SAMPLE Comprehensive Report SAMPLE

Transcription

SAMPLE
Subject:
SAMPLE
GUANGZHOU STAR SAMPLE INDUSTRIAL CO., LTD.
Comprehensive Report SAMPLE
Your Enquiry:
广州市世达密封 SAMPLE 有限公司
Given Address:
广州市夏茅
Given Telephone
860823XX
Given Facsimile:
860833XX
Date of Enquiry
Nov. 8, 2010
Type of Enquiry
Normal
Date of Completion
Nov. 15, 2010
Subject Name
Business Address
North Side of Yuntong Guanghua Parking Lot, SAMPLE, Northern
Outskirts, Guangzhou, Guangdong
Zip Code
510510
Telephone
(020) 860823XX/860823XX
Facsimile
(020) 860833XX
Website
www.gz-SAMPLE.com
AIC Registration No.
44010611001XX
SAMPLE
Subject:
SAMPLE
Printing Date:
Dec. 14, 20010
Report Type:
Comprehensive Report
Currency in this report is Chinese Yuan unless otherwise stated.
"--" in this report indicates "unavailable" due to insufficient information or "no comment."
Registered Address:
Rm. 201 No.9-1 SAMPLE Rd., Tianhe Dist., Guangzhou, Guangdong
Zip Code:
510510
Telephone:
(86-020) 860823XX/870512XX
Business Address:
North Side of Yuntong Guanghua Parking Lot, SAMPLE, Northern
Outskirts, Guangzhou, Guangdong
Zip Code:
510510
Telephone:
(86-020) 860823XX/860823XX
Facsimile:
(86-020) 860833XX
Website:
www.gz-SAMPLE.com
Organization Code:
190993858
SIC Code (China):
3581, metal seals manufacturing industry
SUMMARY
Date of Establishment:
Sep. 12, 1992
Legal Status:
Private limited liability company
Registered Capital:
10,000,000.00
Main Business:
Production and distribution of metal seals
Turnover:
26,340,000.00 (2005)
Net Profit:
210,000.00 (2005)
Total Assets:
71,840,000.00 (Dec 31, 2005)
Net Worth:
35,810,000.00 (Dec 31, 2005)
Employees:
700
Import and Export Permits:
Self-run import & export permits
Credit Rating:
CR4
Base Credit Limit:
800,000
SAMPLE
Subject:
SAMPLE
REGISTRATION
Date of Establishment:
Sep. 12, 1992
Registry:
Guangzhou Municipal Administration for Industry and Commerce
Legal Representative:
SAMPLE Wenping
AIC Registration Number:
44010611001XX
Legal Status:
Private limited liability company
Registered Capital:
10,000,000.00
Business Scope:
R&D of plastic, rubber and graphite seals; distribution business:
domestic business activities and materials supply & marketing
(except for items monopolized or specially controlled by the state);
export of self-made products and technologies and import of
machinery & equipment, parts & fittings, raw & auxiliary materials and
technologies needed by the company, except for those monopolized
or banned by the state
SHAREHOLDERS AND SHARES
As indicated in the following table:
Shareholders
Capital Subscribed
Percentage
SAMPLE Wenping
8,000,000.00
80.00%
SAMPLE Jinghong
2,000,000.00
20.00%
-----------
--------
10,000,000.00
100%
Total
Way of investment
Paid-up percentage
SAMPLE Wenping
In currency
100.00%
SAMPLE Jinghong
In currency
100.00%
Shareholders
BACKGROUND OF MAJOR SHAREHOLDERS
Name:
SAMPLE Wenping
Other Key Information:
ID Number: 4401126208020XX
Name:
SAMPLE Jinghong
Other Key Information:
ID Number: 4401056512201XX
SAMPLE
Subject:
SAMPLE
MAIN EXECUTIVES
Name:
AMPLE Wenping
Post:
Chairman of the Board
Gender:
Male
Date of Birth:
Aug. 2, 1962
Education:
Junior college education
Work Experience:
Jun 1991: started preparations for the establishment of Guangzhou
Tianhe SAMPLE Technology Research Institute (transliteration)
Sep. 1992: with Guangzhou Tianhe SAMPLE Technology Research
Institute (transliteration), the predecessor of Subject, as Director
1997: with Subject as Chairman of the Board
2000: with Shanghai Star SAMPLE Co., Ltd. (literal translation) as
Chairman of the Board concurrently
Now also with Guangzhou AOLIS Oil SAMPLE Co., Ltd. and
Guangzhou SAMPLE Enterprises Co., Ltd. (transliteration) as
Chairman of the Board and with Guangzhou SAMPLE Mfg. Works
(literal translation) as Factory Director; a deputy to Guangzhou
Municipal People’s Congress and Vice President of Guangzhou
SAMPLE District Federation of Industry & Commerce
AFFILIATE(S)
Name:
Guangzhou AOLIS Oil SAMPLE Co., Ltd.
