MIRA INFORM REPORT

 

 

Report No. :

345603

Report Date :

23.10.2015

 

IDENTIFICATION DETAILS

 

Name :

KAO FONG MACHINERY CO., LTD.

 

 

Registered Office :

No.16, Keya Rd., Daya Dist., Taichung City 428

 

 

Country :

Taiwan

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

03.02.1979

 

 

Com. Reg. No.:

55857746

 

 

Legal Form :

Joint Stock Company

 

 

Line of Business :

Manufacturing and sales of machinery.

 

 

No. of Employee :

About 220

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No complaints

 

 

Litigation :

Clear

 

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Taiwan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 


 

TAIWAN ECONOMIC OVERVIEW

 

Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. Exports, led by electronics, machinery, and petrochemicals have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to fluctuations in world demand. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are other major long-term challenges.

Free trade agreements have proliferated in East Asia over the past several years. Following the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010, Taiwan in July 2013 signed a free trade deal with New Zealand - Taipei’s first-ever with a country with which it does not maintain diplomatic relations - and, in November, inked a trade pact with Singapore. However, follow-on components of the ECFA, including a signed agreement on trade in services and negotiations on trade in goods and dispute resolution, have stalled. In early 2014, the government bowed to public demand and proposed a new law governing the oversight of cross-Strait agreements, before any additional deals with China are implemented; the legislature has yet to vote on such legislation, leaving the future of ECFA up in the air as President MA enters his final full year in office. MA has portrayed ECFA as Taiwan’s key to greater participation in East Asia’s free trade networks.

Taiwan's total fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 expected to account for nearly 20% of the island's total population by 2025.

The island runs a trade surplus, largely because of its surplus with China, and its foreign reserves are the world's fifth largest, behind those of China, Japan, Saudi Arabia, and Switzerland. In 2006 China overtook the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taiwan since 2009 has gradually loosened rules governing Chinese investment on the island and has also secured greater market access for its investors in the mainland. In August 2012, the Taiwan Central Bank signed a memorandum of understanding (MOU) on cross-Strait currency settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese RMB and the New Taiwan dollar across the Strait, which has helped Taiwan develop into a local RMB hub.

Closer economic links with the mainland bring greater opportunities for Taiwan’s economy but also pose new challenges as the island becomes more economically dependent on China at a time when political differences remain unresolved. During 2014, the press paid increasing attention to domestic economic issues, while pushing aside the debates over trade liberalization that were a hallmark of MA’s tenure. The media focused on the divide between Taiwan’s “haves” and “have nots,” providing extensive coverage of public frustration with stagnant wages, skyrocketing housing prices, and the difficulty of finding decent entry-level jobs.

 

Source : CIA

 

Contact Points

 

Company Name:

Kao Fong Machinery Co., Ltd.

Supplied Name:

KAO FONG MACHINERY CO LTD., TAIWAN

Trading Address:

No.16, Keya Rd., Daya Dist., Taichung City 428, Taiwan (R.O.C.)

Supplied Address:

No. 16, Keya Road, Daya District Taichong 42881

Telephone Number:

+886-4-2566-2116

Fax Number:

+886-4-2567-1001

E-mail:

kafo@kafo.com.tw 

Website:

www.kafo.com.tw 

Notes: The exact name and address are as above.

 

 

Company Identification Details

 

Registered Name:

Kao Fong Machinery Co., Ltd.

Registered Address:

No.16, Keya Rd., Daya Dist., Taichung City 428, Taiwan (R.O.C.)

Date of Foundation:

1979-02-03

Registration Number:

55857746

Registry:

Central Taiwan Science Park Bureau, MOST

Registered Capital:

NTD 1,200,000,000 (USD 37,200,000)

(As of 2015.10, 1 NTD = 0.031 USD)

Paid-up Capital:

NTD 1,080,106,890 (USD 33,483,313.59)

Legal Representatives:

Guorong Shen

Legal Form:

Joint Stock Company

Principal Activities:

Manufacturing and sales of machinery, etc.

Staff:

About 220 Employees

Listed at Stock Exchange:

Yes; Stock Symbol:4510

Date of Last Annual Return:

2015-07-02

 

 

History

 

Subject was incorporated on 1979-02-03 with registered number 55857746 as Joint Stock Company in Taiwan.

