China Merchants Securities eyes $1.6 bln IPO

SHANGHAI, Nov 8 (Reuters) - China Merchants Securities Co plans to raise up to 11.1 billion yuan ($1.62 billion) through an initial public share offer in Shanghai, according to a price range it set on Sunday.

The medium-sized brokerage said in an exchange filing that it plans to sell as many as 358.5 million shares at 26 yuan to 31 yuan apiece, which means what would be China's third brokerage IPO could raise between 9.3 billion yuan and 11.1 billion yuan.

The range would price the stock at 47.18 to 56.26 times its 2008 earnings per share, Merchants Securities said, based on its enlarged share capital.

That is slightly lower than the valuation put on the IPO shares of Everbright Securities Co (601788.SS), which went public in Shanghai in August.

Other brokerages including Huatai Securities Co, Guosen Securities Co and Industrial Securities Co are also lining up for domestic IPOs, seeking to take advantage of this year's stock market revival, which has boosted their trading commissions and investment banking revenues.

Merchants Securities, based in China's southern boomtown of Shenzhen, will take institutional subscriptions on Nov. 9 and retail subscriptions on Nov. 10, according to its IPO prospectus.

Twenty percent of the IPO shares will be sold to institutional investors through the off-line tranche of the subscription process, while the remainder will be sold to mainly retail investors, the company said on Sunday.

Merchants Securities, controlled by port-to-property conglomerate China Merchants Group, has appointed Goldman Sachs's (GS.N) China joint venture, and Swiss bank UBS (UBSN.VX) (UBS.N) as underwriters for its China IPO. ($1=6.831 Yuan) (Reporting by Samuel Shen and Edmund Klamann; Editing by Greg Mahlich)