By Chris Oliver

A strong gain Thursday in shares of what reports say will be the first company to debut shares in Shanghai this year bodes well for larger initial public offerings expected in the months ahead.

Shares of toll-road operator Sichuan Expressway Co. were up 10% in Hong Kong morning trade on word that it will issue Shanghai's first IPO after a nine-month freeze of new share sales.

The South China Morning Post reported the company will soon receive approval for the IPO from the China Securities Regulatory Commission, citing an unidentified official with China Galaxy Securities, the underwriter for the offer.

"The A-share initial public offering will broaden [Sichuan Expressway's] financing avenues and enable more acquisitions," said Macquarie Securities Analyst Anderson Chow.

The Hong Kong-listed company is planning to raise about 1.4 billion yuan ($205 million) through the sale of 500 million yuan-denominated shares, also known as Class A shares.

The company is one of many Chinese firms which currently list outside the mainland in Hong Kong, commonly known as "H shares."

News reports said Chinese officials are giving preference to H-share companies in vetting applications for new Shanghai share listings.

The market reaction to news of Sichuan Expressway's expected IPO is good news for larger Hong Kong-listed names which hope to tap the mainland stock markets soon.

These include heavyweights Cnooc Ltd. and China Mobile Ltd. . Energy major Cnooc traded down 0.8% in late Thursday morning action, though telecom China Mobile gained 0.6%. This, as Hong Kong's benchmark Hang Seng Index rose 0.8%.

In other regional action, Tokyo's Nikkei 225 Average ended the morning session flat, while Australia's S&P/ASX 200 was up 0.3%, and the Shanghai Composite Index added 1.4%.

The reborn Chinese IPO market will get more cues as traditional Chinese medicine company Guilin Sanjin Pharmaceutical Co. comes to market on the smaller Shenzhen Stock Exchange.

Guilin Sanjin has attracted 455.42 billion yuan in subscriptions, and the retail portion was 584 times subscribed, Southwest Securities analyst Yan Li was quoted as saying in a Dow Jones Newswires report Wednesday.