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MIRA INFORM REPORT
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Report No. : |
504955 |
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Report Date : |
21.04.2018 |
IDENTIFICATION DETAILS
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Name : |
ZHEJIANG HUAHAI PHARMACEUTICAL CO., LTD. |
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Registered Office : |
Xunqiao, Linhai, Zhejiang Province 317024 PR
China |
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Country : |
China |
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Financials (as on) : |
31.12.2017 |
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Date of Incorporation : |
28.02.2001 |
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Com. Reg. No.: |
91330000147968817N |
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Legal Form : |
Shares Limited Company |
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Line of Business : |
· Subject includes manufacturing drug (range see the People's Republic of China Pharmaceutical Production License); manufacturing pharmaceutical intermediates; import and export business. · Products mainly include: APIs and pharmaceutical intermediates, such as Irbesartan and Hydrochlorothiazide Tablets;. |
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No. of Employees : |
6,065 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A+ |
|
Credit Rating |
Explanation |
Rating Comments |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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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
|
Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
|
China |
A2 |
A2 |
|
Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
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. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout 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 continues to pursue an industrial policy, state support of key sectors, and a restrictive investment regime. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2016 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, China in July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing announced it would allow a resumption of gradual liberalization. From 2013 until early 2015, the renminbi (RMB) appreciated roughly 2% against the dollar, but the exchange rate fell 13% from mid-2015 until end-2016 amid strong capital outflows in part stemming from the August 2015 official devaluation; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi, after the currency was accepted as part of the IMF’s special drawing rights basket. However, since late 2015 the Chinese Government has strengthened capital controls and oversight of overseas investments to better manage the exchange rate and maintain financial stability.
The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) managing its high corporate debt burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (e) dampening speculative investment in the real estate sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (g) raising productivity growth rates through the more efficient allocation of capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the “one-child policy” - which was relaxed in 2016 to permit all families to have two children - 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 urbanization. The Chinese Government is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030.
The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made more progress on subsidizing innovation than rebalancing the economy. Beijing has committed to giving the market a more decisive role in allocating resources, but the Chinese Government’s policies continue to favor state-owned enterprises and emphasize stability. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. 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. Chinese leaders also have undermined some market-oriented reforms by reaffirming the “dominant” role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015.
|
Source
: CIA |
COMPANY NAME AND ADDRESS
|
COMPANY NAME |
Zhejiang Huahai Pharmaceutical Co., Ltd. |
|
CURRENT ADDRESS/ REGISTERED ADDRESS |
Xunqiao, Linhai,
Zhejiang Province 317024 PR China |
|
TEL. NO. |
86 (0)
576-85016569/85010288/85016009/85991096 |
|
FAX NO. |
86 (0)
576-85016010 |
EXECUTIVE SUMMARY
Date of Registration : FEBruary 28, 2001
Unified social credit code : 91330000147968817N
LEGAL FORM : SHARES LIMITED COMPANY
REGISTERED CAPITAL : CNY 1,042,490,332
staff : 6,065
BUSINESS CATEGORY : manufacturing & trading
REVENUE : CNY 5,002,003,000 (Consolidated, As of Dec. 31, 2017)
EQUITIES : CNY 5,054,724,000
(Consolidated, As of Dec. 31, 2017)
WEBSITE : www.huahaipharm.com
E-MAIL : postmaster@huahaipharm.com
PAYMENT : REGULAR
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : fairly good
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : GOOD
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 shares limited company of PRC with State Administration of Industry &
Commerce (SAIC) under Unified Social Credit Code: 91330000147968817N.
