Sinotrans, a unit of China's biggest freight-forwarding and logistics company Sinotrans, plans to put about 35 per cent of its shares on the block during its H-share initial public offering (IPO) next year, market sources said. The IPO, to be followed by a debut on the SAR main board, will most likely happen in the first half of the year, the sources said. The share sale is estimated to raise between US$300 million and US$500 million, which will be used to upgrade systems for managing cargo, bankers involved in the deal told Bloomberg yesterday. Credit Suisse First Boston is sponsoring the listing, with Bank of China International also participating. The listed vehicle will almost certainly include an international courier and freight-forwarding operation spanning the coastal regions and a 70 per cent stake in Shanghai-listed Sinotrans Air Transport Development. Freight-forwarding agency business accounted for 33 per cent of Sinotrans's operating profit last year, shipping and international courier services made up 12 and 32 per cent respectively. Some investment bankers described the scale of Sinotrans's IPO fund-raising as aggressive, citing waning investor interest in mainland logistics plays. 'I think its challenge is a huge staff (44,000) and low margin,' one investment banker said, 'and how it can spin off its best assets for listing.' He said that to attract investors, Sinotrans should price its IPO at no more than 10 times of earnings. That implies after-tax earnings of 800 million yuan (about HK$757.66 million) to one billion yuan (about HK$947 million) next year. It is understood the company made a pre-tax profit of about 700 million yuan last year.