MIRA INFORM REPORT

Report No. :	506585
Report Date :	03.05.2018

IDENTIFICATION DETAILS

Name :	YIEH HSING ENTERPRISE CO., LTD
Registered Office :	No.369, Baomi Rd., Baimi Village, Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)
Country :	Taiwan
Financials (as on) :	31.12.2017
Date of Incorporation :	18.07.1978
Com. Reg. No.:	75992214
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and sale of stainless steel wire rods, etc
No. of Employees :	Not available

RATING & COMMENTS

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

MIRA’s Rating :

B

Credit Rating	Explanation	Rating Comments
B	Medium Risk	Business dealings permissible on a regular monitoring basis

Status :	Moderate
Payment Behaviour :	Slow
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)
Taiwan	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

TAIWAN - ECONOMIC OVERVIEW

Taiwan has a dynamic capitalist economy that is driven largely by industrial manufacturing, and especially exports of electronics, machinery, and petrochemicals. This heavy dependence on exports exposes the economy to fluctuations in global demand. Taiwan's diplomatic isolation, low birth rate, rapidly aging population, and increasing competition from China and other Asia Pacific markets are other major long-term challenges.

Following the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010, Taiwan in July 2013 signed a free trade deal with New Zealand - Taipei’s first-ever with a country with which it does not maintain diplomatic relations - and, in November of that year, inked a trade pact with Singapore. However, follow-on components of the ECFA, including a signed agreement on trade in services and negotiations on trade in goods and dispute resolution, have stalled. In early 2014, the government bowed to public demand and proposed a new law governing the oversight of cross-Strait agreements, before any additional deals with China are implemented; the legislature has yet to vote on such legislation, leaving the future of ECFA uncertain. President TSAI since taking office in May 2016 has promoted greater economic integration with South and Southeast Asia through the New Southbound Policy initiative and has also expressed interest in Taiwan joining the Trans-Pacific Partnership as well as bilateral trade deals with partners such as the US. These overtures have likely played a role in increasing Taiwan’s total exports, which rose 11% during the first half of 2017, buoyed by strong demand for semiconductors.

Taiwan's total fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 expected to account for nearly 20% of the island's total population by 2025.

The island runs a trade surplus with many economies, including China and the US, and its foreign reserves are the world's fifth largest, behind those of China, Japan, Saudi Arabia, and Switzerland. In 2006, China overtook the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taiwan since 2009 has gradually loosened rules governing Chinese investment and has also secured greater market access for its investors on the mainland. In August 2012, the Taiwan Central Bank signed a memorandum of understanding (MOU) on cross-Strait currency settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese renminbi (RMB) and the New Taiwan dollar across the Strait, which has helped Taiwan develop into a local RMB hub.

Closer economic links with the mainland bring opportunities for Taiwan’s economy but also pose challenges as political differences remain unresolved and China’s economic growth is slowing. President TSAI’s administration has made little progress on the domestic economic issues that loomed large when she was elected, including concerns about stagnant wages, high housing prices, youth unemployment, job security, and financial security in retirement. TSAI has made more progress on boosting trade with South and Southeast Asia, however, which may help insulate Taiwan’s economy from a fall in mainland demand should China’s growth slow in 2018.

Source : CIA

Company summery

Company Name:	Yieh Hsing Enterprise Co., Ltd.
Trading Address:	No.369, Baomi Rd., Baimi Village, Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)
Telephone Number:	+886-7-611-1111
Fax Number:	+886-7-625-9887
E-mail:	sales-yh@yheco.com.tw

Notes: The exact name and address are as above.

Company Identification Details

Registered Name:	Yieh Hsing Enterprise Co., Ltd.
Registered Address:	No.369, Baomi Rd., Baimi Village, Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)
Date of Foundation:	1978-7-18
Registration Number:	75992214
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 12,000,000,000 (USD 408,000,000)
Paid-up Capital:	NTD 5,306,516,130 (USD 180,421,548.42)
Legal Representatives:	Linmao Wu
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sale of stainless steel wire rods.
Staff:	N/A
Date of Last Annual Return:	2017-10-5

Note: Subject declined to disclose the number of staff, and from other source we cannot obtain the information, either.

