* HSI -0.3 pct, H-shares -0.9 pct, CSI300 -1.7 pct
* Great Wall Motor climbs after positive H1 profit f'cast
* China Merchants Bank sinks after new A-share issue
* Apple Inc's H1 earnings support suppliers
By Clement Tan
July 24 (Reuters) - China shares were headed for their first loss in three days, weighing on Hong Kong markets on Wednesday, as declines accelerated after a preliminary survey showed manufacturing activity in the mainland sank to an 11-month low in July.
Chinese banks were a key weakness, paring or reversing gains made on Tuesday on concerns of more fundraising in the sector after regulators approved a plan for China Merchants Bank to issue 3 billion new A-shares.
At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was off 1.7 percent, while the Shanghai Composite Index slid 1.3 percent as midday bourse volumes slipped from Tuesday.
The Hang Seng Index slipped 0.3 percent as turnover also dropped from Tuesday, while the China Enterprises Index of the top Chinese listings in Hong Kong shed 0.9 percent after closing on Tuesday at its highest since June 11.
"After the big move up yesterday, people were always going to take some profit today, but the weak flash PMI is magnifying losses for some sectors," said Larry Jiang, chief strategist at Guotai Junan International Securities in Hong Kong.
"In this kind of environment where it's not quite possible to have a clear mid-to long-term view on the Chinese economy, the upcoming earnings season will be important in helping investors identify earnings visibility," Jiang added.
Great Wall Motor jumped 7.3 percent in Shanghai, but a more modest 3.5 percent in Hong Kong after China's largest sports utility vehicle manufacturer said it expects interim net profit to rise 74 percent from a year earlier.
Apple Inc suppliers climbed after third-quarter profit for the world's largest technology company fell less than expected. AAC Technology, the primary supplier of iPhone and iPad speakers, rose 2 percent.
CHINA BANKS WEAK
But gains in these sectors were offset by losses in the Chinese banking sector. China Merchants Bank tumbled 3.1 percent in Shanghai and 2.5 percent in Hong Kong although its planned new A-share issue is targetted at existing shareholders, suggesting any stake dilution may be minimal.
Merchants Bank's other mid-sized rivals, more dependent on short-term financing, were also comparatively harder hit than the "Big Four" China banks as cash markets opened higher.
Industrial and Commercial Bank of China (ICBC) slipped 0.5 percent in Shanghai and 0.2 percent in Hong Kong, while China Minsheng dived 3 percent in Shanghai and 2.6 percent in Hong Kong.
Further dimming sentiment, China's flash HSBC/Markit Purchasing Managers' Index fell to 47.7 this month from June's final reading of 48.2 as new orders faltered and a sub-index measuring employment sank to its weakest since March 2009.
A higher-than-expected yield at an auction for 5-year Finance Ministry bonds, an official announcement on cutting overcapacity and dissonant messages from Beijing on its growth-reform balancing act further combined to stall an equity rally on Tuesday on stimulus hopes.