Dun & Bradstreet 四川宏华

HDBC Report - China Supplier Evaluation Report
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This report prepared by Huaxia D&B China is sent to answer your inquiry on:
Sichuan Honghua Petroleum Equipment Co., Ltd.
D - U - N - S: 52 - 780 - 7604
Prepared for   :  Sichuan Honghua Petroleum Equipment Co., Ltd.
Subscriber Key   :  927113623
Delivery Date   :  May 16,2013
Printed on   :  May 16,2013
Inquiry Date   :  May 14,2013
Inquiry Subject   :  四川宏华石油设备有限公司
Inquiry Address   :  四川省广汉市中山大道南二段四川
Inquiry Phone/Fax  :  (P)028-82971733
Inquiry Reference   :  CS Dept.
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negligence.
Sichuan Honghua Petroleum Equipment Co., Ltd.
Report compiled May 16,2013

Identification
Company Name Sichuan Honghua
Petroleum Equipment Co.,
Ltd.
Official English
Name
Yes
Chinese Name 四川宏华石油设备有限公司
DUNS? Number 52-780-7604
Address Sec.2, Zhongshan Road,
South,
Guanghan
Sichuan
Postal Code 618300
Address (Chinese) 中山大道南二段
广汉市
四川省
Telephone 0838 5151724
0838 5102729
Facsimile 0838 5151100
Website www.hhcp.com.cn
Type of Business A wholly foreign-owned
enterprise
Year Started 2006
History Clear (Complete
Shareholder(s) and
management information)
Imports Yes
Exports Yes
Employees 4,000 (Total)
3,800 (Here)
Principal Ping ZHAO / Legal
Representative
US SIC Code 3533 9903
Primary Business Oil field machinery and
equipment

Risk Summary
RISK
EVALUATION

EMMA Score 2
D&B Rating 5A1
D&B PAYDEX? 78

China Delinquency
Score Risk Class
2
LEGAL EVENTS
Litigation Records 1
PRINCIPAL
INFORMATION

Principal(s) 1
PAYMENT
INFORMATION

Trade References 43
COMPANY KEY
EVENTS

History Changes 18
Media Records 1
FINANCIAL
SUMMARY

Registered Capital RMB 750,000,000
Sales/Turnover 2,958,600,000 (2011)
Tangible Net Worth 1,493,225,000 (2011)
Total Assets 4,423,376,000 (2011)
Shareholders Equity 1,613,751,000 (2011)

CURRENCY
All monetary amounts quoted in this report are
shown in Renminbi(RMB) unless otherwise
stated.

REMARK
"-" stands for "Insufficient information" or "No

Low Risk
Delinquency Class: 2
comments".

Risk Assessment
EMMA Score 2
Relative Risk

1 10

D&B Rating 5A1

Financial
Strength
5A
(Tangible Net worth >
450,000,000)

Composite
Appraisal
1 Strong
China Delinquency Score 533

Likelihood this company will not pay on time
over the next 12 months

1 5

Subject's CDS score is 533, indicating the company is within the class of 2 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 3.1%, which belongs to medium
level delinquency risk group. Meanwhile, the theoretical probability of sever delinquency by subject company is
referenced as 3.40%, 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 2006. Subject is mainly engaged in manufacturing and selling Oil field
machinery. Currently, subject owns around 3,800 staff. In 2011, subject's Revenue reached RMB
2,958,600 thousand, Operation Profit was RMB 234,265 thousand and Quick Ratio that year was 1.09.
Subject's EMMA score is "2", which is in the low risk range. Based on its financial statements, subject's
financial status is considered as fair, indicating subject's real risk is probably consistent with the EMMA
score reflected.
Current Investigation
On May 16,2013 , Song Daoyou(Tel: 1592862****) confirmed all information in this report.
The information in this report 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.
History Changes
Date Event
Oct 09,2006 Name changed
Feb 27,2006 Shareholder changed
Apr 26,2006 Shareholder changed
Jul 03,2006 Shareholder changed
Aug 17,2006 Shareholder changed

