MIRA INFORM REPORT

 

 

Report No. :

342003

Report Date :

24.09.2015

 

IDENTIFICATION DETAILS

 

Name :

TIONG HUAT RUBBER FACTORY SDN BHD

 

 

Registered Office :

1001-1002, Kompleks Sri Putra, Seberang Jalan Putra, 1st Floor, 05150 Alor Setar, Kedah

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

06.08.1969

 

 

Com. Reg. No.:

8700-M

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Processing and Sales of Rubber and Latex.

 

 

No. of Employees :

300 [2015]

 

 

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 :

Slow but correct

 

 

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.

 

 

MALAYSIA - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

 

The NAJIB administration is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. As an oil and gas exporter, Malaysia has previously profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is trying to lessen its dependence on state oil producer Petronas.

 

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

 

Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

 

Source : CIA


EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

8700-M

COMPANY NAME

:

TIONG HUAT RUBBER FACTORY SDN BHD

FORMER NAME

:

N/A

INCORPORATION DATE

:

06/08/1969

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

1001-1002, KOMPLEKS SRI PUTRA, SEBERANG JALAN PUTRA, 1ST FLOOR, 05150 ALOR SETAR, KEDAH, MALAYSIA.

BUSINESS ADDRESS

:

SUNGAI DIVISION, U.P. ESTATE, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

TEL.NO.

:

04-4404955

FAX.NO.

:

04-4404233

EMAIL

:

INFO@TIONGHUATRUBBER.COM

WEB SITE

:

WWW.TIONGHUATRUBBER.COM

CONTACT PERSON

:

LOW KOK HORNG ( MANAGING DIRECTOR )

INDUSTRY CODE

:

22193

PRINCIPAL ACTIVITY

:

PROCESSING AND SALES OF RUBBER AND LATEX

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARES 5,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 1,327,443,250 [2014]

NET WORTH

:

MYR 192,888,804 [2014]

M1000 OVERALL RANKING

:

573[2011]

M1000 INDUSTRY RANKING

:

14[2011]

STAFF STRENGTH

:

300 [2015]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

MATURE

 


 

HISTORY / BACKGROUND

 

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

 

The Subject is principally engaged in the (as a / as an) processing and sales of rubber and latex.

 

The Subject is not listed on Bursa Malaysia (Malaysia Stock Exchange).

 

According to the Malaysia 1000 publication, the Subject's ranking are as follows:

 

 

YEAR

2011

2009

2008

2005

OVERALL RANKING

573

434

431

934

INDUSTRY RANKING

14

8

7

20

 

The immediate holding company of the Subject is RIPRO SDN. BHD., a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2015

MYR 5,000,000.00

MYR 5,000,000.00

20/05/2002

MYR 5,000,000.00

MYR 3,015,800.00

 

The major shareholder(s) of the Subject are shown as follows :


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

RIPRO SDN. BHD.

1001-1002, KOMPLEKS SRI PUTRA, SEBERANG JALAN PUTERA, 1ST FLOOR, 05150 ALOR SETAR, KEDAH, MALAYSIA.

153076X

5,000,000.00

100.00

---------------

------

5,000,000.00

100.00

============

=====

+ Also Director


Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

GOH SAY SEAH REALTY SDN. BHD.

MALAYSIA

63602M

602,752.00

06/08/2007

KEMBOJA JATI SDN. BHD.

MALAYSIA

444268H

4,230,791.00

06/08/2007

OOI AH GAIK

MALAYSIA

2742815

76,265.00

06/08/2007

TAY ENG CHEE & TAY ENG LEE

MALAYSIA

000008970

45,096.00

06/08/2007

TAY ENG SU

MALAYSIA

6385420

45,096.00

06/08/2007

 

The Subject's interest in other companies (Subsidiaries/Associates) are shown as follow :

 

Local No

Country

Company

Status

(%)

As At

426383M

MALAYSIA

COMMERCE TRADE INTERNATIONAL SDN. BHD.

