Chinese rating agency Dagong plans to open its European headquarters in Milan by the beginning of next year, in a joint venture with Sino-Italian private equity group Mandarin Capital Partners, Italian business daily Il Sole 24 Ore reported on Friday.

Dagong has hired former Fitch Italy executive Marco Cecchi di Rossi to oversee the start-up of Dagong Europe, which plans to apply for authorisation to the Paris-based ESMA securities regulator by this summer, the paper said.

The Dagong Europe headquarters in Italy's financial capital will initially have about 10 analysts, overseeing France, Germany, Italy and Spain, and will extend its action to Britain in a second phase, the paper said.

It aims to have 30 analysts within the first five years, with a turnover target of 9 million euros ($12 million)and a 5-10 percent market share.

Dagong, whose credit assessments are not closely followed outside China, downgraded Italy's sovereign rating to BBB from A- in December, a month before Standard and Poor's announcement of its mass credit rating downgrade of euro zone nations. ($1 = 0.7716 euro)

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