CHINA'S largest blanket-maker, Guangdong Meiya, hopes to make its maiden issue, of between 50 million and 100 million B shares, on the Shenzhen Stock Exchange by the end of the year. Although the company has not yet decided on the price and exact number of shares, market sources said the amount raised probably would be between HK$200 million and $300 million. The company already has A shares listed on the Shenzhen exchange. After a restructuring in preparation for the B-share issue, the total number of A shares was increased to 280 million in the middle of this year from 190 million. Theoretically, only mainland investors can trade in A shares and foreign investors can trade in B shares. Guangdong Meiya director and vice-general manager Feng Guoliang said: 'We are in the process of applying for the issue of B shares and are waiting for the approval document from the authorities in Beijing and Shenzhen.' He said the company was determined to obtain the approval document and issue the shares before the year's end. The proceeds would be used to expand the company's production capacity, acquire other firms to fuel growth and reduce debt burdens. The company planned to raise annual production to between 10 million and 15 million blankets by the year 2000. It predicted the country would have an annual demand for 50 million blankets in the next five years. The installation of an assembly line with production capacity of 500,000 blankets needs an investment of about US$7 million. Last year, the company produced 4.5 million blankets. Thirty per cent of the output was exported to destinations that included Japan and Russia and the Middle East. Sales reached 1.4 billion yuan while pre-tax profit rose 22 per cent to 166 million yuan. Operating margins for domestic and overseas sales were about the same at 20 per cent. The company had a gearing of 36 per cent. Its fixed asset value stood at 1.2 billion yuan as at last year. Like many other enterprises in China, the company was hit by the austerity programme. Chairman and general manger Li Chenghai said the company's large scale of production made it better positioned to shield itself from the credit crunch. 'As demand outstrips supply, cash returns to us very quickly,' he said. There was little triangular debt, as products were usually delivered upon payment, Mr Li said. The cut in value-added tax rebate, this year and next, has had and would have an impact on the company. The company said it would try to increase total production, domestic sales and production of higher-end products as ways to minimise the negative impact. The possible abolition of the exemption on tariffs on imported equipment next year would not have an immediate effect on the company. 'The prospects of the business are rosy, because, as people's standard of living improves, they demand better quality bedware,' he said. Government statistics last year showed that every 100 households in China possessed 142 blankets, compared with 200 per 100 households in Japan and Korea.