By Liz Lee
    KUALA LUMPUR, April 23 (Reuters) - Malaysian poultry
producer Leong Hup is targeting raising as much as $291 million
in a scaled-down IPO in mid-May, sources with knowledge of the
matter said, in what would be the  Southeast Asian nation's
largest listing in nearly two years.
    The company cut the offer size to up to 1.2 billion ringgit
($290.84 million), including an overallotment option, from an
earlier target of $600 million to match subdued investor
sentiment amid choppy markets, said the sources, who declined to
named as the talks were still private.
    The indicative offer price will be in a narrow band of
1.09-1.10 ringgit, as demand has proven "overwhelming", one of
the sources said.
    The source also said revised valuations for the IPO are now
"deemed attractive" at around 15 times forward earnings.
    Two weeks ago, Malaysia's biggest fast-food operator QSR
Brands shelved its $500 million IPO plans as potential local
investors felt its valuations were too lofty.  urn:newsml:reuters.com:*:nL3N21T05N
    Pending for over a year, Leong Hup's offer is set for launch
on Thursday, and will be the largest since Lotte Chemical
Titan's  LOTT.KL  issue in July 2017.
    Malaysia's stock market has been soft since May as
uncertainty over the country's policies surfaced after veteran
leader Mahathir Mohamad ousted the ruling coalition of more than
six decades in the elections.
    The benchmark stock index  .KLSE  fell 6 percent last year,
in line with regional markets. Year-to-date the index has fallen
a further 3.7 percent, a laggard among its neighbouring peers.
    Total fundraising in the primary market tumbled to $170
million in 2018, the lowest in 20 years, according to Refinitiv
data.
    The source also said cornerstone investors on the deal
include pension fund Employees Provident Fund (EPF), insurer AIA
Group and agricultural goods processor and merchant Louis
Dreyfus Company.
    EPF, Louis Dreyfus Company did not immediately respond to
requests for comment while AIA was not immediately reachable.
    Leong Hup is majority-owned by the founding Lau family and
also backed by private equity firm Affinity Equity Partners,
both of whom will remain shareholders post-listing.
    The company, which farms poultry and produces livestock feed
and poultry products, has operations in Indonesia, Vietnam,
Philippines and Singapore.
($1 = 4.1260 ringgit)

 (Reporting by Liz Lee; Editing by Muralikumar Anantharaman)
 ((liz.lee@thomsonreuters.com; +60323338039; Reuters Messaging:
liz.lee.thomsonreuters.com@reuters.net))