Sichuan Honghua Petroleum Equipment Co., Ltd. Industry
0 1 2 3 4 5 6 7 8 9 10
EMMA Score
Sep 15,2006 Shareholder changed
Oct 26,2009 Shareholder changed
Apr 26,2006 Capital changed
Jul 03,2006 Capital changed
Aug 17,2006 Capital changed
Sep 15,2006 Capital changed
Jun 05,2008 Capital changed
Sep 15,2006 Registered Address Changed
Sep 15,2006 Legal Status Changed
Legal Representative Changed
Sep 15,2006 Registration Number Changed
Jun 05,2008 Registration Number Changed

EMMA Score
1 2 3 4 5 6 7 8 9 10
EMMA Score Analysis
Subject's EMMA score is mainly impacted by the following risk drivers:
Subject's registered capital is RMB 750,000,000, which is in the higher level
range, indicating a lower risk.
Subject has an employee size of 4000, which is in the higher range level,
indicating a lower risk level.
Subject is a wholly foreign-owned enterprise, which is classified as a lower risk
type of business.
Subject/Industry PAYDEX? shows payment behaviour of the company/industry is
good, indicating lower risk.
EMMA Score
2
By evaluating all risk factors, the company is assigned with EMMA score of "2", indicating "Low
Risk".
Industry Norm Grouping

Industry Group SIC 3533
Industry Group Description Oil and gas field machinery

Industry Group EMMA Score Quartile Values Lower Quartile 5
Median 6
Upper Quartile 7

Company Risk Vs Industry Norm Chart
EMMA Score
Lower Quartile
Median
Upper Quartile


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 2%
3 6%
4 9%
5 24%
6 22%
7 23%
8 8%
9 6%
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 (Subject lies in this
group)
BB 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 "AB", which represents the subject belongs to the
quality group:
The risk level of the subject is low, which reveals its business risk is relatively lower than 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;
Subject is rated as a high quality company due to its sound operation, low risk level and good credit
reputation. Even the subject/industry has some short-term delay payment behaviors, which might be caused
by the specific industry character, subject is still recommended to be granted with relative favorable credit
policy.

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.


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)

PAYDEX of This Business
78

0 100

When weighted by value,payments to
suppliers average 3 days beyond terms
based on payments collected over the last 24
months

This business has a higher PAYDEX than its
industry

PAYDEX of This Industry
64

0 100

When weighted by value,payments to
suppliers average 19 days beyond terms
based on payments collected over the last 24
months

Industry Name:Oil and gas field
machinery
Industry Median:64
Upper/Lower Quartile:84/46
Based on:40 businesses

D&B PAYDEX? Key
Trade Payment Experiences Details
(Amounts may be rounded to the nearest figure in prescribed ranges)
Date Paying Record
High
Credit
Now Owes Past Due
Selling
Terms
Last Sale
May 16,2013 Prompt 300,000 0 0 EOM 30 May 16,2013
May 16,2013 Prompt 1,200,000 0 0 % Deposit May 16,2013
Apr 30,2013 Prompt 0 0 0 Advance --
Mar 31,2013 Prompt 0 0 0 Advance --
Mar 31,2013 Prompt 2,000,000 500,000 35,000 Net --
Feb 28,2013 Prompt 0 0 0 Advance --
Feb 28,2013 Prompt/Slow 90+ 2,000,000 900,000 400,000 Net --
Jan 31,2013 Prompt 0 0 0 Advance --
Jan 31,2013 Prompt/Slow 60+ 2,000,000 900,000 300,000 Net --
Jan 31,2013 Prompt/Slow 60+ 800,000 200,000 65,000 Net 45 --
Dec 31,2012 Prompt 0 0 0 Advance --
Dec 31,2012 Prompt/Slow 30+ 2,000,000 2,000,000 300,000 Net --
Dec 31,2012 Prompt 800,000 800,000 40,000 Net 45 --
Nov 30,2012 Prompt/Slow 60+ 500,000 300,000 45,000 Net 45 --
Nov 30,2012 Prompt 0 0 0 Advance --
Nov 30,2012 Prompt 2,000,000 1,000,000 60,000 Net --
Oct 31,2012 Prompt 500,000 400,000 0 Net 45 --
Oct 31,2012 Prompt 0 0 0 Advance --
Oct 31,2012 Prompt/Slow 30+ 2,000,000 2,000,000 400,000 Net --
Sep 30,2012 Prompt 0 0 0 Advance --
Sep 30,2012 Prompt/Slow 30+ 2,000,000 2,000,000 400,000 Net --
Sep 30,2012 Prompt/Slow 30+ 500,000 200,000 55,000 Net 45 --
Aug 31,2012 Prompt 500,000 500,000 0 Net 45 --
Aug 31,2012 Prompt 0 0 0 Advance --
Aug 31,2012 Prompt 2,000,000 2,000,000 200,000 Net --
Jul 31,2012 Prompt 0 0 0 Advance --
Jul 31,2012 Prompt/Slow 60+ 1,000,000 1,000,000 500,000 Net --

