This report prepared by Huaxia D&B China is sent to answer your inquiry on:

Planet International

Prepared for   :   D&B Registration (Normal) - 1 year
Subscriber Key   :   927012669
Delivery Date   :   Dec 26,2013
Printed on   :   Dec 26,2013

Inquiry Date   :   Dec 18,2013
Inquiry Subject   :   苏州恒星医用材料有限公司
Inquiry Address   :   -
Inquiry Phone/Fax   :   (P)0512-82181629 
Inquiry Reference   :   CUSTSR

Copyright © 2011-2015 Shanghai Huaxia Dun & Bradstreet Business Information Consulting Co., Limited

 
 

Planet International

Report compiled Dec 26,2013
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IDENTIFICATION & SUMMARY

Summarise  
 
   
 

Identification

Company Name Planet International
Official English Name Yes
Chinese Name 苏州恒星医用材料有限公司
DUNS® Number 52-819-4366
Address No.33, Qinglian Rd., Huguan Industry Zone,
Suzhou
Jiangsu
Postal Code 215151
Address (Chinese) 苏州新区浒关工业园青莲路33号
苏州市
江苏省
Telephone 0512 82181667
0512 82181680
Facsimile 0512 82181666
Website www.planethk.net
E-mail danielsz@planet-sz.com
Type of Business A limited company
Year Started 2004
History Clear (Complete Shareholder(s) and management information)
Imports Yes
Exports Yes
Employees 192 (Here)
Principal Xiaoshen ZHOU / General Manager
US SIC Code 3842 0500
Primary Business Bandages and dressings
 
 

Risk Summary

   
 
RISK EVALUATION
   
  EMMA Score 4  
  D&B Rating 3A2  
  D&B PAYDEX® N/A  
  China Delinquency Score Risk Class 3  
 
LEGAL EVENTS
   
  Litigation Records 0  
 
PRINCIPAL INFORMATION
   
  Principal(s) 1  
 
PAYMENT INFORMATION
   
  Trade References 0  
 
COMPANY KEY EVENTS
   
  History Changes 0  
  Media Records 0  
 
FINANCIAL SUMMARY
   
  Registered Capital RMB 23,000,000  
  Sales/Turnover 40,022,000 (2012)  
  Tangible Net Worth 25,195,000 (2012)  
  Total Assets 61,747,000 (2012)  
  Shareholders Equity 27,859,000 (2012)  
 
 
Click on summary items for full details
 
 
 
CURRENCY
All monetary amounts quoted in this report are shown in Renminbi(RMB) unless otherwise stated.
 
REMARK
"-" stands for "Insufficient information" or "No comments".
 
 
   

Risk Assessment


  EMMA Score 4  
  Relative Risk  
 
 Below Average Risk
 
   
  1 10  
 
  D&B Rating 3A2  
  Financial Strength 3A (Tangible Net worth 8,500,000 - 84,999,999)  
  Composite Appraisal2 Good 

  PAYDEX of This Business N/A
     
  PAYDEX of this business is not available
     
  It requests at least three trade experiences to generate a PAYDEX. PAYDEX is not computable with the current payment information of the company.
     
 
 
  Delinquency Class 3 
 

 

 

 
  Delinquency Risk: Medium Level
  China Delinquency Score: 503
 

Subject's CDS score is 503, indicating the company is within the class of 3 in CDS distribution, which is within medium level of delinquent risk range.

The likelihood of the company group to be delinquent in next 12 month is 5.6%, which belongs to medium level delinquency risk group. Meanwhile, the theoretical probability of sever delinquency by subject company is referenced as 5.55%, indicating that the base line for initial credit granting could be based on group level delinquency, but should go through comprehensive overview of subject's credit worthiness before final decision.

 

Company Overview

Subject was established in 2004. Subject is mainly engaged in the development, production and marketing of class 1 medical materials and dressings. Currently, subject owns around 192 staff. In 2012, subject's Revenue reached RMB 40,022 thousand, Operation Profit was RMB 1,465 thousand and Quick Ratio that year was 1.14.

Subject's EMMA score is "4", which is in the medium risk range. Based on its financial statements, subject's financial status is considered as good, indicating subject's real risk is probably lower than the EMMA score reflected.

