MIRA
INFORM REPORT
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Report No. : |
347569 |
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Report Date : |
31.10.2015 |
IDENTIFICATION DETAILS
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Name : |
JIANGSU
LIHUAI IRON & STEEL CO., LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.12.2014 |
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Date of Incorporation : |
11.06.1993 |
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Com. Reg. No.: |
320800400000141 |
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Legal Form : |
Chinese Foreign Equity Joint Venture |
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Line of Business : |
Manufacturing and selling bearing steel, spring steel, quality carbon
steel, cold heading steel, low alloy steel, carbon steel, and steel bar; and
exporting its products and technology. |
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No. of Employees : |
3,104 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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) |
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China |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
CHINA - ECONOMIC OVERVIEW
Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, in July 2005 China moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate.
The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2014 more than 274 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development.
Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.
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Source
: CIA |
Company Name & address
JIANGSU LIHUAI IRON & STEEL CO., LTD.
NO. 188 SOUTH
XI’AN ROAD, HUAIAN, JIANGSU PROVINCE 223002 PR CHINA
TEL: 86 (0)
517-83066856/83036666
FAX: 86 (0)
517-83631344
EXECUTIVE SUMMARY
DATE OF REGISTRATION :
JUNE 11, 1993
REGISTRATION NO. :
320800400000141
LEGAL FORM :
CHINESE FOREIGN EQUITY JOINT VENTURE ENTERPRISE
CHIEF EXECUTIVE :
JI YONGXIN (LEGAL REPRESENTATIVE)
REGISTERED CAPITAL :
CNY 725,636,000
STAFF :
3,104
BUSINESS CATEGORY : MANUFACTURING & TRADING
REVENUE :
CNY 9,668,278,000 (AS OF DEC. 31, 2014)
EQUITIES :
CNY 2,468,374,000 (AS OF DEC. 31, 2014)
E-MAIL :
N/A
PAYMENT :
AVERAGE
MARKET CONDITION :
COMPETITIVE
FINANCIAL CONDITION :
FAIRLY STABLE
OPERATIONAL TREND :
FAIRLY STEADY
GENERAL REPUTATION :
AVERAGE
EXCHANGE RATE :
CNY 6.36 = USD 1
Adopted
abbreviations (as follows)
SC - Subject Company (the company inquired by you)
N/A – Not available
CNY – China Yuan Ren Min Bi
OPERATIONAL TREND & GENERAL REPUTATION
This section aims at indicating the relative positions of SC in respect
of its operational trend & general reputation
Operational Trend:- General
Reputation:-
Upward Excellent
Steady Good
Fairly Steady Fairly
Good
Ordinary Average
Fair Fair
Stagnant Detrimental
Downward Not
known
Not known Not
yet be determined
Not yet be determined
LEGAL STATUS
& HISTORY
SC was established as a Chinese foreign equity joint venture enterprise
of PRC with State Administration of Industry & Commerce (SAIC) under
registration No.: 320800400000141 on June 11, 1993.
SC’s Organization Code Certificate No.: 60847196-X
SC’s Tax No.: 32080060847196X
SC’s registered capital: CNY 725,636,000
SC’s paid-in capital: CNY 725,636,000
Registration Change Record:-
|
Date |
Change of
Contents |
Before the
change |
After the change |
|
2003-03-18 |
Registered Capital |
USD 12,000,000 |
USD 29,980,000 |
|
Shareholder (s) |
Nanjing Iron & Steel Group Jiangsu Huaigang Co., Ltd. 75% Hong Kong Jiali International Enterprise Company 25% |
Nanjing Iron & Steel Group Jiangsu Huaigang Co., Ltd. 75% Luen Hing Shing Resources Limited (Hong Kong) 25% |
|
|
2008-06-04 |
Shareholder (s) |
Nanjing Iron & Steel Group Jiangsu Huaigang Co., Ltd. 75% Luen Hing Shing Resources Limited (Hong Kong) 25% |
Nanjing Iron & Steel Group Jiangsu Huaigang Co., Ltd. 75% Fengrong Co., Ltd. (B.V.I.) 25% |
|
2011-08-31 |
Registered Capital |
USD 29,980,000 |
CNY 725,636,000 |
|
Shareholder (s) (% of Shareholding) |
Nanjing Iron & Steel Group Jiangsu Huaigang Co., Ltd. 75% Fengrong Co., Ltd. (B.V.I.) 25% |
Fengrong Co., Ltd. (B.V.I.) 15% Jiangsu Shagang Group Huaigang Special Steel Co., Ltd. 75% Join Wealth Development Limited (Hong Kong) 10% |
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|
-- |
Registration No. |
000199 |
320800400000141 |
|
2015-6-17 |
Legal Representative |
Lu Jinxiang |
Ji Yongxin |
Current Co search indicates SC’s shareholders & chief executives are
as follows:-
|
Name of
Shareholder (s) |
% of
Shareholding |
|
Fengrong Co., Ltd. (B.V.I.) |
15 |
|
Jiangsu Shagang Group Huaigang Special Steel Co., Ltd. |
75 |
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Join Wealth Development Limited (Hong Kong) |
10 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative, Chairman, and General Manager |
Ji Yongxin |
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Director |
Li Peisong |
|
Ma Yi |
|
|
Chen Shaohui |
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Supervisor |
Wei Guo |
|
Zhang Zhaobin |
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|
Cui Youquan |
RECENT
DEVELOPMENT
No recent development was found during our checks at present.