SC’s Import and Export Enterprise Code:
3300147968817
SC’s registered capital: cny 1,042,490,332
Registration Change Record:-
|
Date |
Change of Contents |
Before the change |
After the change |
|
-- |
Registered No. |
3300001007639 |
330000000027652 |
|
2012 |
Registered
Capital |
CNY 538,607,000 |
CNY 547,448,000 |
|
2013 |
Registered
Capital |
CNY 547,448,000 |
CNY 775,486,000 |
|
Registered
Capital |
CNY 775,486,000 |
CNY 785,302,271 |
|
|
2014 |
Registered
Capital |
CNY 785,302,271 |
CNY 785,653,271 |
|
2015-9-25 |
Registered
Capital |
CNY 785,653,271 |
CNY 793,137,771 |
|
2015-12-24 |
Registration No./ Unified Social Credit Code |
330000000027652 |
91330000147968817N |
|
2016-11-28 |
Registered
Capital |
CNY 793,137,771 |
cny 1,031,079,103 |
|
2016-12-29 |
Registered
Capital |
cny 1,031,079,103 |
cny 1,043,049,722 |
|
2017-9-4 |
Registered
Capital |
cny 1,043,049,722 |
cny 1,042,560,402 |
|
2018-2-23 |
Registered
Capital |
cny 1,042,560,402 |
cny 1,042,490,332 |
Current Co search indicates SC’s shareholders & chief executives are
as follows:-
|
Name of Shareholder (s) (As of December 31, 2017) |
% of Shareholding |
|
Chen Baohua |
26.47 |
|
Zhou
Minghua |
19.36 |
|
Norges
Bank-Own Assets |
1.49 |
|
Central Huijin Asset Management Ltd. |
1.47 |
|
Weng Zhenyu |
1.36 |
|
National Council
for Social Security Fund Combination 114 |
1.26 |
|
Zhejiang
Huahai Pharmaceutical Co., Ltd.-Y2015 The Employee Stock Ownership Plan |
1.15 |
|
Taikang
Life Insurance Co., Ltd.-Toulian-Venture Power |
1.07 |
|
Haitong Asset Management-Minsheng-Haitong
Haihui Series-Xingshi No. 1 Collection Asset Management Plan |
1.05 |
|
Hong Kong
Securities Clearing Company Limited |
0.93 |
|
Other Shareholders |
44.39 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal
Representative, Chairman and General Manager |
Chen Baohua |
|
Vice
Chairman and Director |
Du Jun |
|
Director |
Shan Weiguang |
|
Zhu Yonghua |
|
|
Su Yan |
|
|
Guo Sijia |
RECENT DEVELOPMENT
SC is a listed company in Shanghai Stock Exchange Market with the code
of 600521.
SHAREHOLDER CHART & BACKGROUND
Name %
of Shareholding
(As of December
31, 2017)
-----------------------------------
Chen Baohua 26.47
Zhou Minghua 19.36
Norges Bank-Own Assets 1.49
Central Huijin Asset Management Ltd. 1.47
Weng Zhenyu 1.36
National Council for Social Security Fund
Combination 114 1.26
Zhejiang Huahai Pharmaceutical Co.,
Ltd.-Y2015 The Employee Stock
Ownership Plan 1.15
Taikang Life Insurance Co.,
Ltd.-Toulian-Venture Power 1.07
Haitong Asset Management-Minsheng-Haitong
Haihui Series-Xingshi
No. 1 Collection Asset Management Plan 1.05
Hong Kong Securities Clearing Company
Limited 0.93
Other Shareholders 44.39
Central Huijin Asset Management Ltd.
----------------------------------------------
Unified Social Credit Code:
91110101MA001QTAX2
Legal Form: Sole State-owned Enterprise
Registered Capital: CNY 5,000,000,000
Legal Representative: Zhang Hongan
MANAGEMENT
Chen Baohua, Legal
Representative, Chairman and General Manager
-----------------------------------------------------------------------------------------------------
Ø
Gender: M
Ø
Age: 56
Ø Qualification: Senior
Engineer
Ø Working experience
(s):
At present, working in SC as legal
representative, chairman and general manager;
Du Jun, Vice
Chairman and Director
----------------------------------------------------------
Ø
Gender: M
Ø
Age: 62
Ø Qualification:
University
Ø Working experience
(s):
At present, working in SC as vice chairman
and director
Director
-----------
Shan Weiguang
Zhu Yonghua
Su Yan
Guo Sijia
BUSINESS OPERATION
SC’s registered business scope includes manufacturing drug (range see
the People's Republic of China Pharmaceutical Production License);
manufacturing pharmaceutical intermediates; import and export business.
SC is mainly
engaged in manufacturing and selling APIs (Active Pharmaceutical Ingredients)
and pharmaceutical intermediates.