-

100.00

22/09/2015



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. TAN AH BAH

Address

:

3, JALAN DESA INDAH, TAMAN DESA INDAH, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

IC / PP No

:

4359496

New IC No

:

521213-02-5409

Date of Birth

:

13/12/1952

Nationality

:

MALAYSIAN

Date of Appointment

:

23/01/1998

 

DIRECTOR 2

 

Name Of Subject

:

MR. LOW PING KUN

Address

:

LOT 1521, PANTAI HALBAN, JALAN KEPALA BATAS-JITRA, 06000 JITRA, KEDAH, MALAYSIA.

IC / PP No

:

4808984

New IC No

:

550601-02-5665

Date of Birth

:

01/06/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

23/01/1998

 

DIRECTOR 3

 

Name Of Subject

:

MR. LOW KOK KEAN

Address

:

298, TAMAN BERJAYA, 05050 ALOR SETAR, KEDAH, MALAYSIA.

IC / PP No

:

A0157615

New IC No

:

650615-02-5963

Date of Birth

:

15/06/1965

Nationality

:

MALAYSIAN

Date of Appointment

:

23/01/1998

 

DIRECTOR 4

 

Name Of Subject

:

MR. LOW KEONG KOON

Address

:

28, PEKAN JITRA 2, 06000 JITRA, KEDAH, MALAYSIA.

IC / PP No

:

4472223

New IC No

:

530430-02-5573

Date of Birth

:

30/04/1953

Nationality

:

MALAYSIAN

Date of Appointment

:

23/01/1998

 

DIRECTOR 5

 

Name Of Subject

:

MR. LOW KOK HORNG

Address

:

99, TAMAN BERJAYA, 05050 ALOR SETAR, KEDAH, MALAYSIA.

IC / PP No

:

A1566863

New IC No

:

700528-02-5167

Date of Birth

:

28/05/1970

Nationality

:

MALAYSIAN

Date of Appointment

:

23/01/1998



MANAGEMENT

 

 

1)

Name of Subject

:

LOW KOK HORNG

Position

:

MANAGING DIRECTOR

 

2)

Name of Subject

:

TAN CHAI SIN

Position

:

ACCOUNT MANAGER

 

3)

Name of Subject

:

TAN KEAN HUA

Position

:

HUMAN RESOURCE MANAGER

 

4)

Name of Subject

:

TAN PENG YEAN

Position

:

PRODUCTION MANAGER

 

5)

Name of Subject

:

TAN YOU CHAI

Position

:

FACTORY MANAGER

 

 

 

AUDITOR

 

Auditor

:

KIAT & ASSOCIATES

Auditor' Address

:

BANGUNAN HENG GUAN, 5TH FLOOR, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. MAK POH IM

IC / PP No

:

4962764

New IC No

:

560609-07-5164

Address

:

7, TAMAN PUMPONG, 05250 ALOR SETAR, KEDAH, MALAYSIA.

 

2)

Company Secretary

:

MS. ANG LEE LEE

New IC No

:

791103-02-5248

Address

:

