Construction machinery maker Sany Heavy Industry Co Ltd said on Monday it would seek an initial public offering (IPO) in Hong Kong after reporting 59.3 percent year-on-year growth in its net profit in 2009.

Hunan-based Sany Heavy said it would float H-shares in Hong Kong, which would be worth at least 15 percent of its expanded capital. The company didn't provide a detailed fund-raising target.

"The company currently has issued a total of 1.6 billion shares. According to its plan, the new float should include up to 260 million shares," said Li Jianjian, an analyst with Founder Securities.

At its current market value, Sany Heavy would raise about 7.9 billion yuan.

According to the announcement, the share sale has received shareholder approval but still requires the regulatory go-ahead. Raised funds will be used to expand capacity and overseas operations as well as technology upgrades.

Already setting up plants in the United States, Germany and India, Sany Heavy Industry is eager to further its international expansion and boost overseas branding by opening more factories abroad, said Guo Yaling, an industrial analyst with Citic Securities.

"The fund-raising in Hong Kong will speed up Sany Heavy Industry's development overseas, and help make it a world renowned machinery maker," added Guo.

Although rising steel prices will erode the company's overall profit to some extent, the company is expected to grow at a rate of between 30 and 50 percent in the coming year, said Guo.

Being the nation's largest construction and mining equipment producer, Sany Heavy Industry controls 50 percent of the market share in construction manufacturing, and it also accounts for 7 percent of the mining machinery market across the nation, public information shows.

However, the company's international branding has been less successful. Currently it is ranked in the world's top 30 in machinery manufacturing, but its goal is to be in the top 10 in the business.

"In comparison with some global brands such as Japan's Komatsu and the US' Caterpillar, Sany Heavy is less competitive in consumer recognition beyond China," Li noted.

"But Sany has an enormous advantage over other global rivals because China is on the road to rapid urbanization. Bolstered by the nation's enormous spending on infrastructure construction, Sany will benefit more than expected," added Li.

Currently, the nation's urbanization rate has risen to 45 percent, but still far lower than that of developed countries, which average 75 percent. The global urbanization rate is currently 49 percent.

The company garnered 16.5 billion yuan in revenue in 2009 with 1.96 billion yuan in net profit, up 20 percent and 59.3 percent respectively from a year earlier, according to its annual report published on Monday.

Sany Heavy's Shanghai-listed A shares edged down 0.36 percent to close at 30.08 yuan on Monday, while the benchmark Shanghai Composite Index shed 0.47 percent to 2969.50.