CHINA'S two most famous bicycle companies, which hold about a fifth of the mainland market, have grown from selling bikes to shares. Shanghai Phoenix Bicycle and Shanghai Forever Bicycle, known for their Phoenix and Forever bike brands, are to join Shenzhen-listed China Bicycle on China's stock markets. Last year, Phoenix made 4.83 million bikes and Forever 3.34 million, against the country's total of 32.5 million. About 20 to 30 per cent of the pair's bicycles are exported. China Bicycle sells about two-thirds of its bikes overseas. Phoenix was approved to issue 30 million A shares and 100 million B shares. Forever will issue 23 million A shares and 60 million B shares. Phoenix' A shares were listed in Shanghai last month, and its B shares are to be placed internationally next month. Shanghai International Securities and Standard Chartered Asia will be the underwriters for the B-share issue. Forever has issued A shares and is awaiting a listing. Its B-share prospectus was published yesterday in China. It will issue 60 million B shares, or 25.97 per cent of the enlarged share capital, at 35.5 US cents in an international placing to raise US$21.3 million. Underwriters for the issue include Shanghai Shenyin Securities, Smith New Court Securities and N.M. Rothschild and Sons (Hong Kong). Although Tsingtao beer is among the most popular China brands in Hong Kong, Phoenix and Forever enjoy greater recognition in what is dubbed ''the Kingdom of Bicycles''. The duo strengthened their presence in the domestic bike industry when the Tianjin producer of Feige - the famous Flying Pigeon - ran into difficulties and made huge losses. In preparation for listing, Phoenix and Forever began joint-stock restructuring last year under the umbrella of Shanghai's Light Industry Bureau. Phoenix was formed last year through the merger of Shanghai No 3 Bicycle Factory, Shanghai No 2 Bicycle Factory and Shanghai No 4 Bicycle Factory. The firm also makes Feida brand bikes. Last year, Phoenix topped the sales list of firms under China's Light Industry Bureau, posting sales of 1.27 billion yuan (about HK$1.7 billion at the official rate), against Forever's 853.3 million yuan. According to Phoenix's A-share prospectus, demand for traditional bicycles in most Chinese bigger cities is declining. Their place is being taken by branded and medium to upmarket bicycles, demand for which is gradually rising, it says. This, coupled with the fast growth in the number of Sino-foreign bike makers, has pushed local bike producers to aim for higher quality products to keep pace. In the two years to 1995, Phoenix has mapped out an ambitious expansion plan that requires 621 million yuan. Forever's planned growth to 1996 will need 449.5 million yuan. Phoenix assistant general manager Yin Shijian said in Shanghai that one target would be to produce Zip motorcycles with Italy's Piaggio. It would also team up with Taiwan's Giant Co to produce higher priced bikes, and further develop geared bikes. At Forever, an official of its shareholding restructuring team said the firm would concentrate on developing products such as motor-powered bikes. Officials at Phoenix and Forever shrugged off worries that they would be competing for investors. Mr Yin said: ''As the combined issue size of Fenghuang [Phoenix] and Yongjiu [Forever] is not big, the market will not be affected even if we both come to the market at about the same time.'' Phoenix has a factory site area of 340,000 square metres and a workforce of about 11,130, while Forever has 6,370 workers on a 137,000 sq m site. with production working out at about 1.3 bikes per person per day.