A sum of nearly US$1.12 billion is being sought to be raised by China National Pharmaceutical Group Corp., China's largest pharmaceutical products distributor by sales, from an initial public offering in Hong Kong.

Sources close to the matter said: "The Company, known as Sinopharm, plans to sell 545.7 million shares, or 25% of its enlarged share capital, in an indicative range of HK$12.25-HK$16.00 each."

It is at a P/E ratio of 14 times that Hong Kong-listed peer Guangzhou Pharmaceutical Co. trades; however, analysts specified that Sinopharm is much bigger apart from having better growth prospects because of its state ownership.

It has appeared that a combined US$195 million worth of shares have been assured to nine cornerstone investors, which include BOC International Holdings Ltd., CCB International (Holdings) Ltd., China Life Insurance Co. (LFC), Government of Singapore Investment Corp., Och- Ziff Capital Management LLC (OZM), Value Partners Group Ltd., Martin Currie Investment Management Ltd., China Chengtong Development Group Ltd. and Bank of East Asia Ltd.'s chairman, David Li.

One of the analysts said: "The Company plans to use the proceeds from the IPO to expand its distribution coverage and retail network, acquire pharmaceutical products, and upgrade its logistics and information technology systems."

With bookbuilding being initiated Friday; the motive of Sinopharm is to list on the Hong Kong stock exchange Sept. 23.

The joint bookrunners on the deal are China International Capital Corp., Morgan Stanley (MS) and UBS AG (UBS).