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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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INTERNATIONAL COMPANY PROFILE
Your Reference Your Enquiry Given Telephone Given Facsimile Date of Enquiry Type of Enquiry Date of Completion 1072 ZHONGSHAN GOMEC COMPANY LIMITED (0760) 2282088 (0760) 2282599 Feb. 08,2005 Normal Feb. 18, 2005
SBD Number Subject Name Business Address Zip Code Telephone Facsimile
0120309219 ZHONGSHAN GOMEC COMPANY LIMITED Longshan Industrial Park, 6 Gongye Dadao (S), Xiaolan Town, Zhongshan, Guangdong 528415 (0760) 2282088/2282598/2282588 (0760) 2282599
AIC Registration Nr.
003040
Organization Code
743668175
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 1
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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Printing Date: Report Type:
Feb. 18, 2005 International Company Profile
Currency in this report is Chinese Yuan unless otherwise stated. "--" in this report indicates "unavailable" due to insufficient information or "no comments".
Registered Address: Telephone: Business Address: Zip Code: Telephone: Facsimile: Organization Code: SIC Code (China):
Longshan Industrial Park, Xiaolan Town Industrial Zone, Zhongshan (0760) 2282588 Longshan Industrial Park, 6 Gongye Dadao (S), Xiaolan Town, Zhongshan, Guangdong 528415 (0760) 2282088/2282598/2282588 (0760) 2282599 743668175 2900, rubber products industry
STRUCTURE OF ORGANIZATION Subject is a limited liability company, and its internal ultimate authority is the Board of Directors. The General Manager is held exclusively responsible for daily management. The main departments include the Production Dept., General Manager’s Office, Sales Dept., Dept. of Administration, Purchasing Dept., Dept. of Finance, and Dept. of Technical Support.
SUMMARY Date of Establishment: Legal Status: Registered Capital: Main Business: Sep. 30, 2002 Wholly foreign owned enterprise 4,000,000.00 USD Producing thermoplastic compounds
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 2
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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Total Assets: Net Worth: Employees: Import and export permits: Credit Rating: Base Credit Limit:
16,767,000.00 (Dec. 31, 2003) 16,530,000.00 (Dec. 31, 2003) 30 Yes CR5 600,000
REGISTRATION Date of Establishment: Registry: Legal Representative: AIC Registration Number: Legal Status: Registered Capital: Business Scope: Duration of Operation: Sep. 30, 2002 Zhongshan Municipal Administration for Industry and Commerce HUANG Zhangnan 003040 Wholly foreign owned enterprise 4,000,000.00 USD Producing a wide range of plastics, rubber granules, synthetic plastics, and synthetic rubber. From Sep. 30, 2002 To Sep. 29, 2013
IMPORT & EXPORT PERMITS I/E Permits: Yes
HISTORY Sep. 2002 Subject was registered and set up as a wholly foreign-owned enterprise, formerly known as Zhongshan Gomec Shoe Materials Co., Ltd. (literal translation). Mar. 2004 The name Zhongshan Gomec Company Limited was officially adopted, and production commenced.
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 3
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219 SHAREHOLDERS AND SHARES As indicated in the following table: Shareholders Goter Thermoplastic Compound SPA, (Italy) Malayan Electro-Chemical Industry Co., Sdn. Bhd. (Malaysia) ----------Total 4,000,000.00 USD 2,000,000.00 USD Capital Subscribed 2,000,000.00 USD
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Percentage 50.00% 50.00%
-------100%
BACKGROUND OF MAJOR SHAREHOLDERS Name: SBD Nr. Address: Main Business: Other Key Information: Goter Thermoplastic Compound SPA 0120313099 zona industriale Mosciano Stazione 64023 Mosciano Sant'Angelo (TE) - Italy Production of thermoplastic compound materials Founded in 1987 and headquartered in Italy, Goter Thermoplastic Compound SPA is a manufacturer of thermoplastic compound materials. Name: SBD Nr. Address: Telephone: Facsimile: Main Business: Other Key Information: Malayan Electro-Chemical Industry Co., Sdn. Bhd. 0120313080 No.1416, Lorong Perusahaan Dua, 13600 Prai, P.W., Penang, Malaysia (604) 3907928 (604) 3908419 Production of PVC resin products, with a maximum annual output of 50,000 tons of PVC resin and 14,400 tons of PVC compounds Set up in 1973, Malayan Electro-Chemical Industry Co., Sdn. Bhd. is a Malaysian-Japanese equity joint venture.
