Cheung Kong Infrastructure Holdings (CKI) forecasts a profit of more than $700 million this year, up from $569 million last year, as a prelude to its planned flotation in July. The new infrastructure arm of Cheung Kong (Holdings) is set to raise more than $3 billion through the sale of a 22.5 to 25 per cent shareholdings of its enlarged share capital to territory and global investors. CKI chairman Victor Li Tzar-kuoi, who is also the deputy chairman of Cheung Kong, said the market value of the new subsidiary's assets would be about $14 billion, which would include the capital to be injected by its parent Cheung Kong. He did not disclose the amount to be injected by Cheung Kong but said the proposed capital injection indicated that Cheung Kong had no intention to tap funds through the listing. The spin-off move was aimed at streamlining Cheung Kong's infrastructure business and its other investments, said Mr Li, adding that Cheung Kong this year would not have any booked profits incurred by the flotation. CKI's infrastructure portfolio at present includes its local cement, concrete and quarry operations Green Island Cement and Anderson Asia. It also includes 19 mainland projects including power plants, toll roads and toll bridges. Mr Li said: 'The market value of CKI [after flotation] will increase to more than $17 billion.' According to CKI executive director Edmond Ip Tak-chuen, the difference between the asset value before and after flotation would be about the same as the money to be raised through the flotation. But he said the amount would be varied by many factors like the size of the flotation and initial investor response to the offering. Mr Ip said CKI's estimated earnings in the 1996 financial year would be not less than $728 million, which was more than 27 per cent up from that of 1995. CKI posted $569 million in 1995 earnings, of which nearly $400 million came from its quarry, concrete and cement operations in Hong Kong - with the rest contributed from the earnings of its mainland projects. The substantial earnings contributions from Hong Kong operations caused concern among some analysts, who were cautious about the profitability of CKI's mainland investments. Mr Li said CKI would see a high earnings potential in its mainland projects. Profits generated from its local infrastructure investments would be used mainly to fund its China projects. To further expand its infrastructure portfolio, CKI is negotiating a power plant in Guangdong's Dongguan city. CKI has submitted listing application to the Hong Kong stock exchange and the initial public offering in Hong Kong is expected in early July. The flotation campaign also will include an international share placement aimed at professional institutional investors. After the listing, Cheung Kong will own a 73 per cent interest in CKI and its associate Hutchison Whampoa will have CKI's 4.1 per cent shares. Mr Li said Hutchison's 4.1 per cent interests had reflected its investments in CKI's mainland's toll roads, bridges and a power plant projects, which were in joint venture with Cheung Kong. He also said that holders of exchangeable bonds issued by Cheung Kong in 1994 on Cheung Kong (China) could not convert CKI's shares when it went public. HSBC Investment Bank Asia and CEF Capital will be CKI's joint global co-ordinators for international placing and sponsors for the initial public offering in Hong Kong.