Wang Jian, a senior manager with Lianhua's listing office, said that the China Securities Regulatory Commission formally accepted the company's application to list earlier this month but the timetable for public offering was not set yet.

"If the (listing) process goes smoothly, we will try to go public in Hong Kong this year," Wang told China Daily.

The Shanghai-based retailer aims to raise at least US$100 million on the Hong Kong market, unidentified industry sources have reportedly told local media.

Lianhua's General Manager Liang Wei declined to comment on its financial targets for listing. But he told China Daily that the company was looking to add more than 4,000 stores nationally over the next three years.

Liang said the stores, mostly hypermarkets and small convenience stores, will be built in more than 10 provinces, municipalities and autonomous regions, targetting big cities along the country's coast.

The company had decided to list because it needed to expand to fight off competition from overseas rivals, analysts said.

Under the country's commitment to the World Trade Organization (WTO), restrictions on overseas investments in China's retailing sector will be completely lifted by the end of next year.

Chao Gangling, professor with the Shanghai University of Finance and Economics, said domestic retailers, who have tended to limit their business to certain regions, have to become "national enterprises" to compete against their overseas counterparts.

"No scale, no interest. That is the consensus reached by retailers worldwide," said Chao.

Liang from Lianhua also noted that the company had made expansion its No 1 priority since 2000.

Lianhua Supermarkets, founded in 1991, have more than 1,900 chain stores around the country and recorded annual sales of more than 17 billion yuan (US$2.1 billion) last year, according to the company's statistics.

About 70 per cent of the world's largest 50 retailers have entered the Chinese market, including the top three - Wal-Mart, Carrefour and Metro.

(China Daily February 27, 2003)