Address:
SAMPLE, Northern Outskirts, Baiyun Dist., Guangzhou, Guangdong
Telephone:
(020) 860823XX/860801XX/860833XX
Facsimile:
(020) 860833XX
Interest in Subject:
75.00%
BANKING RELATIONSHIP
Account Bank:
Industrial and Commercial Bank of China Guangzhou Xinshi
Sub-branch
Account No. (RMB):
36020015192000298XX
Tel. of Interviewee:
(020)86304139
Remarks of Interviewee:
Subject’s banking transactions are basically normal.
Date of Interview:
Nov. 13, 2010
Account Bank:
Bank of China Guangzhou Shatai Road Sub-branch
SAMPLE
Subject:
SAMPLE
Account No.(RMB):
8454002998080910XX
(020)87233383
Subject’s banking transactions are basically normal.
Date of Interview:
Nov. 13, 2010
NUMBER OF EMPLOYEES
Employees:
700
Including: Managerial staff:
About 20
Technical staff:
About 10
Sales staff:
About 30
Production staff:
Over 600
The information above was confirmed by Subject's staff member on Nov. 13, 2010.
ORGANIZATIONAL STRUCTURE
Board of Directors
Chairman of the Board
General Manager
General Manager’s Office
Mfg. Center
Admin. Dept.
HR Dept.
Technology Dept.
Purchasing Dept.
Finance Dept.
Market Dept.
OFFICE FACILITIES
Geographic Location: North Side of Yuntong Guanghua Parking Lot, Northern Outskirts,
Guangzhou, Guangdong
Area:
Plot Area: around 12,000 square meters; floor area: 10,000 square meters
Property Ownership: Freehold
SAMPLE
Subject:
SAMPLE
Descriptions:
SAMPLE Development Zone, sitting in the northern part of Guangzhou City
with a distance of around 8 km away from the urban area, runs from the east
side of Jingguang (Beijing-Guangzhou) Railway Line in the west to the
vicinity of Dalingkou and Jiangxia Village in the east, and runs from the
location of Guangdong Broadcasting & Television Company in the south and
the No.1 Storehouse of Guangzhou Metallurgical Ind. Company to SAMPLE
Village in the north. The traffic conditions of this district, where the rentals of
factory buildings are relatively low, are mediocre.
PRODUCTION EQUIPMENT & PRODUCTION CAPACITY
Subject currently has among its production equipment and instruments 150 to 160 punches as well
as rubber vulcanization testers, Mooney viscosity meters, rubber Banbury mixers, injection
machines,
fully
automatic
plate
vulcanizers,
vacuum
plate
vulcanizers,
large-caliber
(1600×2000mm) 800-ton plate vulcanizers, machining centers, CNC machine tools, electric
discharge machines (EDM), sand blasters, projectors, fully automatic spring assembly machines &
tester units, CNC spring winders, infinitely variable speed Banbury mixers, Barwell precision
performing machines and a phosphating production line. It is reported that Subject has invested a
total of over RMB200 million in the acquisition of production equipment to reach an annual
production scale and capacity of 5 million pieces.