Current Investigation


On Dec 26,2013 , Mr.Dai Lin, Operation Director (Tel: 0512-82181679) submitted financial statement, and confirmed the operational and historical data in this report. Other information was obtained from a third party source.

Generally in China, the information in our reports is collected and validated through telephone interview with subject, review of public web sites of the business and acquisition of data that is publicly available by the Chinese Government.

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RISK ANALYSIS

Summarise
 
   

EMMA Score


10 


EMMA Score Analysis

Subject's EMMA score is mainly impacted by the following risk drivers:

  • Subject is a limited company, which is classified as a lower risk type of business.
  • Subject's history is Clear (Complete Shareholder(s) and management information), which indicates a lower risk level.
  • Subject has an employee size of 192, which is in the medium range level, indicating a medium risk level.
  • Subject/Industry PAYDEX® shows payment behaviour of the company/industry is good, indicating lower risk.
  • EMMA Score
    4


    By evaluating all risk factors, the company is assigned with EMMA score of "4", indicating "Below Average Risk".


    Industry Norm Grouping
           
      Industry Group SIC 3842  
      Industry Group Description Surgical appliances and supplies  
      Industry Group EMMA Score Quartile Values
    Lower Quartile 4
    Median 5
    Upper Quartile 6
     

    Company Risk Vs Industry Norm Chart
    EMMA Score
    Lower Quartile
    Median
    Upper Quartile
      0 1 2 3 4 5 6 7 8 9 10
    EMMA Score
    Planet International Industry
    Distribution of EMMA Score in Huaxia D&B China's Database
    40%
    35%
    30%
    25%
    20%
    15%
    10%
    5%
    0%
      1 2 3 4 5 6 7 8 9 10
     
    Score Distribution
    1 0%
    2 3%
    3 11%
    4 20%
    5 24%
    6 17%
    7 15%
    8 8%
    9 2%
    10 0%

    Note: please refer to the report appendix for the principle and major factors of Huaxia D&B China EMMA Score.

     

    Risk Assessment Matrix
    PAYDEX Risk Range
    Low
    (EMMA 1 - 3)
    Medium
    (EMMA 4 - 7)
    High
    (EMMA 8 - 10)
    PAYDEX>=80 AA BA CA
    80>PAYDEX>=60 AB BB (Subject lies in this group) CB
    PAYDEX<60 AC BC CC

     

    Interpretation and Analysis of Risk Assessment Matrix
    Classifications Risk Level Description Credit Policy
    Quality group AA->AB Business is sound, and the bills are paid promptly with good credit reputation. Favorable credit policy can be granted with automatic approval.
    Medium risk group BA->BB->AC Business is operated under medium risk, and some delay payment behaviors exist. Appropriate credit policy is suggested with some manual review.
    High risk group CA->BC->CB Business is operated under high risk, and some severe delay payment behaviors exist. Relatively strict credit policy is suggested with detailed manual review.
    Monitoring group CC Business is run under high risk or with high possibility of windup, and the bills are unable to be paid in time. Avoid credit sales. Cash settlement is suggested.
    *Risk levels are listed in order of risk from low to high.

     

    According to the Risk Assessment Matrix, subject is rated as "BB", which represents the subject belongs to the medium risk group:

  • The risk level of the subject is medium, which reveals its business risk is at the average level amid all Chinese enterprises;
  • The PAYDEX® of subject/industry indicates that some delay payment behavior exists. However, the time and amount of the delay is relatively acceptable, thus its delay payment behavior is not severe;
  • On the whole, Subject's business is operated at the average level and its business risk is also at the average level. And the subject/industry has some short-term delay payment behaviors. The subject is classified in the medium risk group. The appropriate credit policy should be granted, following a necessary manual review of the subject based on its capacity, internal policy and risk tolerance.
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    TRADE PAYMENTS

    Summarise
     
       


    Up to Dec 26,2013 , no particular payment records on subject can be found in HDBC Dun-trade Program database. In addition, any related payment information for subject could not be obtained via tele-interviews during current investigation.

    D&B PAYDEX®


    The D&B PAYDEX® is a unique indicator of payment performance weighted by the monetary value of the payment experiences as reported to D&B by trade references. A detailed explaination of how to read and interpret PAYDEX values can be found in the Appendices section of this report.


      PAYDEX of This Business N/A
         
      PAYDEX of this business is not available
         
      It requests at least three trade experiences to generate a PAYDEX. PAYDEX is not computable with the current payment information of the company.
         
