MIRA INFORM REPORT

 

 

Report No. :

347184

Report Date :

27.10.2015

 

IDENTIFICATION DETAILS

 

Name :

KINTETSU GROUP HOLDINGS CO LTD

 

 

Registered Office :

6-1-55 Ue-Honmachi Tennojiku Osaka 543-0001

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

June, 1944

 

 

Com. Reg. No.:

1200^01-023131 (Osaka-Tennojiku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Railway Operator in Kansai Area.

 

 

No. of Employees :

7,675

 

 

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)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

 

Company Name and address

 

KINTETSU GROUP HOLDINGS CO LTD (Name changed in Apr/2015)

 

REGD NAME:               Kintetsu Group Holdings KK

MAIN OFFICE:              6-1-55 Ue-Honmachi Tennojiku Osaka 543-0001 JAPAN

                                                Tel: 06-6775-3355     Fax: 06-6775-3468     -

 

URL:                             http://www.kintetsu-g-hd.co.jp

E-Mail address:            (thru the URL)

 

 

ACTIVITIES

 

Railway operator in Kansai area

 

 

BRANCHES   

 

Tokyo, Nagoya, other (Tot 370)

 

 

OVERSEAS

 

USA (subsidiary)

 

 

FACTORIES

 

Osaka (subsidiary)

 

 

CHIEF EXEC

 

YOSHINORI YOSHIDA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES                      Yen 1,233,798 M

PAYMENTSNO COMPLAINTS    CAPITAL                       Yen 126,476 M

TREND UP                                WORTH                        Yen 335,452 M

STARTED         1944                             EMPLOYES                 7,675

 

 

COMMENT

 

RAILWAY OPERATOR IN KANSAI AREA

 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

Unit: In Million Yen

Forecast figures for the 31/10/2016 fiscal term.

 

 

HIGHLIGHTS

 

This is a major private-sector railway operator in Kansai area, having the longest railway tracks in operation in Japan. Originally founded in 1910, the company traces back to Nara Kido, a train operator that served between Osaka and Nara. It operates several inter-city railway lines that connect major cities in Osaka, Nara and Kyoto Prefectures, and additional railway lines that link Osaka Prefecture, Nagoya City and Mie Prefecture. It affiliates bus, taxi and air cargo firms, Kinki Nippon Tourist, Kintetsu Department Store and some other firms on the consolidated basis. The firm was originally Kintetsu Corporation but in Apr 2015 changed the name as captioned to become a Holding Company of the Kintetsu Group firms. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 1,233,798 million, a 1.0% down from Yen 1,246,360 million in the previous term.  Railway operations edged down.  The recurring profit was posted at Yen 52,219 million and the net profit at Yen 27,864 million, respectively, compared with Yen 46,824 million recurring profit and Yen 24,598 million net profit, respectively, a year ago.

 

(Apr/Jun/2015 results): Sales Yen 279,201 million (down 4.3%), operating profit Yen 13,291 million (up 21.6%), recurring profit Yen 11,189 million (up 34.9%), net profit Yen 6,997 million (up 45.2%). (% as compared with the corresponding period a year ago).

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 44,000 million and the net profit at Yen 23,000 million, respectively, on a 1.1% fall in turnover, to Yen 1,220,000 million.   

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

           

Date Registered:　Jun 1944

Regd No.:           1200^01-023131 (Osaka-Tennojiku)

            Legal Status:       Limited Company (Kabushiki Kaisha)

            Authorized:       5,000 million shares

            Issued:                1,906,620,616 shares

            Sum:                   Yen 126,476 million

 

Major shareholders (%): Master Trust Bank of Japan T (4.4), Japan Trustee Services T (3.2), Nippon Life Ins (2.4), MUFG (2.0), Bank of New York Mellon SANV 10 (1.2), State Street Bank West Treaty 505234 (1.1), MUFG Trust Bank (1.1), Japan Trustee Services T5 (1.0), Japan Trustee Services T1 (1.0), Japan Trustee Services T6 (1.0); foreign owners (14.2)