SHAREHOLDER
CHART & BACKGROUND
Name %
of Shareholding
Fengrong Co., Ltd. 15
Jiangsu Shagang Group Huaigang Special Steel Co., Ltd. 75
Join Wealth Development Limited (Hong Kong) 10
Jiangsu Shagang Group Huaigang Special Steel Co., Ltd.
--------------------------------------------------------------------
Jiangsu Shagang Group Huaigang Special Steel Co., Ltd. is located in
southwest industrial area of Huaian, which is the hometown of beloved former
premier Zhou Enlai, and covers an area of 3,150,000 square meters (4500 Mu). It
crosses the Beijin-Hangzhou Grand Canal, and is close to Jinhu, Tongsan,
Ninglian Highway and Xinchang Railway and the transportation is very
convenient. The company’s predecessor – Qingjiang Iron & Steel Factory was
established in October 1970 with 1,000,000 RMB investment from municipal
government of Qingjiang City. The company changed its name toHuaiying Metallurgical
Industry Company in April 1986 and in December 1996 the company was
restructured as Jiangsu Huaigang Group Co. Ltd., based on which a
provincial-level enterprise group – Jiangsu Huaigang Group was formed.
Registration No.: 320800000001951
Web: www.huaigang.com
Join Wealth Development Limited (Hong Kong)
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CR No.: 0958179
Legal Form: Private
Status: Live
MANAGEMENT
Ji Yongxin , Legal Representative, Chairman and General Manager
---------------------------------------------------------------------------------------------------
Gender: M
ID# 420106196702155154
Age: 48
Qualification: University
Working experience (s):
At present, working in SC as legal representative, chairman and general
manager
Director
-----------
Li Peisong
Ma Yi
Chen Shaohui
Supervisor
--------------
Wei Guo
Zhang Zhaobin
Cui Youquan
BUSINESS
OPERATION
SC’s registered business scope includes manufacturing and selling
bearing steel, spring steel, quality carbon steel, cold heading steel, low
alloy steel, carbon steel, and steel bar; and exporting its products and
technology.
SC is mainly engaged in manufacturing and selling steel products.
SC’s products mainly include:
Bearing steel
Anchor chain round bar for Vessel
Alloy structure steel
Seamless tube billet for high pressure
Continuous casting billets
Corrosion resistant standard unit steel
Steel for cold heading and cold intrusion
Steel for fastening unit
SC sources its materials 100% from domestic market. SC sells 40% in domestic market and 60% to overseas market, mainly Southeast Asia.
The buying terms of SC include Check, T/T and Credit of 30-60 days. The
payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.
*Major Customers:
==============
L And H Threaded Rods Corp.
Shinsho Mexico Sa De Cv
Staff & Office:
--------------------------
SC is known to have approx. 3,104 staff at present.
SC owns an area as its operating office and factory, but the detailed
information is unknown.
RELATED
COMPANY
SC is known to have 3 subsidiaries at present.
Hangzhou Huaite Iron & Steel Trade Co., Ltd.
Wuxi Huaite Materials Trade Co., Ltd.
Huai’an Jinxin Qiutuan Mining Co., Ltd.
PAYMENT
Overall payment
appraisal: ( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be determined
The appraisal serves as a reference to reveal SC's payments habits and
ability to pay. It is based on the 3
weighed factors: Trade payment experience (through current enquiry with SC's
suppliers), our delinquent payment and our debt collection record concerning
SC.
Trade payment experience: SC did not provide any name of trade/service
suppliers and we have no other sources to conduct the enquiry at present.
Delinquent payment record: None in our database.
Debt collection record: No overdue amount owed by SC was placed to us
for collection within the last 6 years.
