UPDATE 2-Italy's Moleskine shares rise in market debut
* CEO sees "significant" revenue growth on China expansion
* Moleskine "better" than luxury brands financially -CEO
* Shares rise nearly 3 pct, outperform Milan's broad index (Adds CEO quotes, details, updates shares)
By Antonella Ciancio
MILAN, April 3 (Reuters) - Shares in upmarket notebook maker Moleskine rose in their market debut in Milan on Wednesday, defying broad market weakness in this year's first major stock listing in crisis-hit Italy.
The maker of notebooks based on originals used by Ernest Hemingway and Bruce Chatwin is the first company to join the main Milan stock market since the listing of cashmere brand Brunello Cucinelli nearly a year ago.
Shares in Moleskine rose nearly 3 percent in early trading, outperforming Italy's broad share index, which was down 0.5 percent, underlining investor interest in brands that appeal to style-conscious consumers.
Moleskine was up 0.17 percent at 1038 GMT to 2.31 euros from the 2.30 euros price the company had set for its 488 million euro ($626.5 million) initial public offering (IPO).
The Milan-based company was valued at a discount to exclusive names such as Prada but in line with luxury brands with strong margins and growth in foreign markets.
"We are better than the average of luxury makers in terms of profitability," Chief Executive Arrigo Berni told Reuters at the market launch ceremony at Milan's stock exchange.
Founded in 1997, the company makes its thread-bound jotters in Asia, with a margin on sales of 43 percent.
Moleskine is the fourth upscale Italian brand to tap the stock market in under two years, following the IPOs of Prada, Salvatore Ferragamo and Cucinelli.
Berni said he expected "significant" growth in coming years as Moleskine develops apps and other digital products for a growing number of smartphone users and opens its first stores in China.
"We are not like Rolex, which makes exclusivity and price an integral part of its appeal," Berni said.
Moleskine sells 90 percent of its 15-euro notebooks outside Italy, which is struggling with a deep recession and stuck in a political limbo after inconclusive elections.
"I hear the concerns that Italy doesn't have a government," said Raffaele Jerusalmi, CEO of Italian stock exchange Borsa Italiana, adding that the listing provided a sign of confidence.
"It is even more important to have a market flotation at this moment of uncertainty."
Moleskine offered 106.3 million shares, including 12 million new ones, meaning just over 50 percent of the company's shares are now traded on the market.
Demand for the shares has come from investors in Italy, Britain, elsewhere in Europe, the United States and Asia. The offer was 90 percent reserved to institutional investors.
Private equity funds Syntegra Capital and Index Ventures, alongside founder Francesco Franceschi and management, will pocket most of the 244 million euros generated by the sale.
Moleskine has seen growth of around 25 percent per year since Syntegra bought 75 percent for around 60 million euros in 2006. The company had revenues of 78 million euros in 2012.
Moleskine, whose products also include leather covers for tablets and writing tools, said remaining proceeds from the capital increase would be used to halve debt to 12 million euros while retail growth would be funded through cash generation.
($1 = 0.7789 euros) (Additional reporting by Elisa Anzolin; Writing by Lisa Jucca and Antonella Ciancio; Editing by Mark Potter and Helen Massy-Beresford)