 

Subject listed on Taiwan Over-The-Counter Securities Exchange on 1998-02-24.

 

 

Corporate Structure

 

Factory

Address:

No.16, Keya Rd., Daya Dist., Taichung City 428, Taiwan (R.O.C.)

Date of Registration:

2007-10-22

Factory Registration Number:

93A00006

Factory Manager:

Guorong Shen

Status:

In Production

Date of Last Annual Return:

2010-08-04

Major Products:

292 Other special machinery equipment

251 Metal hand tool and moulds

291 Metal processing machinery equipment

259 Other metal products

293 General machinery equipment

 

Related Companies

1

Name

Maxture Technology Sdn Bhd

Address:

No.25 Jalan Bulan U5/166 Bandar Pinggiran Subang 40150 Shah Alam, Malaysia

Tel:

+60-12-216-5586/+60-12-219-9686

Fax:

+60-3-7846-6160

E-mail:

heng_maxture@hotmail.com 

lim@maxture.com.my 

2

Name

PT. Javatec Trimitra Machinery

Address:

Jl. Kranji Blok F 18 No.17E Delta Silicon 3, Lippo Cikarang, Bekasi 17550 - Indonesia

Tel:

+62-21-8990-9099

Fax:

+62-21-8990-8787

E-mail:

david@javatec-machinery.com

3

Name

Takawa Seiki, Inc.

Address:

15348 Valley Blvd., City of industry, CA 91746

 

Tel:

+626-387-5428

Fax:

+626-387-5453

4

Name

Kao Fong Machinery (Kunshan) Co., Ltd.

(Literal Translation)

Address:

No. 306, S. Qingyang Rd., Economic and Technological Development Zone, Kunshan City, Jiangsu Province

Tel:

+86-512-5771-7009

Fax:

+86-512-5770-5293

E-mail:

jason@kafo.com.tw

 

Agents

1

Address:

Rm.8, 4/F, No.7 1st Wuquan Rd., Xinzhuang City, Taiwan

Tel:

+886-2- 2299-5537

Fax:

+886-2-2299-6021

E-mail:

shin.iron@msa.hinet.net

2

Address:

1/F, No.45, Jilin Rd., Jhongli City, Taoyuan County, Taiwan

Tel:

+886-3-392-2129

Fax:

+886-3-360-7109

3

Address:

No. 321, 2nd Zhongzheng St., Yongkang City, Tainan County, Taiwan

Tel:

+886-6-253-9299

Fax:

+886-6-243-2975

4

Address:

No. 446, Zhongxin Rd., Zuoying Dist., Kaohsiung City, Taiwan

Tel:

+886-7-359-0698

Fax:

+886-7-359-0987

 

 

Shareholders

 

Major Shareholders

 

Name

Subscription Shares     

Hezuan Investment Co., Ltd. (Literal Translation)

15,697,826

Far East Machinery Co., Ltd.

291,194

Haoqing Investment Co., Ltd. (Literal Translation)

1,487,855

Youzhen Family Asset Management Co., Ltd.

(Literal Translation)

34,629

Yuzheng Zhang

22,066

Qianci Shen

159,788

Fengyi Huang

1,611,000

Lin Ke Co., Ltd. BVI

(Literal Translation)

473,668

 

Shareholders’ Information:

1

Registered Name:

Hezuan Investment Co., Ltd. (Literal Translation)

Registered Address:

7/F., No.391, Chenggong Road, Ruicheng Li, Dali District, Taichung City, Taiwan

Date of Foundation:

2005-12-09

Registration Number:

28051373

Registry:

Taichung City Government

Registered Capital:

NTD 200,000,000 (USD 6,200,000)

(As of 2015.10, 1 NTD = 0.031 USD)

Paid-up Capital:

NTD 178,510,000 (USD 5,533,810)

Legal Representatives:

Guorong Shen

Legal Form:

Joint Stock Company

Date of Last Annual Return:

2015-07-28

2

Registered Name:

Far East Machinery Co., Ltd.

Registered Address:

No. 752 Chung Hsiao Rd., Chiayi City, Taiwan

Date of Foundation:

1963-10-09

Registration Number:

65818201

Registry:

Department of Commerce, Ministry of Economic Affairs, R.O.C.