B20, TAMAN CEMARA, JALAN KILANG TEBU, 05250 ALOR SETAR, KEDAH, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

5

11/03/1978

N/A

UNITED ASIAN BANK BHD

MYR 1,400,000.00

Satisfied

2

20/02/1980

N/A

UNITED ASIAN BANK BHD

MYR 1,400,000.00

Satisfied

4

15/12/1980

N/A

UNITED ASIAN BANK BHD

MYR 400,000.00

Satisfied

3

10/01/1981

N/A

RHB BANK BERHAD

MYR 700,000.00

Satisfied

6

12/12/1983

N/A

RHB BANK BERHAD

MYR 300,000.00

Satisfied

7

21/05/1985

N/A

UNITED ASIAN BANK BHD

MYR 1,350,000.00

Satisfied

8

21/06/1988

N/A

UNITED MALAYAN BANKING CORP LTD

MYR 2,750,000.00

Satisfied

9

16/05/1990

N/A

UNITED MALAYAN BANKING CORPORATION BERHAD

MYR 2,000,000.00

Satisfied

10

14/12/1994

N/A

UNITED MALAYAN BANKING CORPORATION BERHAD

MYR 850,000.00

Satisfied

11

11/06/1995

N/A

UNITED MALAYAN BANKING CORPORATION BERHAD

MYR 1,500,000.00

Satisfied

12

11/06/1995

N/A

UNITED MALAYAN BANKING CORPORATION BERHAD

MYR 1,500,000.00

Satisfied

13

04/11/1995

N/A

BANK OF COMMERCE M BERHAD

MYR 1,200,000.00

Satisfied

14

25/03/1996

N/A

RHB BANK BERHAD

MYR 700,000.00

Satisfied

15

25/03/1996

N/A

RHB BANK BERHAD

MYR 700,000.00

Satisfied

16

07/01/2000

N/A

MALAYAN BANKING BERHAD

MYR 16,700,000.00

Satisfied

17

07/01/2000

FIRST LEGAL CHARGE

MALAYAN BANKING BERHAD

MYR 16,700,000.00

Unsatisfied

18

05/10/2000

FACILITY AGREEMENT AND A LEGAL CHARGE

BUMIPUTRACOMMERCE BANK BERHAD

MYR 1,500,000.00

Satisfied

19

25/02/2008

1ST PARTY 2ND LEGAL CHARGE

MAYBANK ISLAMIC BERHAD

MYR 5,535,000.00

Unsatisfied

 

 

LITIGATION CHECK AGAINST SUBJECT


* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.

No blacklisted record & debt collection case was found in our defaulters' databank.

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

100%

Overseas

:

NO

Percentage

:

0%



The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

20%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

80%

Export Market

:

AUSTRALIA
BRAZIL
SINGAPORE
TAIWAN
JAPAN
NEW ZEALAND
CHINA
EUROPE
UNITED STATES
MIDDLE EAST

Credit Term

:

30 DAYS

Payment Mode

:

ELECTRONIC TRANSFER

Type of Customer

:

DISTRIBUTORS,MANUFACTURING INDUSTRIES

 

 

OPERATIONS

 

Products manufactured

:

RUBBER AND LATEX PRODUCTS

Product Brand Name

:

THR

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

2010


GROUP

N/A

N/A

N/A

N/A

N/A

N/A

COMPANY

300

260

260

260

253

253

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) processing and sales of rubber and latex.

The Subject's products has undergone stringent quality control in every stage of the production process which has resulted in the recognition by the Standard and Industrial Research Institute of Malaysia (SIRIM).

We were informed that the Subject's core product is Standard Malaysia Rubber or SMR.

Besides that the Subject also has a warehouse to keep stocks and materials.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

04-4404955

Match

:

N/A

Address Provided by Client

:

N/A

Current Address

:

SUNGAI DIVISION, U.P. ESTATE, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

Match

:

N/A

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the Subject and she provided some information on the Subject.


FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Decreased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Decreased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

(7.81%)

]

Return on Net Assets

:

Unfavourable

[

(7.28%)

]

The continuous fall in turnover could be due to the lower demand for the Subject's products / services.The Subject incurred losses during the year due to the inefficient control of its operating costs. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

29 Days

]

Debtor Ratio

:

Favourable

[

10 Days

]

Creditors Ratio

:

Favourable

[

0 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Acceptable

[

0.90 Times

]

Current Ratio

:

Unfavourable

[

1.13 Times

]

The Subject's liquid ratio was slightly low. This could indicate that the Subject's working capital was slightly deficient. The Subject will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.

Solvency

Interest Cover

:

Unfavourable

[

(4.28 Times)

]

Gearing Ratio

:

Unfavourable

[

2.27 Times

]

The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.

