A NEW name is set to top China's rich list by the end of the month following the planned initial public offering of one of the country's largest private real estate developers.

Xu Jiayin (49), owner of Evergrande Real Estate, will be worth as much as $7.1 billion if his company prices its IPO at the top of its price range. He is likely to be worth even more after its debut on the Hong Kong stock exchange at the end of March.

However, with Chinese banks under strict orders from the government to limit credit to the real estate sector and with housing prices slumping in key markets in the south, where Evergrande is based, some analysts say its IPO could be a matter of survival.

The company is hoping to raise up to $2.1 billion by selling 20 per cent of its enlarged share capital, but a price range of HK$3.50- HK$5.60 represents a discount to its total asset value of 45-65 per cent. More than half the money the IPO is set to raise has been earmarked to pay for land the developer has already bought, a sign of the funding problems that have hit the real estate sector since the government introduced stringent measures to cool it down and make housing more affordable.

"Property developers can't enjoy high valuations like in the past because they face cash-flow problems as well as price corrections and some competitive price cutting," said Bai Hongwei, an analyst at CICC in Beijing.

"For some companies, the cash-flow problems could even lead to bankruptcy if they can't raise money from the capital markets."

Mainland China's richest person is Yang Huiyan (26), daughter of the founder of Hong Kong-listed property developer Country Garden. Her estimated wealth is about $8 billion, based on her holdings and the company's closing share price yesterday.

"The key wealth creator in the last decade has been real estate on the back of China's mega-trend of urbanisation," said Rupert Hoogewerf, publisher and compiler of an annual list of China's rich.

Mr Xu's story is the kind of peasant-to-property developer tale that is typical in China today. Born in the overpopulated province of Henan, Mr Xu almost dropped out of school when his mother died at a young age and survived on rations of steamed bread, according to biographies. - (Financial Times service)