hong kong

China Development Bank Financial Leasing, the leasing unit of China’s largest policy bank, has filed for a Hong Kong initial public offering with the aim of bolstering its balance sheet.

Thomson Reuters publication IFR previously reported the deal could raise about $1 billion in the first half of 2016.

News of the IPO comes after the company reported a 4.7% drop in revenue to CYN 8 billion ($1.22 billion) in the nine months through September. It said profits dipped to CYN 840.8 million from CYN 1.18 billion over the same period because of lower domestic interest rates.

CDB Leasing said aircraft leasing accounted for 43% of revenue, followed by leasing of infrastructure such as toll roads, electric and power equipment. Leasing of shipping vessels, construction machinery, commercial property and manufacturing equipment made up the remainder of revenue.

Deal Street Asia reports that the company is betting on continued demand for aircraft and other types infrastructure in China. CDB Leasing owned 179 aircraft as of the end of September and had commitments for 181 more, most of them coming from previous orders for 130 aircraft worth a combined $12.6 billion with Boeing Co and Airbus Group.

The number of leased aircraft in China is forecast to rise 12.5% a year from 2014 to 2019, faster than the 9.3% a year from 2009 to 2014, according to research firm Frost & Sullivan’s estimates.

Leasing overall has soared an average of 32% a year from 2009 to 2014 in China, making it the world’s largest leasing market with CYN 2.63 trillion ($401.70 billion) of asset.

Penetration of leasing in China reached 5.1% at the end of 2015, paling in comparison to more developed markets including the US with 23.2% and the UK with 28.6%.

CDB Leasing would join companies including BOC Aviation, the aviation arm of Bank of China, brokers Everbright Securities Co Ltd and Orient Securities, and Postal Savings Bank of China, that are also looking to raise funds in Hong Kong to bolster their balance sheets in the face of tougher capital requirements.