Registered Capital:

NTD 1,400,000,000 (USD 43,400,000)

(As of 2015.10, 1 NTD = 0.031 USD)

Paid-up Capital:

NTD 1,167,310,000 (USD 36,186,610)

Legal Representatives:

Guohui Zhuang

Legal Form:

Joint Stock Company

Date of Last Annual Return:

2014-09-12

3

Registered Name:

Haoqing Investment Co., Ltd. (Literal Translation)

Registered Address:

1/F., No.572, Sec 6, Huanzhong East Road, Dali District, Taichung City, Taiwan

Date of Foundation:

2005-04-15

Registration Number:

27669764

Registry:

Taichung City Government

Registered Capital:

NTD 12,500,000 (USD387,500)

(As of 2015.10, 1 NTD = 0.031 USD)

Legal Representatives:

Yongcang Sun

Legal Form:

Private Limited Liabilities Company

Date of Last Annual Return:

2014-03-06

4

Registered Name:

Youzhen Family Asset Management Co., Ltd.

(Literal Translation)

Registered Address:

2/F., No.168, Sec 2, Bo-ai Road, Houyi Li, West District, Jiayi County, Taiwan

Date of Foundation:

2007-04-13

Registration Number:

28642856

Registry:

MOEA Central Office

Registered Capital:

NTD 1,000,000 (USD 31,000)

(As of 2015.10, 1 NTD = 0.031 USD)

Legal Representatives:

Huimei Zhuang

Legal Form:

Private Limited Liabilities Company

Date of Last Annual Return:

2012-07-20

 

 

Management Information

 

Core Management

 

Directors

1

Name

Guorong Shen

Position

Chairman of the Board & Manager

Date of Appointment for Manager

 2010-07-12

2

Name

Yishan Chen

Position

Director

3

Name

Rongdong Liao

Position

Director

4

Name

Shuixiang Shen

Position

Director

5

Name

Qingshou Sun

Position

Director

6

Name

Yuzheng Zhang

Position

Director

7

Name

Mingxin Guo

Position

Director

8

Name

Qianci Shen

Position

Supervisor

9

Name

Fengyi Huang

Position

Supervisor

10

Name

Zhongxian Zhang

Position

Supervisor

 

Personnel Structure

 

Total Employees

About 220 Employees

 

 

Operation Information

 

Offices & Factories

 

 

Headquarters

Add

No.16, Keya Rd., Daya Dist., Taichung City 428, Taiwan (R.O.C.)

 

Production Information

 

Subject is engaged in manufacturing of machinery

Subject has a factory in Taiwan for production.

Subject obtained the certification of ISO 9001 and ISO 14001.

 

Purchase Information

 

The registered activities of subject:

Business Code

Details

CB01010

Manufacturing of machinery

CP01010

Manufacturing of hand tool

Research, development, design, manufacturing and sales the following items:

--

Semiconductor processes for the vacuum pump

--

Linear motor machine tool

--

Plasma machine is used technique is applied to vertical center machine VMC850

--

Wafer cleaning machine

--

Import, export and agent of the above related products

ZZ99999

Besides licensed business, all other business items those are not banned or restricted

 

The components and raw material for production are purchased from both home and abroad.

It is introduced that subject’s major suppliers are Jea Sheng Industry Co., Ltd., Yuan Jun Fong Casting Co., Ltd., “Fanuc”, “Mitsubishi Electric” and “Siemens”

 

 

Sales Information

 

Subject is engaged in sales of machinery

The major products of subject are horizontal machining center, vertical machining center, CNC gantry milling machine, five-face double column machining center

Subject’s sales regions include domestic market, Southeast Asia, North America and Europe,

One of subject’s major customers is Camex Machinery, Inc (USA).

 

Import and export right:

Import right

Yes

Export right

Yes

 

 

Settlements

 

Purhase

 

Domestic Purchase

Products

Raw materials and components

Payment Terms

T/T, Cash

 

Import

Products

Raw materials and components

Payment Terms

L/C, T/T

 

 

Sales

 

Domestic Markets

Product

Machinery

Selling Terms

T/T, Cash

 

Export

Product

Machinery

Selling Terms

L/C, T/T

 

Balance Sheet

 

Unit: NTD/000

Consolidated

2014-12-31

2013-12-31

Current assets

 

 

