MIRA INFORM REPORT

 

 

Report No. :

337125

Report Date :

09.09.2015

 

IDENTIFICATION DETAILS

 

Name :

DAIDO STEEL CO LTD

 

 

Registered Office :

Urbannet Nagoya Bldg, 1-1-10 Higashisakura Higashiku Nagoya 461-8581

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015 (Consolidated Financial)

 

 

Date of Incorporation :

February 1950

 

 

Com. Reg. No.:

1800-01-037514 (Nagoya-Higashiku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufactures special steel products (39%), high performance materials & magnetic materials (33%), automotive & industrial machinery parts (21%), engineering (5%), others (2%).

 

 

No. of Employee :

10,872

 

 

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

 

Maximum Credit Limit :

Yen 17,120.0 Million

 

 

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)

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

 

DAIDO STEEL CO LTD

 

REGD NAME:               Daido Tokushuko KK

MAIN OFFICE:              Urbannet Nagoya Bldg, 1-1-10 Higashisakura Higashiku Nagoya 461-8581

JAPAN

                                                Tel: 052-963-7501     Fax: 052-963-4386     -

           

                                                *.. The is one of its factories in Nagoya

 

URL:                             http://www.daido.co.jp

E-Mail address:             (thru the URL)

 

 

ACTIVITIES

 

Mfg of special steel for automobiles

 

 

BRANCHES

 

Tokyo, Osaka, Fukuoka, other (Tot 10)

 

 

OVERSEAS

 

USA, China, Hong Kong, Singapore, Thailand, Germany, India, Indonesia,

Korea, Taiwan, Philippines, other (--Offices & subsidiaries)

 

 

FACTORIES

 

Tokai (3), Kimitsu, Shibukawa, Nagoya, other (Tot 8)

 

 

CHIEF EXEC

 

TADASHI SHIMAO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY

 

FINANCES        FAIR                 A/SALES          Yen 483,633 M

PAYMENTSREGULAR   CAPITAL           Yen 37,172 M

TREND UP                    WORTH            Yen 292,405 M

STARTED         1950                 EMPLOYES      10,872

 

 

COMMENT

 

MFR OF SPECIAL STEEL FOR AUTOMOBILES 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 17,120.0 MILLION, 30 DAYS NORMAL TERMS

 

Unit: In Million Yen

Forecast figures for the 31/03/2016 fiscal term.

 

 

HIGHLIGHTS

 

This is a top-ranked mfr of special steel, with strong sales to automakers including main client Nissan & Honda Motors.  Automotive-related items account for some 60% of overall sales.  Expanding sales ratio of new lines, including machinery, magnetic materials and environmental equipment like industrial furnaces.  Has association with Nippon Steel & Sumitomo Metal and formed alliance with US major automobile parts supplier Timken.  .  Streamlining China Plant. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 483.633 million, a 5.7% up from Yen 457,731 million in the previous term.  The recurring profit was posted at Yen 21,729 million and the net profit at Yen 10,886 million, respectively, compared with Yen 20,287 million recurring profit and Yen 12,616 million net profit, respectively, a year ago.

 

(Apr/Jun/2015 results): Sales Yen 116,705 million (down 2.6%), operating profit Yen 3,967 million (down 5.0%), recurring profit Yen 4,240 million (down 7.3%), net profit Yen 1,788 million (down 30.8%).  (% as compared with the corresponding period a year ago).

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 29,000 million and the net profit at Yen 19,000 million, respectively, on a 3.4% rise in turnover, to Yen 500,000 million.  Overall businesses, including magnetic products and special steel products, will continue expansion, benefitting from Honda’s new car releases.   

