* HSI flat, H-shares -0.3 pct, CSI300 +0.1 pct
* China railway sector rises on state support
* China airlines fall after another profit warning
* Yili climbs 4.5 percent to nearly 2-month high (Updates to midday)
By Grace Li
HONG KONG, July 21 (Reuters) - China shares held a soft tone on Monday, with investors preparing a sizable amount of money for upcoming initial public offerings (IPOs), while Hong Kong was flat.
By midday, the Hang Seng Index was barely changed at 23,457.16 points. The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.3 percent and appeared on track for a fourth straight daily loss.
The CSI300 of the leading Shanghai and Shenzhen A-share listings inched up 0.1 percent, while the Shanghai Composite Index was off 0.2 percent at 2,055.45 points. Both flitted between negative and positive territory.
Eleven of the 12 IPOs which were approved last week will start taking subscriptions on Wednesday and Thursday, which is expected to lock up hundreds of billions of yuan in funds.
But Du Changchun, an analyst at Northeastern Securities in Shanghai, said the indexes would likely not experience large declines as was seen in June, when the diversion of capital by the first 10 IPOs after a four-month lull led to the indexes' biggest daily losses in more than seven weeks.
"For institutional investors, the yields from the first batch were not that good, with the winning rate low but costs relatively high," said Du.
"The IPOs will draw more interest from retail investors. But as they comprise the bulk of investors on the mainland, the division in funds is still obvious," he added.
Railway-related sectors outperformed on optimism there would be increased state spending. In Hong Kong, China Railway Construction added 1.7 percent and train maker CSR Corp 2.4 percent.
A China Business News report said on Monday several central government agencies, including the top planning agency and the finance ministry, have unveiled policies to ensure railway investment in the second half.
China Eastern Airlines sank 1.3 percent after it warned of a sharp profit decline in January-June from a year earlier after the market close on Friday.
China Southern Airlines, which issued a similar profit alert last week, shed 0.8 percent in Hong Kong.
Top index boost Inner Mongolia Yili Industrial Group gained 4.5 percent to its highest since May 27.
Macau casino operators were broadly stronger, recovering some losses from last week. Galaxy Entertainment Group , Sands China and SJM Holdings all rose 2.8 percent. (Editing by Jacqueline Wong)