Jun 30,2012 Slow 30-60 1,000,000 900,000 500,000 Net --
Jun 30,2012 Prompt 0 0 0 Advance --
Jun 30,2012 Prompt/Slow 30+ 300,000 300,000 100,000 Net 45 --
May 31,2012 Prompt 0 0 0 Advance --
May 31,2012 Prompt 1,000,000 1,000,000 90,000 Net --
May 31,2012 Prompt 100,000 100,000 0 Net 45 --
Apr 30,2012 Prompt 0 0 0 Advance --
Apr 30,2012 Prompt/Slow 30+ 900,000 900,000 300,000 Net --
Apr 30,2012 Prompt 100,000 100,000 0 Net 45 --
Mar 31,2012 Prompt 0 0 0 Advance --
Mar 31,2012 Slow 30-60 900,000 750,000 400,000 Net --
Mar 31,2012 Slow 30+ 1,000 1,000 500 Net 45 --
Feb 29,2012 Prompt 0 0 0 Advance --
Feb 29,2012 Slow 30-60 900,000 900,000 400,000 Net --
Jan 31,2012 Prompt 0 0 0 Advance --
Jan 31,2012 Slow 30-60 900,000 900,000 500,000 Net --

Note: The above payment record reflects how accounts are paid in relation to the terms granted. Slow-30, for
example, indicates a 30 day term where 30 additional days are taken. In some instance, payment beyond terms can
be the result of disputes over merchandise, lost invoices, etc
Industry Payment Information
According to the statistics collected by Huaxia D&B in 2012, the timely payment rate of the machinery
manufacturing industry fluctuated between 55% and 60%, indicating the steady development of the industry.
In terms of the payment records, the average overdue term of the industry was 16 days, one day longer
than that at the last count (2011.10-2012.9). The timely payment rates and the overdue rates in 2012
reached 57.79% and 32.61%, which were slightly better than that of the last court (56.44% and 33.99%),
indicating a stable circumstance of the performance. Moreover, 16.56% of the total payment was delayed in
2012. The overdue term of 31-60 days has the largest proportion.
Overall, the payment performance of machinery manufacturing industry in the recent 12 months was stable.
However, as affected by the weak demand and the severe export condition, the increase pace of total
production and sales volume of the industry slowed down. The payment performance of the industry in the
future should yet be focused.
Supplier Reference
According to one of subject's suppliers Shaanxi Qinchuan Machinery Development Co., Ltd., it has cooperated
with subject for several years, it supplies machinery and equipment, the general procurement volume of RMB
200,000～300,000 per month, settlement method is pay in net 30. Subject's credit is good, no outstanding
accounts receivable.
Customer Reference
Ref.Date
Shipment
Promptness
Product
Quality
Pricing
Competiveness
Technical/Service
Support
Cooperation
Time
May 16,2013 Prompt Good Fair Good 1 Year–2 Year
Note: Subject's customer(s) were inquired to comment on the performance on above four dimensions with overall
assessment of strong, good, fair and poor.
According to one of subject's customers, Jiangsu Xinde Petroleum Machinery Co., Ltd., it has cooperation
with subject for 1 year, it supplies of rig. The quality of subject’s products is good with fair price and it’s
always prompt delivery.

