UPDATE 2-China Pacific, Want Want kick off HK share sales

(For an expanded IPO diary, click <HK/IPOMENU>) (Adds details, background, quote)

By Tony Munroe and Kennix Chim

HONG KONG, March 3 (Reuters) - Hong Kong's revived IPO market gained momentum on Monday as China Pacific Insurance (601601.SS) began pre-marketing a share sale to raise roughly $3.9 billion while snack maker Want Want China Holdings kicked off a roadshow for its $1.43 billion deal.

China Pacific Insurance, the country's third-largest life underwriter, plans to sell 783 million shares in Hong Kong, or 9.2 percent of its enlarged share capital, sources familiar with the deal said.

An overallotment option on the long-expected IPO would lift the size of the deal to about 900 million shares.

IPOs are returning to Hong Kong after the market ground to a halt at the start of this year, when several deals were postponed or cancelled.

Hong Kong ranked third among global IPO markets last year, behind the Shanghai and London boards, with 79 deals raising $37.75 billion, according to Thomson Financial.

Investors, however, are expected to be far more selective than they were during the bullish markets of the past two years.

China Pacific's Hong Kong IPO price will be based on the stock's Shanghai price, which at current levels would put it at a premium to larger rivals China Life Insurance (2628.HK) and Ping An Insurance (2318.HK) after sell-downs of both.

"The price is not going to be very attractive, especially compared with China Life and also Ping An Insurance after the recent plunge of the share price, so the response may be a little bit cautious," said Steve Leung, director at UOB Kay Hian Holdings. "Also, the size of this particular issue is very big."

Last week, China Railway Construction Corp began marketing the Hong Kong portion of a dual listing set to raise $5.4 billion -- a deal that is proving popular given heavy infrastructure spending in China.

In another IPO, Chinese oil rig manufacturer Honghua Group on Friday raised $409 million after pricing its shares in the middle of its range. China Evergrande Real Estate, which delayed its IPO in January, is looking to raise $1.5 billion in Hong Kong.

Want Want on Monday began taking orders for its IPO worth up to $1.43 billion ahead of a listing scheduled for March 25, according to a term sheet obtained by Reuters. BNP Paribas (BNPP.PA), Goldman Sachs (GS.N) and UBS are handling the deal.

So-called cornerstone investors have pledged to take up $167 million worth of Want Want's IPO. The eight include Taiwan's Uni-President Enterprises (1216.TW) and its Hong Kong-listed mainland China affiliate Uni-President China Holdings (0220.HK), which are buying a combined $50 million of shares.

Want Want is selling about 2.7 billion shares, not including an overallotment option, at HK$3.00 to HK$4.10 each, or 20.3 to 27.7 times forecast 2008 earnings, the term sheet said.

By comparison, noodle and beverage maker Uni-President China trades at 27 times forecast 2008 profits.