Sources from Hong Kong reported that Jiangsu Rongsheng Heavy Industries Group had started pre-marketing activities. The IPO was expected to be triggered in November.

The target was located for collection of CNY11.7bn ($1.76bn). The underwriting group predicted that the price to earnings ratio would rise at 110% to 190% next year.

In addition, as is revealed, the funds collected by Rongsheng during IPO might be used in different ways. About 25% would be paid for debt and 42.5% would be invested in machinery. Another 12.5% would be splashed out on shipbuilding capacity.

According to the report from BOC International (China) Limited which is Rongsheng's sponsor, during 2007 to 2008 Rongsheng came across of losses at CNY440m and CNY530m respectively. Last year, Rongsheng earned CNY1.3bn.

This year, the profit may reach CNY1.9bn and it was expected to hit CNY4.5bn next year. It was raised by 49% and 130% separately. BOC International also indicated that Rongsheng's shipbuilding base in Nantong was China's largest shipyard in terms of deadweight recorded in orders.

BOC International estimated that the valuation was hanging around CNY56.5bn to CNY83.4bn. The price to earnings ratio was expected to reach 125% to 185% while Deutsche Bank thought it might hit 110% to 160%.