YDNEY/MILAN- Italian luxury yacht maker Ferretti Group is expected to kick off on Monday the process to list its shares in Hong Kong, aiming for a valuation of around $1 billion as it sells a 25% stake, two sources close to the matter said.

Ferretti, controlled by Chinese conglomerate Weichai Group, is pushing ahead with its initial public offering (IPO) despite the conflict in Ukraine rattling financial markets and hitting shares in the superyacht sector.

The pre-marketing phase ends on Friday and the company, which ditched a previous IPO attempt in Milan in 2019, could still change its plans depending on the market.

Ferretti has sought to play down the impact of international sanctions against Russian oligarchs on its business. It has said that countries involved in the conflict account for less than 3% of its revenues and it has no exposure to the largest mega-yachts more likely to be targeted by sanctions.

Shares in listed Italian rivals such as Sanlorenzo and The Italian Sea Group plunged in the wake of Russia's invasion of Ukraine, shedding between a quarter and a third of their value, but have cut losses in the past 10 days.

"The supportive environment enjoyed by the yachting industry over the past 12 months will continue over the mid-term," Berenberg said in a recent note, adding the share slide provided a good entry point.

Ferretti met with investors and analysts over the past two weeks and it is slated to launch the institutional offering on Monday, broadening it to retail investors the following day, one of the sources said.

Having met interest including from Western names and securing support from cornerstone investors that could make up about 60% of the deal, it aims to raise $300 million selling newly-issued shares for an overall valuation of around $1.2 billion, the source said.

A second source pointed to a $900 million valuation.

Both sources said shares are expected to start trading at the end of March. IPOs in Hong Kong normally take around four days with another five days before the trading debut.

Ferretti is expected to use the proceeds to expand its range of yachts while also developing services such as yacht brokerage and chartering.

The 54-year-old company, which runs six shipyards in Italy, owns brands such as Pershing, Riva and Wally, in addition to Ferretti Yachts.

Ferretti filed with the Hong Kong Stock Exchange at the end of December, with investment bank CICC as sole sponsor as well as joint global coordinator together with BNP Paribas and Intesa Sanpaolo.

Hong Kong's Hang Seng index gained more than 5% on Thursday, adding to Wednesday's 9% surge driven by the prospect of fresh Chinese economic stimulus.

(Additional reporting by Federico Maccioni in Milan; Editing by Keith Weir and Elaine Hardcastle)