2007'02.01.Thu
Xinhua Far East Downgrades Haixin to BBB+ Credit Rating, Rating Outlook Remains Stable

March 29, 2006

HONG KONG, March 29 /Xinhua-PRNewswire/ -- Xinhua Far East China Ratings today downgraded the domestic currency issuer credit rating of Shanghai Haixin Group Co., Ltd. ("Haixin" or "the Company", SH A 600851, B 900917) to BBB+ from A-. The rating outlook remains stable. The rating action was prompted by Xinhua Far East's concerns over the competitive nature of China's export plush industry as well as high prices for upstream petrochemical products£¬mounting pressures from increasing overheads and the possibility of further RMB appreciation. The rating also incorporates the risks incurred as the Company tries to explore more value-added garment business lines. Xinhua Far East notes that most Chinese companies are at the low end of the textile industry value chain, mainly providing raw materials, semi-finished products and, at best, OEM. These players are facing squeezing margins as overheads in China continue to rise as a result of economic development and the upward pressure on the foreign exchange rate. Margins in the plush industry are also negatively impacted by high petrochemical product prices. As a result, Haixin's gross margin fell to 19.5 pct in 2005, compared with 22.9 pct in 2004. EBIT margins for the Company fell to 7.2 pct last year from 10.5 pct in 2004. In order to counteract competition and thinning margins, the Company set up its strategy to raise its position in the value chain. Although such plans represent a necessary evolution for the Company, the uncertainties of such a migration are substantial, as it requires increased investment and more managerial talent to build a successful brand. With its expansion in the garment business, Haixin's requirement for working capital is increasing, thus pushing up the Company's debt level. At the end of 3Q05, the Company's gross debt to total capital increased to 33.2%, the highest level seen over the past six years. Nevertheless, the Company's leading position in the plush industry, its relatively conservative financial policy and abundant cash reserves of RMB 642.2 million as of end-3Q05 have provided a cushion for solvency in the medium term. Furthermore, the Company was awarded a license to produce products related to "Fuwa" (the five Beijing Olympic Mascots), which provides the Company with an opportunity to boost revenues and improve profit margins. Haixin is a leader in China's plush industry. In the first three quarters of 2005, Haixin realized turnover of RMB1.52 billion. At the end of June 2005, Shanghai Songjiang Dongjing Industrial Company was Haixin's largest shareholder, with a 12.44% stake in the Company. Hong Kong Shen Hai Company followed with an 11.81% stake. Haixin is a mid cap company constituting the Xinhua/FTSE China 200 and B35 Indices. As of March 28, 2006, its total A-share market cap equaled RMB2.1 billion, with investable market cap of RMB1.1 billion. Its B-share market cap totaled USD74 million, USD55 million of which is investable. For the rating report summary, please visit http://www.xinhuafinance.com/creditrating . Note to Editors: About Xinhua FTSE China 200 Index Xinhua FTSE China 200 Index is the large cap index in the Xinhua FTSE China A Share Index Series and includes the top 200 companies in China by market cap. It is designed as a tradable index and is calculated in real-time every 15 seconds. For daily data and further information, see http://www.xinhuaftse.com . About Xinhua Far East China Ratings Xinhua Far East China Ratings (Xinhua Far East) is a pioneering venture in China that aims to rank credit risks among corporations in China. It is a strategic alliance between Xinhua Finance (TSE Mothers: 9399), and Shanghai Far East Credit Rating Co., Ltd. Shanghai Far East became a Xinhua Finance partner company in 2003 and the first China member of The Association of Credit Rating Agencies in Asia in December 2003. Capitalizing on the synergy between Xinhua Finance and Shanghai Far East, Xinhua Far East's rating methodology and process blend unique local market knowledge with international rating standards. Xinhua Far East is committed to provide investors with independent, objective, timely and forward-looking credit opinions on Chinese companies. It aims to help investors differentiate the credit risks among the corporations in China, thereby, cultivating their awareness and promoting information disclosures and transparency in China market. For more information, see http://www.xfn.com/creditrating . About Xinhua Finance Limited Xinhua Finance Limited is China's unchallenged leader in financial information and media, and is listed on the Mothers board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China's financial markets and the world, Xinhua Finance serves financial institutions, corporations and re-distributors through four focused and complementary service lines: Indices, Ratings, Financial News and Investor Relations. Founded in November 1999, the Company is headquartered in Shanghai with 21 news bureaus and offices in 18 locations across Asia, Australia, North America and Europe. For more information, please visit http://www.xinhuafinance.com . About Shanghai Far East Credit Rating Co., Ltd Shanghai Far East Credit Rating Co., Ltd. is the first and leading professional credit rating company with comprehensive business coverage in China. It is an independent agency established by the Shanghai Academy of Social Sciences with the mission to develop internationally accepted standards for capital market in China. The company is a pioneer in conducting bond-rating business in China. For years, it has been authorized by the Shanghai branch of the PBOC to undertake loan certificate credit rating. Since establishment, it has rated over 1,000 corporate long-term bonds and commercial papers, based on the principles of objectivity, fairness and independence. The company has also maintained over 50% market share in the loan certificate-rating sector in Shanghai for three consecutive years. With its strong local presence and knowledge, it provides investors with unique and the most insightful credit opinion. For more information, see http://www.fareast-cr.com . For more information, please contact: Hong Kong Joy Tsang, Corporate & Investor Communications Director, Xinhua Finance Tel: +852-3196-3983, +86-21-6113-5999, or +852-9486-4364 Email: joy.tsang@xinhuafinance.com US David Leeney, Taylor Rafferty (IR/PR Contact in US) Tel: +1-212-889-4350 Email: david.Leeney@taylor-rafferty.com SOURCE Xinhua Far East China Ratings
PR
Post your Comment
広告
ブログ内検索
アーカイブ
カウンター