion GmbH, Germany.

Miles Fashion Group France EURL, France.

Miles Fashion USA Inc., U.S.A.

Millwork Holdings Co. Inc., U.S.A.

Modium Konfeksiyon Sanayi ve Ticaret Abnonim Sirketi, Turkey.

Nanjing LF Asia Co. Ltd., China.

New Star Instruments Ltd., Macau.

Ningbo Penavico-COL International Freight Forwarding Co. Ltd., China.

Ningbo Zhicheng Customs Brokerage Co. Ltd., China.

On-Tip LLC, U.S.A.

P.T. Lifung Indonesia, Indonesia

Paco Trading (International) Ltd., Hong Kong.

PATCH Licensing LLC, U.S.A.

Perfect Trading Inc., Egypt.

Peter Black Footwear & Accessories Ltd., England.

Peter Black Holdings Ltd., England.

Peter Black International Ltd., England.

Peter Black Overseas Holdings Ltd., England.

Phil Henson GmbH, Germany.

Product Development Partners Ltd., Hong Kong.

PromOcean France SAS, France.

PromOcean GmbH, Germany.

PromOcean No 1 Ltd., England.

PromOcean Spain SL, Spain.

PromOcean The Netherlands B.V., The Netherlands.

PromOcean UK Ltd., England.

PT Direct Sourcing Indonesia, Indonesia.

PT. IDS Logistics Indonesia, Indonesia.

PT. LF Asia Manufacturing Indonesia, Indonesia.

PT. LF Asia Marketing Indonesia, Indonesia.

PT. LF Services Indonesia, Indonesia.

Ralsey Group Ltd., U.S.A.

Ratners Enterprises Ltd., British Virgin Islands.

Region Giant Holdings Ltd., British Virgin Islands.

RT Sourcing (Shenzhen) Co. Ltd., China.

RT Sourcing Asia Ltd., Hong Kong.

RT Sourcing USA Inc., U.S.A.

Shanghai IDS Distribution Co., China.

Shanghai IDS Logistics Co. Ltd., China

Shanghai LF Asia Healthcare Co. Ltd., China.

Shenzhen Catalyst Trading Co. Ltd., China.

Shiu Fung Fireworks Co. Ltd., Hong Kong.

Shiu Fung Fireworks Trading (Changsha) Ltd., China.

Shubiz Ltd., England.

Shutoo Ltd., England.

Silvereed (Hong Kong) Ltd., Hong Kong.

Simkar 2 Ltd., Cayman Islands.

Simkar Ltd., Cayman Islands.

Sky Million International Ltd., Hong Kong.

Sports Brands Italia Ltd., Hong Kong.

STS Shenzhen Testing Service Ltd., China.

Tantallon Enterprises Ltd., British Virgin Islands.

Texnorte II-Industrias Texteis Ltda., Portugal.

Texnorte Industrial Ltd., Hong Kong.

TH Success Ltd., Hong Kong.

Toy Island (USA) LLC, U.S.A.

Uncle Sam Online Vertriebs-und Vermarktungsrechte GmbH, Germany.

Upsolut Merchandising GmbH & Co. KG, Germany.

Ventana Bekleidungsfabrikation GmbH, Germany.

Visage (Hong Kong) Ltd., Hong Kong.

Visage Group Ltd., England.

Visage Holdings (2010) Ltd., England.

Visage Holdings Ltd., England.

Visage Ltd., England.

W S Trading Ltd., Hong Kong.

Welmed (Macau) Co. Ltd., Macau.

Whalen LLC, U.S.A.

Whalen Ltd., Hong Kong.

Wilson Fabric Mart (China) Ltd., Hong Kong.

Wilson Textile Ltd., Hong Kong.

Winco Fireworks International LLC, U.S.A.

Winco Fireworks Mississippi LLC, U.S.A.

Winco of Tennessee LLC, U.S.A.

