BRIGHT World Precision Machinery, a China-based manufacturer of metal stamping machines, aims to float more than a quarter of its shares on the Singapore Exchange mainboard next week to raise funds for new facilities that will double production capacity.

It hopes to raise $34.1 million net from its initial public offer of 105 million new and vendor shares at 36 cents each. One hundred million of the shares will be privately placed, while the rest will be available to the public.

Bright World said on Wednesday that it had registered its prospectus with the Monetary Authority of Singapore in preparation for listing. It also said it intended to pay out about 30 per cent of its net profit for 2005 and 2006 as dividend.

At 36 cents, the offer price is 7.1 times Bright World's historical earnings per share, based on the most recent full-year net profit of 74.6 million yuan (S$15.2 million) in 2004. On Wednesday, Bright World chief executive Shao Jian Jun said the group planned to use the bulk of the funds - $28.1 million - to expand its 130,000 sq m production plant in Danyang City, Jiangsu province.

Another $2.2 million will help to pay for a research and development centre in Shanghai, he said. A third portion of the funds - about $1.6 million - will be used to set up a sales office in Guangdong. The rest of the funds will be used as general working capital.

Bright World is part of an industry that supports other manufacturers by supplying them stamping machines and related parts. The equipment is used to make goods ranging from cars to electrical appliances and toys.

Mr Shao told BT he expected demand for the company's products would continue to outstrip supply, owing to the robust growth in global consumption of China-made products. According to its prospectus, Bright World's order book on March 15 was 348.5 million yuan.

'The signs look positive. With the growth of the automobile manufacturing industry and the emergence of new manufacturing bases in central and north-east China ... we are optimistic about our business prospects and growth ahead,' Mr Shao said.

Based on the enlarged share capital of 400 million shares after the offer, Bright World will have a market capitalisation of $144 million when it goes public.

It is the latest in a string of China companies that have flocked to Singapore to list this year, drawn by the buoyant stock market and strong economic conditions. Bright World's offer closes at noon on April 25, and the shares are expected to start trading on April 27.