Xinyi Glass Holdings, the mainland's largest exporter of vehicle glass, will invest 300 million yuan in manufacturing and selling glass for solar energy systems. While it was in favour of financing the investment internally, the company said yesterday that it might issue new shares not exceeding 5 per cent of its current equity capital 'if the market conditions permit'. Xinyi shares yesterday fell 5.51 per cent to close at $3 on news of its possible issuance of new shares. 'The directors confirm that the company has not entered into any binding agreement with any third party in respect of the placing of the shares,' the company said. The company had $86 million cash at the end of March and gearing of 11 per cent. Xinyi plans to produce ultra-clear photovoltaic glass, which is used to cover solar energy panels, in the third quarter of next year at its Dongguan plant. Production capacity will reach 400 tonnes a day, or about 100,000 tonnes a year. Chief executive Gerry Tung Ching-sai said the company might also consider bank borrowing as it still had an 800 million yuan credit limit. Mr Tung said the gross margin on ultra-clear glass, which provides brighter light and solar transmission than ordinary glass, was about 70 per cent. This is significantly higher than the company's 34 per cent gross margin on vehicle glass and building glass panels last year. Energy-saving glass is a focus in China's 11th five-year plan. 'It is also a worldwide trend to use clean energy,' Mr Tung said, adding that Xinyi was negotiating with mainland and overseas solar energy system providers, which supply solar panels and glass to commercial buildings. Mr Tung expected 70 per cent of Xinyi's ultra-clear glass to be exported and 30 per cent to be sold in the mainland. Xinyi posted a 10.3 per cent increase in net profit to $260.11 million last year with a turnover of $1.38 billion.