 

 

BUSINESS REGISTRATION NUMBER

 

03835715

 

 

COMPANY FILE NUMBER

 

0032289

 

 

MANAGEMENT

 

Honorary Chairman:  Dr. Fung Kwok King, Victor

Group Chairman:  Dr. Fung Kwok Lun, William

 

 

ISSUED SHARE CAPITAL

 

HK$10,000,200.00

SHAREHOLDERS

 

(As per registry dated 06-03-2015)

Name

 

No. of shares

 

 


Ordinary

Non-voting Deferred

LF Properties Ltd., Hong Kong.

 

1

20

Li & Fung (B.V.I.) Ltd.

P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

 

1

99,980

 

 

––

–––––––

 

Total:

2

=

100,000

======

 

 

DIRECTORS

 

(As per registry dated 06-03-2015)

Name

(Nationality)

 

Address

Henry CHAN

   (Canadian)

Flat B, 6/F., The Somerset, 67 Repulse Bay Road, Hong Kong.

 

Marc Robert COMPAGNON

House 76, Cedar Drive, The Redhill Peninsula, 18 Pak Pat Shan Road, Tai Tam, Hong Kong.

 

FUNG Kwok King, Victor

   (American)

32A, The Harbourview, 11 Magazine Gap Road, Hong Kong.

 

FUNG Kwok Lun, William   (British)

30 A & B, The Harbourview, 11 Magazine Gap Road, Hong Kong.

 

Spencer Theodore FUNG

32A, The Harbourview, 11 Magazine Gap Road, Hong Kong.

 

Lale KESEBI

House 143, Palm Drive, The Redhill Peninsula, 18 Pak Pat Shan Road, Tai Tam, Hong Kong.

 

LEUNG Wai Ping, Annabella

   (British)

31B, Broadwood Park, 38 Broadwood Road, Hong Kong.

 

MOK Oi Wai, Emily

House 10, 2nd Street, Hong Lok Yuen, Tai Po, New Territories, Hong Kong.

 

 

SECRETARY

 

(As per registry dated 06-03-2015)

Name

(Nationality)

 

Address

WAN Mei Chow, Terry

   (Chinese)

11/F., LiFung Tower, 888 Cheung Sha Wan Road, Kowloon, Hong Kong.

 

 

HISTORY

 

The subject was incorporated on 6th March, 1973 as a private limited liability company under the Hong Kong Companies Ordinance.

 

Formerly the subject was located at 7/F. - 8/F. & 10/F. - 16/F., Lifung Tower, China Hong Kong City, 33 Canton Road, Tsimshatsui, Kowloon, Hong Kong, moved to LiFung Centre, 888 Cheung Sha Wan Road, Kowloon, Hong Kong in early 1998.  The LiFung Centre was renamed as LiFung Tower in June 1999.

 

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

 

 

OPERATIONS

 

Activities:                Export Trading and Investment Holding.

 

Lines:                     Men’s, ladies and children’s knit and woven wears, garments, fashion accessories, handicrafts, fireworks and firecrackers, plastic flowers, electronic and metal products, toys and games, sporting goods, timepieces, sundries.

 

Trade Mark:             LI & FUNG.

 

Company

Employees:            500.  (Including associates)

 

Group Employees:  25,065.  (As at 30-06-2015)

 

Commodities

imported from:        Imported and bought from various sources.

 

Markets:                  US, Canada, Europe, Australia, South Africa, Japan, etc.

 

Group Turnover:-

US$15,912,201,000  (Year ended 31-12-2010)

US$20,030,271,000  (Year ended 31-12-2011)

US$20,221,806,000  (Year ended 31-12-2012)

US$19,025,512,000  (Year ended 31-12-2013) [restated]

US$19,288,499,000  (Year ended 31-12-2014)

US$  8,709,600,000  (6 months ended 30-06-2014)

US$  8,625,611,000  (6 months ended 30-06-2015)

 

Terms/Sales:  Various terms.

 

Terms/Buying:  As per contracted.

 

 

MEMBERSHIP

 

Federation of Hong Kong Industries, Hong Kong.  [Member No. A0202]

The American Chamber of Commerce in Hong Kong.

