Property developer Soho China has sought to play down concerns of a high historical price-to-earnings valuation for its looming initial public offering, through which it is believed to be aiming to raise between US$100 million and US$200 million. Co-chief executive Zhang Xin said previous media speculation that it was aiming to achieve a 26 to 52 price-to-earnings (PE) ratio based on a forecast net profit for this year of 100 million yuan (HK$94.23 million) was incorrect. Ms Zhang and chief financial officer Cheng Lilan would not give the correct ratio or comment on the company's profit forecast and target fund-raising amount - the key to calculating the ratio. But they said investors should focus on the PE ratio based on this year's profit rather than last year's. Reuters last Friday quoted co-chief executive Pan Shiyi as saying that the company was aiming for a PE ratio of more than 10, adding that the forecast turnover for this year was about US$470 million. He did not give a profit forecast. Based on last year's net profit of 128 million yuan, the PE ratio would be 20.31 and 40.62. Locally listed mainland-focused property developer China Resources Beijing Land last traded at a PE of eight on this year's forecast earnings. Beijing North Star was at 10.84 and China Overseas Land and Investment at 10.85. Mr Cheng said Soho China's turnover was just over 1.8 billion yuan last year compared with one billion yuan in 2000. Operating profit for last year was around 20 per cent and was expected to remain the same this year. Net profit rose from about 400,000 yuan in 1999 to 78 million yuan in 2000 and 128 million last year. Established in 1995, Soho China focuses on mid-tier to high-end residential, commercial and office property development. It books revenue based on the percentage of completion of its projects. This implies that revenue from units sold in a certain year tend not be recognised in the same year, as the developer generally pre-sells its projects and construction takes a few years. The total area under construction is about 200,000 square metres. Last year's turnover was derived entirely from the pre-sale of Soho New Town - a six-tower office, commercial and residential development in downtown Beijing with a gross floor area of 490,000 square metres. Soho China has a 50 per cent stake in the project. Jianwai Soho, in which Soho China has a 90 per cent stake, will be the main profit contributor for next year. It consists of a seven-phase 700,000 square metre residential development and a two-tower office development in downtown Beijing. Mr Cheng said most of the 600 units of the residential portion's phase one and two had been sold this year, as well as half of one of the two office towers. The residential units ranged between 100 and 290 square metres and were sold at 12,000 yuan per square metre. The two office towers have about 100,000 square metres of saleable area, which was sold at an average of 15,000 yuan per square metre. Soho China is expected to start pre-marketing its IPO in a week, and hopes to list in Hong Kong and New York next month.