Cash and cash equivalents

355,043

338,388

Current available-for-sale financial assets, net

360,193

262,050

Notes receivable - net

98,773

60,985

Net notes receivable - related party

485

16,531

Accounts receivable - net

432,839

268,875

Accounts receivable - related parties - net

27,606

28,089

Other receivables, net

13,235

8,859

Inventories

710,733

564,334

Prepayment

55,027

14,517

Other current assets

7,983

8,883

Total current assets

2,061,917

1,571,511

Non-current assets

 

 

Current financial assets valued by the cost, net

138,767

86,082

Investment by equity method, net

3,556

4,728

Real property, plant and equipment

1,272,991

940,906

Net investment real estate

41,324

36,028

Intangible assets

3,771

3,433

Deferred income tax assets

12,930

12,509

Other non-current assets

35,310

8,757

Non-current assets

1,508,649

1,092,443

Assets

3,570,566

2,663,954

Current liabilities

 

 

Short-term borrowing

459,094

279,246

Short-term notes payable

40,000

40,000

Financial liabilities measured at fair value through profit or loss - current

0

2,809

Notes payable

3,262

2,097

Accounts payable

273,947

230,737

Other payables

104,270

75,000

Tax liabilities

27,261

19,057

Liability reserve-current

7,777

7,775

Other current liabilities

30,596

177,264

Current liabilities

946,207

833,985

Non-current liabilities

 

 

Long-term borrowings

763,100

396,100

Deferred income tax liabilities

4,091

1,744

Other non-current liabilities

25,274

23,345

Non-current liabilities

792,465

421,189

Liabilities

1,738,672

1,255,174

Equity attributable to owners of parent

 

 

Share Capital

 

 

Ordinary share

1,080,107

894,334

Total capital stock

1,080,107

894,334

Capital surplus

 

 

Total capital surplus

270,497

180,497

Retained earnings

 

 

Total retained earnings

308,621

229,985

Other equity

 

 

Other equity

169,409

100,573

Total equity attributable to owners parent

1,828,634

1,405,389

Non-controlling interests

3,260

3,391

Total equity

1,831,894

1,408,780

 

 

Profit and Loss Account

 

Unit: NTD/000

Consolidated

2014

2013

Operating income

2,095,770

2,019,967

Operating costs

1,599,437

1,576,320

Gross profit (loss) from operations

496,333

443,647

Implemented sales profit (loss)

0

43

Gross profit (loss) from operations, net

496,333

443,690

Operating expense

 

 

Selling expense

181,267

181,906

Administrative expense

88,178

77,793

Research and development expenses

38,455

27,295

Operating expenses

307,900

286,994

Operating profit (loss)

188,433

156,696

Non-operating revenues and costs

 

 

Other income

18,787

8,552

Other gains and losses, net

19,308

12,127

Finance costs, net

17,730

14,368

Share of profit (loss) of associates and joint ventures accounted for using equity method, net

-1,172

-2,690

Total non-operating income and expenses

19,193

3,621

Profit (loss) from continuing operations before tax

207,626

160,317

Tax expense (profit)

38,153

26,494

Profit (loss) from continuing operations

169,473

133,823

Profit (loss)

169,473

133,823

Other comprehensive profit and loss (net)

 

 

Exchange differences on translation

7,685

8,561

Available for sale of the unrealized evaluation profit (loss) of financial assets

62,620

168,367

Actuarial gains (losses) on defined benefit plans

-1,731

1,380

Income tax related to components of other comprehensive income

1,273

1,459

Other comprehensive income, net

67,301

176,849

Total comprehensive income

236,774

310,672

Net profit (loss) attributable to:

 

 

Profit (loss), attributable to owners of parent

169,800

134,008

Profit (loss), attributable to non-controlling interests

-327

-185

Comprehensive income, attributable to:

 

 

Comprehensive income, attributable to owners of parent

236,905

310,881

Comprehensive income, attributable to non-controlling interests

-131

-209

Basic earnings per share

1.76

1.44

Diluted earnings per share

1.76

1.44

 

 

Cash Flows

 

Unit: NTD/000

Consolidated

2014

2013                  

Cash Flows from Operating Activities - Indirect Method

 

 

Profit (loss) from continuing operations before tax

207,626

160,317

Profit (loss) before tax

207,626

160,317

Depreciation expense

33,859

33,418

Amortization expense

1,638

1,209

Provision (Reversal of Provision) for Bad Debts Losses

1,444

361

Net loss (gain) on financial assets or liabilities at fair value through profit or loss