Registration
Registration Date Sep 15,2006
Registered At Sichuan Deyang Administration for Industry & Commerce
Registration No. 510600400000212
National Organization
Code
620905206
License Expiry Date Sep 14,2026
Registered Capital RMB 750,000,000
Paid-up Capital RMB 750,000,000
Total Investment RMB 750,000,000
Tax No. 510681620905206
Business Started 2006
Type of Business a wholly foreign-owned enterprise
Registered Address South section of Zhongshan Ave., Guanghan, Sichuan
Legal Representative Zhao Ping
Business Scope Oil drilling automation, digital control systems and electrical equipment and
machinery equipment development, design, manufacturing, processing; sell our
products and supporting mechanical and electrical products and oil additives
(excluding dangerous chemicals and precursor chemicals); The company sells
products to provide after-sales service, oil field construction, drilling and related
technical services;Contract with the company's strength, size, performance to
adapt to foreign projects and the implementation of external sent abroad for the
project services personnel. (More countries restrict or prohibit the scope of
business, except business, shall obtain an administrative license, must obtain the
relevant administrative permission, in accordance with permits to carry out
production and business activities of the matter)
Shareholder(s)
Shareholding Structure
Name
Region/
Country
Shares
Investment
Mode
Paid-Up
Rate
Honghua Holdings Limited
宏华控股有限公司
Hong Kong 100.0% Cash fully paid
Total 100%
Comment:
Subject passed the annual inspection of 2011 with Administration for Industry & Commerce.
History Changes
Name Changed
From: Chuanyou Guanghan Honghua Co.,Ltd.
To: Sichuan Honghua Petroleum Equipment Co.,
Ltd.(Current Name)
On(in) Oct 09,2006
Registered Address Changed
From: South of Zhongshan Avenue,Guanghan City,Sichuan.
To: South section of Zhongshan Ave., Guanghan,
Sichuan(Current Registered Address)
On(in) Sep 15,2006
Shareholders Changed


From: Sichuan Huasheng Oil Industry Development General
Company (16.34%),Xing Manrong(5.86%),Yuan
Guiqi(5.81%),Deng Meng(5.81%),Zhang
Mi(5.56%),Wang Yaoxin(5.16%),Liu
Chuanjun(4.23%),Shi Shuming(4.02%),Li
Yan(4.01%),He Guangfu(3.97%),Ren Jie(3.41%),Zhi
Rongmo(3.39%),Zuo Huixian(3.18%),Zhang
Zongyong(3.14%),Zhang Yanyong(2.86%),Zhou
Tao(2.72%),Zhang Xu(2.68%),Fan Bing(2.53%),Ni
Xiurong(2.39%),Liu Xuetian(2.29%),Chen
Zongliang(2.26%), other natural persons(8.62%)
To: Sichuan Huasheng Oil Industry Development General
Company (16.32%),Yang Yuanchun(1.33%),Yang
Xuefeng(1.78%),Ni Xiurong(2.25%),Liu
Xuetian(2.33%),Zhou Tao(2.60%),Zhang
Xu(2.72%),Fan Bing(2.74%),Zhang
Yanyong(2.95%),Zhi Rongmo(3.01%),Zuo
Huixian(3.21%),Shi Mingshu(3.77%),Li
Yan(3.77%),Ren Jie(3.98%),Zheng Yong(4.04%),Liu
Chuanjun(4.09%),Wang Yaoxin(5.15%),Xing
Manrong(5.28%),Deng Meng(5.81%),Yuan
Guiqi(5.81%),Zhang Mi(10.95%), other natural
persons(6.11%)
On(in) Feb 27,2006
To: Sichuan Huasheng Oil Industry Development General
Company (24.78%),Shen Dingjian(0.24%),Tian
Yu(0.29%),Chen Jun(0.29%),Li
Hanqiang(0.29%),Tang Ying(0.41%),Tian
Diyong(0.52%),Lv Lan(0.72%),Ao Pei(0.75%),Liu
Zhi(1.77%),Zhou Bing(1.79%),Liu
Xuetian(3.53%),Zhang Xu(4.13%),Fan
Bing(4.16%),Zhang Yanyong(4.48%),Zuo
Huixian(4.88%),Ren Jie(6.05%),Zheng
Yong(6.13%),Deng Meng(8.81%),Yuan
Guiqi(8.81%).Zhang Mi(16.63%), other natural
persons(0.54%)
On(in) Apr 26,2006
To: Liu Yingguo(0.3%),Liu Lulu(0.3%),Shen
Dingjian(0.41%),Tian Yu(0.49%),Chen Jun(0.51%),Li
Hanqiang(0.51%),Tang Ying(0.70%),Tian
Diyong(0.90%),Lv Lan(1.24%),Ao Pei(1.29%),Wang
Jiangyang(1.45%), Liu Zhi(3.04%),Zhou
Bing(3.07%),Liu Xuetian(6.06%),Zhang
Xu(7.08%),Fan Bing(7.15%),Zhang
Yanyong(7.68%),Zuo Huixian(8.37%),Ren
Jie(10.38%),Zheng Yong(10.52%),Zhang Mi(28.55%)
On(in) Jul 03,2006
To: Xu Chuan(0.76%),Ma Limin(0.87%),Di
Xiaohong(0.92%),Chen Jun(0.94%),Liu
Gangqiang(0.96%),Wang Jiangyang(1.07%),Luo
Qiping(1.60%),Zhou Bing(2.03%),Zhao
Ping(2.49%),Yang Hong(3.19%),Zhang
Yanyong(3.71%),Liu Xuetian(3.73%),Fan
Bing(4.16%),Zhang Xu(4.21%),Zuo
Huixian(4.37%),Zhang Cong(4.55%),Zheng
Yong(5.60%),Liu Zhi(5.60%),Ren Jie(7.90%),Zhang
Mi(36%), other natural persons(5.34%)
On(in) Aug 17,2006
To: Asia Harbour International Limited(100%) On(in) Sep 15,2006
To: Honghua Holdings Limited(100.0%)(Current
Shareholders)
On(in) Oct 26,2009
Registration Organ Changed
From: Sichuan Deyang Guanghan Administration for
Industry & Commerce
To: Sichuan Deyang Administration for Industry &
Commerce(Current Registration Organ)
On(in) Sep 15,2006
Capital Changed
From: RMB 21,011,100
To: RMB 13,944,485 On(in) Apr 26,2006
To: RMB 8,070,305 On(in) Jul 03,2006
To: RMB 18,750,000 On(in) Aug 17,2006

