Asia's largest furniture exporter Samson Holdings is looking to tap the Hong Kong market for US$250 million to US$350 million after obtaining approval for a listing on the main board yesterday, according to sources familiar with the offer. Pre-marketing will start next week and will follow hot on the heels of Kasen International Holdings' initial public offering, which closes today. Kasen, a Zhejiang-based maker of furniture and leather products, hopes to raise up to $958.29 million and has been marking its shares at 10.3 to 12.8 times this year's estimated earnings. In contrast to Kasen, which is an original equipment manufacturer (OEM), Samson has two brands of its own - Universal and Legacy Classic - and derives only about 10 per cent of its revenues from high-end OEM-based production. It also offers design and manufacturing as well as distribution. Samson, which is owned by Taiwanese investors but has both its production facilities in the mainland, sells exclusively to the United States. This had allowed it to dodge most of the anti-dumping tariffs imposed by the US on Chinese furniture makers, the sources said. The firm pays a tariff of 2.66 per cent, compared with an average of about 100 per cent for mainland furniture makers as a group. Compared with OEM manufacturers, Samson also has a higher net profit margin (approaching 20 per cent) and should command a higher price-earnings ratio than Kasen. US furniture makers traded at an average of about 14 times forward earnings and Samson could end up pricing its offer at a multiple in the mid-teens, one source said. The company's net profit rose to about $68 million in 2003 from $60 million in 2002, but was largely flat at $70 million last year when it opened a production plant in Shanghai. This year, the bottom line was expected to increase 28.5 per cent to $90 million on revenues of about $500 million, sources said. The proceeds from the offer will be used partly to further expand production capacity in Shanghai, although the company has indicated it also wants to expand into upholstery and children's furniture. Samson, which will be brought to market by Morgan Stanley, is looking to sell about 25 per cent of its enlarged share capital, with 75 per cent of the shares coming from existing shareholders, including its chairman and founder Kuo Shan-hui. The rest will be new shares. The offer is scheduled to open on November 4 and trading is expected to begin on November 16.