MIRA INFORM REPORT

Report No. :	505730
Report Date :	30.04.2018

IDENTIFICATION DETAILS

Name :	YEN SHENG FACTORY LIMITED
Registered Office :	Unit 2102-2103, 21/F., Yen Sheng Centre, 64 Hoi Yuen Road, Kwun Tong, Kowloon
Country :	Hong Kong
Date of Incorporation :	1956
Com. Reg. No.:	01562954
Legal Form :	Private Limited Company
Line of Business :	Subject is engaged in Manufacturer; Exporter and Importer of Leather, PVC and fabric handbags, wallets, travelling bags and leather garments.
No. of Employees :	100

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

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

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
Hong Kong	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

HONG KONG - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of reexports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.

Excess liquidity, low interest rates and a tight housing supply have caused Hong Kong property prices to rise rapidly. The lower and middle-income segments of the population increasingly find housing unaffordable.

Hong Kong's open economy has left it exposed to the global economic situation. Its continued reliance on foreign trade and investment makes it vulnerable to renewed global financial market volatility or a slowdown in the global economy.

The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory surged from 4.5 million in 2001 to 47.3 million in 2014, outnumbering visitors from all other countries combined. After peaking in 2014, overall tourist arrivals dropped 2.5% in 2015 and 4.5% in 2016. The tourism sector rebounded in 2017, with visitor arrivals rising 3.2% to 58.47 million. Travelers from Mainland China totaled 44.45 million, accounting for 76% of the total.

The Hong Kong Government is promoting the Special Administrative Region (SAR) as the preferred business hub for renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts, RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong, RMB trade settlement is allowed, and investment schemes such as the Renminbi Qualified Foreign Institutional Investor (RQFII) Program was first launched in Hong Kong. Offshore RMB activities experienced a setback, however, after the People’s Bank of China changed the way it set the central parity rate in August 2015. RMB deposits in Hong Kong fell from 1.0 trillion RMB at the end of 2014 to 559 billion RMB at the end of 2017, while RMB trade settlement handled by banks in Hong Kong also shrank from 6.8 trillion RMB in 2015 to 3.9 trillion RMB in 2017.

Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2015, mainland Chinese companies constituted about 50% of the firms listed on the Hong Kong Stock Exchange and accounted for about 66% of the exchange's market capitalization.

During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. In 2014, Hong Kong and China signed a new agreement on achieving basic liberalization of trade in services in Guangdong Province under the Closer Economic Partnership Agreement (CEPA), adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, which took effect in March 2015, cover a negative list and a most-favored treatment provision. On the basis of the Guangdong Agreement, the Agreement on Trade in Services signed in November 2015 further enhanced liberalization, including extending the implementation of the majority of Guangdong pilot liberalization measures to the whole Mainland, reducing the restrictive measures in the negative list, and adding measures in the positive lists for cross-border services as well as cultural and telecommunications services. In June 2017, the Investment Agreement and the Agreement on Economic and Technical Cooperation (Ecotech Agreement) were signed under the framework of CEPA.

Hong Kong’s economic integration with the mainland continues to be most evident in the banking and finance sector. Initiatives like the Hong Kong-Shanghai Stock Connect, the Hong Kong- Shenzhen Stock Connect the Mutual Recognition of Funds, and the Bond Connect scheme are all important steps towards opening up the Mainland’s capital markets and have reinforced Hong Kong’s role as China’s leading offshore RMB market. Additional connect schemes such as ETF Connect (for exchange-traded fund products) are also under exploration by Hong Kong authorities. In 2017, Chief Executive Carrie LAM announced plans to increase government spending on research and development, education, and technological innovation with the aim of spurring continued economic growth through greater sector diversification.

Source : CIA

Company name and address

YEN SHENG FACTORY LIMITED

Address: Unit 2102-2103, 21/F., Yen Sheng Centre,

64 Hoi Yuen Road,

Kwun Tong, Kowloon,

Hong Kong.

Company name

YEN SHENG FACTORY LIMITED

ADDRESS : Unit 2102-2103, 21/F., Yen Sheng Centre, 64 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong.

PHONE: 852-2343 8261

FAX: 852-2341 9641, 2341 9772

E-MAIL: irisyau@yen-sheng.com

MANAGEMENT

Managing Director & Chief Executive Officer: Mr. Yau Tai Nin, Sonny

SUMMARY

Started in : 1956.

Incorporated on : 27th August, 1963.

Organization : Private Limited Company.

Issued Share Capital : HK$1,485,000.00

Business Category : Handbag Manufacturer and Exporter.

Employees : 100. (Hong Kong & China) (as at 31-12-2017)

Main Dealing Banker : Hang Seng Bank Ltd., Hong Kong.