-2,809

-690

Interest expense

17,730

14,368

Interest income

-2,404

-287

Dividend income

-9,771

-2,390

Share of profit (loss) of associates and joint ventures accounted for using equity method, net

1,172

2,690

Loss (gain) on disposal of property, plant and equipment

25

-824

Disposal of investment profit (loss)

-548

1,013

Realized profit (loss) of sales

0

-43

Other items

285

281

Non-effect on cash gains and losses items

40,621

49,106

Decrease (increase) in holding of the financial assets for transaction

0

7,581

Decrease (increase) in notes receivable

-36,621

2,329

Decrease (increase) in notes receivable-related party

16,698

2,514

Decrease (increase) in accounts receivable

-174,451

-6,869

Decrease (increase) in other receivable-related party

-6,572

-23,123

Decrease (increase) in inventories

-4,372

-3,515

Decrease (increase) in inventories

-146,429

-32,535

Decrease (increase) in prepayment

-41,593

23,339

Decrease (increase) in other current asset

232

-216

Decrease (increase) in other financial asset

668

-8,651

Total changes in operating assets

-392,440

-39,146

Increase (decrease) in notes payable

1,165

-3,538

Increase (decrease) in accounts payable

43,411

85,644

Increase (decrease) in accounts payable-related party

-201

201

Increase (decrease) in other payables

2,638

28,971

Increase (decrease) in other payables-related party

236

28

Increase (decrease) in liability reserve

0

1,632

Increase (decrease) in prepayment

-10,839

26,804

Increase (decrease) in other current liabilities

171

-64

Increase (decrease) in accrued pension liabilities

198

188

Total changes in operating liabilities

36,779

139,866

Total changes in operating assets and liabilities

-355,661

100,720

Total adjustments

-315,040

149,826

Cash inflow (outflow) generated from operations

-107,414

310,143

Interest collected

2,400

286

Dividends collected

9,771

2,390

Interest paid

-17,476

-14,266

Income taxes refund (paid)

-29,296

-3,999

Net cash flows from (used in) operating activities

-142,015

294,554

Cash flows from (used in) investing activities

 

 

Acquisition of available-for-sale financial assets

-35,523

0

Acquisition of financial assets valued by cost

-60,175

-3,000

Disposal of financial assets valued by cost

8,038

0

Acquisition of property, plant and equipment

-336,078

-118,248

Disposal of property, plant and equipment

35

1,090

Increase in guaranteed deposits paid

-922

-875

Decrease in guaranteed deposits paid

2,383

0

Acquisition of intangible assets

-1,976

-1,664

Acquisition of investment property

-5,296

-36,028

Increase in other prepayments

-12,866

0

Net cash flows from (used in) investment activities

-442,380

-158,725

Cash flows from (used in) financing activities

 

 

Increase in short-term borrowing

179,848

82,003

Increase in short-term notes payable

0

10,000

Long-term borrowings

670,000

93,100

Repayments of long-term debt

-439,000

-75,333

Cash dividends paid

-53,660

-17,366

Cash capital increase

240,000

0

Uncontrolled changes of equity

0

3,600

Net cash flows from (used in) financing activities

597,188

96,004

Effect of exchange rate changes on cash and cash equivalents

3,862

4,950

Net increase (decrease) in cash and cash equivalents

16,655

236,783

Cash and cash equivalents at beginning of period

338,388

101,605

Cash and cash equivalents at end of period

355,043

338,388

Cash and cash equivalents reported in the statement of financial position

355,043

338,388

 

Note: Subject didn’t submit its individual financial information; we obtained its consolidated financials as above for reference.

The above financial figures are based on the IFRSs Accounting System.

 

 

Bankers

 

Subject declined to disclose its bank details; from other source we could not obtain the relevant information, either.

 

 

Public Record

 

Mortgage

 

No chattel mortgage record of subject has been found within the recent 3 months.

 

Lawsuit

 

Up to date of reporting, no existing or latent litigation of the subject has been found.

 

 

Special Note

 

Interview Details

Name

Ms. Chen

Department

Sales Department

 

 

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.65.15

UK Pound

1

Rs.100.53

Euro

1

Rs.73.97

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

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.