China's top hotel chain eyes float

SHANGHAI - Jinjiang International Group, China's top hotel conglomerate, plans to raise US$300 million ($492 million) in a Hong Kong listing as early as September, sources say.

Shanghai's government merged Jinjiang Group and Shanghai New Asia Group in 2003 to create Jinjiang International Holdings, which is now the biggest hotel company in Asia.

The state-owned firm runs more than 200 hotels in 59 cities in China, including the Peace Hotel, a landmark on the Bund riverfront that is Shanghai's best-know luxury hotel, according to its website.

Hotels in China are seeing strong growth from rising tourist arrivals. China's first-time hosting of the Olympic Games in Beijing in 2008 and the World Expo 2010 in Shanghai should further boost tourist arrivals.

The country's 770 billion yuan ($157 billion) tourism market expanded over 12 per cent in 2005, and is projected to grow at 10 per cent a year for the next decade, according to the World Travel and Tourism Council.

The sources said the initial public offering, arranged by BNP Paribas, was set to start its marketing around September or October.

The Shanghai-listed company also runs the largest budget hotel chain on the mainland - Shanghai Jinjiang Inn Investment and Management, which has about 100 hotels in major cities such as Beijing, Tianjin, Shenyang and Dalian.

"Hotel and catering are the best assets in the group, that's why the Hong Kong listing vehicle chose these assets," one person familiar with the situation said.

Jinjiang Hotel saw its profit jump almost 33 per cent to 193 billion yuan last year, with its net profit margin improving to 21 per cent in 2005, from about 17 per cent in 2004.

The group's other assets, including Shanghai Jinjiang International Industrial Investment and Shanghai Jinjiang International Travel, will not be included, the sources said.

- REUTERS