Listing candidate Shenzhou International Group Holdings plans to adjust its product mix to manufacture a larger percentage of higher-margin sportswear products, with some of the funds raised to be spent acquiring production equipment. Contribution to the firm from sportswear has been minimal in the past few years but is improving, accounting for 6.8 per cent of turnover in the first five months of this year from 1.9 per cent last year, according to Shenzhou's preliminary offering document. At yesterday's investor presentation, the knitwear manufacturer's management told fund managers that the company already had business with Nike and Puma and sportswear was a huge market for the company, whose main product was casual wear. Market sources said Shenzhou aimed to raise $897 million by selling 300 million shares at a preliminary price range of $2.63 to $2.99 each, representing 9.5 to 10.8 times forecast earnings for this year. The institutional book of the offering opened last Wednesday and sources said initial response was encouraging. About half of the net proceeds would be used for equipment acquisition and almost $300 million for debt repayment, sources said. Unlike other mainland knitwear manufacturers, Shenzhou is not affected by quotas imposed by the United States and the European Union on mainland textile products since its largest market is Japan. Last year, 89.1 per cent of the company's turnover was attributed to Japanese customers. The contribution was lowered to 85.9 per cent in the first five months. Shenzhou forecast a 345 million yuan profit for this year. It plans to pay 45 per cent to 50 per cent of its profit as dividend. The retail tranche is set to kick off on October 26 ahead of the listing on November 7. BNP Paribas is the listing sponsor. Meanwhile, market sources said agricultural irrigation system maker Xinjiang Tianye plans to raise about $200 million on the Growth Enterprise Market by the end of the year. Sun Hung Kai International is the arranger of the share sale.