Banking Relation: Good.

COMPANY NAME AND ADDRESS

YEN SHENG FACTORY LIMITED

ADDRESS:

Registered Head Office:-

Unit 2102-2103, 21/F., Yen Sheng Centre, 64 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong.

China Factories:-

Yuen Heng Leather Goods Manufacturing Co. Ltd.

Yuen Xing Leather Products Factory

Dayuan Garden Industrial Village, Shixia, Dalang Town, Dongguan City, Guangdong Province, China.

[Tel: (86-769) 8331 2003; Fax: (86-769) 8331 8410]

China Joint Venture:-

Shanghai Huitaofang Commercial & Trading Co. Ltd., China.

Holding Company:-

Lee Sang Investment Co. Ltd., Hong Kong.

Associated Companies:-

Atbest Investments Ltd., Hong Kong.

Dognguan Yuanheng Leather Goods Co. Ltd., China.

Dongguan Taiheng Handbags Co. Ltd., China.

Ever Credit Consumer Corporation Ltd., Hong Kong. [Dissolved]

Glee Path Trading Ltd., Hong Kong.

Highcliff Co. Ltd., Hong Kong.

Hong Kong Hua Ying Co. Ltd., Hong Kong.

Macia Co. Ltd., Hong Kong.

Qitai Leather Goods (Meizhou) Co. Ltd., China.

Senate Trading Co. Ltd., Hong Kong.

Sino Supreme (Shanghai) Co. Ltd., China.

Sling Group Holdings Ltd., Cayman Islands/Hong Kong.

Tai Heng Factory Ltd., Hong Kong.

Unigrade International Ltd., Hong Kong.

Yen Hing Factory Ltd., Hong Kong.

Yen Sheng International Ltd., Hong Kong.

Yen Sheng Investment Ltd., British Virgin Islands

YS Manufacturing (Cambodia) Ltd., Cambodia.

etc.

BUSINESS REGISTRATION NUMBER: 01562954

COMPANY FILE NUMBER: 0009188

MANAGEMENT

Managing Director & Chief Executive Officer: Mr. Yau Tai Nin, Sonny

Director & Manager: Mr. Yau Tai Leung, Sammy

ISSUED SHARE CAPITAL: HK$1,485,000.00 (14,850 fully paid ordinary shares)

SHAREHOLDERS

(As per registry dated 27-08-2017)

Name		No. of shares
Lee Sang Investment Co. Ltd., Hong Kong.		9,000
Atbest Investments Ltd., Hong Kong.		2,700
YAU Tai Nin, Sonny [Son]		1,575
YAU Tai Leung, Sammy [Son]		1,575
		––––––
	Total:	14,850 =====

DIRECTORS

(As per registry dated 27-08-2017)

Name (Nationality)	Address
YAU Tai Nin, Sonny (Chinese)	Flat A, 12/F., Fortuna Court, 25 Repulse Bay Road, Hong Kong.
YAU Tai Leung, Sammy (Chinese)	House No. 40, 38-48 Horizon Drive, Chung Hom Kok, Hong Kong.
YAU Heng Chung, Frederick	Flat B, 15/F., Celestial Garden, 5 Repulse Bay Road, Hong Kong.

SECRETARY

(As per registry dated 27-08-2017)

Name	Address	Co. No.
Rocky Shek Secretarial Ltd.	Room 901, 9/F., Yip Fung Building, 2-12 D’Aguilar Street, Central, Hong Kong.	0105477

HISTORY

The subject was first established in 1956 and incorporated on 27th August, 1963 as a private limited liability company under the Hong Kong Companies Ordinance.

It was originally registered under the name of Yen Seng Plastic & Rattan Factory Ltd. but changed to the present style on 31st January, 1975.

The subject moved from 3/F., Yen Sheng Building, 64 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong to Units 903-904, 9/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong in March 1993, and further to 27/F., Yen Sheng Centre, 64 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong with effect from 29th September, 1997.

The subject moved to the present address in May 2012.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities : Manufacturer; Exporter and Importer.

Lines : Leather, PVC and fabric handbags, wallets, travelling bags and leather garments.

Brand Names : JCPENNEY, LIZ CLAIBORNE and NINE WEST.

Employees : 100. (Hong Kong & China)

Raw Materials : Mainly imported from Taiwan, Japan, U.S.A., South Korea, South America, China and India.

Markets : US (main), Europe, Australia, Asian countries, etc.

Terms/Sales : L/C, T/T, etc.

Terms/Buying : L/C or as per contracted.

MAIN JAPANESE SUPPLIERS

Hakuryu & Co. Ltd., Japan.

Leo Corporation, Japan.

