It is common for mainland companies to sell shares in Hong Kong first and then seek a domestic listing as that saves them from facing the problem of the big valuation gap between the two markets.

Shareholders of H-share companies normally would not object to an A-share offering as the companies would be selling the shares at a higher valuation in the mainland, which could help boost H-share prices.

But it is tough to convince holders of A shares of the merits of moving the other way, with the A-share market trading at an earnings multiple of 31 times against 14 times for H shares.

In April last year, ZTE abandoned its proposed US$450 million H-share offering due to strong opposition from minority shareholders, who feared the H-share offering would dilute the company's earnings and weigh on its share price.

Back then, JP Morgan and BOC International were ZTE's sponsors.

'It's very challenging. On the high side you've got the A-share and on the low side you've got the H-share price. Somehow you need to close the gap,' a banking source said.

But the banker said that once the landmark deal was done, it would set the formula for other A-share companies to follow.

Some market observers expect Shanghai-listed Minsheng to be the first A-share company to list H shares. The bank plans to raise US$1 billion in Hong Kong.

'Minsheng is understood to have gained the support from the mainland authorities for its listing in Hong Kong. The Chinese government desperately wants to boost the capital base of its banking sector,' one investment banker said.

'Also, the listing of Minsheng will pave the way for the listings of the Big Four [state-owned banks].'

Citigroup, Deutsche Bank and Goldman Sachs are arranging the issue.