Chinese home textile companies are lining up for initial public offerings (IPO) this year, said Thursday's China Daily.
Luolai, the Shanghai-based high-end home textile supplier, started its new stock subscription on Wednesday, putting it in the vanguard of those seeking a stock market listing.
The company has set the IPO price at 27.16 yuan (3.88 U.S. dollars) per share. Shares are expected to debut on the Shenzhen bourse around Sept 10,the newspaper said, citing Wu Xianzhong, Luolai's board secretary.
The company will issue 35.1 million shares or 25.01 percent of its total equity, to raise 523.17 million yuan.
Apart from Luolai, Mendale from Hunan province and Fuanna in Shenzhen are also preparing for their debut on the bourses.
According to its IPO prospectus, Luolai will utilize the IPO proceeds for setting up company-owned chains, a research and development center and to expand its manufacturing base in Nantong, Jiangsu province.
Some of the capital will be used to strengthen its directly owned marketing channel in order to develop the brand. After the IPO, Luolai will open 136 new company-owned sales outlets, including three flagship and 10 anchor stores. By the end of June, it had 231 self-owned outlets.
The company also wants to reduce its dependence on sales from franchise chains, which currently account for 84 percent of the total sales.
The Chinese textile industry was hit hard during last year's financial crisis due to its high dependence on overseas markets. However, Luolai, Mendale and Fuanna suffered less because of their emphasis on the domestic market. In 2008, Luolai saw a sales growth of 20 percent, while Fuanna's sales rose 27 percent.
