Chinese property developer Evergrande Real Estate Group Limited plans to raise up to $769 million in a Hong Kong initial public offering, according to a term sheet obtained by Reuters on Monday, 63 percent below its attempted goal last year.

Like so many property IPOs, the Evergrande deal was pulled in 2008 after the financial crisis hammered Asian stock markets.

Evergrande is a high-profile IPO not only because of its size, but also because of the Western banks and hedge funds involved in the offering.

Evergrande plans to raise up to $769 million -- well below the $2.1 billion offer it tried last year. Earlier, reports said Evergrande hoped an IPO would fetch more than $1 billion.

But the Hong Kong IPO market has cooled a bit, particularly when it comes to the glut of property companies hitting the market.

Separately on Monday, a source said another Chinese developer, Mingfa Group, is likely to raise $437 million in its Hong Kong IPO, less than half its initial plan, due to weak demand.

According to traders, Evergrande will have a tough time attracting investors.

Investors are cautious about investing in mainland property stocks even when they are cheap, as they worry the government may tighten policy to cool the sector, said Steven Leung, director of institutional sales at UOB-Kay Hian.

Guangzhou-based Evergrande, which focuses on residential property developments, is selling 1.5 billion shares, including 900 million new shares and 611 million secondary shares, at an indicated price range between HK$3 and HK$4 per share, according to the term sheet.

Evergrande's offer is priced at about 5.0 to 6.6 times forecast 2010 earnings, a source with the direct knowledge of the deal said.

By comparison, Agile Property trades at 11 times 2010 forecast earnings, while China Overseas Land trades at 16.5 times.

Evergrande is expected to price its shares on or around Oct. 28, with trading expected to begin on Nov. 5.

BofA-Merrill Lynch, Goldman Sachs, Credit Suisse and BOC International are handling the deal.

More Chinese property IPOs are on the way, with Yuzhou Properties, Fantasia, Longfor Properties, SCE Property and Sunac China preparing for listings.

Mingfa is selling 900 million new shares, or 15 percent of its enlarged share capital, at a price range indicated between HK$3.03 and HK$3.79 per share, with trading expected to begin on or around Nov. 3, a source close to the deal said.

BofA-Merrill Lynch and Deutsche Bank are the joint bookrunners for the Mingfa deal.

(US$1=HK$7.8)

(Additional reporting by Michael Flaherty; Editing by Don Durfee and Deepak Kannan)

Merrill Lynch Investment Goldman sachs Bank of america