S.Y. Enterprises Corporation, Japan.

MEMBERSHIP: Federation of Hong Kong Industries, Hong Kong.

The Hong Kong General Chamber of Commerce, Hong Kong.
[Membership No. HKY0053]

FINANCIAL INFORMATION

Issued Share Capital : HK$1,485,000.00 (14,850 fully paid ordinary shares)

Mortgage or Charge : (See attachment)

Profit or Loss : Made profits in the past years.

Condition : Business is active and satisfactory.

Facilities : Making active use of general banking facilities.

Payment : Good.

Commercial Morality : Satisfactory.

Bankers:-

Hang Seng Bank Ltd., Hong Kong.

BNP Paribas, Hong Kong Branch.

Bank of China (Hong Kong) Ltd., Hong Kong.

The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking:-

One source reports subject maintains a properly and an active and a well-conducted current account opened in May 1969. Banking facilities have been granted to them with partial security. They have financed their imports and exports with satisfactory result.

Another source informs it maintains a current account opened in their books in December 1972. The account has been very active and properly conducted. They grant them a substantial line of secured banking facilities and handle a substantial volume of their export and import bills with favourable results.

Standing: Very Good.

GENERAL

The predecessor of Yen Sheng Factory Ltd. was established in 1956 under the name of Yen Sheng Factory. The founder of the company Mr. Chiu Chi Chieng is deceased now. Yen Sheng Factory Ltd. was incorporated in August 1963 and jointly owned by the Yau family and two holding companies located at the subject’s operating address.

The subject is engaged in manufacturing handbags, leather bags, luggage bags, wallets, backpacks, PVC bags, other leather goods. Some of its products bears the following brand names: “JCPENNEY”, “LIZ CLAIBORNE” and “NINE WEST”.

The subject has got factories in Dongguan City, Guangdong Province, China. Employing about 800 persons in total, the factories are known as Yen Heng Leather Good Manufacturing Ltd. and Yuen Xing Leather Products Factory. Both companies are engaged in manufacturing handbags and luggage bags, etc.

Most of the products, about 80%, are exported to the United States. Other markets are Europe (such as the United Kingdom, Italy, etc.), South America and Australia.

The subject is responsible for products marketing and shipping, and supplying its affiliated factories in China with raw materials which are mainly imported from Europe. It has got the ISO 9001 certification.

The subject and other investors set up a joint venture in Shanghai, China known as Shanghai Huitaofang Commercial & Trading Co. Ltd. [Huitaofang] in 1999. This firm is engaged in importing, wholesaling and retailing garments, cosmetics, handbags, etc. Brand names carried include “ELLE Paris”, “ELLE Sport”, “Marissa”, “Sisley”, etc. Huitaofang’s head office is in Shanghai with branch offices set up in Beijing, Chongqing, Wuxi, etc.

In 1999, the subject and the other investors set up a joint venture known as Sino Supreme (Shanghai) Co. Ltd. which is in Shanghai, China. Sino Supreme is trading in ladies’ high-end products such as fashion handbags and accessories in China. Headquartered in Shanghai, this company has set up retailing and distributing centres in more than forty cities in China such as in Beijing, Shanghai, Hangzhou, Chengdu, Chongqing, etc. Overall business is active.

The Yau family also owns Lee Sang Investment Co. Ltd. which is a properties holder in Hong Kong.

Besides, it is worthwhile to note that the Yau family has set up a company known as Sling Group Holdings Ltd. [SGH] which was registered in the Cayman Islands. This company was listed on the Growth Enterprise Market [GEM] of the Stock Exchange of Hong Kong on 16th January, 2018.

For the year ended 31st December, 2017, the revenue of SGH amounted to RMB209.0 million Yuan (2016: RMB210.5 million Yuan), profit for the year was RMB3.8 million Yuan (2016: RMB6.3 million Yuan).

On the whole, having a history of over 54 years in Hong Kong, the subject is considered good for normal business engagements.
MORTGAGE OR CHARGE

Date	Description of Instrument	Mortgagee
29-02-2012	Assignment of Insurance Policy	Hang Seng Bank Ltd., Hong Kong.
08-03-2012	Charge Over Securities (2-Party)	Hang Seng Bank Ltd., Hong Kong.
27-06-2013	Charge Over Deposits/Securities (2-Parties)	Hang Seng Bank Ltd., Hong Kong.
16-12-2016	Deed of Indemnity, Charge Over Deposit and Set-Off	Bank of China (Hong Kong) Ltd., Hong Kong.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 66.78
UK Pound	1	INR 92.89
Euro	1	INR 80.74
HKD	1	INR 8.47

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	PRA
Report Prepared by :	DNS

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)

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.