To: RMB 72,000,000 On(in) Sep 15,2006
To: RMB 750,000,000(Current Capital) On(in) Jun 05,2008
Legal Status Changed
From: a limited company
To: a wholly foreign-owned enterprise(Current Legal
Status)
On(in) Sep 15,2006
Legal Representative Changed
From: Zhang Mi
To: Zhao Ping(Current Legal Representative) Change date not available
Registration Number Changed
From: 5106812801294
To: 000370 On(in) Sep 15,2006
To: 510600400000212(Current Registration Number) On(in) Jun 05,2008
History Summary
Subject was established in 2006. Subject's registered capital is RMB 750,000,000 at present.

Principal(s)
Ping ZHAO - Legal Representative
赵平
Started with Subject 2003
Activity Status Yes
Area of Responsibility Overall management
Related Working Experience 5 Year+

Supply Capacity & Operation Nature
Subject is mainly engaged in manufacturing and selling Oil field machinery.
US SIC Code 3533 9903 Oil field machinery and equipment
Ordering Methods: Electronic Data Interchange(EDI),E-mail,Fax
Logistics: Third party logistics
The operation is not seasonal.
Brands

Brands Owned Hong Hua
Awards & Certifications
Awards & Certifications Name ISO9001
Date Awarded 2000
Licenses
Subject is entitled to independent import and export rights.
Products & Services
Product Name Maximum Productivity Percent
Land rigs 150 sets per year 70%
Mud Pump 600 sets per year 10%
others 20%
Subject owns 600 sets of manufacturing equipments made in China.
Subject owns 40 production lines made in China.
Annual Output
Product Name Amount Year
Land rigs 3.5 billion yuan 2012
Mud Pump 500 million yuan (Sales) 2012
Purchasing
Purchase Territory
Area Percent Region/Country
Domestic 80% Sichuan Shaanxi Chongqing Hubei
Overseas 20% United States ( 10% )
Germany ( 5% )
Others ( 85% )
Import Value
Year Amount
2012 USD 139,010,000
Purchasing Terms
Terms Percent
L/C - -
Agreement/Contract basis - -
Partial Advance - -
Credit - -
Purchasing Settlement Method
Settlement Method Percent
Cash
T/T


Check
Draft
L/C
Suppliers Number 450
Major Suppliers
Area Name DUNS
Domestic Shaanxi Qinchuan Machinery Development Co., Ltd. 42-072-0427
Domestic Shanghai Shenkai Petroleum Science & Technology
Co., Ltd.
52-815-8346
Domestic Nanyang Explosion-proof Motor Factory
Selling
Sales Territory
Area Percent Region/Country
Domestic 32% Jiangsu Heilongjiang Xinjiang
Overseas 68% Venezuela ( 26% )
Russia ( 12.5% )
United Arab Emirates ( 3% )
India ( 1.6% )
Others ( 56.9% )
Export Value
Year Amount
2012 USD 634,630,000
Selling Terms
Terms Percent
Agreement/Contract basis - -
Partial Advance - -
Credit - -
L/C (Sight) - -
Selling Settlement Method
Settlement Method Percent
T/T
Cash
Check
Draft
L/C
Customer Type
Customer Total 250
Type Percent
Company
Major Customers

