China National Chemical Engineering Co plans to raise up to 6.7 billion yuan (US$981 million) in a Shanghai initial public offering to fund new projects and purchase more equipment.

The major chemical project contractor said it planned to sell up to 1.233 billion yuan-denominated A shares at between 4.90 yuan to 5.43 yuan per share, representing 40.83 times to 45.25 times its 2008 earnings per share, the Beijing-based company said in a statement to the Shanghai Stock Exchange.

The share sale accounts for 25 percent of its enlarged capital base while the offer price allows it to raise between 6.04 billion and 6.7 billion yuan.

About 30 percent of the shares were issued offline to institutional investors from yesterday while the remaining 863.1 million shares will be offered online to both retail and institutional investors today.

The proceeds will be used to buy production equipment, build an information system and boost working capital to major engineering projects.

Analysts are optimistic about the company as investments in the petrochemical industry keep growing at more than 25 percent annually and the firm can tap on this solid foundation to continue growing in the future.

"The company's profitability and market share will be raised after new projects start," said Chen Zhibing, a Shanghai Securities Co analyst. Chen said net profit is expected to grow 28 percent, 37 percent and 41 percent for the next three years.