UPDATE 1-Giti Tire, 2 others join HK IPO pipeline

(For an expanded IPO diary, please click <HK/IPOMENU>)

(Combines earlier stories, adds details and background)

HONG KONG, May 14 (Reuters) - China’s largest tyre maker, Giti Tire, plans to launch a $400 million to $500 million Hong Kong IPO this year, sources with knowledge of the deal said on Wednesday, joining a line-up of listing candidates hoping for a revival in the market for new issues.

Two other companies also plan Hong Kong listings, sources familiar with the deals said on Wednesday.

China ITS (Holdings) Co Ltd, a technology service provider for transportation industry, plans to raise about $150 million from a Hong Kong initial public offering in 2008, while Chinese liquor and cigarette distributor Silver Base Ltd aims to raise $300 million.

Founded in 1993, Giti Tire originally had planned to launch a Hong Kong IPO in 2004, but postponed the deal and underwent a restructuring.

“We hope that the deal can be launched as soon as June,” one of the sources said, while another source said the firm had not yet fixed a timetable.

ITS, which provides information system solutions for expressways, railways, and urban traffic systems in China, has filed a listing application with the Hong Kong Stock Exchange, the sources said.

This has been a harsh year for IPOs in Hong Kong, as 10 companies planning a combined $7.68 billion worth of listings have withdrawn or postponed their offerings so far this year, according to Thomson Reuters data.

Investors have seen little attraction in unproven firms, and the few recent newcomers to the market have turned in a mixed performance.

“Unless there is a unique and specific sector that we are interested in, there is no pull factor for us to invest in IPOs, as IPOs’ post-market performance has been poor,” said Teresa Chow, a fund manager at RBC Investment Management.

Chow said that if the market could choose between existing stocks and newcomers in the same sector, they were likely to prefer the market leader.

Last week, Chinese women’s apparel firm E-Land Fashion China Holdings Ltd shelved a listing worth up to $369 million even though it was sufficiently subscribed at the bottom of its indicated price range, people familiar with the matter said.

Still, a growing handful of capital-hungry firms are looking to raise funds despite Hong Kong's Hang Seng Index .HSI losing 8 percent so far this year.

At least six companies are currently pre-marketing their IPOs, including Chinese sports apparel retailer Xtep China Co Ltd, Pou Sheng Internatonal (Holdings) Ltd and Chenming Paper Holdings, with plans to raise a combined $2 billion.

Silver Base distributes products made by top Chinese liquor maker, Wuliangye Yibin 000858.SZ, as well top cigarette maker Hongtashan's premium series. It hopes to list in June or July, one of the sources said.

Giti Tire is part of the Gajah Tunggal group, controlled by Indonesia’s Nursalim family, whose interests encompass manufacturing, agriculture, property, financial services and retailing.

China is the world’s biggest tyre maker and exporter. Last year, it shipped about 157 million tyres overseas, or 48 percent of the country’s output, according to the China Rubber Industry Association.

China’s tyre exports in 2007 grew 30.8 percent compared with 2006, data released by the trade group shows. Some market watchers expect a slowdown in the global economy would cause exports to grow more slowly this year.

Giti's deal is being sponsored by Credit Suisse CSGN.VX and UBS UBSN.VX, while Merrill Lynch MER.N is sponsoring ITS's deal. UBS is also sponsoring the Silver Base offering.


Reporting by Kennix Chim, editing by Tony Munroe