     
      PAYDEX of This Industry
    78
     
     
     
     
       
      0 100  
     
      When weighted by value,payments to suppliers average 3 days beyond terms based on payments collected over the last 24 months
     
      Industry Name:Surgical appliances and supplies
      Industry Median:78
      Upper/Lower Quartile:80/61
      Based on:55 businesses
         
     
    D&B PAYDEX® Key
    High risk of late payment(average 30 to 120 days beyond terms) Medium risk of late payment(average 30 days or less beyond terms) Low risk of late payment(average prompt to 30+ days sooner)

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    HISTORY

    Summarise
     
       

    Registration


    Registration Date Feb 12,2004
    Registered At Suzhou High-new District (Huqiu) Administration for Industry & Commerce
    Registration No. 320512000023442
    National Organization Code 757993286
    License Expiry Date Feb 10,2054
    Registered Capital RMB 23,000,000
    Paid-up Capital RMB 23,000,000
    Tax No. 320508757993286
    Business Started 2004
    Type of Business a limited company
    Registered Address Xuguan Indusry Zone, Suzhou High-new District
    Legal Representative Zhou Xiaoshen
    Business Scope License the project: None. General business items: a class of medical materials and dressings production; sales: a class of medical equipment, textiles, garments, gifts, stationery, sponge products, non-hazardous chemical products, cosmetics, luggage and accessories, leather goods, hardware products, auto parts, building materials, mold, electronic products, electrical equipment, communication products, plastic products, plastic packaging products; commodity import and export business of various commodities and technologies (the state limit or prohibit the import and export business and except technology).

    Shareholder(s)

    Shareholding Structure

    Name Region/ Country Shares Investment Mode Paid-Up Rate
    Zhou Xiaoshen and other 3 individuals
    周小申等四位自然人
    China 100%   fully paid
    Total   100%    

    Comment:

  • During this current investigation, the Inv. mode is not available.
  • Subject passed the annual inspection of 2012 with Administration for Industry & Commerce.
  • Mr.Dai confirmed the shareholder information on Dec 26,2013.
  • History Summary

    Subject was established in 2004.Subject's registered capital is RMB 23,000,000 at present.

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    PRINCIPALS

    Summarise
     
       

    Principal(s)

    Xiaoshen ZHOU - General Manager/Legal Representative
    周 小申

    Gender Male
    Nationality China
    Education university

  • He has more than 10 years working experience.
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  •  
       

    OPERATIONS

    Summarise  
       

    Line of Business

    Subject is a manufacturer.

    Subject is mainly engaged in the development, production and marketing of class 1 medical materials and dressings.


    US SIC Code 3842 0500 Bandages and dressings

    US SIC Code 3841 9900 Surgical and medical instruments

    The operation is not seasonal.

    Awards & Certifications

    Awards & Certifications Name ISO9001:2008
       
    Awards & Certifications Name ISO13485
       
    Awards & Certifications Name FDA
       
    Awards & Certifications Name SA8000
       

    Subject is entitled to independent import and export rights.



    Products & Services

    Product Name Maximum Productivity Percent
    Band-Aid 2 billion pcs per year  
    Cooling paste 400 million pcs per year  
    Alcohol wipes 1 billion pcs per year  

    Purchasing

    Purchase Territory

    Area Percent Region/Country
    Domestic 80%  
    Overseas 20% North America
    Asia  

    Purchasing Terms

    Terms   Percent
    Agreement/Contract basis - -
    End of Month - -

    Purchasing Settlement Method

    Settlement Method Percent
    T/T  

    Selling

    Sales Territory

    Area Percent Region/Country
    Domestic 15%   nationwide
    Overseas 85% North America  

    Selling Terms

    Terms   Percent
    Agreement/Contract basis - -
    Credit - -

    Selling Settlement Method

    Settlement Method Percent
    T/T  
    L/C  

    Employees

    Employee Size


    Type Number
    Here 192
    Plant Worker 140
    The above are approximate staff numbers.