IMPORT & EXPORT
I/E Permits:
Self-run import & export permits
File No. of Approval:
(2003) SWJMDZ No.220
Date of Approval:
Dec. 1, 2003
Approval Authority:
Bureau of Foreign Trade and Economic Cooperation of Guangzhou
Main Self-run Imports:
Commodity Code
Unit
2009
kilogram
1
Currency
2009
Self-run Import Value:
USD
186
Self-run Export Value:
USD
0
38159000
Main self-run import area(s):
2009
USA (100.00%)
Notes: The commodity codes shown in this report are H.S. codes. Please refer to the Appendix for
the specific commodity descriptions. Main Self-run Imports/Exports refers to the top three products
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Subject:
SAMPLE
by import/export value in the latest fiscal year and Main Self-run Import/Export Area(s) refers to the
top three areas by import/export value. The bracketed figures represent the proportions of the
import/export values realized in different areas in Subject’s total.
TRADEMARKS & PATENTS
Total No. of Trademarks
1
Registration No.
1310053
Registration Date
Sep. 7, 1999
Trademark Design
No patent application of Subject is available from the State Intellectual Property Right Office of the
People’s Republic of China.
HISTORY
Sep. 1992
Subject was established under the name of Guangzhou Tianhe SAMPLE
Technology Research Institute (transliteration).
1997
Subject was reorganized and changed its name to the present one.
2000
Subject achieved ISO9001 certification award.
2002
Subject was issued the state’s permit for the production of oil seals and O
rings.
2005
Subject achieved ISO/TS1694:2002 certification award and ISO14001
certification award.
MAIN BUSINESS
Main Business: Production and distribution of seals
Products and Services: The main categories of Subject’s available seals include dustproof seal
series, static seal series, piston seal series, piston rod series, transmission seal series, rotary seal
series and O-ring series and so on.
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Subject:
SAMPLE
BULLETIN BOARDS
Year
Bulletin Board
Place
Top 1000 Enterprises Groups of Guangzhou
XXX
Top 500 Service Enterprises of China by Turnover
XXX
Top 500 Enterprises of China
XXX
Top 100 Enterprises Groups of Guangzhou by Turnover
XX
Top 500 Enterprises of China
XXX
Top 100 Enterprises Groups of Guangzhou by Turnover
XX
20XX
20XX
20XX
PURCHASING INFORMATION
Main Commodities
Production & processing equipment, rubber and hardware fittings
Purchased:
Number of Major Suppliers: Over 10
Major Suppliers:
1. ITR of Italy
2. Guangzhou 3F New Materials Sales Co., Ltd. (literal translation)
3. Hanyun
Enterprises
Management
Consultants
Co.,
Ltd.
(transliteration)
4. Guangzhou Xuqi Trading Co., Ltd. (transliteration)
5. Shanghai Qinan Adhesive Materials Factory (transliteration), etc.
Main Terms of Payment:
COD or 30-60 days credit
PURCHASING TERRITORY & STATUS QUO
The commodities purchased by Subject can be divided into two parts, which are production
equipment and raw materials. The production machines and equipment are mainly imported from
Italy, Japan and Taiwan, etc. The raw materials needed in Subject’s production are mainly sourced
domestically, especially in Guangdong Province, which accounts for over 60% of its purchasing
volume. The raw materials and auxiliary materials sourced overseas are usually imported from
abroad and the import areas are reportedly concentrated in Japan and USA, which account for over
80% of its import volume.
Subject usually has several suppliers to choose from in purchasing every kind of raw material so
that the raw materials can be supplied any time when need arises and its normal production can
thus be well secured. Additionally, Subject only keeps a modest quantity of raw materials in stock in
order to reduce business risks, and therefore its purchasing frequency is quite high. For example,
Subject generally purchases every kind of raw material twice or three times per month.
The information above was confirmed by Subject’s staff member on Nov. 13, 2010.