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 4
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219 MAIN EXECUTIVES Name: Post: Gender: Education: Working Experience: HUANG Zhangnan Chairman of the Board Male University education Chinese Italian
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Before 2002: with Goter Thermoplastic Compound SPA; Since 2002: with Subject as Legal Representative and Chairman of the Board
BANKING RELATIONSHIP Account Bank: Account No.(RMB): Account No.(FC): Tel. of Interviewee: Remarks of Interviewee: Bank of China, Zhongshan Xiaolan Sub-branch 24113008091001 24113008092014 (0760)2268168 The clerk of Bank of China, Zhongshan Branch, Xiaolan Sub-branch confirmed that Subject held an account with the Bank and noted that its day-to-day banking relations were normal. Date of Interview: Feb. 16, 2005
NUMBER OF EMPLOYEES Employees: 30
The information above was obtained from Subject's clerk with the Sales Dept. on Feb. 16, 2005.
OFFICE FACILITIES Subject is based at Longshan Industrial Park, 6 Gongye Dadao (S), Xiaolan Town, Zhongshan, Guangdong and covers a land area of about 30,000 square meters.
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 5
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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Subject's main production facilities were introduced from Italy. At present, it owns three production lines.
MAIN BUSINESS Main Business: Producing thermoplastic compounds Products and Services: Subject mainly produces and sells TR, TPR, SEBS, light rubber, and other thermoplastic compounds. It offers more than 60 varieties of products. At present, Subject's two packaging specifications are 25KG and 800KG. Currently, Subject owns a daily production capacity of 100 tons of thermoplastic materials.
PURCHASING INFORMATION Main Commodities Purchased: Number of Major Suppliers: Major Suppliers: Main Terms of Payment: Compound resin, organic compounds, plasticizer, antioxidant, vesicant, and pigment Above 5 Zhongshan Xiaolan Jinji Rubber Factory (transliteration) L/C, T/T, or monthly settlement, etc.
Currently, all of the raw materials used by Subject are imported directly from abroad, and the main source countries include Italy and Malaysia. As to the production equipment, almost all of Subject's machines are imported from Italy. The auxiliary materials needed by Subject are mostly purchased in the domestic market by means of deep processing factory transfers, and the main region of purchasing covers Dongguan, Zhongshan, and other neighboring cities. Most of the suppliers are Hong Kong- or Taiwan-funded enterprises. The information above was confirmed by Subject's clerk with the Purchasing Dept. on Feb. 16, 2005.
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 6
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219 SALES INFORMATION Domestic: Regions: 100%
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Guangdong, Fujian, and Zhejiang; Dongguan of Guangdong claims a big proportion (about 80%) of its sales. Jinjiang of Fujian and Wenzhou of Zhejiang are also main regions of sales for Subject.
Major Customers (Industries):
The client groups are primarily sole production enterprises. At present, important clients include Dongguan Yitai Shoes Co., Ltd. (transliteration), Dongguan Chenglong Shoes Co., Ltd. (transliteration), Dongguan HingLong Shoes Material Co., Ltd., and Wenzhou Chuangeng Shoes Material Co., Ltd.
Sales Terms:
Generally, 15-day credit is extended to first-time clients and those with a short period of cooperation. Those with a long period of cooperation or of good credit standing are usually granted a 30-45 day credit. Additionally, T/T and L/C are used when necessary.
The proportion of Subject’s direct exports is virtually zero. However, a majority of its present clients are Taiwan- or Hong Kong-funded enterprises, whose products are subsequently exported to overseas markets, meaning that Subject's products are ultimately exported abroad via these clients. Most of Subject’s current products for sale are black or white. It mainly performs deep processing in line with its clients' color requirements. The information above was confirmed by Mr. ZHOU with Subject’s Sales Dept. on Feb. 16, 2005.
TRADE REFERENCES According to the relevant marketing clerk of Dongguan Yitai Shoes Co., Ltd. (0769-3973231), the cycle of their purchasing from Subject is generally around 7 days and the average monthly purchasing amount is nearly 1,000 pieces. Subject extends it a credit of 15-30 days. According to the relevant financial clerk of Dongguan Chenglong Shoes Co., Ltd. (0769-4692839), the company purchases goods from Subject once a month on the average and the purchasing amount each time is approximately 600 pieces. Subject extends it a credit of 15 days.
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 7
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219 CREDIT RECORD
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Subject's main suppliers are overseas. Further, we were unable to get in touch with Zhongshan Xiaolan Jinji Rubber Factory (transliteration), Subject’s supplier of materials by means of deep processing factory transfers. Therefore, the relevant payment records cannot be provided.
