2:15 PM New York – China State Construction Engineering plans to raise 50 billion yuan in public offering. The largest offering in two years marks the Chinese regulators desire to cool the securities markets. Indexes in Shanghai and Shenzhen have surged more than 60% in the last three months.

China State Construction Engineering filed to raise as much as 50 billion yuan in public offering that will sell 12 billion shares between 3.96 yuan and 4.18 yuan a share.

The company will use the proceeds for general corporate purposes and also expand into residential construction at the land reserve of 34.3 million square meters that it controls. The company at the filing price range is valued at 125 billion or $17 billion based on 51 times earnings of 2008.

State Construction IPO will be the largest in two years after PetroChina raised nearly $9 billion of 67 billion yuan.

The construction company was established in 1982 and since then has expanded rapidly with contracts in the domestic and international markets. More than 30% of completed works are related to international projects.

The profits in 2008 declined to 4.92 billion yuan as construction slowed down.

Chinese regulators tightened the regulations in the last six months and did not allow companies to offer stocks for more than five months. The recently approved offerings of Guilin Sanjin Pharmaceuticals and Zhejiang Wanma Cable also surged more than 80% on the first day of trading.

Chinese regulators were hoping that tighter disclosure and trading rules will prevent the first day trading surge.

Visa Inc IPO completed with the listing in New York raised more than $19 billion in March 2008.