BANKING
Basic Bank:
Bank of
China Huaian Branch
AC#:
06858008091001
FINANCIALS
Balance Sheet
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Unit: CNY’000 |
As of Dec. 31, 2013 |
As of Dec. 31, 2014 |
|
136,467 |
64,245 |
|
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Notes receivable |
59,163 |
0 |
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Accounts receivable |
10,243 |
34,978 |
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Advances to suppliers |
302,621 |
76,341 |
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Other receivable |
2,177 |
264,039 |
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Inventory |
1,710,501 |
1,029,806 |
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Deferred expenses |
0 |
0 |
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Other current assets |
0 |
2,873 |
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|
------------------ |
------------------ |
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Current assets |
2,221,172 |
1,472,282 |
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Long-term investment |
43,015 |
43,015 |
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Fixed assets |
2,309,680 |
2,020,074 |
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Construction in progress |
20,892 |
4,729 |
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Intangible assets |
0 |
399 |
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Long-term prepaid expenses |
40,101 |
26,485 |
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Deferred income tax assets |
36,462 |
17,115 |
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Other non-current assets |
7,112 |
3,512 |
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------------------ |
------------------ |
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Total assets |
4,678,434 |
3,587,611 |
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============= |
============= |
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Short-term loans |
320,000 |
70,000 |
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Notes payable |
0 |
292,200 |
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Accounts payable |
750,476 |
617,416 |
|
Wages payable |
58,205 |
55,581 |
|
Taxes payable |
-31,635 |
9,477 |
|
Dividends payable |
166,282 |
0 |
|
Advances from clients |
12,232 |
32,088 |
|
Other payable |
1,010,731 |
37,704 |
|
Other current liabilities |
636 |
4,771 |
|
|
------------------ |
------------------ |
|
Current liabilities |
2,286,927 |
1,119,237 |
|
Non-current liabilities |
0 |
0 |
|
|
------------------ |
------------------ |
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Total liabilities |
2,286,927 |
1,119,237 |
|
Equities |
2,391,507 |
2,468,374 |
|
|
------------------ |
------------------ |
|
Total liabilities & equities |
4,678,434 |
3,587,611 |
|
|
============= |
============= |
Income Statement
|
Unit: CNY’000 |
As of Dec. 31, 2013 |
As of Dec. 31, 2014 |
|
Revenue |
10,304,901 |
9,668,278 |
|
Cost of sales |
10,204,743 |
9,436,736 |
|
Taxes and surcharges |
8,403 |
25,755 |
|
Sales expense |
11,685 |
18,055 |
|
Management expense |
18,116 |
16,707 |
|
Finance expense |
45,338 |
26,434 |
|
Non-operating income |
5,202 |
888 |
|
Non-operating expense |
3,911 |
7,040 |
|
Profit before tax |
-950 |
106,534 |
|
Less: profit tax |
1,781 |
34,277 |
|
-2,731 |
72,257 |
Important Ratios
=============
|
|
As of Dec. 31, 2013 |
As of Dec. 31, 2014 |
|
*Current ratio |
0.97 |
1.32 |
|
*Quick ratio |
0.22 |
0.40 |
|
*Liabilities to assets |
0.49 |
0.31 |
|
*Net profit margin (%) |
-0.03 |
0.75 |
|
*Return on total assets (%) |
-0.06 |
2.01 |
|
*Inventory / Revenue ×365 |
61 days |
39 days |
|
*Accounts receivable / Revenue ×365 |
1 day |
2 days |
|
*Revenue / Total assets |
2.20 |
2.69 |
|
*Cost of sales / Revenue |
0.99 |
0.98 |
FINANCIAL
COMMENTS
PROFITABILITY:
AVERAGE
The revenue of SC appears fairly good in its line.
SC’s net profit margin is average in 2014.
SC’s return on total assets is average in 2014.
SC’s cost of sales is fairly high, comparing with its revenue.
LIQUIDITY: AVERAGE
The current ratio of SC is maintained in a normal level.
SC’s quick ratio is maintained in a fair level.
The inventory of SC appears average.
The accounts receivable of SC appears small.
SC’s short-term loans appear average.
SC’s revenue is in an average level, comparing with the size of its
total assets.
LEVERAGE: AVERAGE
The debt ratio of SC is average.
The risk for SC to go bankrupt is low.
Overall financial condition of the SC: Fairly Stable.
CONCLUSIONS
SC is considered large-sized in its line with fairly stable financial
conditions. Taking into consideration of SC’s good background, general
performance, reputation as well as market conditions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.65.22 |
|
|
1 |
Rs.99.93 |
|
Euro |
1 |
Rs.71.67 |
INFORMATION DETAILS
|
Analysis Done by
: |
KAS |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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-- |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.