July 30, 2009 / 9:30 AM / in 8 years

UPDATE 1-China Lifan plans up to $440 mln A-shr IPO -sources

* Aims for A-share IPO in 2009, raising up to $440 mln

* Hires Guotai Junan as adviser for China IPO

* Funds to be invested in boosting capacity, R&D (Adds quotes, details)

By Fang Yan and Edmund Klamann

SHANGHAI, July 30 (Reuters) - Lifan Group, one of China’s biggest motorcycle makers which is diversifying into car production, aims for an initial public offering in Shanghai this year, raising as much as 3 billion yuan ($439 million), sources familiar with the situation said on Thursday.

Lifan, partly owned by an American International Group Inc (AIG.N) affiliate, is joining the expanding ranks of mainland IPO candidates eager to tap investor interest amid a bull-run in the benchmark stock index .SSEC, which has jumped more than 80 percent so far this year.

The non-state firm is resuming its Shanghai listing plan, held up by a 10-month ban on new share sales, and has hired Guotai Junan as its adviser, a source with direct knowledge of the matter told Reuters.

“It wants to raise at least 1 billion yuan but may hike that target to 3 billion yuan if the stock market remains strong,” said a second source.

It has restarted preparations for the long-planned IPO and will submit an application to the country’s securities regulator soon, added the source.

Other Chinese auto makers, including Chery Automobile and Guangzhou Automobile Group Co, a Honda Motor (7267.T) and Toyota Motor (7203.T) partner, are also resurrecting plans to go public, according to media reports and industry executives.

Guotai Junan declined to comment and a Lifan spokesman could not immediately be reached.


Lifan, which modelled itself after Honda, exports motorcycles to over 100 countries, mostly in the developing world.

    It rolled out its first self-developed car, the Lifan 520, in January 2006 and followed up with two more models, joining Chery and other indigenous Chinese car makers to tap growth in the world’s biggest auto market, where passenger car sales rose more than 25 percent in the first half.

    Sales of Lifan’s compact cars, priced between 50,000 and 80,000 yuan domestically, came to 116,400 units in 2008, exceeding its previous target of 80,000 units, company data showed.

    Revenue came to 12.59 billion yuan last year, with exports at $568.9 million. No comparative figures were provided.

    The firm is investing 2.4 billion yuan in phases to boost its car manufacturing capacity, currently at 150,000 units a year.

    Funds raised from the Shanghai IPO would help to bankroll the expansion as well as research and development of medium- to high-range models it hopes to roll out in the future, one of the sources said.

    Other domestic players in the low-priced car market including Chery, Geely Automobile Holdings (0175.HK) and Great Wall Motor Co (2333.HK) unveiled their first premium models at the Shanghai auto show in April, aiming to challenge foreign automakers which dominate the more lucrative segment.

    “Some may say it is way too early for Lifan to tap the premium segment. But it’s better to start making preparations now than later as it cannot stay at the low end forever,” said one of the sources. ($1=6.832 Yuan)

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