Area Name DUNS
Domestic CNPC the Great Wall Drilling Engineering Group
Domestic Jiangsu Xinde Petroleum Machinery Co., Ltd. 54-666-3480
Domestic Yumen Oil Field
Domestic Daqing Oil Field
Domestic Sino Pec Southwest Bureau
Domestic Sino Pec Middle South Bureau
Employees
Employee Size
Type Number
Total 4,000
Here 3,800
Sales Person 120
Administrative Staff 500
The above are approximate staff numbers.
Major Functional Departments
Department(s)
Finance Dept. Business Dept.
Administration Dept. Production Dept.
Purchasing Dept. others
Operations Summary
Subject is mainly engaged in manufacturing and selling Oil field machinery. It owns brand 'Hong Hua'.
The materials subject demands for its production are 80% purchased domestically. 20% of the materials
are imported, mainly from United States, Germany, Others and other region. Shaanxi Qinchuan
Machinery Development Co., Ltd., Shanghai Shenkai Petroleum Science & Technology Co., Ltd. and ect.
are its suppliers.Subject is entitled to I/E Rights.
Currently, subject owns 600 sets production equipment and 40 production lines. Subject's major
products are Land rigs, Mud Pump and others. The productivity of Land rigs is 150 sets per year. The
productivity of Mud Pump is 600 sets per year.
32% of the products are sold domestically. Major customers include CNPC the Great Wall Drilling
Engineering Group, Jiangsu Xinde Petroleum Machinery Co., Ltd. and etc. 68% of the products are
exported, such as Venezuela, Russia, United Arab Emirates, India and Others and other region.
Location
Principal Place of Business
Location Description An industrial area
Land Area 700,000 sqm
Used as Office, factory and warehouse
Occupation Type Owns
Other Place of Business
Type REGISTERED ADDRESS
Address South section of Zhongshan Ave., Guanghan, Sichuan


Linkage Up
Parent Company
D-U-N-S 66-941-3643
Company Name Honghua Holdings Limited
Address 39 Gloucester Rd
Wan Chai Hong Kong Island
Hong Kong
Shares held in subject 100.0%

Finance
The 2011 financial statements were submitted by the company personnel.
Financial Highlights

Dec 31,2011
RMB '000
Change
%
Dec 31,2010
RMB '000
Change
%
Dec 31,2009
RMB '000

Current Assets 3,629,755 -9.03% 3,990,027 -7.13% 4,296,369
Current Liabilities 2,408,517 -14.54% 2,818,229 -4.93% 2,964,295
Working Capital 1,221,238 4.22% 1,171,798 -12.03% 1,332,074
Tangible Net Worth 1,493,225 9.26% 1,366,679 -8.34% 1,491,026
Fixed Assets 292,792 -3.07% 302,060 5.43% 286,501
Total Assets 4,423,376 - 4,423,616 - 4,711,448
Total Liabilities 2,809,625 -6.78% 3,013,967 -5.13% 3,176,897
Shareholders Equity 1,613,751 14.48% 1,409,649 -8.14% 1,534,551
Sales 2,958,600 57.66% 1,876,596 -4.32% 1,961,270
Net Profit 200,301 312.17% (94,408) 19.81% (117,732)
Balance Sheet

Dec 31,2011
RMB '000
Fiscal
(Independent)
Dec 31,2010
RMB '000
Fiscal
(Independent)
Dec 31,2009
RMB '000
Fiscal
(Independent)

Cash and Bank 465,800 504,318 1,142,693
Accounts Receivables 1,838,960 1,149,577 893,084
Notes Receivables 1,700 2,000 200
Dividends Receivable 7,558 7,558 12,262
Interest Receivable 26 366 6,512
Other Receivables 35,920 162,040 171,896
Inventory 992,478 1,346,532 1,296,644
Advance to Suppliers 287,313 817,636 773,078
Total Current Assets 3,629,755 3,990,027 4,296,369
Fixed Assets Disposal 15 - 476
Other Fixed Assets 276,993 279,572 259,078
Construction in Progress 15,784 22,488 26,947