Overall Assessment :

The Subject's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions. The Subject's liquidity was at an acceptable range. If the Subject is able to obtain further short term financing, it should be able to meet all its short term obligations. The Subject's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : POOR

 

 

 

MALAYSIA ECONOMIC/ INDUSTRY OUTLOOK

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.2

4.0

Unemployment Rate

3.3

3.2

3.0

2.9

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

4.00

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

6.85

-

Business Loans Disbursed( % )

15.3

32.2

-

56.0

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

43,486.6

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

49,144

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

6.1

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

21,753

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

(17.7)

-

Registration of New Business ( No. )

284,598

324,761

329,895

332,723

-

Registration of New Business ( % )

5.0

14.0

2.0

1.0

-

Business Dissolved ( No. )

20,121

20,380

18,161

21,436

-

Business Dissolved ( % )

1.9

1.3

(10.9)

18.0

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

63.2

-

Credit Cards Spending ( % )

15.6

12.6

-

13.5

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-



INDUSTRIES ( % of Growth ):

2011

2012

2013

2014*

2015**

Agriculture

5.8

1.0

2.1

3.8

3.1

Palm Oil

10.8

(0.3)

2.6

6.7

-

Rubber

6.1

(7.9)

(10.1)

(10.4)

-

Forestry & Logging

(7.6)

(4.5)

(7.8)

(4.2)

-

Fishing

2.1

4.3

1.6

2.7

-

Other Agriculture

7.1

6.4

8.2

6.2

-

Industry Non-Performing Loans ( MYR Million )

634.1

-

-

-

-

% of Industry Non-Performing Loans

3.2

-

-

-

-

Mining

(5.4)

1.4

0.9

(0.8)

2.8

Oil & Gas

(1.7)

-

-

3.0

-

Other Mining

-

-

-

46.6

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.4

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

1.4

-

Plastic Products

3.8

-

-

2.7

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

13.0

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index 



INDUSTRY ANALYSIS

 

MSIC CODE

22193 : Rubber remilling and latex processing

INDUSTRY :

NATURAL RUBBER

Malaysia is currently the world's fourth largest producer of Natural Rubber (NR) after Thailand, Indonesia and Vietnam. The output of rubber in year 2015 is expected to reach 800,000 tonnes, up from the forecasted 792,000 tonnes in 2014. However, over the first half in 2014, the rubber sector declined 13.3% due to lower output and prices. Production of natural rubber dropped 13.2% mainly due to the hot weather conditions during the first quarter of the year. Nevertheless, due to the stable prices and improved weather conditions during the second half of 2014, the output of rubber is expected to achieve the estimated production of 792,000 tonnes.

Furthermore, based on the information from Malaysian Rubber Export Promotion Council (MREPC), the production of natural rubber had declined by 10.6% to 826,421 tonnes in year 2013 from 922,798 tonnes in year 2012. Besides, in September 2014, the price of natural rubber has dropped. It was partly due to sluggish demand from China's automobile industry following measures to restrict production of new cars to reduce air pollution and traffic congestion. Hence, rubber price are expected to remain low and average RM5/kg in 2014 (2013: RM7.81/kg). Even so, exports recorded a positive year-on-year growth of 2.6% for the same period.

Over the first six months in the year 2014, Malaysia exported 390,222 tonnes of natural rubber. There were 847,090 tonnes of natural rubber exported by Malaysia in year 2013. China remained the largest markets for Malaysian natural rubber, accounting for more than 40% of Malaysia's total exports of natural rubber. Out of the overall natural rubber exports from Malaysia, 47.6% of natural rubber was exported to China over the first six months of year 2014, and 46.3% in year 2013.

The natural rubber imported by Malaysia was 426,502 tonnes over the first six months. However, Malaysia imported 1,004,805 tonnes of natural rubber in the year of 2013. Additionally, out of the overall natural rubber imports by Malaysia, 216,628 tonnes (50.8%) natural rubber were imported from Thailand over the first six months and 515,283 tonnes (51.3%) in year 2013.

