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Sample Report
Subject: Shanghai XXXX Technology Development Co., Ltd.
Printing Time: Mar. 3, 2002
Report Type: Business Credit Report
Currency in this report is Chinese Yuban unless otherwise stated.
Registered Address: No.1688, Huqingping Rd., Shanghai
Post Code: 200001
Telephone: (021)612345xx
Facsimile: (021)676543xx
Business Address: Suite B, 24/F, No.88 Hengshan Rd., Shanghai
Post Code: 200000
Telephone: (021)612388xx
Facsimile: (021)612388xx
Website: www.dlzh.com.cn
SIC Code (China): 6270 mechanical & electrical equipment wholesale
IMPORTANT EVENTS
Subject changed its name from Shanghai XX Technology Development Co., Ltd. into the current name in April 2001.
SUMMARY
Starting Time: May 18, 1997
Legal Status: Limited Liability Company
Registered Capital: 10,000,000
Turnover: 178,258,000 (2001)
Total Assets: 56
Business Line: computer equipment wholesale and retail
CREDIT RATING
Credit Limit: 1,500,000
Credit status: CR3
We recommend here does not take into consideration of your specific transaction with Subject and is only for your reference in making your credit decisions. For purpose of credit rating, we take into consideration the subject company's size, history and background, its financial and operational status against the average level in its line, its credit history as well as other relevant information, The implications of our credit rating are as follows:
Rating Level of Risk Credit Suggestion
CR1 Very small risk Credit is highly recommended.
CR2 Small risk Credit terms can be flexible.
CR3 Below normal risk Credit terms should be on normal basis.
CR4 Normal risk Credit terms should be on monitoring basis.
CR5 Above normal risk Credit should better be avoided.
CR6 High risk Credit should be on secured basis.
CR7 Very high risk Transactions should be on COD basis.
OVERVIEW
Subject is in an industry that develops rather well. Subject is a fairly large company in its line and locally rather well known. Subject has been a trader of many famous brands and enjoys rather stable relationship with the relevant suppliers. Subject has a financial performance above the average level in its line. Its sales margin is becoming a little low due to fierce competition in its line. Its assets structure and efficiency are above the average level of its line.

FIELD VISIT
Our credit analyst visited Subject's office at B 24 th floor, Zhengshen Plaza, on March 10, 2002. The plaza is in a busy and convenient commercial section of Xuhui District, Shanghai. According to an employee of the plaza's property management office, the plaza is a high-grade office building with a pretty high rental of 100-120 RMB/m 2 /month. Subject moved here in October 2000 and has no detrimental rental payment record. Subject occupies about 400 m 2 as its office and the internal layout is good. The working atmosphere inside is tense.

MAIN ACTIVITIES
Main Business: Computer equipment wholesale and retail. Subject is the general agent of Huari displays. It is also engaged in the distribution of Hongda memories, Kunpeng hard disks, Quanshun CD-ROMs, keyboards, mouses, etc.

SALES INFORMATION
Subject has offices in Nanjing, Hangzhou, Hefei and Nanchang besides its headquarter office in Shanghai.Our credit analyst met with the general manager, Mr. Li Jun in visiting their office on March 10, 2002. According to him, their sales margin keeps coming down due to the fierce competition in East China recently, especially computer display that is their main commodity. However, he further advised, they will focus on middle and small cities where the sales margin is higher. Now most of their sales are still made in Shanghai and Jiangsu, taking 70% of their total sales. Their sales terms are usually COD or 30 days credit.

PURCHASE INFORMATION
As the agent of Huari display, Subject directly purchases computer displays from Nanjing Huari Display Co., Ltd. on terms of 30-day credit.Other commodities, such as memories, hard disks, CD-ROMs, are purchased from its upstream dealers, which are chosen for purpose of getting the most favorable terms. Its main suppliers include Shanghai Qianzheng Technology Co., Ltd., Suzhou Zhongji Electronic Co., Ltd. Its normal payment terms are COD or 30-day credit.

CREDIT RECORD
Our credit analyst contacted Miss Yan (025-84556567) of the financial department of its supplier, Nanjing Huari Display Co., Ltd. and was advised that Subject did not have any detrimental payment record.Our credit analyst also called Subject's another supplier, Suzhou Zhongji Electronic Co., Ltd. (0551-63415399). There is no negative comment from their sales manager, Mr. Wang. Check with local courts has revealed nothing detrimental against Subject.

STAFF
Total: 56
Headquarters: 18

FINANCE
Balance Sheet (Unit: 1.000):
Current assets 12-31-2000 12-31-2001
Cash & Bank 2,950 4,183
Accounts receivable 3,119 6,267
Inventory 5,262 8,291
Other current assets 2,749 8,340
Total current assets 14,080 27,081
Fixed assets    
Fixed assets, net 561 891
Total fixed assets 561 891
Intangible and deferred assets 0 0
Total assets 14,641 27,972
Current Liabilities    
Short-term loans 1,000 2,000
Accounts payable 6,915 8,213
Other Current liabilities 192 653
Total Current liabilities 8,107 10,866
Long-term liabilities 0 0
Total Liabilities 8,107 10,866
Shareholders's equity    
Total shareholders's equity 6,534 17,106
Total liabilities and shareholders's equity 14,641 27,972
Income Statement (Unit:1,000): 2000 2001
Principal operating revenues 130,030 178,528
Cost of Goods

