Sunny Optical Technology, the mainland's largest camera-lens part provider by sales, plans to raise up to HK$1.03 billion from a Hong Kong initial public offering after setting the price at up to 23 times this year's earnings.

The Zhejiang province-based company is set to price 270 million shares at between HK$3 and HK$3.82 each, or 18 times to 23 times this year's profit, according to a source.

'Component makers could benefit from a well established vertical integration platform, helping them grab higher operating margins as well as cost efficiency,' the source said. '[Sunny Optical] will also be a beneficiary of the booming digital consumer product sales in the coming five years.'

Shares in AAC Acoustic Technologies Holdings, a mobile phone components maker, trade at 16 times this year's forecast earnings while larger peer Foxconn International Holdings trades at 29 times this year's earnings.

Hong Kong retail investors can place orders after this week's international roadshow. Trading is expected to start in the middle of next month. BNP Paribas is arranging the deal.

''Profit margin for the optical component reached 38 per cent last year and we expect [it] could climb higher on the back of stronger demand for high-quality consumer digital products,'' said president Ye Liaoning.

Two other companies, Ta Yang Group and Walker Group, are also tapping the IPO market and will launch their combined HK$1.3 billion deals for retail investors today.