SAMPLE
Subject:
SAMPLE
SALES INFORMATION
Domestic:
80%
Regions:
South China and southwest regions
Domestic
1. Guangzhou Xingqiu Tire Co., Ltd. (transliteration)
Customers (Industries):
2. Guangzhou Honda Automobile Co., Ltd.
3. Guangzhou Mitsuba Electric Co., Ltd.
4. Guangzhou Showa Auto Parts Co., Ltd. (literal translation), etc.
Sales Terms:
30-60 days credit
Overseas:
20%
Regions:
Hong Kong, Taiwan and Japan
Total Export Value:
Kinugawa Rubber Industrial. Co., Ltd. of Japan
Sales Terms:
30-day L/C
SALES CHANNEL & MARKET DISTRIBUTION
According to Miss WANG of Subject, its products are sold both domestically and abroad while direct
sales are usually used for the domestic market, which accounts for around 80% of the total. Among
the domestic markets, Guangzhou, Foshan, Shenzhen, Tianjin, Chongqing, Wuhan, Xi’an, and
Shanghai are the top eight in terms of sales volume. Accordingly, Subject has set up production
bases, sales companies, or business offices one by one in these regions to facilitate business
development therein.
The products exported directly by Subject are only a few, but the quantity exported indirectly is quite
big. Presently, the USA, which accounts for over 40% of Subject’s export volume, heads the list of
Subject’s overseas markets both by direct and indirect exports. Japan follows in second place by
contributing around 20% of Subject’s export volume.
OTHER SALES INFORMATION
Subject advised that the company has constantly expanded its business scale in recent years
through the acquisition of other firms. For instance, Subject purchased Guangzhou AOLIS Oil
SAMPLE Co., Ltd. in 2003. The M&A of other businesses have considerably enhanced Subject’s
production and sales capacities, and Subject’s annual sales value has reached RMB100 million.
Unsatisfied with the achieved results however, Subject still takes proactive measures in enlarging
its production scale and is now negotiating with a Guangzhou-based company regarding the details
of a forthcoming acquisition. The two sides are expected to reach an agreement at the beginning of
2011 if everything goes smoothly, and then Subject’s annual sales value will witness an increase of
RMB50 million. According to Miss WANG, Subject’s goal for 2012 is to achieve a sales value of
RMB500 million (which is a leapfrog development plan for Subject) when the number of Subject’s
employees will near 2000. Subject’s sales goal for 2015 is RMB750 million, but we hold a
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Subject:
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conservative attitude for the possibility of achieving the above goals and plans proposed by
Subject.
The above information was confirmed by Subject’s staff member on Nov. 13, 2010.
CREDIT RECORD
Name of Supplier:
Shanghai Qinan Adhesive Materials Factory (transliteration)
Main Commodities Supplied: Plastic materials
Post of Interviewee:
Business staff
021-63639523
Subject pays on 30-day credit and maintains basically normal
payment records.
Date of Interview:
Nov. 13, 2010
Name of Supplier:
Guangzhou 3F New Materials Sales Co., Ltd. (literal translation)
Main Commodities Supplied: Chemical materials
Post of Interviewee:
Business staff
020-83753507
Subject proves to be a client of the said company and the
cooperation between the two sides remains stable. Subject’s
payments are prompt on the whole.
Date of Interview:
Nov. 13, 2010
Name of Supplier:
Guangzhou Xuqi Trading Co., Ltd. (transliteration)
Main Commodities Supplied: Rubber
Name of Interviewee:
Mr. ZHANG
020-37603323
Subject began to purchase rubber from the said company at the end
of 2002 and after that its purchases occurred every month, usually
twice or thee times, and its monthly purchasing value was quite big,
which remained between RMB700,000 and RMB800,000. Subject,
as a large-sized client of the said company and boasting
considerable assets scale, was extended a credit period of 60 days
and a credit limit between RMB1.5 million and RMB1.6 million.
Subject’s payment performance however had been disappointing in
recent years with large amounts unpaid invoices and the payment
period was usually delayed to 120 days, or even 150 days at
maximum, which caused stress on its capital turnover. The said
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Subject:
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company hence terminated its supply to Subject in Aug. 2010 in order
to maintain its normal operations.