The Hong Kong Exporters’ Association, Hong Kong.
[Membership No. 319]

The Hong Kong General Chamber of Commerce, Hong Kong.
[Membership No. HKL0066]

 

 

FINANCIAL INFORMATION

 

Issued Share Capital: HK$10,000,200.00

 

Group Profit Attributable to Shareholders:-

US$548,491,000  (Year ended 31-12-2010)

US$681,229,000  (Year ended 31-12-2011)

US$617,416,000  (Year ended 31-12-2012)

US$725,337,000  (Year ended 31-12-2013)

US$441,276,000  (Year ended 31-12-2014)

US$111,421,000  (6 months ended 30-06-2014)

US$148,685,000  (6 months ended 30-06-2015)

 

Profit or Loss:        Group business is profitable.

 

Condition:              Business is actively conducted.

 

Facilities:               Making active use of general banking facilities.

 

Payment:                Prompt and reliable.

 

Commercial

Morality:                 Very Good.

 

Bankers:-

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

Citibank N.A., Hong Kong Branch.

Dah Sing Bank Ltd., Hong Kong.

JPMorgan Chase Bank N.A., Hong Kong Branch.

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

The Royal Bank of Scotland N.V., Hong Kong Branch.

 

Standing:               Very Good.

 

 

GENERAL

 

Li & Fung (Trading) Ltd. [Li & Fung Trading] is a wholly-owned subsidiary of Li & Fung Ltd. [Li & Fung] which was incorporated in Bermuda on 25th October, 1991 as a holding company of the Li & Fung Group – Export Trading Section, and was listed on The Stock Exchange of Hong Kong Ltd. with stock code 494 in 1992.  Li & Fung has become one of the 33 constituent stocks of the Hong Kong Hang Seng Index with effect from 2nd August, 2000.

The Li & Fung Group has been trading since 1906 and is now the market leader amongst export trading and sourcing companies in Hong Kong and even Asia Pacific region.  Main activity of Li & Fung is investment holding.  Its subsidiaries are principally engaged in the export of consumer products, including garments and textiles, fashion accessories, toys and games, sporting goods, home furnishings, handicrafts, shoes, travel goods and tableware.  The Group is also engaged in property investment, including the development of two industrial parks at Panyu and Heshan, China.  Its biggest markets are the United States and Western Europe.

Now the Group is recognized as the world’s leader in consumer goods design, development, sourcing and distribution.  It manages the supply chain for retailers and brands worldwide with over 300 offices and distribution centres in more than 40 economies spanning across the Americas, Europe, Africa and Asia. Through its three interconnected Business Networks – Trading, Logistics and Distribution – Li & Fung offers a spectrum of services that covers the entire supply chain end-to-end.

The trading business of the Group is conducted through Li & Fung Trading and its associates.  Li & Fung Trading is primarily an exporter of a wide variety of goods manufactured in Hong Kong and acts as a purchasing agent for importer, department stores, chain stores and specialty stores throughout the world and in particular North America and Western Europe.  Its principal exports are ready-to-wear garments and textiles, toys, electronic and mechanical products, artificial flowers, household ware, gift and art items.  It is not substantially dependent on any one of those categories of exports.

Fung Holdings (1937) Ltd., established in Hong Kong in 1937, is the ultimate holding company of the Li & Fung Group which is now controlled by Dr. Victor Fung Kwok King and Dr. William Fung Kwok Lun – the third generation of the founder.  Li & Fung was founded in Guangzhou, China in 1906 as a traditional Chinese family company engaged in trading.  Fung Holdings (1937) Ltd. is 100%-owned subsidiary of King Lun Holdings Ltd., a private company incorporated in the British Virgin Islands which is the investment arm of the two Fung brothers.

The Li & Fung Group is now a large multinational consumer product trading group comprising three distinct core businesses: Export Trading – conducted by Li & Fung Ltd. group, Retailing – conducted by Li & Fung (Retailing) Ltd. group, and Distribution – conducted by Li & Fung (Distribution) Ltd. group.

The Group now services its customers globally through a sourcing network of 80 offices in more than 40 economies.

The Group is also engaged in property investment, including the development of two industrial parks at Panyu and Heshan, China.