SC’s products mainly include: APIs and
pharmaceutical intermediates, such as Irbesartan and Hydrochlorothiazide
Tablets, etc.
SC sources its
materials 50% from domestic market, and 50% from overseas market. SC sells 20%
of its products in domestic market, mainly Zhejiang province, and 80% to
overseas market.
The buying terms of SC include Check, T/T, L/C 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:
=============
Shanghai MSD Pharmaceutical Trading Co.,
Ltd.
Par Pharmaceutical Inc.
Merck Sharp & Dohme Asia Pacific
Services Pte Ltd.
*Major suppliers:
============
Lupin Limited
Shanghai Kingsun Pharma & Tech. Co., Ltd.
Rexam HealthCare Packaging
USV Limited
Staff & Office:
--------------------------
SC is known
to have approx. 6,065 staff
at present.
SC owns an area as
its operating office & factory of approx. 1,200,000 sq. meters at the
heading address.
RELATED COMPANY
SC is known to
have the following subsidiaries at present, as follows:
n
Linhai Huanan Chemical Co., Ltd.
n
Zhejiang Huahai Medical Sale Co., Ltd.
n
Zhejiang Huahai Import & Export Co., Ltd.
n
Shanghai Aobo Bio-pharmaceutical Tech. Co., Ltd.
n
Shanghai Shuanghua Biological Medicine Technology Development Co., Ltd.
n
Shanghai SynCores Technologies, Inc.
n
Zhejiang Huahai Yintong Real Estate Co., Ltd.
n
Linhai Huahai Pharmaceutical Equipment Co., Ltd.
Etc.
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’s suppliers
declined to make any comments.
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:
Industrial and Commercial Bank of China Linhai Sub-branch
AC#:
1207021109045000869
FINANCIALS
Consolidated Balance Sheet
|
Unit: CNY’000 |
As of Dec. 31, 2015 |
As of Dec. 31, 2016 |
As of Dec. 31, 2017 |
|
601,721 |
791,588 |
691,323 |
|
|
Trading financial
assets |
0 |
0 |
0 |
|
Accounts receivable |
1,037,164 |
1,280,917 |
1,604,229 |
|
Notes receivable |
41,758 |
25,897 |
52,846 |
|
Advances to suppliers |
39,708 |
35,705 |
76,409 |
|
Interest receivable |
0 |
0 |
0 |
|
Other receivable |
12,850 |
15,181 |
9,150 |
|
Inventory |
1,077,348 |
1,330,231 |
1,593,835 |
|
Non-current assets within one year |
0 |
0 |
0 |
|
Other current assets |
21,028 |
31,835 |
44,403 |
|
|
------------------ |
------------------ |
------------------ |
|
Current assets |
2,831,577 |
3,511,354 |
4,072,195 |
|
Financial assets available for sale |
0 |
21,311 |
30,919 |
|
Long-term investment |
0 |
0 |
334,817 |
|
Investment real estate |
0 |
0 |
1,196 |
|
Fixed assets |
1,600,229 |
1,865,228 |
2,233,371 |
|
Construction in progress |
492,179 |
695,880 |
704,913 |
|
Project materials |
1,677 |
0 |
0 |
|
Fixed assets in liquidation |
8,140 |
0 |
0 |
|
Intangible assets |
393,310 |
430,637 |
562,083 |
|
Development expenditure |
0 |
52,339 |
142,308 |
|
Goodwill |
70,902 |
70,902 |
70,902 |
|
Long-term deferred expense |
0 |
0 |
2,875 |
|
Deferred income tax assets |
53,798 |
78,733 |
99,666 |
|
Other non-current assets |
63,684 |
0 |
11,582 |
|
|
------------------ |
------------------ |
------------------ |
|
Total assets |
5,515,496 |
6,726,384 |
8,266,827 |
|
|
============= |
============= |
============= |
|
Short-term loans |
837,776 |
462,351 |
1,059,778 |
|
Notes payable |
225,520 |
397,119 |
369,572 |
|
Accounts payable |
351,340 |
363,312 |
389,843 |
|
Payroll payable |
86,875 |
107,683 |
130,651 |
|
Taxes payable |
96,889 |
91,578 |
197,057 |
|
Interest payable |
1,241 |
1,049 |
3,229 |
|
Advances from clients |
10,067 |
18,607 |
24,755 |
|
Other payable |
48,255 |
44,782 |
130,638 |
|
Other current liabilities |
24,514 |
27,262 |
529,566 |
|
|
------------------ |
------------------ |
------------------ |
|
Current liabilities |
1,682,477 |
1,513,743 |
2,835,089 |
|
Non-current liabilities |
112,665 |
634,809 |
377,014 |
|
|
------------------ |
------------------ |
------------------ |
|
Total liabilities |
1,795,142 |
2,148,552 |
3,212,103 |
|
Equities |
3,720,354 |
4,577,832 |
5,054,724 |
|
|
------------------ |
------------------ |
------------------ |
|
Total liabilities & equities |
5,515,496 |
6,726,384 |
8,266,827 |
|
|
============= |
============= |
============= |
Consolidated Income Statement
|
Unit: CNY’000 |
As of Dec.
