Yingmao Sugar Industry, a major producer in the country's southwest region, aims to raise about HK$600 million from an initial public offering in Hong Kong, according to market sources. The company, which is due to meet the listing committee of the Hong Kong stock exchange soon, hoped to kick off its share sale 'at the end of next month at the earliest or early July', a source said. Guotai Junan (Hong Kong), which is arranging the deal, declined to make any comment. Headquartered in Kunming, the capital city of Yunnan province, Yingmao ran eight sugar factories in the province at the end of 2006. Its major products include the white sugar under its namesake brand and edible and industrial alcohols. It has an annual production capacity of about 400,000 tonnes of white sugar, according to the company's website. Francis Lun Sheung-nim, a general manager at Fulbright Securities, said industrial stocks 'generally lack an appeal among local investors'. 'If there is an upswing in both the market as well as the global sugar price at the time when the company launches its share sale, the room for the shares to go up may be bigger and therefore its appeal to local investors may increase,' Mr Lun said. Despite a rebound of 154.73 points yesterday, the benchmark Hang Seng Index is still suffering from a loss of 3,530.61 points or 12.69 per cent so far this year. 'The valuation on the company is a key to its share offering,' said a fund manager. 'Yingmao is not really a big sugar producer in the country so a lower valuation will help increase its attractiveness.' Shares in Xiwang Sugar Holdings, the country's top crystallised glucose producer, are trading at about five times forecast earnings for this year. The stock closed 1.02 per cent lower at HK$2.92 yesterday.