Malaysia remains the world seventh largest consumer of natural rubber (NR) in the year 2013. The other countries in the top ten ranking include China, the USA, Japan, India, Thailand, Brazil, Indonesia, Germany and the Russian Federation. Malaysia's natural rubber consumption over the first six months in year 2014 was 220,570 tonnes. The natural rubber consumption in the year 2013 was 434,192 tonnes and it slightly decreased compare to 441,400 tonnes in 2012.

Prime Minister Datuk Seri Najib Tun Razak, in tabling Budget 2015, said the Malaysian Rubber Board (MRB) would get a RM100 million allocation to implement a price regulation mechanism at the farm level. According to Minister of Plantation Industries and Commodities, the incentives were aimed at reducing the smallholders' economic burden by increasing their revenue amid the volatility in rubber prices. Thus, starting January 1, 2015, rubber smallholders will be eligible for assistance should rubber prices fall below certain levels.

Other than that, according to Deputy Minister of Plantation Industries and Commodities, the Malaysian rubber-based industry is expected to contribute RM52.9 billion to the country's gross national income by 2020 through targets set under the National Key Economic Area. She said that the development of income projection since 10 decades ago has shown that the rubber industry's contribution would continue to be important and relevant for the long-term, and become among the key income sources for Malaysians, particularly the rural folks.

OVERALL INDUSTRY OUTLOOK : Mature



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1969, the Subject is a Private Limited company, focusing on processing and sales of rubber and latex. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term.  The Subject is expected to enjoy a stable market shares. A paid up capital of MYR 5,000,000 allows the Subject to expand its business more comfortably. With a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise.

Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. The Subject is a fairly large and rapidly growing company with over 300 staff in its operations Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

Due to the challenging market conditions, the Subject's business performance seems to be deteriorating and losses incurred. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject managed to maintain an adequate liquidity level, indicating that the Subject has the ability to meet its financial obligations. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. Given a positive net worth standing at MYR 192,888,804, the Subject should be able to maintain its business in the near terms.

We noted that the Subject's supplies are solely sourced from local market. Being highly dependent on a limited number of suppliers could lead to delays, lost of revenue and increased costs if such resources become unavailable or shortage.

The Subject's payment habit is average. With its adequate working capital, the Subject should be able to pay its short term debts.

The industry has reached its optimum level and is generally stable. It is saturated and very competitive. Thus, the Subject's growth prospect is very much depends on its capacity in sustaining its performance in the market.

Based on the above condition, we recommend credit be granted to the Subject normally.

 



PROFIT AND LOSS ACCOUNT

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

TIONG HUAT RUBBER FACTORY SDN BHD

 

Financial Year End

2014-12-31

2013-12-31

2012-12-31

2011-12-31

2010-12-31

Months

12

12

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

GROUP

GROUP

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

1,327,443,250

1,926,227,654

1,947,284,638

2,182,155,060

1,309,285,286

----------------

----------------

----------------

----------------

----------------

Total Turnover

1,327,443,250

1,926,227,654

1,947,284,638

2,182,155,060

1,309,285,286

Costs of Goods Sold

(1,283,035,157)

(1,815,834,981)

-

(2,065,731,311)

(1,213,928,904)

----------------

----------------

----------------

----------------

----------------

Gross Profit

44,408,093

110,392,673

-

116,423,749

95,356,382

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) FROM OPERATIONS

(17,322,343)

52,180,579

71,755,081

78,224,128

70,772,672

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) BEFORE TAXATION

(17,322,343)

52,180,579

71,755,081

78,224,128

70,772,672

Taxation

2,257,855

(12,460,907)

(15,595,482)

(18,667,147)

(17,321,716)

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) AFTER TAXATION

(15,064,488)