Total Fixed Assets 292,792 302,060 286,501
Intangibles 118,447 42,970 43,525
R&D Expenses 2,079 - -
Total Intangible Assets 120,526 42,970 43,525
Held-to-maturity Investment 235,000 - -
LT Equity Investment 130,522 88,522 84,876
LT Prepaid Expense - 37 177
Deferred Tax Assets 14,781 - -
Total Investment & Other Assets 380,303 88,559 85,053
TOTAL ASSETS 4,423,376 4,423,616 4,711,448
Short-Term Loans 763,623 200,179 1,014,141
Accounts Payable 967,689 1,368,269 812,416
Notes Payable 256,191 124,275 92,642
Interest Payable 3,119 562 1,197
Other Payables 69,694 16,343 34,132
Advances from Customers 317,963 949,046 977,993
Provision:Taxes & Fees (26,175) (12,633) 7,710
Provision for Dividends 4 4 5
Accrued Payroll 26,409 22,184 24,059
LT Debt Due in 12 Mths 30,000 150,000 -
Total Current Liabilities 2,408,517 2,818,229 2,964,295
Provisions 21,108 15,738 12,602
Other Non-Current Liab 380,000 180,000 200,000
Total Non-Current Liabilities 401,108 195,738 212,602
Total Liabilities 2,809,625 3,013,967 3,176,897
Capital 750,000 750,000 750,000
Capital Reserve 95,802 92,002 94,621
Surplus 161,720 141,690 141,690
Retained Earnings 606,229 425,957 548,240
Total Equity 1,613,751 1,409,649 1,534,551
TOTAL LIABILITIES & EQUITY 4,423,376 4,423,616 4,711,448
Profit & Loss Statement

Dec 31,2011
RMB '000
Fiscal
(Independent)
Dec 31,2010
RMB '000
Fiscal
(Independent)
Dec 31,2009
RMB '000
Fiscal
(Independent)

Sales 2,958,600 1,876,596 1,961,270
-Cost of Goods Sold 2,283,133 1,666,829 1,640,589
-Sales Tax 1,767 661 42
Gross Profit/Loss 673,700 209,106 320,639
-Operating Expenses 185,060 105,636 119,370
-Administrative Expenses 112,404 138,165 157,700
-Financial Expenses 43,375 63,580 34,125
-Asset Impairment Losses 98,596 1,604 123,424
Operating Profit/Loss 234,265 (99,879) (113,980)

+Investment Income 4,206 241 31,873
+Non Operating Income 3,076 10,787 5,030
-Non-Operating Expense 5,228 5,557 40,655
Profit/Loss Before Tax 236,319 (94,408) (117,732)
-Income Tax 36,018 - -
Profit/Loss After Tax 200,301 (94,408) (117,732)
Net Profit(Loss) 200,301 (94,408) (117,732)
Key Financial Ratios
Ratio 2011 2010 2009
Current Ratio 1.50 1.41 1.44
Quick Ratio 1.09 0.93 1.01
Total Debt/Equity Ratio 1.74 2.13 2.07
Debt Ratio 0.63 0.68 0.67
Collection Period (Days) 223 220 163
Payment Period (Days) 152 295 178
Inventory Turnover (Days) 156 290 284
Asset Turnover 0.66 0.42 0.41
Gross Profit Margin % 22.77 11.14 16.34
Net Profit Margin % 6.77 (5.03) (6.00)
Return on Equity % 12.41 (6.69) (7.67)
Return on Assets % 4.52 (2.13) (2.49)
Financial Comments
Business Performance: According to subject's financial statements of 2011, its sales realized
RMB 2,958,600 thousand, up 57.66% over the previous year, indicating its decent sales
growth. During the same year, subject's net profit booked RMB 200,301 thousand, up 312.17%
over the previous year. Its net profit margin was 6.77%, higher tha the year-earlier level,
which indicated its profitability was enhanced to certain extent.
Solvency: By the end of 2011, Subject's current ratio and quick ratio posted 1.50 and 1.09
respectively, showing its strong short-term solvency capacity. Its working capital increased to
RMB 1,221,238 thousand.
Capital Structure: At the end of 2011, subject's debt ratio stood at 0.63, which indicated its
capital structure was fair.
Cash Flow: By the end of 2011, subject's cash and bank deposit was RMB 465,800 thousand,
decreasing from the previous year. At the end of 2011, subject's account receivable booked
RMB 1,838,960 thousand, and its DSO recorded 223 days, extending 3 days compared with the
year earlier, indicating its control on account receivable weakened. Its account payable was
RMB 967,689 thousand, with a payment period of 152 days.
Overall financial status of subject is considered as fair.