31, 2015 |
As of Dec.
31, 2016 |
As of Dec.
31, 2017 |
|
Revenue |
3,500,362 |
4,092,853 |
5,002,003 |
|
Cost of
sales |
1,777,490 |
2,052,665 |
2,202,668 |
|
Business
Taxes and Surcharges |
27,513 |
40,340 |
61,084 |
|
Sales expense |
448,118 |
614,718 |
904,650 |
|
Management expense |
714,171 |
859,527 |
999,942 |
|
Finance expense |
-5,818 |
-8,026 |
110,331 |
|
Asset impairment loss |
48,981 |
26,222 |
-7,771 |
|
Investment income |
1,598 |
491 |
-2,425 |
|
Non-operating income |
41,514 |
69,884 |
860 |
|
Non-operating expense |
10,824 |
10,816 |
12,793 |
|
Profit before tax |
523,790 |
567,066 |
779,247 |
|
Less: profit tax |
87,069 |
110,167 |
155,659 |
|
436,721 |
456,899 |
623,588 |
Important Ratios
=============
|
|
As of Dec.
31, 2015 |
As of Dec.
31, 2016 |
As of Dec.
31, 2017 |
|
*Current ratio |
1.68 |
2.32 |
1.44 |
|
*Quick ratio |
1.04 |
1.44 |
0.87 |
|
*Liabilities to assets |
0.33 |
0.32 |
0.39 |
|
*Net profit margin (%) |
12.48 |
11.16 |
12.47 |
|
*Return on total assets (%) |
7.92 |
6.79 |
7.54 |
|
*Inventory / Revenue ×365 |
113 days |
119 days |
117 days |
|
*Accounts receivable / Revenue ×365 |
109 days |
115 days |
118 days |
|
*Revenue / Total assets |
0.63 |
0.61 |
0.61 |
|
*Cost of sales / Revenue |
0.51 |
0.50 |
0.44 |
FINANCIAL COMMENTS
PROFITABILITY:
FAIRLY GOOD
l The revenue of SC
appears fairly good in its line.
l SC’s net profit
margin is fairly good.
l SC’s return on
total assets is fairly good.
l
SC’s cost of goods sold is low, comparing with its
revenue.
LIQUIDITY: FAIR
l
The current ratio of SC is maintained in a normal
level.
l
SC’s quick ratio is maintained in a normal level.
l
The inventory of SC appears large.
l
The accounts receivable of SC appears large.
l
The short-term loans of SC appear large.
l
SC’s revenue is in a fair level, comparing with the
size of its total assets.
LEVERAGE: FAIRLY
GOOD
l
The debt ratio of SC is low.
l
The risk for SC to go bankrupt is low.
Overall financial
condition of the SC: Fairly Good.
CONCLUSIONS
SC is considered large-sized in its line with fairly good financial
conditions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
INR 66.02 |
|
|
1 |
INR 92.73 |
|
Euro |
1 |
INR 81.46 |
|
CNY |
1 |
INR 10.52 |
Note:
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
NIS |
|
|
|
|
Report Prepared
by : |
NIT |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
|
A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
|
B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
|
C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
|
D |
High Risk |
Business dealing not recommended or on
secured terms only |
|
NB |
New Business |
No recommendation can be done due to
business in infancy stage |
|
NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.