Shanghai Industrial Holdings, the listed arm of the Shanghai municipal government in Hong Kong, has filed applications with the China Securities Regulatory Commission to acquire assets from its parent, according to analysts. The red chip would not identify the sector it planned to expand, but the analysts said the group reiterated it wanted to build up its four main arms: infrastructure, consumer products, vehicle parts, and commercial and retail businesses. 'Company officials said it would be a major asset injection,' one analyst said after a meeting with management on Wednesday. He said an infrastructure project would meet the firm's criteria for an asset injection. 'I expect the acquisition will take place in the second half of this year, so that the impact on earnings will be rolled over to next year,' the analyst said. Analysts were also told that Shanghai Industrial would seek to expand income growth by acquiring assets from channels other than its parent. Some forecasts suggest the group will post flat earnings growth in 1999 unless it is helped by asset purchases. SocGen-Crosby Securities (HK) head of China research Raymond Jook said he expected Shanghai Industrial to deliver a more than 25 per cent rise in earnings per share growth this year, propelled by guaranteed US dollar earnings from two Shanghai toll-road projects. Amid uncertain regional economic conditions, the stability provided by the US dollar-generating infrastructure projects, which accounted for 49 per cent of the company's net profit in 1997, ranked as one of investors' highest priorities, he said. He said Shanghai Industrial compared favourably with other H-share toll-road operators, which had no such guarantee.