    Operations Summary

    Subject is mainly engaged in the development, production and marketing of class 1 medical materials and dressings. The materials subject demands for its production are 80% purchased domestically. 20% of the materials are imported, mainly from North America, Asia and other country/region.Subject is entitled to I/E Rights.
    Subject's major products are Band-Aid, Cooling paste and Alcohol wipes. The productivity of Band-Aid is 2 billion pcs per year. The productivity of Cooling paste is 400 million pcs per year. The productivity of Alcohol wipes is 1 billion pcs per year. Subject was awarded ISO9001:2008, ISO13485, FDAand SA8000 certificate.
    Subject's major products are Band-Aid, Cooling paste, Alcohol wipes and etc. 15% of the products are sold domestically. 85% of the products are exported, such as North America.

    Location

    Principal Place of Business

    Location Description An industrial area
    Land Area 13,333 sqm
    Used as Office and factory
    Occupation Type Owns

    Other Place of Business

    Type REGISTERED ADDRESS
    Address Xuguan Indusry Zone, Suzhou High-new District
       

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    FINANCE & BANKING

    Summarise
     
       

    Finance


    The 2012 balance sheet and profit and loss statement were audited.
    The 2012 financial statements were submitted by the company personnel.

    Financial Highlights

         
     
     
     
     
     
     
     
    Dec 31,2012
    RMB '000
     
      Current Assets         46,829  
      Current Liabilities         33,888  
      Working Capital         12,941  
      Tangible Net Worth         25,195  
      Fixed Assets         12,254  
      Total Assets         61,747  
      Total Liabilities         33,888  
      Shareholders Equity         27,859  
      Sales         40,022  
      Net Profit         1,175  

    Balance Sheet

         
     
     
     
    Dec 31,2012
    RMB '000
    Fiscal
    (Independent)
     
      Cash and Bank     5,782  
      Accounts Receivables     12,789  
      Other Receivables     20,232  
      Prepaid Expense     93  
      Inventory     7,933  
      Total Current Assets     46,829  
      Fixed Assets, at cost     14,798  
      Less Acc. Depreciation     (5,081)  
      Construction in Progress     2,537  
      Total Fixed Assets     12,254  
      Intangibles     2,664  
      Total Intangible Assets     2,664  
      Total Investment & Other Assets     -  
      TOTAL ASSETS     61,747  
      Short-Term Loans     28,000  
      Accounts Payable     1,481  
      Notes Payable     5  
      Other Payables     3,682  
      Provision:Taxes & Fees     720  
      Total Current Liabilities     33,888  
      Total Non-Current Liabilities     -  
      Total Liabilities     33,888  
      Capital     23,000  
      Retained Earnings     4,859  
      Total Equity     27,859  
      TOTAL LIABILITIES & EQUITY     61,747  

    Profit & Loss Statement

         
     
     
     
    Dec 31,2012
    RMB '000
    Fiscal
    (Independent)
     
      Sales     40,022  
      -Cost of Goods Sold     31,515  
      -Sales Tax     210  
      Gross Profit/Loss     8,297  
      -Operating Expenses     1,209  
      -Administrative Expenses     3,832  
      -Financial Expenses     1,791  
      Operating Profit/Loss     1,465  
      Profit/Loss Before Tax     1,465  
      -Income Tax     290  
      Profit/Loss After Tax     1,175  
      Net Profit(Loss)     1,175  

    Key Financial Ratios

      Ratio
        2012  
      Current Ratio     1.38  
      Quick Ratio     1.14  
      Total Debt/Equity Ratio     1.21  
      Debt Ratio     0.54  
      Collection Period (Days)     115  
      Payment Period (Days)     16  
      Inventory Turnover (Days)     90  
      Asset Turnover     0.64  
      Gross Profit Margin %     20.73  
      Net Profit Margin %     2.93  
      Return on Equity %     4.21  
      Return on Assets %     1.90  
    Financial Comments
     
    • On Dec 26,2013, subject’s financial statement of 2012 were obtained from subject personally, and they have been audited by Suzhou Junhe Borui Tax Accountant Firm.
    • Overall financial status of subject is considered as stable.
     

    Banking

     

    During this current investigation, the bank information of subject is not available.