123,804

 171,418
Sales tax and additional

70

 97
Sales gross profit

6,156

7,013
Selling expenses

1,677

 1,998
General administration expenses

2,424

 2,829
Financial expenses

2

 82
Principal operating profit

2,057

 2,268
Other operating profit

11

 (328)
Operating profit

2,046

 1,940
Non-operating profit

203

--
Non-operating expenses

3

--
Total profit

2,246

 1,940
Less: Income tax

62

 54
Net profit

2,184

1,886

Important Ratios

2000 2001

Return on net assets ratio (%)

33.43 11.03
Return on total assets ratio (%)

15.34

 6.94
Profit margin after tax (%)

1.68

 1.06
Turnover of total assets

8.88

 6.38
Turnover of current assets

9.24

 6.59
Turnover of accounts receivable

41.69

 28.49
Liabilities /assets ratio

55.37

38.85
Current ratio

1.74

 2.49
Quick ratio

1.09

 1.73
Source of Financial Statements: Government.
FINANCIAL NOTES
Our credit analyst conducted a phone interview with the finance manager of Subject, Miss BaiXue on March 11, 2002 and asked why its net worth increased so much. She advised that the reason is that Subject increased its registered capital by 9,000,000 in April 2001.In answering the question why the inventory and accounts receivable were so big as of the end of the year 2001, she explained that was the result of aggressive credit sales in order to take bigger market share.
FINANCIAL RATIO COMPARISON
SIC Code: 6270 mechanical & electrical equipment wholesale

Index(2001)

Subject Industrial Average

Return on net assets ratio (%)

11.03 7.23

Return on total assets ratio (%)

6.94 3.32

Profit margin after tax (%)

 1.06 0.84

Turnover of total assets

 6.38 3.12

Turnover of current assets

 6.59 3.98

Turnover of accounts receivable (days)

28.49 16.88

Liabilities /assets ratio

38.85 63.81

Current ratio

 2.49 1.24

Quick ratio

1.73 1.03

Index (2000)

 Subject Industrial Average

Return on net assets ratio (%)

33.43 7.23

Return on total assets ratio (%)

 15.34 3.32

Profit margin after tax (%)

1.68 0.84

Turnover of total assets

 8.88 3.12

Turnover of current assets

 9.24 3.98

Turnover of accounts receivable(days)

 41.69 16.88

Liabilities/assets ratio

 55.37 63.81

Current ratio

1.74 1.24

Quick ratio

1.09 1.03
*Industrial Average is the average of the financial rations of the businesses within the industry that are in our database.
BANK RELATIONS
A/C Bank: Xuhui District Branch of Shanghai Bank
A/C Number: 8090333
REGISTRATION
Starting Time: May 18, 1997
Registration Date: May 18, 1997
Registry:Shanghai Municipal Administration for Industry & Commerce
Legal Status: Limited Liability Company
Registered Capital: 10,000,000
Business Line: Computer equipment, office automation equipment, communication and electromechanical equipment (wholesale, retail, agent purchase and sales)
Duration: 20 years
Import Permit: No
Export Permit: No
Capital Alteration: Changed from 1,000,000 to the current amount in April 2001
HISTORY: Subject originated from Shanghai Zhiheng Technology Development Co., Ltd. established on May 18, 1997, which was purchased by Shanghai Dalong (Group) Co., Ltd. and changed to the current name but its business scope remains unchanged basically.
SHAREHOLDERS AND SHARES

Shareholders

 Capital Shares

Shanghai Dalong (Group) Co., Ltd.

 5,100,000 51%

Li Jun

 4,000,000 40%

Fu Bin

 900,000 9%
INFORMATION ON MAIN SHAREHOLDERS
Shanghai Dalong (Group) Co., Ltd.
Address: No. 300 Dalian Rd., Shanghai
Telephone: (021) 67891234
Major business activities are industrial investment and real estate development. Main projects they invested in are the Beach Garden, Xinxin Garden, etc.
MATN EXECUTIVES

Name:

 Wang Tao

Position:

 Board Chairman

Gender:

 Male

Age:

 36

Education:

 Master
Working Experience: Previously employed in Chinese Academy of Science Now General
Manager of Shanghai Dalong (Group) Co., Ltd.
Board Chairman of the Subject from April 2000.

Name:

 Li Jun

Position:

 General Manager

Gender:

 Male

Age:

 40

Education:

 Master
Working Experience: 1983, researcher in Shanghai Chemical Fiber
Research Institute;
1985, section manager in Shanghai Foreign Trade Corporation;
1989, manager in Shanghai Honglong Electronic Co., Ltd.;
1997, General manager of Subject
AFFILIATES

Name:

 The First Business Department

Address:

 lst floor No. 2000 Quyang Rd., Shanghai

Telephone:

 (021) 34561234

Facsimile:

 (021) 34566789

Subject's Shares:

 100%
   

Name:

The Second Business Department

Address:

 No. 218 Dongfang Rd. Pudong, Shanghai

Telephone:

(021) 56780000

Facsimile:

(021) 56788888

Subject's Shares

 100%
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This report is furnished only for your reference in business decision-making and for no other use. Information contained herein shall not be released to any third party unless otherwise agreed by us. We does not warrant the accuracy of any information herein and shall not be liable for any loss or damage arising out of the use of this report.