China's largest producer of cotton textiles, Weiqiao Textile Co, is likely to raise up to HK$2.14 billion (US$275 million) from its initial public offering later this year, it was reported Monday.

The firm, which makes items for businesses such as Fountain Set (Holdings) Ltd and Texwinca Holdings Ltd, will use most of the proceeds from this month’s float for boosting and upgrading its production capacity.

Weiqiao, which also makes denim fabric, said it will boost its annual production capacity of cotton yarn to 441,000 tons from the current 265,000 tons as part of its expansion drive.

It added it sees a full year net profit before exceptional items of at least 520 million yuan ($63m) compared to 108.2 million yuan ($13m) in the previous fiscal year.