Mar. 6, 2007 (China Knowledge) – Chongqing Lifan Holdings, the Mainland's largest privately owned motorcycle maker, aims to launch an IPO in Hong Kong this year to fund its overseas expansion plans, said its president.

Speaking on the sidelines of the Chinese People's Political Consultative Conference on Monday, Yin Mingshan revealed that a Hong Kong-based investment bank has been picked to be the company’s listing sponsor. He also said that the shares should be sold at a valuation of between eight to 14 times earnings.

Another reason for the IPO, other than for raising funds, is for Lifan to introduce modern management systems, said Yin. According to him, talks with potential strategic foreign investors have already begun.

Lifan, a 15-year-old company, sold 2.54 million engines, 1.33 million motorcycles and 10,100 cars last year, when turnover grew by 34% to RMB 10.4 billion, according to its website. One-third of sales were exports and the rest were in the domestic market.

To get around overseas trade barriers such as import tariffs, the company has set up joint-venture motorcycle assembly plants in Indonesia, Vietnam and Thailand.

A plant in Turkey is scheduled to come on stream in the third quarter. Turkey, the Mainland's third-largest motorcycle export destination, on Friday slapped an import duty of US$200 to US$300 per unit – 33% to 50% of their sale price on the Mainland – on China-made motorcycles.

Lifan is also setting up a joint venture in Egypt capable of assembling up to 50,000 passenger cars to supply that market when production started in June, Yin said. Another plant with a capacity of 100,000 units in Russia is expected to be ready by November.