Shares in Fujian-based China Green Holdings, the first company to list on Hong Kong's main board this year, were up 60 per cent at HK$2.025 after their Hong Kong market debut, compared to an initial public offering price of HK$1.28.

Trading in the company's shares began Tuesday under the stock code 0904.

China Green's listing saw record-breaking demand and was the first on Hong Kong's main board in 2004, extending a wave of excitement over Chinese IPOs that began at the end of last year with investors looking to cash in on the country's strong economic growth.

Hong Kong's blue-chip Hang Seng Index was down 1.2 per cent.

In comparison, Chaoda Modern Agriculture (Holdings) Ltd, a Chinese organic farming firm listed in Hong Kong, trades at 8.46 times its profits for the year ended in June 2003.

The farming and food processing company initially offered 150 million new shares, of which 10 per cent were allocated to retail investors, and the remaining 90 per cent to institutional investors.

The retail portion of the deal was a massive 1,604 times subscribed by retail investors, while the institutional tranche was covered 8.5 times.

Strong retail demand has prompted the company to enlarge the retail tranche from 10 per cent to 50 per cent, with the institutional portion reduced from 90 per cent to 50 per cent.

The agricultural firm has issued an additional 22.5 million new shares under the institutional tranche with a full overallotment option, raising gross proceeds of HK$220.8 million (US$28.3 million).

China Green's listing follows a wave of popular IPOs from Chinese firms at the end of last year, as investors look to take advantage of China's booming economy.

These include Tianjin Tianlian Public Utilities Company and SJTU Sunway Software Industry, which were listed successfully on the Hong Kong Growth Enterprise Market earlier this month.

Chinese mining company Fujian Zijin Mining Industry Company was also listed in December last year, raising HK$1.3 billion in an initial public offering that was 744 times subscribed by public investors.

The overwhelming response to China Green's listing indicates that investor interest in Chinese companies has continued to grow.

A number of large Chinese firms including the likes of China Construction Bank and Ping An Insurance have indicated plans for overseas share offerings, anticipated to raise a combined US$11.7 billion.

China Green made a net profit of 116.98 million yuan (US$14.1 million) last year, more than double its earnings in 2002.

"The timing for China Green's offer is good and the IPO price, at HK$1.28 per share, is cheap too," said Zheng Qi, an analyst with China Securities Co in Beijing.

The China concept also helps, she said.

China has expected its economic growth to reach 8 per cent in 2003. Most economists predict the momentum to be maintained this year.

As for the green-food industry, the growing market demand also points a big potential of development in China, said Zheng. People pay more attention to food safety nowadays and green-food products are becoming increasingly popular.

Established in 1998 in Fujian Province, China Green is engaged in vegetable and fruit processing and distribution. It is largely export-oriented, with the Japanese market contributing 80 per cent to the company's total turnover.

The company produced 69,000 tons of vegetables in the last fiscal year, exporting about 80 per cent of its products to Japan, and about 2 per cent to Europe and Southeast Asia.

The company said it plans to use proceeds from the IPO mainly to enhance its processing facilities.

China Green originally sold 150 million shares in the IPO handled by JS Cresvale, at about seven times its earnings for 2003 or a quarter of its share capital.

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