1. Still weak but overall positive improvement in 2014 financial picture
The limit was considered with 2014 performance and partial of 2015. We noticed 2-year consecutive loss during 2013-2014 with negative NW, but loss amount was smaller. Liquidity was high. With lower ST debt utilized and current liabilities were mostly A/P, we considered good ST obligation competency of the buyer. We also noted that LT loans amount was bigger significantly but due to continuously lower financing cost, it is reasonable that the loan was supported by shareholders as subordinated debt.
2. Positive industry outlook
Plastic industry was reported with an uptrend in 2015, and with good prospect for 2016.
With the update 2015 full financial performance, we sees improvement in profitability aspect. Liquidity remains high. However, LT loans amount continued to increase while capital structure had become weaker since NW was recorded with bigger deficits. With deteriorate capital structure, we recommend trade on secure basis.
For this buyer, we would like Insured to kindly confirm exposure they want to maintain.