Dec. 20 (Bloomberg) -- China National Materials Co., the world's largest supplier of cement-making equipment, gained 35 percent on its trading debut in Hong Kong as investors sought to benefit from a nationwide building boom.

Shares of Sinoma, as the company is known, climbed to HK$6.07 at the close of trading in Hong Kong, compared with the initial offer price of HK$4.50. Sinoma raised about HK$3.86 billion ($495 million) from the sale.

Investors applied for 238 times the stock offered on optimism the 2008 Beijing Olympics and the 2010 World Expo in Shanghai will spur earnings at builders. Gains for Sinoma and China Railway Group Ltd. this month follow first-day declines for the previous two Chinese companies to sell shares in Hong Kong.

``Investors are getting more discerning,'' said Andrew Clarke, a sales trader at SG Securities Hong Kong Ltd. ``Sinoma is China, construction and related to the building sector, which is very much in favor.''

Vietnam Manufacturing & Export Processing Holdings, a Bien Hoe City, Vietnam-based maker of motorbikes, fell 10 percent on its Hong Kong debut today as of the midday break.

Beijing-based China Railway Group Ltd., the world's third- biggest construction company, surged 27 percent on its Dec. 7 debut in Hong Kong. Sinotrans Shipping Ltd. and Sinotruk (Hong Kong) Ltd., China's largest maker of heavy trucks, both dropped more than 10 percent on their Hong Kong trading debut last month. China plans to invest 5.05 trillion yuan ($680 billion) on transport systems by 2010.

Worst Drop

The benchmark Hang Seng Index has fallen 6 percent this month after the Hong Kong market suffered its worst monthly drop in three and a half years last month, reducing demand for IPOs.

``This IPO market is very mixed and to a certain degree linked to the time of year,'' Clarke said. ``Many professional investors just aren't around and don't want to get involved.''

Fixed-asset investment in real-estate and building projects accounted for 42.5 percent of China's gross domestic product in 2006, compared with 24 percent in Japan, 20 percent in the U.S. and 17 percent in Germany.

Sinoma is building new kilns to meet increasing demand for cement in China, the largest market for the construction material. Proceeds from the sale will also be used to increase production of glass fiber, according to the company's share sale document.

The company controls about 90 percent of China's market for cement-producing equipment and related engineering services and 22 percent of the global market outside China, the document said.

BOC International (Holdings) Ltd. and UBS AG arranged Sinoma's share sale.

To contact the reporter on this story: Lee Spears in Beijing at lspears2@bloomberg.net.

Last Updated: December 20, 2007 03:32 EST