China Merchants Hai Hong Holdings Co will launch a share placement soon to fund acquisitions on the mainland, sources say. Possible acquisition targets for the listed arm of China's Ministry of Communications included four roads, the sources said yesterday. It is understood Union Bank of Hong Kong has been excluded from the acquisition list. Company officials were not available for comment on the long-awaited asset injection from parent China Merchants Holdings. Hai Hong said last month it would need to raise funds to finance the purchase of several investments from its parent under a proposal it was formulating. The parent has interests in shipping, insurance, trading, engineering, construction, hotels, tourism and oil-supply base services. In January, Hai Hong raised about $446.6 million as working capital and to finance future acquisitions through a placing and subscription deal involving the issue of 141.2 million new shares at $3.20 each. Li Yinfei, executive director and president of the parent company, has earlier made known the group's intention of turning the listed arm into a conglomerate from a paints manufacturer. Diversification would help broaden its earnings base. Hai Hong last week reported a 54 per cent increase in net profit to $158 million for last year, bolstered by an exceptional gain, while turnover and operating profit fell.