SINGAPORE (Reuters) - Wilmar, the world's largest listed palm oil firm, plans to list 20-30 percent of its China business to tap investor interest in its biggest market and to raise cash for acquisitions.

The company posted a better-than-expected 11 percent rise in quarterly profit on Wednesday as higher refining and trading margins offset lower revenues, and said it was optimistic about sustained demand from the key China and India markets.

Its stock jumped more than 8 percent, outperforming a 1.3 percent in the broader Singapore index.

Wilmar plans to raise cash from a public offering in China, where it generated about $600 million in profit and $10 billion in revenues last year. China accounts for about half its overall sales.

"With our increasing presence in China's food sector, it is strategic to have more Chinese investors participate in our China growth plans through a listing in Hong Kong or Shanghai," CEO Kuok Khoon Hong told a briefing for media and analysts, adding that he would prefer Shanghai.

He said he hopes to comlete the IPO this year or early next year.

Wilmar already has $1.3 billion in free cash and said earlier this year it was interested in buying plantations, ships or food companies.

Wilmar, which owns oil palm plantations and runs milling, crushing, refining and processing plants in Indonesia and Malaysia, earned $380 million in January-March, up from $343 million a year ago.

The pace of the rise marked a slowdown from recent quarters, after profits jumped 60 percent in the fourth quarter, more than doubled in the third quarter, more than tripled in the second quarter, and rose seven-fold in the first quarter of 2008.

But the profit gain came despite a drop in palm oil prices that drove revenue down by 31 percent to $4.96 billion.

"Overall downstream volumes were generally in line with our expectations, but profit margins were much stronger than we expected," Goldman Sachs analyst Patrick Tiah said in a note.

Malaysia's benchmark palm oil price dropped from a record 4,486 ringgit ($1,278) per tonne in early March 2008 to 2,000 ringgit at the end of the first quarter. However, prices have recovered and are now trading at around 2,700 ringgit.

Citigroup analysts said margins for palm and laurics rose from $27 a tonne in the first quarter 2008 to $55 during the quarter that just ended, due to Wilmar's ability to efficiently time its purchases of raw materials and sale of products.

Wilmar's shares have risen about 60 percent so far this year, compared with a 25 percent rise in Singapore's main stock index, and outperforming a 26 percent gain in both Malaysian rivals Sime Darby and IOI Corp.

Wilmar, which has a market capitalisation of $18 billion, is expected by analysts to book a net profit of $1.2 billion for the full year, according to Reuters Estimates. That compares with $1.5 billion made in 2008.