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    INDUSTRY HIGHLIGHTS

    Summarise  
     
       

    Industry Highlights


    Date May24,2013
    Source Statistics Authorities
    Detail In 2012, with the encouragement and support of the policies, the demand of China’s medical appliance market kept rising. However, as is impacted by declining economic growth, the speed increase of the industry slowed down. At the end of November, 2012, there were over 16,000 Chinese manufacturers of medical appliances. In the first three quarters, the total industrial output value medical equipment & appliance manufacturing industry reached RMB 110.3 billion, up 19.5% year on year with the speed increase 7.1 percents lower than that of Q3 of last year. The sales income was RMB 10.886 billion, up 19.94% year on year with the speed increase 8.24 percents lower. In terms of import and export, its import scale kept a rapid growth while the speed increase of export kep generally low-running with a moderate rebound. In 2012, China’s total volume of imports and exports reached to USD 30.062 billion, up 13.03% year on year. Among that, exportations reached USD 17.59 billion, up 11.96% year on year, and importations were USD 12.472 billion, up 14.56% year on year with the speed increase 27% lower year on year. In 2012, China’s imported medical appliances come fr 103 countries with trade surplus of USD 5.117 billion, up 6.09% year on year. In terms of business condition, the income and profits of China’s medical appliance industry increased by 21.4% and 24.4% and kept a stable growth. Along with the improvement of the domestic medical system, medical appliance market may continue to grow at a high speed.
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    Public Records

    Summarise
     
       

    Litigation Records

    As of Dec 26,2013 , HDBC has searched the China Court website, website of local court in the place where subject is located, major domestic courts websites as well as our internal China court database, but no related court records can be found against the subject.

    Remark: The above mentioned channels are currently publicly available ones to search for the court records against China enterprises. However, due to lack of a centralized database in mainland China that covers all Chinese enterprises' litigation records, partial cases against subject might not be available.

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    APPENDICES

    Summarise  
       

    HDBC EMMA Score

    D&B EMMA Score (Emerging Market Mediation Alert Score) is a risk assessment model developed for emerging market countries. It is a score developed by data profiling approach and statistical modeling, which predicts the possibility of a business in perilous status of instability or unreliability, such as poor financials, delay payment, stale inventory, abnormal operational status, etc. The EMMA Score provides you with a quick assessment of a business' risk standing, and when used together with other information, allows you to make better risk decisions.

    The EMMA Score is based on a scale of 1 to 10, where 1 represents a lower risk and 10 a higher risk.

    EMMA Score for China is initially rolled out in May 2009, derived from the sample analysis of millions of company records. When using the Score to make individual applicant decisions, a customized version of this table based on an analysis of the Score against your customer account portfolio is recommended. It does not necessarily mean doing business with a company, which is assigned with higher Risk Score, will result in increased risk.

    Considering the particularity of Chinese business environment and in order to make EMMA Score analyze and reflect risk factors of Chinese enterprises more appropriately, HDBC conducted an optimization and adjustment toward EMMA Score in the first half of 2012, combined PAYDEX® to appraisal model as an important risk evaluating dimension and will try harder to deeply reflect the internal factors of enterprise risk. The optimized EMMA Score makes the scores more scientifically and effectively reflect the risk characteristics of current China as an emerging market and more objectively and deeply reflect risk level of Chinese enterprises.

    EMMA Score for China is calibrated on regular basis following D&B Global Modeling Methodology that captures business environmental change in China caused by macro economy shift and particular systematic events.

     

    HDBC EMMA Score Commentary
    Risk Range EMMA Score % of Report in Database   % of High Risk Business   Commentary  
    Low Risk Scores 1-3 28.9%   5.7%   Lower Risk Range  
    Medium Risk Scores 4-7 56.7%   9.1%   Average Risk Range  
    High Risk Scores 8-10 14.4%   36.4%   High Risk Range  


    The Key Drivers of the EMMA Score include the following:

    Business Information

    • Business Type
    • Line of Business
    • Employee Size
    • Sales Territory
    • Registered Capital
    • Year of Establishment
    • History Status
    • Property Ownership

    Geographical Information

    • Region & Province

    Public Record

    • Number of Negative Record

    Payment Information

    • Percentage of Overdue Payment
    • Company/Industry PAYDEX®
    EMMA Score Application
    • Low EMMA Score - May proceed to process the applicant quickly with minimal or no manual review depending on the extent of score validation analysis.
    • Medium EMMA Score - Medium Risk Scores - Recommend a manual review of the applicant based on the applicant's capacity, your internal policy and risk tolerance.
    • High EMMA Score - High Risk Scores - Requires thorough manual review of potential decline, or approval depending on the applicant's capacity, your internal policy and risk tolerance.