39,719,672

56,159,599

59,556,981

53,450,956

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

237,862,278

228,142,606

176,501,757

127,444,776

79,018,820

----------------

----------------

----------------

----------------

----------------

As restated

237,862,278

228,142,606

176,501,757

127,444,776

79,018,820

----------------

----------------

----------------

----------------

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

222,797,790

267,862,278

232,661,356

187,001,757

132,469,776

DIVIDENDS - Ordinary (paid & proposed)

(35,000,000)

(30,000,000)

(4,518,750)

(10,500,000)

(5,025,000)

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

187,797,790

237,862,278

228,142,606

176,501,757

127,444,776

=============

=============

=============

=============

=============

INTEREST EXPENSE (as per notes to P&L)

Others

3,283,579

3,175,395

-

2,891,194

1,434,830

----------------

----------------

----------------

----------------

----------------

3,283,579

3,175,395

-

2,891,194

1,434,830

=============

=============

-

=============

=============

DEPRECIATION (as per notes to P&L)

5,717,975

5,387,793

-

4,673,853

3,700,903

----------------

----------------

----------------

----------------

----------------

5,717,975

5,387,793

-

4,673,853

3,700,903

=============

=============

=============

=============

=============

 

 

 

BALANCE SHEET

 

TIONG HUAT RUBBER FACTORY SDN BHD

 

ASSETS EMPLOYED:

FIXED ASSETS

79,479,509

81,757,638

62,895,863

51,417,203

35,893,729

Investments

53,307,406

307,593

-

307,875

13,650

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

53,307,406

307,593

306,937

307,875

13,650

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM ASSETS

132,786,915

82,065,231

63,202,800

51,725,078

35,907,379

Stocks

104,437,678

280,446,243

-

209,662,680

221,635,764

Trade debtors

35,670,967

131,972,411

-

113,594,470

120,533,559

Other debtors, deposits & prepayments

71,861,047

151,399,655

-

80,200,502

88,110,031

Short term deposits

24,800,000

-

-

-

-

Deposits with financial institutions

-

-

-

28,145,000

-

Amount due from holding company

129,219,837

134,166,681

-

32,748,165

4,340,751

Amount due from related companies

-

-

-

11,120,000

6,272,662

Cash & bank balances

131,655,027

34,165,202

-

67,128,003

40,190,117

Others

13,113,124

2,463,900

-

5,327,148

142,618

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT ASSETS

510,757,680

734,614,092

641,463,912

547,925,968

481,225,502

----------------

----------------

----------------

----------------

----------------

TOTAL ASSET

643,544,595

816,679,323

704,666,712

599,651,046

517,132,881

=============

=============

=============

=============

=============

CURRENT LIABILITIES

Trade creditors

1,618,867

1,471,793

-

2,428,444

3,592,812

Other creditors & accruals

10,510,097

7,701,175

-

3,671,532

10,646,662

Bank overdraft

-

10,437,896

-

-

10,912,673

Bill & acceptances payable

437,038,791

549,828,589

-

410,432,609

353,884,825

Amounts owing to related companies

1,483,736

2,631,378

-

279,590

268,511

Provision for taxation

-

-

-

-

4,816,508

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT LIABILITIES

450,651,491

572,070,831

469,990,692

416,812,175

384,121,991

----------------

----------------

----------------

----------------

----------------

NET CURRENT ASSETS/(LIABILITIES)