In FY 2014, the turnover of the Group amounted to US$19,288.5 million (2013: US$19,025.5 million).  Despite the challenging macro-economic environment, Group turnover increased by 1%.

Turnover in the Trading Network was stable and the Logistics Network increased substantially by 66%.  Turnover in its US business was stable for the year, while its European business declined by 1%, Asian business increased by 14% and the rest of world decreased by 3%.

Profit attributable to shareholders amounted to US$441.3 million (2013: US$725.3 million).

During the first half of 2015, turnover of the Group was US$8,625.6 million (same period of 2014: US$8,709.6 million), held up with a 1% reduction despite its customers being affected by a subdued macroeconomic and retail environment, as well as turnover decline in Europe due to currency depreciation.  Turnover in the Group’s Trading Network fell 3%.

Core operating profit decreased by 20% mainly due to the margin decline in the Trading Network and increase in operating costs from the Logistics Network and investments made since 2014.

Profit attributable to shareholders increased by 33% from US$111.4 million to US$148.7 million, which included a non-cash gain of US$60 million on the write-back of contingent considerations during this period, as compared to US$98 million in 2014, as well as the loss from discontinued operations of US$98 million in 2014 relating to Global Brands.  Excluding results from Discontinued Operations, profit attributable to shareholders decreased from US$210 million to US$149 million.

As at 30th June, 2015, the Group had a total workforce of 25,065, of which 6,605 were warehouse-related employees for its logistics and distribution businesses.  In terms of geography, 4,031 of its employees were based in Hong Kong, 9,265 were based in Mainland China and 11,769 were based overseas.

The Group owns the whole Lifung Tower which is located at 888 Cheung Sha Wan Road, Kowloon, Hong Kong.  Most of the Group’s subsidiaries are located at this building.  The total employees of the Group in this building is about 500.

On the whole, in view of the background and parentage of Li & Fung Trading, consider it good for normal business engagements.

 

 

REMARKS

 

Brief information of the principal directors:-

 

Dr. Victor FUNG Kwok King (Honorary Chairman, Chairman of Risk Management and Sustainability Committee), aged 69.  Brother of Dr. William Fung Kwok Lun and father of Mr. Spencer Theodore Fung.  Group Chairman of Li & Fung group, a Hong Kong-based multinational which comprises operating groups engaging in trading, logistics, distribution and retailing.  They include publicly listed Trinity Ltd, Convenience Retail Asia Ltd, Global Brands Group Holding Ltd. and the Company.  Honorary Chairman of the Company after stepping down as Group Chairman since May 2012.  Joined the Group in 1973 as Manager and became Managing Director of the Group’s export trading business in 1977.  Became Group Managing Director in 1981 and Group Chairman in 1989.  A director of King Lun Holdings Ltd. and Fung Holdings (1937) Ltd., which are substantial shareholders of the Company.  Holds Bachelor and Master degrees in Electrical Engineering from the Massachusetts Institute of Technology, and a Doctorate in Business Economics from Harvard University.  An independent non-executive director of Chow Tai Fook Jewellery Group Ltd. (Hong Kong), Koc Holding A.S. (Turkey) and China Petrochemical Corporation (People’s Republic of China).  Founding Chairman of the Fung Global Institute, an independent non-profit think-tank based in Hong Kong.  A member of the Chinese People’s Political Consultative Conference.  A member of the Economic Development Commission of the Hong Kong Government.  Chairman of the Steering Committee on the Hong Kong Scholarship for Excellence Scheme from September 2014.  Chairman of the Hong Kong Trade Development Council (1991 - 2000),  the Hong Kong representative on the APEC Business Advisory Council (1996 - 2003), Chairman of the Hong Kong Airport Authority (1999 - 2008), Chairman of The Council of The University of Hong Kong (2001 - 2009), Chairman of Hong Kong – Japan Business Co-operation Committee (2004 - 2010), Chairman of the Greater Pearl River Delta Business Council (2004 – 2013), a member of the Commission on Strategic Development of the Hong Kong Government (2005 – 2012), Chairman of ICC (2008 – 2010), a member of WTO Panel on Defining the Future of Trade (2012 – 2013) and a vice chairman of China Centre for International Econonic Exchanges (March 2009 – October 2014).  Independent non-executive director of Baosteel Group Corporation (October 2005 – January 2013) and BOC Hong Kong (Holdings) Ltd. (2002 – June 2014).  In 2003 and 2010, the Hong Kong Government awarded Dr. Fung the Gold Bauhinia Star and Grand Bauhinia Medal respectively for his distinguished service to the community.

