(Yicai Global) Oct. 14 -- Shares in Rainbow Appliance Group dipped today after the Chinese maker of electrical heating appliances said that its overseas sales of electric blankets so far this year have only been a fraction of last year’s. The firm was asked by the Shenzhen stock exchange to explain a significant jump in its share price in the last month.

Rainbow’s stock price [SHE:003023] closed down 3 percent today at CNY40.70 (USD5.67), ending an impressive run. The firm’s stock has more than doubled in the last 13 trading days and its market value has also more than doubled since the beginning of September.

The steep rise prompted the Shenzhen stock exchange to write a letter of concern on Oct. 10, asking Rainbow to disclose its sales of electric blankets.

Rainbow had shipped CNY210,000 (USD29,300) worth of orders overseas as of the end of June, and there is another CNY1.3 million (USD185,000) worth still to be delivered, the Chengdu, southwestern Sichuan province-based company said yesterday. This accounts for just 0.13 percent of the firm’s total revenue last year, it added.

But it would seem that Rainbow’s stock is benefiting from a big jump in demand for eco-friendly heating devices in Europe as winter approaches and energy prices jump. Last month, the news that Europeans are snapping up energy-efficient electric blankets and heat pumps to keep warm during the winter months sparked a big buzz on Chinese social media networks.

Rainbow's main businesses have not changed significantly, it is operating as normal and it has not failed to disclose any major information, the company said. There is also no evidence of insider trading that could lead to abnormal fluctuations of the share price.

Rainbow, which makes electric blankets, electric hand warmers as well as household sanitary and pest control products, sold CNY595 million (USD82.8 million) worth of electric blankets last year, accounting for half of all its sales.

In the first half, the firm logged a 26 percent slump in net profit from the same period last year to CNY61.5 million (USD8.5 million), while revenue tumbled 10.5 percent to CNY533 million (USD74 million).

Editor: Kim Taylor