History

Subject was incorporated on 1978-7-18 with registered number 75992214 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 1988-10-4.

Corporate Structure

Factories

1
Name:	Steel Rolling Factory
Address:	No.369, Baomi Rd., Baimi Village, Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)
Date of Foundation:	1990-5-19
Date of Registration:	1992-3-5
Factory Registration Number:	99661429
Factory Manager:	Linmao Wu
Status:	In Production
Date of Last Annual Return:	2009-1-15
Major Products:	259 Other metal products
2
Name:	Suantui Factory
Address:	No.379-1, Baomi Rd., Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)
Date of Foundation:	1990-12-31
Date of Registration:	1990-12-31
Factory Registration Number:	99661430
Factory Manager:	Linmao Wu
Status:	In Production
Date of Last Annual Return:	2009-1-15
Major Products:	259 Other metal products
3
Name:	Wire Rod Factory
Address:	No.4-5, Yongxiang Rd., Donghai Village, Fangliao Xiang, Pingdong County, Taiwan
Date of Foundation:	1997-5-14
Date of Registration:	1997-11-21
Factory Registration Number:	99665558
Factory Manager:	Linmao Wu
Status:	In Production
Date of Last Annual Return:	2016-5-24
Major Products:	241 Steel
4
Name:	Stainless Steel Tube Factory
Address:	No.4-3, Yongxiang Rd., Donghai Village, Fangliao Xiang, Pingdong County, Taiwan
Date of Foundation:	1997-5-14
Date of Registration:	1997-11-21
Factory Registration Number:	99665559
Factory Manager:	Linmao Wu
Status:	In Production
Date of Last Annual Return:	2009-1-19
Major Products:	241 Steel

Shareholders

Major Shareholders

Name	Subscription Shares
Yieh Phui Enterprise Co., Ltd.
299,458,386
Xinglong Investment & Development Co., Ltd (Literal Translation)	2,788,385

Shareholders Information:

1
Registered Name:	Yieh Phui Enterprise Co., Ltd.
Registered Address:	No.369, Yuliao Rd., Qiaotou Dist., Kaohsiung, Taiwan
Date of Foundation:	1978-4-14
Registration Number:	75947936
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 20,000,000,000
Paid-up Capital:	NTD 18,211,760,110
Legal Representatives:	Yishou Lin
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2017-9-26
2
Registered Name:	Xinglong Investment & Development Co., Ltd (Literal Translation)
Registered Address:	3/F, No.9, Sec.1, Xuecheng Rd., Dashu Dist., Kaohsiung, Taiwan
Date of Foundation:	1987-3-12
Registration Number:	22420929
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 2,969,440,000
Paid-up Capital:	NTD 2,969,440,000
Legal Representatives:	Yishou Lin
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2017-8-25

Management Information

Core Management

Directors

1
Name		Linmao Wu
Position		Chairman of the Board
2
Name	Senlong Chen
Position		Director & Manager
Date of Appointment for Manager		2016-10-5
3
Name	Yishou Lin
Position		Director
4
Name	Yongxian Chen
Position		Director
5
Name	Tianji Zhang
Position		Director
6
Name	Jinshu Sun
Position		Independent Director
7
Name	Wenyi Zhang
Position		Independent Director
8
Name	Jingcong Huang
Position		Supervisor
9
Name	Hexing Lai
Position		Supervisor

Operation Information

Offices & Factories

	Headquarters
Add	No.369, Baomi Rd., Baimi Village, Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)

Production Information

l Subject is engaged in manufacturing of stainless steel wire rods, etc.

l Subject has factories in Taiwan for production.

