HONG KONG: Shares in the mainland's top port builder China Communications Construction are expected to soar on its Friday trading debut in Hong Kong, local analysts said.

"It won't surprise me if its shares rise by more than 20 per cent," said Louis Wong, a director at Hong Kong-based Phillip Capital Management Ltd.

The company, which controls 90 per cent of the mainland's port construction market, sold 3.5 billion new shares at HK$4.6 (59 US cents) each.

Institutional investors have placed orders worth as much as US$162 billion.

The State-owned company has attracted strong demand from investors as a result of the country's strong economic growth and government spending on infrastructure.

Wong told China Daily that "investors are eyeing the strong support of the central government, which announced further investment to improve the country's infrastructure facilities in the 11th Five-Year Plan (2006-10).

"Once the company's shares start trading, strong demand from institutional investors will help bring more gains," he said.

The share sale, arranged by BOC (International) Holdings Ltd, Merrill Lynch & Co and UBS AG, was priced at about 18 times its 2007 earnings forecast. The price range was set at between HK$3.4 (44 US cents) and HK$4.6 (59 US cents) apiece.

China Communications Construction said in its prospectus it will use the proceeds from the share sale to finance the purchase of equipment to build roads, ports and railways, pay off debts and improve capacity at its container-crane factory in Shanghai.

Recently listed mainland companies have all seen their shares surge on their trading debut. China Communications Services, a telecom service provider, made a stellar gain of more than 85 per cent last Friday, the best newcomer so far this year in Hong Kong.

Jinjiang International Hotels' IPO also received a good response from the market.

The mainland's biggest hotel operator, sold 1.1 billion shares in a price range of HK$1.81 (23 US cents) to HK$2.2 (28 US cents) per share.

It is expected to report earnings of 425 million yuan (US$54 million) in 2006 and 468 million yuan (US$58.5 million) next year, according to IPO underwriters.

It is reported that the corporate tranche of Jinjiang's IPO has been oversubscribed 10 times.

The hotel chain said it plans to increase its budget hotel network from the current 151 hotels to 180 by the end of 2006. It also plans to expand its network to 600 hotels by 2010 if its business growth remains steady.

The Shanghai-based group said it will sell shares worth US$30 million to Starwood Capital, the founder of Starwood Hotels and Resorts Worldwide Inc, US$20 million to the chairman of Bank of East Asia, David Li, and another US$20 million to China Group Investment Ltd.

Jinjiang, the mainland's biggest and oldest hotel operator, is expected to have an estimated net profit of 424.5 million yuan (US$53 million) this year, 2.5 per cent higher than the previous financial year.

In 2007, the group is forecast to have a net profit of 467.5 million yuan (US$58.4 millioin), according to the IPO's underwriters UBS and BNP Paribas.