China's largest tire maker, Giti Tire, plans to launch a $400 million to $500 million initial public offering (IPO) in Hong Kong this year, sources with knowledge of the deal said.

And two other companies are also planning Hong Kong listings, sources familiar with the deals said on Wednesday.

China ITS (Holdings) Co Ltd, a technology service provider for transportation industry, plans to raise about $150 million from an IPO this year. And Chinese liquor and cigarette distributor Silver Base Ltd aims to raise $300 million.

The plans put those companies in line with a number of IPO candidates waiting for a market revival to sell their shares.

Founded in 1993, Giti Tire had originally planned to launch a Hong Kong IPO in 2004, but it postponed the deal and underwent a restructuring.

"We hope that the deal can be launched as soon as June," one of the sources said, while another source said the firm had not yet set a timetable.

ITS, which provides information system solutions for expressways, railways, and urban traffic systems in China, has filed a listing application with the Hong Kong Stock Exchange, the sources said.

It has been a harsh year for IPOs in Hong Kong, as 10 companies planning a combined $7.68 billion worth of listings have withdrawn or postponed their offerings thus far, according to Thomson Reuters data.

Investors have seen little attraction in unproven firms, and the few recent newcomers to the market have turned in mixed performances.

"Unless there is a unique and specific sector that we are interested in, there is no pull factor for us to invest in IPOs, as IPOs' post-market performance have been poor," said Teresa Chow, a fund manager at RBC Investment Management.

Last week, Chinese women's apparel firm E-Land Fashion China Holdings Ltd shelved a listing worth up to $369 million even though it was sufficiently subscribed at the bottom of its indicated price range.

Still, a growing handful of capital-hungry firms are looking to raise funds despite Hong Kong's Hang Seng Index losing 8 percent so far this year. At least six companies are currently pre-marketing their IPOs, including Chinese sports-apparel retailer Xtep China Co Ltd, Pou Sheng Internatonal (Holdings) Ltd and Chenming Paper Holdings, all with plans to raise a combined $2 billion.

Silver Base distributes products made by top Chinese liquor maker Wuliangye Yibin, as well as top cigarette maker Hongtashan's premium series. It hopes to list in June or July, one of the sources said.

Giti's deal is being sponsored by Credit Suisse and UBS, while Merrill Lynch is sponsoring ITS's deal. UBS is also sponsoring the Silver Base offering.

Reuters

(HK Edition 05/15/2008 page3)