l Subject obtained the certification of ISO 9002.

l

Purchase Information

l The registered activities of subject:

Business Code	Details
-	Surface treatment, manufacturing, wholesale, retail of stainless steel wire, carbon steel wire, free-cutting-steel wire, alloy steel wire, iron tube, stainless steel tube, machine part, steel belt, etc.
-	Manufacturing and trading of parts of haulage motor and bicycle, hardware parts, etc.
-	Leasing and sale of commercial building and residential building
-	Designing, processing and sale of iron plate, steel frame
-	Designing, manufacturing, processing and sale of machinery
-	Manufacturing, processing and sale of galvanized iron sheet, cold pressed steel plate, etc.
-	Manufacturing, processing and sale of rolled steel, structural steel, steel wire, iron wire, etc.
-	Farm, livestock farm operating
-	Manufacturing, processing and sale of raw materials of pulp and related products
-	Designing, manufacturing, installation of whole plant machinery equipment, pipeline, ventilation installation, flue, fire control systems, annealing furnace, heating furnace, conveyor, crane of steelworks, power plant, etc.
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

l The raw materials for production are purchased both at home and abroad.

l It is introduced that Yieh United Steel Corp. is one of subject’s suppliers.

Sales Information

l Subject is engaged in sale of stainless steel wire rods, etc.

l The major products include stainless steel wire rods, stainless steel wire rods for welding, alloy steel wire rods, free-cutting steel wire rods, carbon steel wire rods and so on.

l Subject’s sales regions are domestic market, Southeast Asia, Northeast Asia, America, Europe, etc.

l It is introduced that subject’s customers include Macsteel International USA Corp., Ryerson Canada Inc., etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

1. Domestic Purchase

Products	Raw materials, etc.
Payment Terms	T/T, Cash, etc.

2. Import

Products	Raw materials, etc.
Payment Terms	L/C, T/T, etc.

Sales

1. Domestic Markets

Product	Stainless steel wire rods, etc.
Selling Terms	T/T, Cash, etc.

2. Export

Product	Stainless steel wire rods, etc.
Selling Terms	L/C, T/T, etc.

Financials

Balance Sheet

Unit: NTD/000

Consolidated	2017-12-31	2016-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	283,510	492,625
Current financial assets at fair value through profit or loss
Total current financial assets at fair value through profit or loss	15,900	10,588
Notes receivable, net
Notes receivable, net	7	7
Accounts receivable, net
Accounts receivable, net	354,844	181,272
Other receivables
Other receivables, net	27,377	22,467
Other receivables due from related parties
Other receivables due from related parties, net	45,645	78,358
Current tax assets
Total current tax assets	56	164
Inventories
Total inventories	1,527,177	908,206
Prepayments
Total prepayments	345,859	171,619
Other current assets
Other current financial assets	351,652	244,285
Total other current assets	351,652	244,285
Total current assets	2,952,027	2,109,591
Non-current assets
Non-current financial assets at cost
Non-current financial assets at cost, net	1,650	1,650
Non-current bond investment without active market
Total Non-current investments in debt instrument without active market	94,987	35,650
Investments accounted for using equity method
Investments accounted for using equity method, net	969,905	998,404
Property, plant and equipment
Total property, plant and equipment	13,765,823	12,149,196
Investment property, net
Investment property, net	61,196	61,196
Intangible assets
Total intangible assets	8,208	8,208
Deferred tax assets	173,198	188,903
Other non-current assets
Guarantee deposits paid	444	444
Other non-current financial assets
Total other non-current financial assets	53,323	44,824
Total other non-current assets	53,767	45,268
Total non-current assets	15,128,734	13,488,475
Total assets	18,080,761	15,598,066
Liabilities and equity
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	2,351,497	1,607,962
Short-term notes and bills payable
Total short-term notes and bills payable	219,816	219,461
Notes payable
Total notes payable	107,871	111,901
Accounts payable
Total accounts payable	4,170	11,795
Accounts payable to related parties
Total accounts payable to related parties	0	0
Other payables
Total other payables	287,439	185,918
Other payables to related parties	1,025,421	312,583
Current provisions
Total current provisions	11,352	9,956
Other current liabilities
Advance receipts
Total advance receipts	36,367	16,772
Long-term liabilities, current portion
Total long-term liabilities, current portion	329,389	131,686
Total other current liabilities	365,756	148,458
Total current liabilities	4,373,322	2,608,034
Non-current liabilities
Long-term borrowings
Total long-term borrowings	10,254,545	9,278,715
Deferred tax liabilities
Total deferred tax liabilities	32	513
Other non-current liabilities
Net defined benefit liability, non-current	232,792	295,475
Total other non-current liabilities	232,792	295,475
Total non-current liabilities	10,487,369	9,574,703
Total liabilities	14,860,691	12,182,737
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	5,306,516	6,306,516
Total capital stock	5,306,516	6,306,516
Capital surplus
Total capital surplus	4,851	4,793
Retained earnings
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	-2,087,439	-2,900,455
Total retained earnings	-2,087,439	-2,900,455
Other equity interest
Total other equity interest	-4,363	3,375
Treasury shares	0	0
Total equity attributable to owners of parent	3,219,565	3,414,229
Non-controlling interests	505	1,100
Total equity	3,220,070	3,415,329
Total liabilities and equity	18,080,761	15,598,066
Number of share capital awaiting retirement	0	0
Equivalent issue shares of advance receipts for ordinary share	0	0
Number of shares in entity held by entity and by its subsidiaries	0	0

