Hong Kong-listed Beijing Capital Land Ltd, a leading real estate developer in Beijing, is planning to return to the mainland capital market by issuing up to 1.2 billion A-shares on the Shanghai Stock Exchange.

In a circular published yesterday, the company said it would apply to issue yuan-denominated A-shares to raise approximately 3 billion yuan (US$362 million) to develop its property projects on the mainland.

The proceeds would be used in the construction and development of a commercial centre in Beijing and a complex of office buildings and residential units in the capital's downtown core.

The two projects take a total construction area of 635,500 square metres and are expected to cost 3.9 billion yuan (US$471 million).

The company would also apply part of the A-share proceeds to purchase several other real estate projects in Beijing.

But the exact timetable for the A-share listing has yet to be decided. And the final issuing size and price would depend on the market environment, the circular said.

A company spokeswoman said yesterday that the A-share offering plan has not yet received approval from the company's shareholders who will vote on it at their general meeting and the plan will then be reviewed by the securities watchdog.

Beijing Capital Land issued 564 million H-shares in its initial public offering in Hong Kong last June.

According to the agreement with Hong Kong Exchanges and Clearings Ltd, following the-H share offering, it would take at least a year before the company can issue new shares, the spokeswoman said.

Therefore, the A-share offering, if approved, should be at the earliest in the second half of 2004.

"Beijing Capital Land has a rich land reserve in the capital and its government background also makes it attractive to investors," said Ding Wen, a real estate analyst with China Galaxy Securities Co.

The real estate industry will continue to boom in Beijing over the next few years, fueled by the 2008 Beijing Olympics, said Ding.

Compared to the rally of property prices in Shanghai and Guangzhou last year, Beijing has kept a rather moderate growth and still has more room for growth, she said.

Beijing Capital Land is the real estate arm of the Beijing Capital Group, which is owned by the Beijing municipal government and is involved in real estate, finance and utilities.

The group already has four subsidiaries that have listed A-shares in the mainland. It infused the best real estate resources into Beijing Capital Land last year, prior to the H-share offering.

Liu Xiaoguang, chairman of Beijing Capital Land, said issuing A-shares would help the company expand its group of shareholders and promote its corporate image on the mainland, which can further consolidate its leading position in the capital's real estate business.

The company has undertaken more than 20 real estate projects in Beijing, including commercial buildings and residential properties, which, with a total construction area of 3.4 million square metres, allows for sufficient land reserve for the company's use till 2008, company sources said.

It is expected that these projects will generate 30 billion yuan (US$3.6 billion) in sales volume in the next five years, with a net return of more than 20 per cent.

Liu had said earlier that the company would also seek foreign strategic investors for all the new real estate projects to enhance marketing and become more internationalized.

During the H-share offering, Singapore's GIC Real Estate Pte Ltd bought 158.1 million shares in the company, holding a 9.8 per cent stake. The two clinched an agreement to jointly develop two luxurious housing projects in Beijing last November.

According to the 2003 interim report, Beijing Capital Land realized a turnover of 804.5 million yuan (US$97.2 million) during the first six months of the year.

Gross profit margin was 24.7 per cent during the period and basic earnings per share were 0.071 yuan (US$0.009).

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