CITIC (Hongkong) plans to take a seven per cent stake in Manhattan Card Company, the Hongkong credit card subsidiary of the Chase Manhattan Bank, sources say. The company is now seeking a listing on the stock exchange by offering new shares worth about $500 million to the public. In addition, sources yesterday said that Manhattan Card would also issue new shares representing about 20 per cent of the new issue to CITIC (Hongkong). A Manhattan spokesman yesterday declined to confirm the private placement. Details of the public offer have yet to be released, but stock analysts estimate the company's prospective price earnings multiple to be about 12. Schroders Securities regards the pricing and prospects of the company not overly attractive. Although it achieved impressive earnings growth in the past three years and the company forecasts a 40 per cent to 50 per cent rise in net profit this year, the brokerage questions whether the high growth rate can be sustained because of intense competition in the near-saturated market. Manhattan is mainly engaged in issuing Visa Cards and MasterCards - one of about 30, including American Express and Diners Club. Profit sharing between Manhattan Card and its parent is also a concern, says the brokerage. It said that the company has to pay its parent for using its computer networks and staff and these expenses accounted for some 20 per cent of total operating cost. Meanwhile, the company's working capital is now coming from the US$100 million equity provided by its parent and a $200 million syndication loan at an interest rate of HIBOR plus 75 basis points. Schroders says that when HIBOR rises it is unlikely to increase interest charges because of the intense competition.