60,106,189

162,543,261

171,473,220

131,113,793

97,103,511

----------------

----------------

----------------

----------------

----------------

TOTAL NET ASSETS

192,893,104

244,608,492

234,676,020

182,838,871

133,010,890

=============

=============

=============

=============

=============

SHARE CAPITAL

Ordinary share capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

----------------

----------------

----------------

----------------

----------------

TOTAL SHARE CAPITAL

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

General reserve

91,014

91,014

-

-

-

Retained profit/(loss) carried forward

187,797,790

237,862,278

228,142,606

176,501,757

127,444,776

Others

-

-

91,014

91,014

91,014

----------------

----------------

----------------

----------------

----------------

TOTAL RESERVES

187,888,804

237,953,292

228,233,620

176,592,771

127,535,790

----------------

----------------

----------------

----------------

----------------

SHAREHOLDERS' FUNDS/EQUITY

192,888,804

242,953,292

233,233,620

181,592,771

132,535,790

Deferred taxation

4,300

1,655,200

-

1,246,100

475,100

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM LIABILITIES

4,300

1,655,200

1,442,400

1,246,100

475,100

----------------

----------------

----------------

----------------

----------------

192,893,104

244,608,492

234,676,020

182,838,871

133,010,890

=============

=============

=============

=============

=============

 

 

FINANCIAL RATIO

 

TIONG HUAT RUBBER FACTORY SDN BHD

 

TYPES OF FUNDS

Cash

156,455,027

34,165,202

-

67,128,003

40,190,117

Net Liquid Funds

(280,583,764)

(526,101,283)

-

(343,304,606)

(324,607,381)

Net Liquid Assets

(44,331,489)

(117,902,982)

171,473,220

(78,548,887)

(124,532,253)

Net Current Assets/(Liabilities)

60,106,189

162,543,261

171,473,220

131,113,793

97,103,511

Net Tangible Assets

192,893,104

244,608,492

234,676,020

182,838,871

133,010,890

Net Monetary Assets

(44,335,789)

(119,558,182)

170,030,820

(79,794,987)

(125,007,353)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

(14,038,764)

55,355,974

-

81,115,322

72,207,502

Earnings Before Interest, Taxes, Depreciation And Amortization (EBITDA)

(8,320,789)

60,743,767

-

85,789,175

75,908,405

BALANCE SHEET ITEMS

Total Borrowings

437,038,791

560,266,485

-

410,432,609

364,797,498

Total Liabilities

450,655,791

573,726,031

471,433,092

418,058,275

384,597,091

Total Assets

643,544,595

816,679,323

704,666,712

599,651,046

517,132,881

Net Assets

192,893,104

244,608,492

234,676,020

182,838,871

133,010,890

Net Assets Backing

192,888,804

242,953,292

233,233,620

181,592,771

132,535,790

Shareholders' Funds

192,888,804

242,953,292

233,233,620

181,592,771

132,535,790

Total Share Capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Total Reserves

187,888,804

237,953,292

228,233,620

176,592,771

127,535,790

LIQUIDITY (Times)

Cash Ratio

0.35

0.06

-

0.16

0.10

Liquid Ratio

0.90

0.79

-

0.81

0.68

Current Ratio

1.13

1.28

1.36

1.31

1.25

WORKING CAPITAL CONTROL (Days)

Stock Ratio

29

53

-

35

62

Debtors Ratio

10

25

-

19

34

Creditors Ratio

0

0

-

0

1

SOLVENCY RATIOS (Times)

Gearing Ratio

2.27

2.31

-

2.26

2.75

Liabilities Ratio

2.34

2.36

2.02

2.30

2.90

Times Interest Earned Ratio

(4.28)

17.43

-

28.06

50.32

Assets Backing Ratio

38.58

48.92

46.94

36.57

26.60

PERFORMANCE RATIO (%)

Operating Profit Margin

(1.30)

2.71

3.68

3.58

5.41

Net Profit Margin

(1.13)

2.06

2.88

2.73

4.08

Return On Net Assets

(7.28)

22.63

30.58

44.36

54.29

Return On Capital Employed

(7.28)

21.70

30.58

44.36

50.17

Return On Shareholders' Funds/Equity

(7.81)

16.35

24.08

32.80

40.33

Dividend Pay Out Ratio (Times)

2.32

0.76

0.08

0.18

0.09

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

-

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.65.97

UK Pound

1

Rs.101.19

Euro

1

Rs.73.38

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

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.