    Sample Data Analysis of Risk Assessment Matrix Database


    Risk Matrix Sample Distribution
    PAYDEX Risk Range
    Low Medium High
    PAYDEX>=80 13.6% 12.6% 0.5%
    80>PAYDEX>=60 15.2% 28.7% 1.7%
    PAYDEX<60 0.1% 15.4% 12.2%

    Possibility of High Risk Enterprise
    PAYDEX Risk Range
    Low Medium High
    PAYDEX>=80 5.8% 8.4% 9.1%
    80>PAYDEX>=60 5.6% 8.4% 14.5%
    PAYDEX<60 5.6% 11.1% 40.4%

    Interpretation and Analysis of Risk Assessment Matrix
    Classifications Risk Level Description Credit Policy
    Quality group AA->AB Business is sound, and the bills are paid promptly with good credit reputation. Favorable credit policy can be granted with automatic approval.
    Medium risk group BA->BB->AC Business is operated under medium risk, and some delay payment behaviors exist. Appropriate credit policy is suggested with some manual review.
    High risk group CA->BC->CB Business is operated under high risk, and some severe delay payment behaviors exist. Relatively strict credit policy is suggested with detailed manual review.
    Monitoring group CC Business is run under high risk or with high possibility of windup, and the bills are unable to be paid in time. Avoid credit sales. Cash settlement is suggested.

    *Risk levels are listed in order of risk from low to high.

    Risk Assessment Matrix is the tool for investigating the insight of subject combined with EMMA Score and PAYDEX®. EMMA Score can indicate the risk level of subject. With the help of  PAYDEX®, one can also further analysis subject's risk and find out the internal factors causing risks based on the payment records of subject. In summary, the assessment matrix can make further insightful analysis towards the enterprises with similar EMMA Scores.

    When using EMMA Score and Risk Assessment Matrix, the combination of other information, such as internal assessment policy of enterprise, commercial information provided by HDBC, and feedback from the people who directly contacts with subject, etc., is recommended. With these information, it will allow you to be more convenient to make risk decisions.

    D&B Rating

    D&B Rating Interpretation Tables


      Financial Strength   Composite Credit Appraisal
    Tangible Net worth Registered Capital Renminbi (RMB) Strong Good Fair Limited Undetermined
    5A 5AA > 450,000,000 1 2 3 4 -
    4A 4AA 85,000,000 - 449,000,000 1 2 3 4 -
    3A 3AA 8,500,000 - 84,999,999 1 2 3 4 -
    2A 2AA 6,500,000 - 8,499,999 1 2 3 4 -
    1A 1AA 4,500,000 - 6,499,999 1 2 3 4 -
    A AA 2,500,000 - 4,499,999 1 2 3 4 -
    B BB 1,750,000 - 2,499,999 1 2 3 4 -
    C CC 1,000,000 - 1,749,999 1 2 3 4 -
    D DD 650,000 - 999,999 1 2 3 4 -
    E EE 450,000 - 649,999 1 2 3 4 -
    F FF 300,000 - 449,999 1 2 3 4 -
    G GG 200,000 - 299,999 1 2 3 4 -
    H HH < 200,000 1 2 3 4 -
      Alternate Ratings   Explanation               
    N Financial Strength is negative     3 4 -
    O Financial Strength is undisclosed 1 2 3 4 -
    NB New Business: Less than 24 months 1 2 3 4 -
    NQ Out of Business: Business has ceased to trade 4  
    BR Branch or division location
    INV Investigation is undergoing

    Explanation of PAYDEX

    A score of 80 denotes that payments reported to D&B have generally been made within terms. Scores over 80 indicate that payments reported to D&B have been made earlier than terms. The chart below outlines the specific 0-100 score and what it means.

     

    D&B PAYDEX®   Payment Habit
    100   Anticipate
    90   Discount
    80   Prompt
    70   15 days beyond terms
    60   22 days beyond terms
    50   30 days beyond terms
    40   60 days beyond terms
    30   90 days beyond terms
    20   120 days beyond terms
    0-19   Over 120 days beyond terms
    UN   Unavailable

    Explanation of China Delinquency Score

    HDBC's China Delinquency Score predicts the likelihood that a company will pay its bills in a severely delinquent manner based on the information in HDBC's files. A severely delinquent business is defined as a business with less than 75% of its trade experiences paid in a satisfactory manner (prompt or within 30 days) and at least 10% of its payments 90 days or more past due or one or more events classified as leading to failure, such as meeting of creditors, administrator appointment, bankruptcy, receiver appointed, litigation records within 2 years and negative media information within 1 year.