Date of Interview:
Nov. 13, 2010
Litigation Record:
As of Nov. 13, 2010, no adverse litigation filings against Subject had
been found through our searching the website www.chinacourt.org,
the local court’s website, and other major search engines.
BANKING RECORDS
On Nov. 13, 2010, we inquired of Subject’s A/C Bank, Industrial and Commercial Bank of China,
Guangzhou Xinshi Sub-branch (020-86304139) and the relevant bank clerk confirmed that Subject
does hold an account with the Bank and its account number is XXXXXXXXXXXX, adding that
Subject’s banking transactions are normal.
TAXPAYING RECORDS
We inquired at the Guangzhou State Taxation Administration (020-83732056) and relevant media,
finding no adverse taxpaying records against Subject.
QUALITY INSPECTION RECORDS
We inquired at the Guangzhou Municipal Bureau of Quality and Technical Supervision
(020-83131085) and relevant media, finding no adverse quality inspection record against Subject.
FINANCES
Balance Sheet (Unit: 1,000):
Dec 31, 2009
Dec 31, 2008
Dec 31, 2007
(Unconsolidated) (Unconsolidated) (Unconsolidated)
Total assets
71,840
26,030
21,850
17,320
12,050
16,600
Cash & bank
2,540
620
720
Accounts receivable
3,250
3,710
1,600
10
10
--
Other receivable
9,260
3,980
--
Prepaid expense
0
40
--
2,260
3,690
9,400
41,400
350
350
12,860
13,330
4,800
Including:
Total cur. assets
Including:
Prepayment
Inventory
LT Investment
Total fixed assets
SAMPLE
Subject:
SAMPLE
Including:
Fixed assets, at cost
16,880
16,550
7,200
4,020
3,220
2,400
12,860
13,330
4,800
0
0
0
260
300
100
260
300
100
Total liab. & shareholders' equity
71,840
26,030
21,850
Total liab.
36,030
14,590
19,710
32,160
10,500
15,610
14,000
1,750
1,750
3,520
3,650
2,310
Advances from customers
140
1,340
1,900
Payroll accrued
630
150
--
Welfarism accrued
390
210
--
80
80
--
220
230
--
10
10
--
Other payables
13,170
3,080
8,890
Total long-term liab.
3,870
4,090
4,100
100
100
100
3,770
3,990
4,000
35,810
11,440
2,140
Paid-up capital
10,000
10,000
--
Capital reserve
640
640
--
Surplus reserve
150
120
--
25,020
680
--
2009
2008
2007
Accumulated depreciation
Fixed assets, net
Construction in progress
Total intangible assets and deferred assets
Including:
Intangible assets
Including:
Total cur. liab.
Including:
ST loans
Accounts payable
Dividend unpaid
Tax unpaid
Other unpaid
Including:
LT Loans
LT payable
Total shareholders' equity
Including:
Unappropriated profit
Income Statement (Unit: 1,000):
SAMPLE
Subject:
SAMPLE
Principal operating income
26,340
23,170
16,600
Principal operating costs
21,920
18,740
13,300
Sales tax and additional
150
170
100
Principal operating profit
3,480
3,610
3,200
0
0
0
790
650
560
2,810
3,250
2,200
Financial expenses
370
180
170
Operating profit
300
180
270
10
10
0
0
0
60
Total profit
310
190
210
Income tax
10
60
70
210
130
140
2009
2008
2007
Return on net assets (%)
0.59
1.14
6.54
Return on total assets (%)
0.29
0.50
0.64
Net profit margin (%)
0.80
0.56
0.84
Turnover of total assets
0.37
0.89
0.76
Turnover of current assets
1.52
1.92
1.00
Turnover of accounts receivable
8.10
6.25
10.38
50.15
56.05
90.21
Current ratio
0.54
1.15
1.06
Quick ratio
0.47
0.80
0.46
Government
Government
Government
Yes
Yes
Yes
Other operating profit
Selling expenses
General administration expenses
Non-operating income
Non-operating expenses
Net profit
Important Ratios:
Liabilities/assets ratio (%)
Sources
Whether audited or not
NOTES TO FINANCES
Please note that owing to the imperfect information sources in China, some entries in Subject's
financial statement might be missing, which will lead to the inequality between the sums of the listed
entries and the totals written in the financial statement.
