UPDATE 1- China Cinda soars in HK debut as investors bet on bad debt
* Cinda's shares surge as much as 24 pct on retail demand
* Bodes well for peer Huarong, which also seeking to list
* Cinda raised $2.5 bln in IPO
(Recasts with successful debut, adds outlook for Huarong)
HONG KONG, Dec 12 (Reuters) - Shares in China Cinda Asset Management Co Ltd surged as much as 24 percent in their trading debut on Thursday, boosted by heavy demand from retail investors - a major success for China's first attempt to list one of its four bad debt managers.
Cinda's strong start after a $2.5 billion offering bodes well for peer Huarong Asset Management Corp, which is seeking to list next year and has brightened up an otherwise dim IPO market for Hong Kong this year.
In addition to being taken up by marquee global investors, such as Oaktree Capital Management Ltd and Och-Ziff Capital Management Group LLC, Cinda's IPO was swamped by orders from small investors, all keen to bet that soured loans will be a growth industry as China's economy slows.
The retail portion generated more than 161 times demand than the shares on offer, resulting in that allocation being lifted to 20 percent from 5 percent. The institutional tranche of the IPO was also "significantly oversubscribed".
One of four asset management companies that Beijing established in 1999 to absorb toxic assets held by China's four biggest banks, Cinda is the most profitable.
Cinda said in its IPO prospectus that profit attributable to equity holders jumped 36 percent in the six months to June to 4.06 billion yuan ($666 million) from a year earlier.
By 0140 GMT, Cinda shares were trading at HK$4.35, off the morning's high of HK$4.43 and which compares with its IPO price of HK$3.58. The stock debuted at HK$4.40.
The offering was the largest in the Asia-Pacific region, excluding Japan, since the $3.6 billion listing by People's Insurance Group of China Co Ltd (PICC) in November 2012.
Thursday's jump would raise Cinda's price to book ratio to 1.6 times for 2013, while the Hong Kong-listed banks trade at P/B of 1.2 times, according to Thomson Reuters data.
The shares jumped more than 17 percent in gray market trading on Wednesday, which pointed to a strong start, but Thursday's debut surpassed even the most bullish of estimates from traders.
($1 = 7.7535 Hong Kong dollars)
(Reporting by Elzio Barreto and Denny Thomas; Editing by Edwina Gibbs)