    The China Delinquency Scoring System uses statistical probabilities to classify public and private companies into three risk classifications of Business Delinquency: a 279-641 Score, 1-5 Credit Classes and 1-100 Percentile Ranking. These classifications are based on the chance of a business experiencing the above definition of "bad" over the next 12-months period. The China Delinquency Scoring model utilizes the combined power of HDBC's vast information database including Payment, Demographic, Financial, and other information, when and if available.

    China Delinquency Score is calculated through logistic regression using below 16 risk drivers:

    Demographic Information
    • Business Type
    • Years in Business
    • Line of Business (SIC)
    • Region & Province
    • History Status
    • Existence of Court Record

    Financial Information

    • Age and existence of B/S
    • Current Ratio
    • Liabilities to Net Worth
    • Return on Assets
    • Current Assets
    Payment Information
    • Number of Payment Experiences
    • Payment Term
    • Percent of Satisfactory Payment Experiences
    • Percent of Medium Delinquent Payment Experiences
    • Percent of Severe Delinquent Payment Experiences

     

    The China Delinquency Score assigns the following measurements of risk:

    A “Score” of 279–641, where a 279 represents businesses that have the highest probability of severe delinquency, and a 641 which represents businesses with the lowest probability of severe delinquency. This score provides a direct relationship between the score and the level of risk. The marginal odds of being good doubles for each 40 point increase. For example, a business that scores a 340, on a marginal basis, is half as risky as a business that’s cores a 300. This score enables a customer to utilize more granular cutoffs to drive their automated decision-making process.

    A “Class” of 1–5, which is a segmentation of the scoreable universe into five distinct risk groups where a one (1) represents businesses that have the lowest probability of severe delinquency, and a five (5) represents businesses with the highest probability of severe delinquency. This Class enables a customer to quickly segment their new and existing accounts into various risk segments to determine appropriate marketing or credit policies.

    Risk Quintile in 5 Class
    Class MinScore MaxScore % of Population Actual BadRate(% of Accounts) Predicted BadRate(% of Accounts) Cum. Pct. Bads(% of Accounts)
    5 279 380 10% 52.6% 52.2% 48%
    4 381 485 20% 13.1% 13.4% 72%
    3 486 523 40% 5.7% 5.6% 93%
    2 524 556 20% 3.0% 3.1% 99%
    1 557 641 10% 1.6% 1.5% 100%
    Delinquency Level by 5% Quantile
    Quintile MinScore MaxScore % of Population Actual BadRate(% of Accounts) Predicted BadRate(% of Accounts) Cum. Pct. Bads(% of Accounts)
    20 279 333 5% 61% 60% 28%
    19 334 380 5% 44% 44% 48%
    18 381 435 5% 21% 22% 58%
    17 436 457 5% 13% 14% 64%
    16 458 474 5% 10% 10% 68%
    15 475 485 5% 8% 8% 72%
    14 486 486 5% 8% 7% 75%
    13 487 487 5% 7% 7% 79%
    12 488 495 5% 7% 7% 82%
    11 496 501 5% 6% 6% 85%
    10 502 509 5% 5% 5% 87%
    9 510 520 5% 4% 5% 89%
    8 521 521 5% 4% 4% 91%
    7 522 523 5% 5% 4% 93%
    6 524 532 5% 4% 4% 95%
    5 533 540 5% 3% 3% 96%
    4 541 546 5% 3% 3% 97%
    3 547 556 5% 3% 3% 99%
    2 557 585 5% 2% 2% 99%
    1 586 641 5% 1% 1% 100%

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    Our ref: 201312189309301537

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    Whilst Huaxia D&B China attempts to ensure that the information provided is accurate and complete by reason of the immense quantity of detailed matter dealt within compiling the information and the fact that some of the data are supplied from sources not controlled by Huaxia D&B China which cannot always be verified, including information provided direct from the subject of enquiry as well as the possibility of negligence and mistake, HDBC does not guarantee the correctness or the effective delivery of the information and will not be held responsible for any errors or omissions therein.


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