Privately-held mainland manufacturer and seller of rare-earth products Yixing Xinwei Holdings has pitched the price of its public offering at 6.59 times prospective earnings this year on a pro forma fully diluted basis. This represents 93 cents for each of the 150 million new shares on offer, raising about $139.5 million. Ninety per cent of the issue is earmarked for international placing. The remainder will be offered for public subscription in Hong Kong, starting from today until Friday. About $60 million of the listing proceeds will be used to increase rare-earth production facilities from 3,550 tonnes of rare-earth oxides a year to about 4,900 tonnes. Rare earth is a fundamental ingredient in most high-technology applications. Its use ranges from reinforced glass, long-life light bulbs, computer-memory chips, fluorescent powders for colour-television sets to batteries for mobile phones. About $20 million will be earmarked from listing proceeds for upgrading production facilities of fluorescent powders and about $35 million to upgrade and expand production facilities for refractory materials. The company has forecast net profit of more than $80 million this year. It registered a 14.4 per cent compound annual growth in turnover between 1996 and last year and 31.7 per cent in attributable profit. The company earned $62 million in net profit on turnover of $419.48 million last year. About 69 per cent of the company's turnover last year was derived from rare-earth products and the remainder from refractory materials. Financial controller Jeffrey Cheng Man-for dismissed worries over the level of accounts receivables, saying the turnover had been normal at about 60 days in recent years. He added that provision for bad and doubtful debts of $10 million was small compared with turnover. The company's accounts receivables amounted to $102.66 million as of April 30. Its shares are scheduled to start trading on October 15. After the listing, the family of chairman Jiang Quanlong will hold 75 per cent of the company if the over-allotment option is not exercised.