A CHINESE company that is building a cement business in the People’s Republic big enough to match Britain’s entire annual output is poised to float on London’s stock market.

Prosperity Minerals, controlled by David Wong, the Hong Kong-based entrepreneur, is thought to be at an advanced stage with its AIM flotation plans. Sources told The Times last night that Prosperity had already appointed a nominated adviser and broker and was hoping to start share-trading on London’s junior market by June.

A Prosperity spokesman admitted that a listing on the Alternative Investment Market “is something that we are actively considering”, but would not give further details.

A listing is likely to value Prosperity at more than £200 million and would come after a “substantial” equity raising of as much as £100 million, sources said.

A London listing for Prosperity would — for the first time — give City investors direct exposure to China’s huge domestic economic growth.

Prosperity’s two business units are cement manufacturing, based in China’s heavily populated Guangdong province, and iron ore trading. Prosperity buys the key steel ingredient from mining companies around the world before selling the ore to China’s steel mills.

Although City investors have been able to gain exposure to China’s growth through investments in mining companies such as BHP Billiton and Rio Tinto, whose fortunes have soared on the back of China-propelled metal-price rises, no London-listed company is a pure play on the country’s domestic economy. The most prominent Chinese companies on AIM are Asian Citrus, the orange plantation owner, and Bodisen Biotech, an organic fertiliser group.

China’s cement market has grown by more than 8 per cent a year over the past five years and is expected to continue to expand at a rate of 7 per cent a year until 2013.

Prosperity’s Yingde Dragon Mountain cement plant produced four million tonnes of cement and clinker last year and made a £14 million net profit. Plans are under way to expand capacity to an estimated six million tonnes. Prosperity also has a 25 per cent stake in the Prosperity Conch Cement venture, which analysts believe could make more than five million tonnes annually when finished this year. Combined, the two Prosperity businesses could produce more than 11 million tonnes of cement a year, similar to the 11.4 million tonnes produced by the British industry in 2004, the latest available figure.

China imports more than 50 per cent of its soaring iron ore demand.

Prosperity’s likely float comes as Invesco, the fund manager, urges investment in Chinese companies geared to domestic consumption. Paul Chan, co-manager of the Invesco Greater China Equity Fund, said: “Our strategy for investing in China is the domestic story. We have reduced our exposure in industrial companies that mainly produce consumer goods for the US.”

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