 

Dr. William FUNG Kwok Lun (Group Chairman), aged 66.  Brother of Dr. Victor Fung Kwok King and uncle of Mr. Spencer Theodore Fung.  Group Chairman since May 2012.  Executive Deputy Chairman from 2011 to May 2012 and before that, Group Managing Director from 1986 to 2011.  Join the Group in 1972 and became a Director of the Group’s export trading business in 1976.  Graduated from Princeton University with a Bachelor of Science degree in Engineering.  Holds an MBA degree from the Harvard Graduate School of Business.  Degrees of Doctor of Business Administration, honoris causa, were conferred by the Hong Kong University of Science & Technology and by the Hong Kong Polytechnic University.  An independent non-executive director of VTech Holdings Ltd., Shui On Land Ltd., Sun Hung Kai Properties Ltd., The Hongkong and Shanghai Hotels Ltd. and Singapore Airlines Ltd.  Chairman and non-executive director of Global Brands Group Holdings Ltd. and a non-executive director of Convenience Retail Asia Ltd and Trinity Ltd., all within the Fung Group.  A director of King Lun Holdings Ltd. and its wholly owned subsidiary, Fung Holdings (1937) Ltd., substantial shareholders of Li & Fung.  A director of the Fung Global Institute, an independent non-profit think-tank based in Hong Kong.  Past Chairman of the Hong Kong General Chamber of Commerce (1994 – 1996), the Hong Kong Exporters’ Association (1989 – 1991) and the Hong Kong Committee for Pacific Economic Cooperation (1993 – 2002).  Awarded the Silver Bauhinia Star by the Hong Kong Special Administrative Region Government in 2008.

 

Mr. Spencer Theodore FUNG (Group Chief Executive Officer), aged 41.  Group Chief Executive Officer since 7th July, 2014 and Executive Director since 2008.  Previously Group Chief Operating Officer (2012 – July 2014), in charge of the global infrastructure of the Company.  Before this, President of LF Europe, managing the Group’s European distribution business.  Joined the Group in 2001.  An independent non-executive director of Swire Properties Ltd.  A director of Young Presidents’ Organization – Hong Kong Chapter Ltd.  A member of the General Committee of The Hong Kong Exporters’ Association and the Board of Trustees at Northeastern University.  Holds a Bachelor of Arts degree from Harvard College and Master of Science in Accounting and Master in Business Administration degrees from Northeastern University.  A US Certified Public Accountant.  The son of Dr. Victor Fung Kwok King, Honorary Chairman, and nephew of Dr. William Fung Kwok Lun, Group Chairman.

 

Mr. Marc Robert COMPAGNON (Executive Director and President of LF Sourcing), aged 56.  Executive Director since 1st July 2014.  President of LF Sourcing overseeing the Group’s global agency business for apparel and hard goods.  Joined the Group in 2000 at the time of the acquisition of Colby International Ltd. where he was Chief Merchandising Officer for 17 years and was responsible for establishing Colby’s global sourcing network and sales and marketing strategies.  Holds a Bachelor of Arts degree from the University of Vermont.  Member of the Board of Advisors of the School of Business Administration at The University of Vermont and a founding member of Cotton’s Revolutions.  Non-executive chairman of The Abaca Group, Inc. (Cebu), a hotel and restaurant management group.

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.97

UK Pound

1

Rs.100.55

Euro

1

Rs.73.99

 

INFORMATION DETAILS

 

Analysis Done by :

HEE

 

 

Report Prepared by :

ASH

 

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

3.99

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

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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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