We asked Subject about its big increase in Long Term investment at 2009 yearend, but the relevant
staff member refused to disclose any information on this matter. It is reported that in 2007 Subject
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Subject:
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acquired Guangzhou AOLIS Oil SAMPLE Co., Ltd. whose registered capital is RMB50 million, of
which Subject subscribed a portion of RMB37.5 million. Our assumption is that this acquisition had
not been recorded to its 2007 and 2008 statements and the adjustment was made in 2009 instead.
Our assumption however has not been confirmed by Subject’s relevant staff member.
Subject made capital increase in 2008, which resulted in the sharp growth of its shareholders’
equity at this yearend. The reason why Subject’s shareholders’ equity increased considerably at
2009 yearend against 2008 yearend was that its unappropriated profit increased dramatically in
2009, but Subject’s staff member refused to provide any explanation to the sharply growing
unapprorpaited profit. Our assumption is that Subject modified this entry when adjusting its Long
Term investment, but this assumption has also not been confirmed by Subject’s relevant staff
member.
INDUSTRIAL COMPARISON
SIC Code (China): 3581, metal seal manufacturing industry
Indicators (2009)
Subject
Industry Average (12*)
0.59
9.24
0.29
5.34
0.80
7.00
0.37
0.76
1.52
1.41
8.10
5.17
50.15
42.24
Current ratio
0.54
1.32
Quick ratio
0.47
0.86
Subject
1.14
15.88
0.50
9.86
0.56
10.74
0.89
0.90
1.92
1.74
6.25
7.04
56.05
39.70
Current ratio
1.15
1.38
Quick ratio
0.80
0.90
Indicators (2008)
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Indicators (2007)
Subject
6.54
23.00
0.64
13.60
0.84
14.04
0.76
0.92
1.00
1.81
10.38
11.92
90.21
35.17
Current ratio
1.06
1.72
Quick ratio
0.46
1.32
* The figure refers to the number of businesses in the same line in our database that are included in
the calculation of average financial indicators.
ANALYSIS OF INDUSTRIAL COMPARISON
As indicated by profitability indexes, Subject’s net profit margin, with certain fluctuations over years,
dropped somewhat in 2008 and scaled up in 2009 through effective control over general
administrations expenses. But Subject’s return on net assets and return on total assets both
declined all the time, and furthermore Subject’s profit-making performance was considered at a low
level when compared with the industry average.
As indicated by assets structure and solvency indexes, Subject’s turnover of total assets and
turnover of current assets both decreased significantly in 2009 against 2008, showing its inflexible
capital turnover. Subject’s liabilities/assets ratio has dropped year after year and now its
liabilities/assets ratio is kept at a quite safe level. The sharply growing Short Term loan and other
payables of Subject in 2009 increased the total current liabilities of the company, which led to low
current and quick ratios at 2009 yearend and thus undermined its short-term solvency.
As indicated by the income statement, Subject’s principal operating income has been climbing up in
the past two years, but the growth rate slacked somewhat in 2009. Subject’s gross profit however
remained constant on the whole with little change in recent years, which suggested that Subject’s
operating costs also increased considerably. But Subject’s net profit went up finally in 2009 through
its effective control over general administrations expenses, which proved the tolerably strong
profitability of the company.
Analysis of the assets status showed that Subject’s other receivables were up nearly 133% in 2009,
which described its frequent internal transactions. In addition, the big amount of Subject’s Long
Term investment expanded its assets scale substantially. The observation of its liabilities statement
can find that Subject’s Short Term loans stood at RMB14 million in 2009, which proved its strong
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financing capacity. But the remarkable increase in its other payables implied Subject is usurping
capital resources of its associate enterprises for its own needs. The above facts indicated that
Subject, with a shortage of working capital, usually resorts to Short Term loans and internal
transfers from associate enterprises to alleviate its capital stress.
