Golden Eagle Retail Group has raised its fund-raising target for its initial public offering to as much as $1.3 billion to cash in on the growing investment appetite for China consumer plays. The mainland department store operator, starts its roadshow in Hong Kong today, was originally targeting between $900 million and $1.1 billion from the main board to fund its expansion, according to market sources. 'Mainland financial and domestic consumption stocks are the two main driving forces in the stock market at present. A new offering with such themes is likely to be popular,' said KGI Asia director Ben Kwong Man-bun. Strong demand for Chinese domestic consumer stocks has been demonstrated by the recent rally in Parkson Retail Group, a department store spin-off of Malaysian conglomerate Lion Group. The stock, priced at just $9.80 during its initial offering in November, has surged 37.86 per cent this year to close at $19.30 on Friday, against 6.59 per cent growth in the Hang Seng Index. Golden Eagle's management declined to comment on its listing plans but said there were vast untapped business opportunities for retailers in China. 'China's retail sector is likely to see its fastest growth over the next decade in light of rising purchasing power of the middle and upper class,' chairman Roger Wang Hung told a media briefing yesterday. Mr Wang said the company planned to invest $320 million to open three stores on the mainland by the first quarter of 2007 to take advantage of rising domestic consumption. This would extend its network to nine, he said. It will open a store in Xian by the second quarter, one in Nanjing by the year-end and another in Taizhou by March 2007. Although smaller than rival Parkson, which has 39 outlets in 26 Chinese cities, Golden Eagle had a niche in middle and upper-class consumers in second-tier cities, Mr Wang said. The group carries 1,300 brands in its 110,000 square metre shopping space. Concession counters generate some 80 per cent of its revenue with the rest from direct sales. Middle and upper class consumption in China has been growing rapidly at a compound annual growth rate of 8.1 to 15 per cent in the six years to 2004, according to the China Statistical Yearbook. Retail sales of consumer products posted a compound annual growth rate of 12.7 per cent in the decade to 2004. Sales hit 5.4 trillion yuan in 2004, up from 1.6 trillion yuan in 1994. Golden Eagle's management declined to comment on leaked pre-deal research which contained detailed profit figures and forecasts. The South China Morning Post reported last week the company had received warnings from the stock exchange after the leak.