Coscon, the mainland's largest shipping firm and a unit of China Ocean Shipping Group, originally considered selling shares this year, but abandoned the idea after the market turned south at mid-year. Rival China Shipping Container Lines (CSCL), the country's second-biggest shipping company, in June raised HK$7.68 billion from its share sale, far less than its original target of HK$15.6 billion.

The sale is now back on track thanks to an upturn in the market - the benchmark Hang Seng Index reached a 3-year high on Monday - along with continuing investor interest in mainland offerings. HSBC and UBS, which have been chosen to jointly underwrite the deal, declined to comment.

A raft of mainland stock sales is expected in the first six months of next year. The deal pipeline is so clogged that many sales may be pushed back into the second half. Coscon is also benefiting from a strong upturn in shipping rates that some analysts reckon will not peak until 2006. Much of the increased demand, of course, is for ships to carry the mainland's surging exports.

The Baltic Dry Index, the benchmark index for shipping rates, closed at 5,191 in London on Tuesday, up 23per cent in two months.

The improved fortunes of shippers has already given CSCL's stock a boost. After trading for several months below its June IPO price of HK$3.175, the shares closed on Wednesday at HK$3.375, up slightly on the day.

The strong market may encourage other mainland shipping companies to step up listing plans.

The mainland's number three shipping company, China National Foreign Trade Transportation (Sinotrans) is also seeking to raise up to HK$4.68 billion in the first half of next year in a Hong Kong stock offering sponsored by BOC International.

``The container shipping business is doing well in China, thanks to growing exports to the United States and Europe,''

UOB Kay Hian investment analyst Zhang Xi said. ``[Coscon] has the advantage because it is a Chinese company, because it is [based in] a high-growth economy, and because that economy is driven by exports.''

Coscon, born out of a 1997 merger between Cosco Container Division Beijing and Cosco Shanghai, owns and operates more than 120 container vessels, plying 50 scheduled routes worldwide and accounting for 5 per cent of the global market.

It is the world's ninth-largest container shipping line as measured by 20-foot equivalent units capacity, according to BRS-Alphaliner.

CSCL, the world's tenth-largest shipping container firm, was created in 1997 to challenge Coscon's dominant market position. CSCL posted a four-fold rise in net profit in the first six months to 1.52 billion yuan (HK$1.43 billion), due largely to more traffic on its US and European routes.

Coscon's parent is the country's leading marine transportation company, boasting over 300 affiliates and operating a fleet of around 550 vessels. It is also engaged in logistics, shipbuilding and real estate development.

Most Hong Kong- and mainland-listed port operators and shipping companies have reported good earnings growth this year, with analysts predicting more ahead for next year.

elliot.wilson@globalchina.com