Samsung Hongkong Limited is acting as a financial arm in order to support its head office, Samsung Corporation, China branches and its sales departments. We aim at providing an effective and efficient financing channel to facilitate Samsung Hongkong Limited's growing trading businesses.
Being a competitive trading company, finance department is responsible for not only maintaining a strong cash flow for daily operations, but also partnering with prestigious banks to set up trade finance facilities for sales departments. In addition, we always try to control trading risks and credit risks. The background for both suppliers and buyers would be analyzed through in-depth credit analysis and survey. Professional advice would be given to our sales departments for funding, letter of credit arrangement and negotiation with banks. Under this procedure, we can expand our businesses in the greatest extent and make punctually credit utilization while keeping our risk at the lowest level.

Trade Finance

To cope with our daily transaction between our Samsung Corporation and trading partners, Letter of Credit (LC) is frequently used for the international trade settlement. The finance department is controlling the risks involved in LC transactions. For the export side, we receive LC from our customers and buyers, then we will analyze the issuing bank status, terms and conditions, and the trade credit of the trading partners. The bank status and credit is fairly evaluated by their international standing, financial structure and our deep experience with the global banking partners. Bankers' acceptances can significantly lower the export funding costs for us by using short-term, fixed rate financing. For the import side, we will issue LC to our suppliers (mainly in China) for settling import bills. In order to control the utilization of opening LC, we would allocate the credit line precisely to match with the demand from our sales department.
With reference to the trading businesses related to Samsung Corporation, we will receive master LC from head office for intermediary financial activities. For controlling the funding efficiently, we will pass the full set of the documents to the negotiation bank to get the payments. Normally, we will discount the export bill with recourse when receive 'at sight' LC from issuing bank with top ranking. However, discounting under without recourse basis or adding confirmation will also be processed for some long tenor LC and reducing our credit risk burden on the LC issuing bank. Our bankers always offer preferential rate on discounting based on our long-term relationship and track records. Moreover, standby LC, p-bond and bid bond will also be issued on behalf of Samsung Corporation to match with the different trading terms and requirements.
In order to achieve perfect matching of the cash inflow and outflow, Trust Receipt (T/R) loans will be arranged with the banks to settle our import bills accordingly. As a result, maximum turnover and profit can be achieved while keeping the credit risk at the lowest level.

Syndication and Term Loan

To optimize our capital structures from both an economic and strategic perspective, the finance department is actively engaged in making long-term syndication loan from international bank group.

Project and Structured Finance

Project financings are often structured, using the undertakings and guarantees of several parties to assure a stream of cash flow and credit. It is essential for the lenders or sponsors to thoroughly review and address all the risks involved. The risks and return on the project are investigated by our project financing experts. Future cash flow will be the important factor to consider the feasibility of the project investment. Samsung Hongkong Limited is structuring the financing of a cost competitive project with as minimum recourse as possible to ourselves while at the same time providing sufficient credit support through guarantees.