* Guotai Junan Securities could be biggest China IPO in 4 years
* 65 applications listed on CSRC website in past 5 days
* Investors worry IPO deluge to pressure domestic stocks (Recasts, quotes analyst, adds financial figures, calculations)
SHANGHAI, April 23 (Reuters) - Chinese securities firms are lining up to tap domestic equity markets, with one brokerage likely to post China’s biggest initial public offering in four years if it receives listing approval, the latest batch of IPO applications shows.
The China Securities Regulatory Commission published the application prospectuses of 19 firms on its website on Tuesday evening, bringing the total to 65 applicants over the last five days.
One firm, Guotai Junan Securities Co Ltd, has applied for an IPO in Shanghai that could raise nearly 22 billion yuan ($3.5 billion), according to Reuters calculations.
Reuters arrived at the figure by multiplying the company’s projected earnings per share with the number of shares it hopes to issue, and then with the median forward 12-month price-to-earnings ratio for its 20 listed peers.
If approved, that would make Guotai, China’s third-largest brokerage by profit, the largest listing in the country since Agricultural Bank of China Ltd debuted in July 2010. AgBank raised around $11 billion in Shanghai and another $11 billion in Hong Kong through a dual listing - the current record.
State-owned Guotai plans to use the funds raised to advance the financial services it provides, improve its underwriting capabilities and broaden its asset management business, among other things, according to its draft prospectus.
China Galaxy Securities Co Ltd, Huarong Securities Co Ltd and Ping An Securities Ltd will underwrite the IPO, according to the prospectus.
Among other applicants, Orient Securities is aiming to raise about 7 billion yuan and Dongxing Securities is seeking around 5 billion yuan, based on the same calculation method.
Analysts say the time could be ripe for brokerages to expand given the potential opportunity for new business from a pilot scheme that will allow cross-border stock market investment between Shanghai and Hong Kong.
Chen Xingyu, an analyst at Phillip Securities (Hong Kong) Limited, said that how the pilot is implemented will be a major factor in the reception that brokerages like Guotai receive.
“How the brokerages perform on their listing day will depend on how the co-operation plays out between the Hong Kong and Shanghai stock exchanges. If it works out, they will receive a lot more attention from the market.”
Investors, however, are worried that a deluge of IPOs will pressure Chinese equity prices by diverting funds from existing listed firms into new stocks.
Such concerns pushed mainland indexes down over 1 percent on Monday and have continued to weigh on stocks this week.
Still, the publication of applications does not necessarily mean the applications will be approved, and the listing schedule would still be uncertain for those that are approved.
China resumed initial public offerings in January after a 14-month suspension, but firms have to wait in a lengthy queue and some are abandoning their listing plans.
As of April 18, 606 firms in China were on the IPO waiting list, down from 675 the previous week, and some investment bankers are concerned previous predictions that China’s IPO market would prove a world-beater in 2014 may not come true.
Click here for a timeline on China’s IPO reforms and setbacks: ($1 = 6.2375 Chinese Yuan) (Reporting by Shanghai Newsroom; Additional reporting by Koh Gui Qing in BEIJING; Writing by Pete Sweeney; Editing by Chris Gallagher)