TENDENCY ANALYSIS
Statistics show that there are around 13,000 enterprises involved in the hydraulics,
hydro-mechanicals, pneumatics and seals industry. Over the past few years, with strong support
from the government, a host of mainstay enterprises in the line has significantly enhanced their
technical level and improved their technical equipment, which lays a solid foundation for the forging
of efficiently large production capacity. According to the data released by China Hydraulics
Pneumatics & Seals Association on 296 mainstay hydraulics, hydro-mechanicals, pneumatics and
seals enterprises under observation, the gross profit margin of this industry stood at 9.44% and
sales/output ratio reached 97.38% during the period from Jan. to May 2010. The production and
demand were well balanced in an always brisk market. The production value of this industry hit
RMB6.151 billion, up by 32.54% year-on-year. The sales value hit RMB5.99 billion, up by 34.74%
year-on-year. Sales revenue hit RMB540 million, up by 31.07% year-on-year. In addition, the
development of China’s machinery industry, construction of various infrastructural facilities,
implementation of “Vast West Development Strategy,” improvement of people’s living standards and
further integration of international and domestic markets are also advantageous factors to the
prospects of hydraulics, hydro-mechanicals, pneumatics and seals industry.
Subject, established in Sep. 1992, is now a limited liability company with complete-function
organizational structure composed of HR Dept., Finance Dept., Purchasing Dept., General
Manager’s Office, Mfg. Center, Quality Management Dept., Equipment Dept., R&D Dept; and
Marketing Dept. Principally engaged in the R&D, production and distribution of rubber & plastic
seals, graphite seals, rubber shock absorbers and other rubber products, Subject delivers a good
assortment of products with wide applications in automobiles, household electrical appliances &
consumables, hydraulic parts & engineering machinery and shipbuilding. The huge market demand
bolsters Subject’s production and operations soundly (Subject’s monthly production plan is now
well scheduled and only the period from December to next January is comparatively idle when
Subject usually sets aside partial output as inventory to meet urgent demand). Meanwhile, Subject
has gained adequate technological edges after years of development, which has secured its
product quality convincingly and well guaranteed its customer resources. (Reportedly, more than
80% of Subject’s existing clients are loyal ones cooperating on a long-term bass). Subject has also
acquired a good many firms with its own capital means and therefore expanded its business scale
constantly. Presently, Subject is considered a middle- to large-sized enterprise in its line locally
enjoying certain recognition both in its industry and in local area.
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Subject:
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POTENTIAL RISKS
However, it is noticeable that Subject’s shareholders are natural persons (SAMPLE Wenping and
SAMPLE Jinghong). Its legal representative, SAMPLE Wenping, starting his career as a technician,
provides the strong technical background of Subject. Subject maintains frequent capital transfers
with its numerous associated enterprises (which can be proven by its big other receivables and
other payable at 2009 yearend), which has toughened the pressure on its capital flow. Furthermore,
although Subject has a lot of suppliers, its cooperation with them is far from stable. The inefficient
capital flow also causes certain capital stress and results in Subject’s delayed payments, which
further deteriorates Subject’s relationships with its suppliers. This is also a threat to Subject’s
production and operations and should be one of the issues on
top of Subject’s list to consider for
the best solutions.
INDUSTRY PROFILE
China’s rapid industrialization has brought up a vast market for high-performance seals and the
repairing of automobiles, engineering machinery and imported equipment also indicates the huge
growth potential of the seals manufacturing industry.
China still lags behind foreign countries in terms of production scale and production technology in
the seals manufacturing industry. Industry insiders reveal that the productivity of foreign enterprises
is usually dozens times that of domestic firms. Taking Parker Hannifin of USA, a world-famous seal
maker, as an example, the company, with only 90 employees, achieves annual sales value as high
as USD10 million while the sales value of most Chinese enterprises with thousands of employees is
less than RMB100 million.
