One Hong Kong and two mainland-based software companies are gearing up for stock-market listings to raise capital for future expansion. Sino-software, an investment unit indirectly owned by the Chinese Academy of Sciences, is planning a listing on the mainland's forthcoming second-board market. The market, which will focus on high-technology companies and private start-ups, is expected to be ready for launch by the end of this year. Hong Kong-based Sun Wah Hi-Tech Group is considering spinning off its investment unit Sun Wah Linux for a listing on the technology-heavy Nadsaq in the United States, while Shenzhen-based Kingdee International Software Group aims to seek a listing on Growth Enterprises Market (GEM) in Hong Kong next month. Kingdee International chairman Robert Xu said the application software provider had recently obtained approvals from mainland and Hong Kong regulators for a listing on the GEM board. He did not unveil the listing timetable but it is believed by the market to be next month. Mr Xu said Kingdee had been profitable in the past seven years. The company, a financial management software developer, hopes to earmark funds to develop Internet-based software, promote and upgrade newly released business management software, set up specialised Web sites and conduct research and development. Sun Yufang, deputy director of the Institute of Software, controlled by the Chinese Academy of Sciences, said its investment unit Sino-software aimed to be the first company to list on the second board. Sino-software provides application software on various services such as securities and intelligent buildings. Mr Sun said the investment unit had a turnover of 250 million yuan (about HK$234.17 million) last year, expected to rise to 350 million yuan this year. Profit accounted for 15 per cent of the company's turnover, Mr Sun said. Jonathan Choi, chairman of privately run Sun Wah Hi-Tech, said many overseas investment banks suggested the group list its application software subsidiary Sun Wah Linux on the Nadsaq. He said the plan was being considered but no final decision had been made. Mr Choi said Sun Wah Linux, which develops Linux software and provide solutions services with Linux systems, mainly focused on overseas markets. It was expected to break even and make profits within 12 months. He declined to unveil details of its financial position. Sun Wah Hi-Tech offers solutions and services including systems integration, portal and e-commerce enabling and software development. Mr Choi said a market listing would create a source of funding but it was not the ultimate goal for the group. It planned to expand hi-tech businesses overseas and in the mainland market. To enhance its strength in the China market, Sun Wah Hi-Tech announced it had agreed to take a minority stake in Redflag Linux, another subsidiary of the Institute of Software. Redflag Linux develops innovations in computer operating systems and relevant application software. Before Sun Wah Hi-Tech's investment, the company was 60 per cent-owned by the Institute of Software and 40 per cent-owned by New Margin Venture Capital. New Margin is 50 per cent-owned by Shanghai Alliance Investment and 50 per cent-owned by a unit founded by the State Planning Commission, State Economic & Trade Commission and Chinese Academy of Science. Mr Sun did not unveil the size of the equity stake Sun Wah Hi-Tech had agreed to buy. But he said the Institute of Software would remain the single largest shareholder in the foreseeable future. He said Redflag Linux did not rule out the possibility of launching an initial public offering, either on domestic or overseas markets, although there were no immediate plans.