Mainland-based retailer and listing candidate Kin Don Holdings is expected to launch a $125 million share sale next week. BNP Prime Peregrine is the sponsor and lead manager of the listing, the merchant bank's first deal since the merger of the broking arm of failed Peregrine Investments Holdings and brokerage BNP Prime East in February. Kin Don produces mainly men's shirts and suits in Huizhou and sells around the mainland through 133 franchised outlets. Market sources said about 125 million Kin Don shares would be offered, of which 70 per cent were new shares and the rest existing shares owned by a minority shareholder. The shares were priced temporarily at $1, putting them on a fully diluted prospective price-earnings ratio of 4.4 times. The company expects net profit to grow at least 18 per cent to $110 million in the year to November. Kin Don chairman Au Tung-chi and his brothers own 83 per cent of the company while an unnamed shareholder holds the remaining 17 per cent. The Aus will retain a 69 per cent holding and the minority shareholder a 6 per cent stake after the listing, he said. Mr Au defended the decision to list the company at a time when retail and institutional interest in the stock market had waned. 'We're not desperate to get money to repay debts, but we need capital for further expansion in the mainland,' he said. Mr Au said the company had almost no long-term debt, while short-term debt stood at $30 million as of March 31. Kin Don is expected to spend almost 80 per cent of the $76 million in net proceeds from the new shares buying materials such as cloth to meet demand from 30 proposed franchised outlets to be opened in the next few months. About 13 per cent of the proceeds would be used to buy machinery and update inventory systems, with the remainder going on advertising, sources said.