CPCNet, a wholly owned subsidiary of Citic Pacific looking to list its own shares, said revenue from its virtual private network (VPN) business would grow 60 per cent to 70 per cent this year, boosted by additional service points and customers on the mainland. The company said it would work to boost profit with the aim of meeting requirements for an initial public offering in Hong Kong within one to two years. 'Whether we have a separate listing is a matter to be decided by Citic Pacific. We have not received any instructions about it yet,' said CPCNet chief executive Stephen Ho. CPCNet, a communications and network security solution provider, is benefiting from increasing corporate demand for VPNs, which use software to establish private communications networks over the fixed-line links of other telecommunications operators. The global VPN market will likely grow 25 per cent a year until 2010, according to researcher IDC. CPCNet's VPN sales rose over 50 per cent in the first half, accounting for 70 per cent of total sales. Other income came from its internet connectivity business, which experienced slow growth. Citic Pacific, the main investment arm of Beijing-based Citic Group, last year said it would focus more on its core businesses, including special steel, property and power generation. It spun off its telecommunications unit, Citic 1616 Holdings, and Citic Bank in April. 'According to our estimates, CPCNet's net asset value is about HK$300 million, which is insignificant when compared with that of Citic Pacific,' said an analyst. 'But if Citic Pacific spins off CPCNet, it can send a message to shareholders that it will have a clearer business direction.' The analyst said CPCNet could have more funds to expand after being listed while retail investors would gain another chance to profit from a Citic spin-off. Shares in Citic 1616 rose 2 per cent to close at HK$3.45 yesterday, up 31 per cent from its initial offering price of HK$2.58. Shares in Citic Bank have gained 4.1 per cent since its listing. CPCNet, whose competitors in the mainland include BT Group, Cybertrust and Unisys, is seeking to expand beyond its present 3,000 customers by looking mostly to the mainland but also overseas, while emphasising the security aspects of its services. 'We will enhance our delivery capability by adding three points-of-presence (POPs) in Shunde and Zhuhai in Guangdong and in Chongqing city, thus extending our network coverage to 27 POPs, of which 24 will be on the mainland,' Mr Ho said. 'Our VPN security services can help customers discover insider threats and determine whether any of their staff are using client data inappropriately on the internet or telephone,' said Mr Ho. 'We can alert our customers at an early stage if their servers have been infected by viruses or attacked by hackers.' Mr Ho declined to disclose details of the company's investments and sales, saying the financial figures were combined in the communications segment of Citic Pacific without a breakdown. Citic Pacific's communications segment posted sales growth of 42 per cent to HK$1.73 billion last year.