Chairman Mark Sun Zhongguo said the company was the nation's largest producer of industrial gases - pure oxygen, nitrogen and argon, used mainly in the iron and steel, chemical, non-ferrous metals and electronics production processes.

With a 25 per cent market share by revenue on the mainland last year, Yingde is about 75 per cent owned by management and the remainder by institutional investors including Baring Private Equity and Deutsche Bank. These shareholders bought out the former owner, mainland-listed Torch Automotive Group.

Pure oxygen makes up about 70 per cent of Yingde's sales. Some 80 per cent of its sales are to facilities built at customers' premises via 15- to 20-year contracts, and the rest sold to distributors at spot market prices.

With an oxygen production capacity of 360,000 cubic metres per hour at the end of last year from 20 facilities in operation in 10 regions, 12 plants under development will raise that to 850,000 cubic metres per hour - roughly 60 per cent of the global capacity of the world's biggest producer, France's Air Liquide, last year.

It is a capital-intensive industry, where every 10,000 cubic metres per hour of capacity requires 100 million yuan (HK$113.51 million) of investment. Yingde's expansion plan could cost an estimated 4.9 billion yuan.

Its biggest new project is at the coal-to-olefin processing plant of Shenhua Group, the parent of listed China Shenhua Energy, in Baotou, Inner Mongolia, which will buy 240,000 cubic metres per hour of oxygen from Yingde. Olefin, a key chemical used in a variety of manufacturing sectors, is derived from crude oil.

Yingde's gross margin was about 40 per cent, according to a research report by Goldman Sachs, the global co-ordinator of the offering.

Chief financial officer Alex Xu said under the long-term contracts, customers would pay for agreed purchase volumes regardless of actual demand, while selling prices could be adjusted when power tariffs increased. Electricity is its biggest production cost component.

'Besides raising funds for expansion, our planned listing will enhance brand recognition among our customers, many of which are state-owned enterprises,' Sun said.

Meanwhile, Shanghai developer Glorious Property will open its up to HK$11.9 billion share offer on Thursday. Excluding a share disposal by chairman Zhang Zhirong, it could raise some HK$9.94 billion to fund project development.

Its offer is priced at 15.6 to 20.6 times this year's forecast earnings on a weighted average basis before fair value gains on investment properties, and 10.9 to 14.4 times after fair value gains. The firm forecast net profit of not less than 1.39 billion yuan. Net profit in the first four months was 773.54 million yuan.

China Resources Cement, southern China's largest maker of the construction material, aims to raise as much as HK$6.39 billion to partly fund a plan to increase its annual cement production capacity by 82 per cent and more than double its clinker capacity this year and next.

Chairwoman Zhou Junqing said that despite the aggressive expansion, there remained a huge room for growth, as outdated capacity would be taken offline under central government policy while demand would grow under Beijing's infrastructure-heavy economic stimulus policies.

The shares are priced at 8 to 9.8 times this year's forecast earnings of not less than HK$1 billion. First-half net profit fell 31 per cent year on year to HK$365.66 million but slid only 2.5 per cent if non-recurring gains were excluded.

Turning heads

Yingde Gases' offering has drawn interest from two sovereign funds

The three firms aim to raise from the share sales a total of more than, in HK$: $20b