The airport is expected to raise about HK$762.4 million (US$97.7 million) from the share offering. The share of the airport is set at HK$3.90 (US$0.5) in the pre-open session of their Hong Kong market debut, compared with an IPO price of HK$3.78 (US$0.48) each.

Copenhagen Airports A/S acquired a 20 per cent stake and will be involved in Meilan's management and operations.

"We are planning to use the proceeds from the IPO to expand capacity at the airport, build a new cargo centre and upgrade non-flight business such as shops and advertising income," said Chen Wenli, executive officer of Meilan Airport.

Chen added that the company is also considering possible acquisitions of airport-related assets that offer sound and guaranteed returns for investors.

Income from non-flight business was 28.6 percent, 26.1 percent, 28.1 percent and 19.1 percent of the total respectively in 1999, 2000, 2001 and the first five months of 2002.

He refused to identify the names of "potential targets" for acquisition, but earlier media reports speculated they would include Hainan Sanya Phoenix Airport and Fuzhou Airport.

Chen was confident about Meilan's performance on the Hong Kong capital bourse in spite of the unsatisfactory showing of mainland companies listed in Hong Kong and the overall sluggish market.

"The exchange in Hong Kong will surely get better and better. This is the same forecast for the future development of Meilan," Chen said.

China Telecom, one of mainland's dominant fixed-line telecom carriers, kicked off its IPO in Hong Kong last week but experienced a lukewarm response from the market in the days that followed.

"Meilan's aggressive blueprint is to become an internationally renowned aviation enterprise within the next nine years, promoting annual handling capacity to 10 million passengers from 6 million people at the moment," Chen said.

Meilan Airport handled a record 5.2 million passengers last year, making it the eighth biggest airport in the country.

The airport made a profit of 20 million yuan (US$2.4 million) last year from passengers, more than 20 times the previous year.

Several other airport operators in China have already tapped capital markets for funds, including Beijing Capital International Airport, which has H shares listed in Hong Kong.

Shenzhen Bao'an International Airport, Shanghai Hongqiao International Airport and Xiamen Gaoqi International Airport have listings on domestic stock exchanges.

As its predecessor on the Hong Kong exchange, Beijing Capital International Airport is unlikely to be affected by Meilan Airport's listing, said an official with the securities department of the capital airport.

(China Daily November 19, 2002)