Henry Cheng Kar-shun, the executive chairman and Cheng Yu-tung's son, said on Sunday that listing was the only way to expand the 82-year-old family business.

He said the company would focus on expanding its retail network to benefit from the robust retail sales growth in the region.

The company said in its prospectus yesterday that half the proceeds raised would be used to buy diamonds, gemstones, precious metals and watches. The rest of the funds would be mainly used to repay loans, refurbish and acquire shops and construct a new office building in Shenzhen.

The jewellery chain, which has larger revenues than Tiffany & Co of the United States, had an extensive retail network of 1,421 jewellery stores or counters and 85 watch locations on the mainland, as well as in Hong Kong, Macau and other Asian countries as of September 30.

It reported a turnover of HK$35 billion for the year to March, with more than 55 per cent generated from the mainland market.

The retailing giant hopes to open 200 shops or counters a year over the coming five years to bring the total number of outlets to more than 2,000 by 2016.

The company forecast that net profit for this financial year would be at least HK$6.3 billion while pro forma earnings per share would be about 63 HK cents.

Eugene Mak, an analyst at Core Pacific-Yamaichi Securities, is bullish about the company's prospects.

'As one of the earliest players in the mainland jewellery market, Chow Tai Fook has built a very solid base for itself over the past two decades. It has a good lead compared with other mass luxury jewellery sellers,' Mak said.

The combined turnover of Luk Fook and Chow Sang Sang, two of its major rivals, was less than half of that of Chow Tai Fook last year.

Mak also expected the stock to be included eventually as a constituent of the Hang Seng Index.

The mainland jewellery market has taken off over the past decade, fuelled by rising affluence and looser government rules on importing luxury goods. Jewellery is also regarded as an investment as gold and diamond prices continue to rise.

A study by research firm Frost & Sullivan shows that the mainland's jewellery market is likely to outpace the growth of the country's gross domestic product over the next five years. It also is expected to pass the US as the world's largest jewellery market in that time, with an annual market value of HK$1.5 trillion.

'We are confident that the company will continue to benefit from China's robust retail sales growth in the long term, and we'll focus on expanding our retail network in greater China,' Henry Cheng said.

Chow Tai Fook has 12.6 per cent of the mainland's jewellery market, and a 20 per cent share in Hong Kong and Macau, according to Frost & Sullivan.

Meanwhile, as many as 20 mainland companies planned to launch initial public offerings in Hong Kong by the end of the month, a stock exchange executive said, according to Bloomberg.

About 110 firms were seeking to list their shares and about 40 had been approved, said Lawrence Fok, the chief marketing officer for Hong Kong Exchanges and Clearing.

Between 10 and 20 companies would complete their offerings by December 31, he said.

Chow Tai Fook will fix the share price on Friday and trading will start next Thursday.

14%

China accounted for this amount of global gold and jewellery demand in 2009. The World Gold Council says demand could double in 10 years