Hebei province-based Jinxi Iron and Steel plans to list on Hong Kong's main board as a red chip next month to raise US$200 million to $300 million to expand capacity, sources say.
The company has received provisional approval from Hong Kong Exchanges and Clearing to list and has appointed Merrill Lynch and JP Morgan to sponsor its listing.
The company was a state-owned enterprise until management bought a controlling stake in 1999.
It focuses on construction steel which is in high demand because of China's construction boom, driven by investment in new apartments, factories and public infrastructure.
Jinxi booked total turnover of about 2.6 billion yuan in 2002 with net profit of about 420 million yuan, the sources said, adding it had become one of the lowest-cost domestic producers after privatisation.
The company has an annual capacity to produce more than three million tonnes of steel.
