With offer's institutional portion filled, company expects keen retail interest Senyuan International Holdings, undeterred by lukewarm responses to recent initial public offerings, launched the retail tranche of its $89.97 million offer yesterday. 'The institutional tranche of Senyuan's offering has already been fully covered and we have confidence that the retail tranche will receive a good response,' Quam Capital corporate finance director Karen Wong said. The maker of vacuum circuit-breakers will sell 76.25 million shares at $1.18 each, representing a price-earnings ratio of 9.1. It is due to start trading on July 11. The flotation comes in the wake of the lacklustre retail response to China Cosco Holdings' offering and office printer maker Jolimark's retail tranche left not fully covered. Senyuan will sell 10 per cent of the offer shares to retail investors. Quam Capital and Altus Capital are the sponsors. Senyuan, which plans to pay out 30 per cent of its profit as dividends, has experienced strong profit growth for the past few years. The circuit-breaker's profit surged 51.6 per cent to 31.99 million yuan in 2003 and rose 31.68 per cent to 42.13 million yuan last year. Senyuan's prospectus does not provide a profit forecast. Chairman Patrick Tsang Shui-ching said the company last year produced 14,600 units of circuit-breakers - the core components of switchgear used in buildings, factories, power plants and distribution networks to transform high-voltage power from the distribution grid into usable low-voltage power. It has already produced more than 10,000 units this year. Mr Tsang expected Senyuan to produce 18,000 circuit-breakers for the whole year, a 23.2 per cent rise over last year's output. Senyuan's gross profit margin fell slightly from 26.9 per cent in 2003 to 25.4 per cent last year on increasing costs of copper and steel plates. A large portion of the funds raised will be used for research and development and acquisition of production machinery and testing equipment. About $12 million will be used to repay bank loans. The institutional tranche of the offering closed on Friday, while the retail tranche will close on July 4.