Baby formula-maker Guangdong Yashili Group Co Ltd is seeking an initial public offering (IPO) in Hong Kong in hopes of becoming a premium milk powder brand.

Bloomberg News on Tuesday quoted two people with knowledge of the matter as saying the Chaozhou, Guangdong province-based company seeks to raise about $350 million through the IPO in late October or early November.

Yashili Group, of which global private equity fund Carlyle Group owns a 17.3-percent stake, is one of the three largest baby formula-makers in China, accounting for 10 percent of the market.

Yashili declined to comment on the issue, while Carlyle's spokesperson was not available for comment.

"The public listing will help the company solve its shortage of funding, something many companies must do to grow into big industry names," independent dairy industry expert Wang Dingmian said.

Being an official public company is beneficial to enhancing Yashili's image in the country's baby formula market, 60 percent of which is controlled by foreign companies, such as Abbott Laboratories, Wang said.

Yashili's sales volume in 2009 reached 3.5 billion yuan ($524 million), when most foreign brands' sales were about 2 billion yuan.

China Jianyin Investment Securities Analyst Huang Wei said it is likely Yashili will rank No 1 in the market after its listing. This will provide sufficient finances to improve quality and brand awareness.

Carlyle Group's China Communications Director Brian Zhou said Yashili had in the past two years made vast strides in product safety and overseas cooperation, which will also boost brand recognition. Carlyle had invested at least $7 million in Yashili since it bought a stake in the company in September 2009, the Wall Street Journal reported.