Sinotruk may raise HK$9b

Sinotruk (Hong Kong) Ltd, China's largest maker of heavy trucks, may raise as much as HK$9 billion in a Hong Kong initial public offering, said sources.

Sinotruk will offer 702 million new shares at HK$10 to HK$12.88 each, they said, declining to be identified before an official statement. The sale of a 32 percent stake values the Jinan, Shandong Province-based company at as much as $3.6 billion or 18.8 times next year's profit as estimated by the banks handling the sale, they said.

The truckmaker is raising money to expand production capacity in the country, where investment in fixed assets, such as factories, bridges and real estate, jumped 26 percent in the first nine months of this year. China relies on road transport to carry about 75 percent of its cargo, according to one of the banks arranging Sinotruk's share sale.