Banking
The company maintains relationship(s) with the following bank(s) in China:
Bank of China, Guanghan Sub Branch Office
Account number: 118502911025
Bank of China, Guanghan Sub Branch Office
Account number: 119852911028 (Foreign currencies)


Industry Highlights
Date May02,2013
Source Statistics Authorities
Detail As of Q4, 2012, the decline of sales of Chinese construction machinery has slowed down,
indicating a rebound of the sluggish demand. In 2012, the total sales output of the
construction machinery reached RMB 591.57 billion, with a year-on-year increase of
1.85%. The speed was 1.47 percents higher than that of Q3.
In terms of market situation, the annual sales volume of major products including
loaders, bulldozers, graders, cranes, road rollers, pavers, excavators reached 173,000,
10,200, 4,201, 23,000, 13,300, 2,169 and 112,800 sets, with the respective year-on-
year decline of 29.7%, 22.3%, 17%, 35%, 38.5%, 33.6% and 35%. The speed of
declined was mostly slowed down compared with that of Q3.
In terms of import and export, the import volume has decreased due to the downtur ofg
domestic demands. The export slowed down due to the global economic recession and
protectionism policies of some areas. From January to November, 2011, the total import
and export value of construction machinery reached USD 4.77 billion and USD 15.58
billion, with the year-on-year decrease of 40.3% and a increase of 16.04%.
In terms of total investments, the investment value of the industry in 2012 reached RMB
92.25 billion, a year-on-year increase of 29.30%. It is estimated that some positive
factors will make effects on the industry in 2013 together with the continuous
urbanization, construction of infrastructure and stabilizing of real estate market.
Litigation Records
As of May 16,2013 , 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, and found
below related court record(s) 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.
Judgment Date May 20,2010
Court District Court Judgment
Plaintiff(s) n/a
Case Details Guanghan People's Court-(2010) Guang Han Zhi Zi No.00314.
Judgment To compensate the plaintiff with reimbursement of 1,125.65
Currency RMB
Media Records
News Clipping
Publication Date May 25,2012
mei.net.cn - According to the statistical data of main business incomes of machinery and automobile enterprise
of 2011, China Machinery Industry Federation and China Association of Automobile Manufacturers decided the
list of top100 machinery industry enterprise and top 30 automobile industry enterprises of 2011. Sichuan
Honghua Petroleum Equipment Co., Ltd. ranked the 85th on the list of top100 machinery industry enterprises
with most main business income in China of 2011 with the main business income of RMB 2,972,050,000.

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
Risk Range


PAYDEX
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
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
Risk Quintile in 5 Class
% of

Class MinScore MaxScore
Population
Actual BadRate Predicted BadRate Cum. Pct. Bads
5 279 380 10% 52.6% 52.2% 48%
4 381 480 20% 13.1% 13.4% 72%
3 481 523 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 Predicted BadRate Cum. Pct. Bads
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%
15 475 480 5% 8% 8% 72%
14 481 483 5% 8% 7% 75%
13 484 487 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%
9 510 516 5% 4% 5% 89%
8 517 520 5% 4% 4% 91%
7 521 523 5% 5% 4% 93%
6 524 532 5% 4% 4% 95%
5 533 539 5% 3% 3% 96%
4 540 546 5% 3% 3% 97%
3 547 556 5% 3% 3% 99%
2 557 584 5% 2% 2% 99%
1 585 641 5% 1% 1% 100%
Customer Service
Customer Service Contact Information
Web www.huaxiadnb.com
Email enquiry@huaxiadnb.com
Telephone 400-820-3536 (Shanghai)
400-810-3531 (Beijing)
800-830-9032 (Guangzhou)

Our ref: 201305149309300039
Your ref: CS Dept.

Remarks
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.
Copyright ? Huaxia D&B China

Dun & Bradstreet 四川宏华

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