Everbright Securities Co, China's 10th biggest brokerage by market share, plans to raise as much as 10.96 billion yuan ($1.60 billion) in its Shanghai initial public offering after announcing an IPO price range on Sunday.
The brokerage said it plans to sell up to 520 million shares, or 15.21 percent of its enlarged capital, at 19 to 21.08 yuan apiece. That means the IPO, only China's second by a brokerage, would raise 9.88 billion to 10.96 billion yuan.
The range is higher than analysts' forecasts.
Ping An Securities Co had forecast an IPO price range of 15.22 to 18.48 yuan, and expected the stock to rise to 25.50 to 31.08 on its debut trading day.
The range would price the stock at 52.78 to 58.56 times its 2008 earnings per share, the company said, based on its enlarged share capital, while valuing Everbright Securities at up to 72 billion yuan.
Chinese brokerages, benefiting from a stock market rally that doubled the benchmark Shanghai Composite Index .SSEC from last October's two-year low, are eager to raise funds through public share sales after China lifted a 10-month IPO ban in June.
Rival China Merchants Securities Co and Industrial Securities Co are also preparing for IPOs.
Everbright Securities' net profit jumped 20.2 percent to 1.2 billion yuan in the first half of the year, on revenue that gained 16.5 percent, according to its prospectus. That compares with a 71 percent slump in 2008 earnings.
Everbright Securities set the price range after gauging interest from investors and will take bids from institutional and individual buyers next Monday and Tuesday.
The Shanghai-based brokerage will use the IPO proceeds to expand its network of stock trading offices, upgrade technology, develop overseas business and consolidate its capital base, according to the prospectus.
China has eight listed brokerages, but only one, CITIC Securities, went public by floating IPO shares, in 2002. Six others listed via acquisitions of listed companies and one transformed itself into a brokerage from a trust firm.
Everbright Securities, controlled by financial conglomerate Everbright Group and an affiliate China Everbright Ltd, lags rivals such as CITIC and Haitong Securities in wooing customers for trading commissions.
Everbright hired Orient Securities as the IPO's lead underwriter. The company has not given a date for listing. ($1=6.831 Yuan) (Reporting by Samuel Shen and Edmund Klamann; Editing by Hans Peters)