Ten Fu Tea, China's largest tea producer in terms of sales, hopes to receive approval for a listing from the Hong Kong stock exchange at a hearing to be held next Thursday, Thomson Reuters' publication IFR reported Thursday.

The company hopes to raise around $300 million through its initial public offering.

Founded by Taiwan businessman Ray Ho Lee, Ten Fu Tea has more than 1,100 chain stores in the mainland, up from 543 in early 2006.

The group hopes to further expand its domestic market share through the IPO.

The tea industry involves three sectors: agriculture, industry and services, and most of the tea enterprises in China are small- and medium-sized ones, said Mei Yu, director of the Information Division at China Tea Marketing Association.

Ten Fu Tea Group is a slightly larger company, and it integrates tea sales, research and development, culture, education and tourism.

"Ten Fu Tea has made breakthroughs in terms of profitability and cross-regional development, both of which have been difficult for Chinese tea firms," Wang Qing, vice president of China Tea Marketing Association, told the Global Times Thursday.

China had 60,000 to 70,000 tea companies in 2000, but since then roughly half of them closed. The remaining tea firms have an average profit margin of 15 to 20 percent, Wang said.

Ten Fu Tea has tried to diversify its range of products to enhance its profitability in comparison with traditional tea firms. It also offers various food products and tea sets.

There is still a big gap between Chinese tea firms and transnational brands such as Lipton Tea, which is owned by Unilever, and the Chinese tea industry needs modern management methods and business models in order to develop, said Wang.