FINANCES Balance Sheet (Unit: 1,000) Dec 31, 2003 Total assets Including: Total cur. assets Including: Cash & bank Prepayment Other receivables Inventory LT investment Total fixed assets Including: Fixed assets at cost Accumulated depreciation Fixed assets, net Construction in progress Total intangible & deferred assets 13,930 6 13,924 546 1,134 257 647 58 201 0 14,470 1,163 16,767
Total liabilities & shareholders' equity Total liabilities Including: Total current liabilities Including:
16,767 237
237
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 8
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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Short Term loans Accounts payable Advances from customers Accrued payrolls Tax unpaid Other unpaid Other payables Total Long Term liabilities Total shareholders' equity Important Ratios:
0 0 0 117 64 0 56 0 16,530
2003 Liabilities/assets ratio (%) Current ratio Quick ratio Sources: Government Whether audited or not: Yes 1.41 4.91 4.06
NOTES TO FINANCES Subject was set up in Sep. 2002 and officially started production in Mar. 2004. As a result, this report is unable to present its 2003 income statement. Since Subject is not a group company, the distinction between consolidated statements and statements about the head office does not apply. This report provides Subject's unconsolidated financial statements.
INDUSTRIAL COMPARISON SIC Code (China): 2900, rubber products industry
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 9
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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Indicators (2003) Return on net assets (%) Return on total assets (%) Net profit margin (%) Turnover of total assets Turnover of current assets Turnover of accounts receivable Liabilities/assets ratio (%) Current ratio Quick ratio
Subject ------1.41 4.91 4.06
Industry Average (173*) 5.69 1.97 3.13 0.73 1.58 6.62 62.61 0.98 0.67
* 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 Since Subject did not have any production in 2003, the small quantity of financial figures obtained is for your reference only. Close attention to the trend of Subject's business development would be advisable.
GENERAL COMMENTS/POSITION IN ITS INDUSTRY China has become a large shoemaking country in the world thanks to the rapid development of the domestic shoemaking industry in recent years. The Pearl River Delta of Guangdong has become the major production base in China, and there are thousands of large and small shoes factories there. Subject's target clients are shoe factories, and there are abundant client resources where it is located. Subject was only recently established. Also, its shareholders do not have any prior operational history in the Chinese domestic market nor in domestic purchasing, and their sales network basis is relatively weak. These are considered the primary negative factors for its operations. Set up in 2002 with a Registered Capital of USD$4 million and co-funded by Goter Thermoplastic Compound SPA and Malayan Electro-Chemical Industry Co., Sdn. Bhd., Subject is engaged in the production and sale of thermoplastic compounds. As a medium-sized enterprise, Subject enjoys
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 10
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219 certain recognition in the local market and its industry.
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Subject's products lead the competition to a certain extent in the domestic market. In spite of the fact that its price competitiveness is not strong, it has some attractiveness to some manufacturers of high-end shoes. The multitude of shoe material factories in China may impose certain competitive pressure on Subject. In Mar. 2004, Subject commenced operations officially. Further observation is required before a conclusion is to be drawn on its business development.
PROBLEMS IN OPERATION As indicated by Mr. LI Jun, General Manager of Subject, Subject’s market focus is on the important cities in the Pearl River Delta, which are also the target market of other companies. Consequently, market competition in these regions has become more and more intense in recent years, which has lead to a decline in gross profit from sales. Although its sales performance has improved somewhat in the past few years, there has been a downward slope in its profit position on the whole. This has borne certain pressure on the operations of Subject. In response to the above situation, Subject plans to reinforce its sales efforts in small- and medium-sized cities, as the market and operational circumstances in small- and medium-sized cities are relatively open. It is hoped that Subject’s profitability will be enhanced through such an in-depth penetration into these market segments.
CREDIT RATING CR5 When performing an analysis on the credit rating of Subject, we take into comprehensive consideration Subject's size, history and background, its finances in comparison with the industrial averages, its operations, credit record, and so on. The definitions of our credit ratings are given as follows. Rating Risk Level Our Suggestion
CR1 CR2 CR3
Very low Low Below average
Credit can be extended in very loose terms. Credit can be extended in rather loose terms. Credit can be extended in normal terms.
------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 11
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Subject: ZHONGSHAN GOMEC COMPANY LIMITED SBD No.: 0120309219
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CR4 CR5 CR6 CR7
Average Above average High Very high
Credit should be on close monitoring basis. Credit should be very limited. Credit should be on a secured basis. Transaction should be on COD basis.
BASE CREDIT LIMIT 600,000 When calculating the base credit limit, we presuppose 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 Above 40% 30%-40% 20%-30% 10%-20% Below 10% Suggested Credit Limit Above 4 times of base credit limit 3 to 4 times of base credit limit 2 to 3 times of base credit limit 1 to 2 times of base credit limit Within base credit limit
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------------------------------------------------------------------------------------------------This report is furnished at your request for your exclusive use in making business decisions and shall not be used in legal proceedings. Information contained herein shall not be released to the person or firm reported on, nor to any third party, unless otherwise agreed upon by GLOBIS and SINOTRUST. Neither GLOBIS nor SINOTRUST shall be held liable for any loss or damage arising out of use of any of the information contained in this report. Page 12