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Christine Chan

A HEBEI electronic glass maker is to raise more than 300 million yuan (about HK$278.4 million) from the sale of B shares to fund expansion of television and computer component production.

Shijiazhuang Baoshi Electronic Glass is to issue 150 million B shares in two weeks, 36.8 per cent of its enlarged share capital, for its listing in Shenzhen next month, a company official said.

 It is believed that Nippon Electronic Glass (NEG), which has a 35 per cent share in the world's electronic glass market, is considering taking a stake in Baoshi as part of the equity sale.

 NEG is the technology provider of Baoshi's newly established colour bulbs production line. The bulbs are a major component of cathode ray tubes.

 The line will cost 2.6 billion yuan to set up.

 The Japanese electronic glass giant supplies similar technology to another Chinese company in Anyang in Henan.

 When production on the new line begins in July, Baoshi is forecast to make 4.08 million colour bulbs a year by 1997, assuming 53 centimetre televisions are being made.

 The expansion pro-gramme allows Baoshi to diversify from producing bulbs for black and white TVs into making bulbs for use in colour sets.

 Bulbs account for about 70 per cent of the production cost of cathode-ray tubes, with black and white bulbs carrying a higher percentage in cost than colour bulbs, the official said.

 It is believed that Baoshi is finalising a sales contract with NEG in a bid to secure a steady demand for its colour bulbs.

  The accord will be finalised fairly soon.

 Lower import tariffs on electronic products and excess supply of colour TVs in China has meant it is better for a TV component maker to secure a sales contract to maintain a steady income.

 This is in spite of the huge demand for colour TVs in China.

 Last year, about 10 million colour TVs were sold, and about 6.5 million black and white TVs were bought.

 Proceeds of the B-share sale would be used to fund the production of colour bulbs, which also would be backed by loans and other financing methods, the official said.

 Shanghai Shenyin Securities is lead underwriting the share sale, with Daiwa Securities being the international co-ordinator.

 As part of the effort to promote the share sale, Baoshi invited Hong Kong's analysts for a two-day tour of the plant in Hebei's capital of Shijiazhuang. The visit ended yesterday.

A roadshow is scheduled to begin next week when the company will go from Hong Kong to Singapore through Europe and Tokyo to meet fund managers and analysts.

 It was understood that the initial share offering would be launched by the end of this month, and that the company would raise more than 300 million yuan, the official said.

 Also in Hong Kong for roadshows next week are Heilongjiang Electric Power Co and Auhui's Gujing Brewery, both offering B shares to foreigners.

 Heilongjiang Electric will sell 100 million B shares for its listing in Shanghai next month, while the wine maker is offering 60 million B shares for its Shenzhen listing, also next month.



Glass firm plans Shenzhen listing