Maker of stamping machines and parts wants to expand production, spend more on R&D

CHINA-BASED Bright World Precision Machinery Ltd, a manufacturer of stamping machines and related components which is eyeing a Singapore listing, yesterday lodged its preliminary prospectus with the Monetary Authority of Singapore.

Among other things, the company aims to raise money from its planned initial public offering (IPO) to expand its production and R&D capabilities.

Bright World makes a variety of stamping machines and machinery parts and accessories as well as resin-casted components.

End-users of its products are mainly product manufacturers from the automobile, hardware, electrical appliances and electronics industries.

According to its preliminary prospectus, the company wants to use part of its IPO proceeds to double its production capacity by building a new plant adjacent to its existing one in Danyang City, Jiangsu Province.

Bright World will also buy more equipment for the production of both stamping machines as well as resin-casted components. It also intends to set up an R&D centre in Shanghai to look into improving product quality and efficiency of its production processes and to monitor market trends.

The centre will also focus on developing new stamping machines with improved efficiency and performance.

Bright World said that it believes such machines are 'more resilient to aggressive pricing strategies' and thus the production of these machines will help the company 'achieve long-term growth'.

The company also aims to set up a sales representative office in China's Guangdong province to increase its presence in the region. In addition to providing on-site pre-sales and after-sales services to its customers, the office will also serve as a satellite warehouse.

'We also intend to expand our sales network to the central PRC regions such as Hunan, Hubei, Sichuan, Chongqing as well as the north-eastern regions of the PRC which we have identified as regions for growth with a view to increasing our market share in the PRC stamping machines,' the company said.

Bright World will also increase its sales staff to about 100 personnel to be deployed to these regions.

In addition to its sales representatives, the company has already appointed over 300 sales agents in various parts of the China.

Bright World also said in its preliminary prospectus that China having become the world's factory and production base for all forms of manufacturing is an 'advantageous development' for the company 'as the stamping industry forms the backbone of many manufacturing industries including automobile, hardware, electrical appliances and electronics'.

On a proforma basis, Bright World recorded a turnover of 144 million yuan (S$29 million) for the the first half of 2005, an increase of 40.1 per cent year-on-year, with after-tax profit surging 141.4 per cent to 36.2 million yuan.

Its earnings per share for the same period was 0.1207 yuan.