Due to backward technologies, domestic seals can only find a place with efforts in low- to
middle-end markets. In addition, the struggling domestic enterprises also have to carve out a niche
for their survival. On the one hand, the aggressive march of foreign competitors into the domestic
market has a serious impact on national enterprises. On the other hand, the foreign enterprises
have set barriers for the entry of domestic products through their JVs involved in manufacturing
machines and equipment where seals are used in batches, which has handicapped the
development of China’s national industry. At the same time, more and more imported fittings and
parts are being purchased by domestic enterprises who strive to improve their product quality. This
is especially the case with automobile seals, whose high-end markets are now monopolized by the
products of foreign-invested enterprises. It is not difficult to draw a picture of the predicaments
suffered by the national seals industry under these two pressures.
The equipment manufacturing industry is a major indicator standing for the industrialization level,
modernization level and comprehensive national power of a country, So far, the equipment
manufacturing industry, with complete product categories and considerable production scale and
efficiency, has become a main pedestal to China’s economic development and China has jumped to
SAMPLE
Subject:
SAMPLE
the fifth place in the world in terms of manufacturing sector. According to relevant data, there are
around 55000 sizable equipment manufacturers in China with 15 million employees in total. The
added value of this industry accounts for 10.8% of China’s GDP, and the taxes paid by this industry
contribute 5.5% of the government’s tax revenue. It thus can be seen that the future of the domestic
seals market is quite promising.
However, the status quo of the national seals industry cannot match China’s reputation as a major
equipment manufacturer in the world, which has not only imposed a disadvantageous factor for
enhancing the overall level of China’s equipment manufacturing industry, but also seriously
restricted its development. China should promote the development of this industry.
GENERAL COMMENTS
Our investigation results show that Subject’s business performance has been less satisfactory in
recent years as compared with industry averages and its profitability should be further improved. As
a private limited liability company, the capital resources and stability of Subject’s shareholders are
limited. Furthermore, Subject’s assets structure in recent years is not so reasonable and its
solvency is mediocre. But considering its upward business tendency and growing profit room in
recent years as well as its past business history and credit record, we suggest a credit rating of CR4
on a case-by-case basis.
CREDIT RATING
CR4
When performing an analysis on the credit rating of Subject, SINOTRUST takes into
comprehensive consideration Subject's size, history and background, finances in comparison with
the industrial averages, and operations, credit record, and so on. The definitions of SINOTRUST
credit ratings are given as follows.
Rating
Risk Level
SINOTRUST Suggestion
CR1
Very low
Credit can be extended in very loose terms.
CR2
Low
Credit can be extended in rather loose terms.
CR3
Below average
Credit can be extended in normal terms.
CR4
Average
Credit should be on a closely monitored basis.
CR5
Above average
Credit should be avoided as much as possible.
CR6
High
Credit should be on a security basis.
CR7
Very high
Transaction should be on COD basis.
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Subject:
SAMPLE
BASE CREDIT LIMIT
800,000
When calculating base credit limit, SINOTRUST presupposes that Subject purchases main
commodities/services equally from many suppliers. Main factors considered include Registered
Capital, Net Assets, Total Assets, Turnover, Profit, Credit Rating, etc. No consideration is given to
the specific situation of your transaction with Subject. You may refer to the following suggestions
when making credit decisions, but it is advisable that proper adjustments be made in accordance
with your marketing strategies and credit policies.
Annual Supply/Subject's Turnover
Suggested Credit Limit
Above 40%
Above 4 times the base credit limit
30%-40%
3 to 4 times the base credit limit
20%-30%
10%-20%
Below 10%
Within base credit limit
--------- End of the Report --------APPENDIX:
List of commodity descriptions and codes:
Commodity Code
Commodity Description
38159000
Reaction initiator/accelerator and catalyst excl supported catalyst

SAMPLE Comprehensive Report SAMPLE

Transcription

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