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 17,120.0 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　                   Feb 1950

Regd No.:                                 1800-01-037514 (Nagoya-Higashiku)

Legal Status:                Limited Company (Kabushiki Kaisha

Authorized:                              1,160 million shares

Issued:                         434,487,693

Sum:                            Yen 37,172 million

 

Major shareholders (%): Nippon Steel Sumitomo Metal (7.1), Japan Trustee Services T (5.1), Meiji Yasuda Life Ins (4.7), Mizuho Bank (3.5), NHK Spring (3.3), MUFG (3.2), Honda Motor (3.0), Master Trust Bank of Japan T (2.9), Toyota Motor (2.0), Denso Corp (1.8); foreign owners (12.2)

 

No. of shareholders: 16,556

 

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

 

Managements: Tadashi Shimao, pres; Michio Okabe, v pres; Motoshi Shinkai, v pres; Takeshi Ishiguro, v pres; Akira Miyajima, mgn dir; Yasuhiro Itazuri, mgn dir; Tsukasa Nishimura, mgn dir; Shinji Fujino, dir; Hitoshi Tanemura, dir

 

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

 

Related companies: Nippon Seisen Co, Fuji OOZX Inc, Daido Kogyo Co, other.

 

 

OPERATION

           

Activities: Manufactures special steel products (39%), high performance materials & magnetic materials (33%), automotive & industrial machinery parts (21%), engineering (5%), others (2%).

Overseas Sales Ratio (23%)

           

Clients: [Mfrs, wholesalers] Daido Kogyo, Daido Special Metal, Okaya & Co, Hino Motor, Toyota Motor, UEX, other

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Daido Kogyo, Chubu Electric Power, Metal One, other

 

Payment record: Regular

 

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

 

Bank References:

Mizuho Bank (H/O)

MUFG (Nagoya)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

483,633

457,731

　

  Cost of Sales

413,536

390,387

　

      GROSS PROFIT

70,097

67,344

　

  Selling & Adm Costs

49,688

48,366

　

      OPERATING PROFIT

20,408

18,977

　

  Non-Operating P/L

1,321

1,410

　

      RECURRING PROFIT

21,729

20,287

　

      NET PROFIT

10,886

12,616

BALANCE SHEET

　

　

  Cash

　

32,585

40,674

　

  Receivables

101,918

99,648

　

  Inventory

108,561

97,746

　

  Securities, Marketable

　

　

　

  Other Current Assets

13,117

9,993

　

      TOTAL CURRENT ASSETS

256,181

248,061

　

  Property & Equipment

189,375

184,900

　

  Intangibles

7,283

5,925

　

  Investments, Other Fixed Assets

135,751

118,636

　

      TOTAL ASSETS

588,590

557,522

　

  Payables

72,855

74,804

　

  Short-Term Bank Loans

27,989

41,876

　

　

　

　

　

  Other Current Liabs

58,538

39,780

　

      TOTAL CURRENT LIABS

159,382

156,460

　

  Debentures

20,000

30,000

　

  Long-Term Bank Loans

77,081

70,692

　

  Reserve for Retirement Allw

8,003

7,312

　

  Other Debts

　

31,718

25,433

　

      TOTAL LIABILITIES

296,184

289,897

　

      MINORITY INTERESTS

　

　

Common stock

37,172

37,172

　

Additional paid-in capital

28,542

28,542

　

Retained earnings

152,130

146,079

　

Evaluation p/l on investments/securities

25,128

16,642

　

Others

49,815

39,560

　

Treasury stock, at cost

(382)

(370)

　

      TOTAL S/HOLDERS` EQUITY

292,405

267,625

　

      TOTAL EQUITIES

588,590

557,522

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

25,739

28,567

　

Cash Flows from Investment Activities

-32,178

-34,313

　

Cash Flows from Financing Activities

-2,792

-7,633

　

Cash, Bank Deposits at the Term End

　

31,776

39,905

ANALYTICAL RATIOS            Terms ending:

31/03/20１５

31/03/2014

　

Net Worth (S/Holders' Equity)

292,405

267,625

　

Current Ratio (%)

160.73

158.55

　

Net Worth Ratio (%)

49.68

48.00

　

Recurring Profit Ratio (%)

4.49

4.43

　

Net Profit Ratio (%)

2.25

2.76

　

　

Return On Equity (%)

3.72

4.71

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.66.61

UK Pound

1

Rs.102.30

Euro

1

Rs.74.61

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

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%)

 

 

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.