China's largest bus-shelter advertising firm Clear Media will launch a roadshow today on its initial public offer, which is set to have the highest price-earnings ratio of any listed on the main board this year. Analysts said the aggressive pricing was based on the high growth potential of the mainland's advertising industry, which is expected to be boosted by greater imports of foreign consumer goods after entry to the World Trade Organisation. China's advertising market has grown at an average annual rate of 17 per cent since 1996 to US$4.8 billion last year. The company is planning to raise between HK$624.95 million and HK$812.43 million by selling 110.30 million new shares to international institutional investors and 14.69 million new shares to retail investors. The offer has been priced at HK$5 to HK$6.5 per share, equivalent to 49 to 63.7 times its diluted forecast earnings per share of 10.2 HK cents for the year to December 31. It plans to use HK$230 million to repay short-term bank loans and a shareholder loan, HK$300 million to finance its bus-shelter expansion plan and the remainder to bolster working capital and for expansion of its point-of-sale advertising display operation. Based on listing sponsor Goldman Sachs' 2002 net profit forecast of HK$77 million, the price represents 32 to 42 times its earnings next year. Existing shareholders Yue Hei-yeung and Han Ziwei - a brother of chief executive and major shareholder Han Zijung - are to dispose of 21.93 million shares to raise HK$109.65 million to HK$142.54 million. American media group Clear Channel Worldwide will see its stake of 61.7 per cent diluted to 44.3 per cent after the share offer, assuming an over-allotment option is exercised. Han Zijung's stake will be diluted from 40.8 per cent to 29.3 per cent. Clear Media claims it has the largest market share by number of display panels in 21 out of 28 mainland cities. Beijing, Shanghai, Guangzhou and Shenzhen accounted for 62 per cent of total revenues last year. Last year, Clear Media's net profit grew 51.7 per cent year on year to HK$41.69 million, as turnover rose 51.3 per cent to HK$260.03 million.