Profit and Loss Account

Unit: NTD/000

Consolidated	2017	2016
Operating revenue
Total operating revenue	7,993,007	7,272,512
Operating costs
Total operating costs	7,725,760	7,074,277
Gross profit (loss) from operations	267,247	198,235
Gross profit (loss) from operations	267,247	198,235
Operating expenses
Selling expenses
Total selling expenses	124,497	110,850
Administrative expenses
Total administrative expenses	129,821	124,663
Total operating expenses	254,318	235,513
Net operating income (loss)	12,929	-37,278
Non-operating income and expenses
Other income
Total other income	3,898	4,834
Other gains and losses
Other gains and losses, net	-14,375	-63,079
Finance costs
Finance costs, net	147,414	137,453
Share of profit (loss) of associates and joint ventures accounted for using equity method
Share of profit (loss) of associates and joint ventures accounted for using equity method, net	-23,985	-20,078
Total non-operating income and expenses	-181,876	-215,776
Profit (loss) from continuing operations before tax	-168,947	-253,054
Tax expense (income)
Total tax expense (income)	15,801	3,641
Profit (loss) from continuing operations	-184,748	-256,695
Profit (loss)	-184,748	-256,695
Other comprehensive income
Components of other comprehensive income that will not be reclassified to profit or loss
Gains (losses) on remeasurements of defined benefit plans	-3,393	-15,472
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	-27	-35
Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	-577	-2,630
Components of other comprehensive income that will not be reclassified to profit or loss	-2,843	-12,877
Components of other comprehensive income that will be reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss	-7,738	-2,040
Income tax related to components of other comprehensive income that will be reclassified to profit or loss	0	0
Components of other comprehensive income that will be reclassified to profit or loss	-7,738	-2,040
Other comprehensive income, net	-10,581	-14,917
Total comprehensive income	-195,329	-271,612
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	-184,153	-256,004
Profit (loss), attributable to non-controlling interests	-595	-691
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	-194,734	-270,921
Comprehensive income, attributable to non-controlling interests	-595	-691
Basic earnings per share
Total basic earnings per share	-0.35	-0.48

