Chinese herbal medicine maker Shijiazhuang Yiling Pharmaceutical will raise up to 2.25 billion yuan ($348 million) in an initial public offering (IPO) in Shenzhen, a third more than originally planned.

The company, based in Shijiazhuang in northern Hebei province, will sell 65 million shares at 34.56 yuan apiece, raising 556 million yuan more than planned, the company said in a statement to the Shenzhen Stock Exchange after tapping investor interest for the offer.

The pricing represents 47 times the company's 2010 earnings, much higher than the 20-30 times some companies were fetching in Shenzhen about a month ago, when the IPO market was more sluggish.

Investor interest in IPOs, which was hurt in the first half when many listings fell below their IPO prices on their stock market debut, was rekindled late last month by the Shenzhen debut of Warren Buffett-backed automaker BYD Co Ltd.

BYD shares surged more than 40 percent on their first day of trading in Shenzhen, before rising another 30 percent during the following three trading days.

The Shenzhen market, which is split into a small- and medium-sized enterprise board and the "Chinext" board modelled on the Nasdaq, is known for relatively high valuations in comparison with the main board for bigger companies in Shanghai.

Reflecting strong demand for Yiling Pharmaceutical's IPO, its shares were 7.1 times oversubscribed during the preliminary book-building process, in which the company taps institutional demand for the issuance.

Yiling Pharmaceutical, which starts taking subscriptions from Tuesday, will use the IPO proceeds to build a production base, expand its sales network, and improve information technology. Citic Securities is the sponsor.