China Netcom Group Corp (Hong Kong), the listing arm of China's second-biggest fixed-line phone company, valued its initial public offering at up to US$1.2 billion. The valuation makes the share offering China's third largest to date in 2004. The company said funds raised will be used to expand the company's networks and repay debt. China Netcom will offer shares in both New York and Hong Kong, selling a total of 1.046 billion shares, or 16.2% of the company. The offer price is between 8.3 times and 9.4 times the company's forecast profit of at least US$785 million. Fund managers said Netcom was hoping to lure investors with higher dividends and a lower valuation than its larger rival China Telecom Corp.