Cash Flows

Unit: NTD/000

Consolidated	2017	2016
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	-168,947	-253,054
Profit (loss) before tax	-168,947	-253,054
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	330,671	349,333
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	-2,312	-682
Interest expense	147,414	137,453
Interest income	-830	-980
Dividend income	-300	-345
Share of loss (profit) of associates and joint ventures accounted for using equity method	23,985	20,078
Loss (gain) on disposal of property, plan and equipment	2,100	4,743
Loss (gain) on disposal of investments	1,989	1,092
Impairment loss on non-financial assets	0	49,139
Total adjustments to reconcile profit (loss)	502,717	559,831
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in financial assets held for trading	-4,989	9,908
Decrease (increase) in notes receivable	0	-7
Decrease (increase) in accounts receivable	-173,572	-44,024
Decrease (increase) in other receivable	27,920	-23,901
Decrease (increase) in inventories	-707,378	-9,838
Decrease (increase) in prepayments	-174,240	-83,799
Total changes in operating assets	-1,032,259	-151,661
Changes in operating liabilities
Increase (decrease) in notes payable	-4,030	34,832
Increase (decrease) in accounts payable	-7,625	-9,292
Increase (decrease) in other payable	-6,904	28,572
Increase (decrease) in provisions	1,396	-746
Increase (decrease) in receipts in advance	19,595	-4,726
Increase (decrease) in net defined benefit liability	-66,076	-15,764
Total changes in operating liabilities	-63,644	32,876
Total changes in operating assets and liabilities	-1,095,903	-118,785
Total adjustments	-593,186	441,046
Cash inflow (outflow) generated from operations	-762,133	187,992
Interest received	839	985
Dividends received	300	345
Interest paid	-139,027	-131,973
Income taxes refund (paid)	108	8,821
Net cash flows from (used in) operating activities	-899,913	66,170
Cash flows from (used in) investing activities
Acquisition of available-for-sale financial assets	-59,337	-35,650
Acquisition of investments accounted for using equity method	-3,800	0
Proceeds from capital reduction of investments accounted for using equity method	619	1,098
Acquisition of property, plant and equipment	-1,691,885	-1,807,561
Proceeds from disposal of property, plant and equipment	9,532	755
Acquisition of intangible assets	0	-8,208
Increase in other financial assets	-115,866	0
Decrease in other financial assets	0	75,781
Net cash flows from (used in) investing activities	-1,860,737	-1,773,785
Cash flows from (used in) financing activities
Increase in short-term loans	743,535	309,864
Proceeds from long-term debt	1,300,000	1,074,000
Repayments of long-term debt	-132,000	0
Increase in other payables to related parties	640,000	310,000
Net cash flows from (used in) financing activities	2,551,535	1,693,864
Net increase (decrease) in cash and cash equivalents	-209,115	-13,751
Cash and cash equivalents at beginning of period	492,625	506,376
Cash and cash equivalents at end of period	283,510	492,625
Cash and cash equivalents reported in the statement of financial position	283,510	492,625

Note: Subject didn’t submit its individual financial information; we obtained its consolidated financials as above for reference.

The above financial figures are based on the IFRSs Accounting System.

Bankers

Name	Mega International Commercial Bank Co., Ltd.

Public Record

Mortgage

Case Type:	Chattel Mortgage
Registered Number:	112307
Debtor Name:	Yieh Hsing Enterprise Co., Ltd.
Registry:	MOEA Central Office
Name of Mortgagee:	Mega International Commercial Bank Co., Ltd. Kaohsiung Branch
Date of Registration:	2015-11-16
Amount of Secure Claims:	NTD 1,966,000,000
Type of Mortgage:	Machinery equipment or tools

Lawsuit

Up to date of reporting, no existing or latent litigation of the subject has been found.

Special Note

Interview Details

Department

Business Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 66.66
UK Pound	1	INR 91.66
Euro	1	INR 81.01
TWD	1	INR 2.24

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

INFORMATION DETAILS

Analysis Done by :	NIS
Report Prepared by :	KET

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)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.