China Power International, whose parent company is one of the mainland's top five power producers, has applied to Hong Kong's stock exchange for a listing to raise about US$500 million, sources familiar with the situation said yesterday.

The market had previously expected the firm, controlled by Li Xiaolin - daughter of former premier Li Peng - to launch its IPO in the third quarter of this year.

But it appears China Power and Merrill Lynch, the underwriter for the deal, have accelerated the listing plan. "The debut could come around end-June at the earliest," one source said.

Merrill Lynch declined to comment. The deal would be the US investment bank's second China IPO this year after it helped arrange steel maker China Oriental Group US$284 million share sale in February.

Investor sentiment towards Hong Kong-listed mainland stocks has weakened on concerns about China's efforts to cool its economy, but power stocks continue to outperform the market as surging demand for electricity outstrips supply.

China's power consumption rose 15.4 per cent to 1.891 billion megawatts in 2003, adding pressure to the country's power network and resulting in brownouts in many regions.

Shares in Huaneng Power International have gained 14 per cent so far this year, compared with a 20 per cent fall on the Hang Seng China Enterprise Index, which tracks the performance of mainland companies listed in Hong Kong.

China Power owns five plants in Henan, Jiangsu, Anhui and Liaoning provinces, mainly in the central area of China.

Its generating capacity, totalling 2,632 megawatts, is less than a fifth of Huaneng Power's but is bigger than that of China Resources Power Holdings, which raised HK$2.58 billion (US$330 million) in an IPO handled by Morgan Stanley and BOC International last November.

China Power is an overseas arm of China Power Investment Corp, one of the big five power generating groups created from the break-up of the State Power Corp in 2002.

The parent company controls 30,150 megawatts of capacity and is the largest player in central and northwest China.

Li Xiaolin's brother, Li Xiaopeng, is the chairman of Huaneng Power Group Corp, the State-owned parent of listed Huaneng Power and one of the country's top five power firms.

China Power will probably list before Shenzhen Energy Group. Shenzhen Energy is gearing up for a Hong Kong IPO in the third quarter that could raise about US$500 million and is sponsored by JP Morgan.

(HK Edition 05/07/2004 page3)