 

No. of shareholders: 182,929

 

Listed on the S/Exchange (s) of: Tokyo & Nagoya

 

Managements: Tetsuya Kobayashi, ch; Yoshinori Yoshida, pres; Kazuyasu Ueda, v pres; Toshihide Ogura, s/mgn dir; Yoshihiro Yasumoto, s/mgn dir; Kazuhiro Morishima, s/mgn dir; Yoshihisa Ueda, mgn dir; Takahisa Kurahashi, mgn dir; Michiyoshi Wadabayashi, dir; Hidenori Akasaka, dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Kintetsu Corp, Kintetsu Real Estate, Kintetsu Department Store, Kintetsu Enterprises Co of  America, Kintetsu Miyako Hotels International, other.

 

 

OPERATION

           

Activities: Holding Company of Kintetsu Group firms: Transportation (17%), real estate (11%), retail (31%), hotel & leisure (40%), other (1%)

           

Clients: [Mfrs, wholesalers] Kintetsu Group firms

No. of accounts: 500

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Kintetsu Group firms, others

 

Payment record: No Complaints

 

Location: Business area in Osaka. Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

            MUFG (Osaka-Chuo)

            Resona Bank (Osaka)

            Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

1,233,798

1,246,360

　

  Cost of Sales

1,036,231

1,050,674

　

      GROSS PROFIT

197,567

195,686

　

  Selling & Adm Costs

141,141

141,063

　

      OPERATING PROFIT

56,425

54,623

　

  Non-Operating P/L

-4,206

-9,799

　

      RECURRING PROFIT

52,219

46,824

　

      NET PROFIT

27,864

24,598

BALANCE SHEET

　

　

  Cash

　

57,604

60,680

　

  Receivables

47,145

46,568

　

  Inventory

165,591

170,253

　

  Securities, Marketable

　

1,984

　

  Other Current Assets

75,529

77,623

　

      TOTAL CURRENT ASSETS

345,869

357,108

　

  Property & Equipment

1,392,867

1,409,468

　

  Intangibles

17,280

18,452

　

  Investments, Other Fixed Assets

190,709

174,700

　

      TOTAL ASSETS

1,946,725

1,959,728

　

  Payables

49,198

48,944

　

  Short-Term Bank Loans

298,273

279,064

　

　

　

　

　

  Other Current Liabs

292,759

370,386

　

      TOTAL CURRENT LIABS

640,230

698,394

　

  Debentures

304,960

236,400

　

  Long-Term Bank Loans

514,762

560,235

　

  Reserve for Retirement Allw

10,830

11,614

　

  Other Debts

　

140,491

147,930

　

      TOTAL LIABILITIES

1,611,273

1,654,573

　

      MINORITY INTERESTS

　

　

Common stock

126,476

126,476

　

Additional paid-in capital

61,100

61,049

　

Retained earnings

23,871

6,572

　

Evaluation p/l on investments/securities

7,976

5,171

　

Others

117,205

106,780

　

Treasury stock, at cost

(1,176)

(1,393)

　

      TOTAL S/HOLDERS` EQUITY

335,452

304,655

　

      TOTAL EQUITIES

1,946,725

1,959,228

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

87,744

92,432

　

Cash Flows from Investment Activities

-46,231

-41,731

　

Cash Flows from Financing Activities

-44,436

-37,751

　

Cash, Bank Deposits at the Term End

　

57,198

60,202

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

335,452

304,655

　

Current Ratio (%)

54.02

51.13

　

Net Worth Ratio (%)

17.23

15.55

　

Recurring Profit Ratio (%)

4.23

3.76

　

Net Profit Ratio (%)

2.26

1.97

　

　

Return On Equity (%)

8.31

8.07

 

           

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.64.96

UK Pound

1

Rs.99.55

Euro

1

Rs.71.62

 

INFORMATION DETAILS

 

Analysis Done by :

KIN

 

 

Report Prepared by :

NIT

 

               

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%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.