Listing candidate Jilin Qifeng Fibre plans to use half of its flotation proceeds to set up a mainland joint venture with the world's second-largest fibre maker, Montefibre, sources have said.
Jilin Qifeng, one of the world's largest acrylic fibre makers, started pre-marketing its $400 million initial public offering on Monday.
According to fund managers, the company claimed to be the most profitable among the world's major fibre makers as its prices were higher than those of its peers.
Most of the world's fibre-making companies have posted losses in recent years amid high crude oil prices and an oversupply of fibre products.
Italian-listed Montefibre recorded a net loss of Euro25.4 million ($253.7 million) last year, widening from a Euro4.4 million loss in 2004.
Sinopec Yizheng Chemical Fibre, the mainland's largest chemical fibre maker, reported a loss of 33.1 million yuan in the first quarter of the year from a net profit of 2.9 million yuan a year earlier.
Fund managers said Jilin Qifeng was marketing the float at seven to nine times historical earnings. No forecast earnings were available as the company did not make a profit forecast for this year.