** Hong Kong shares of Chinese home appliance manufacturer and distributor Midea Group surge 8% to HK$69.15, their new high since debut on Sept. 17

** Citi initiates coverage on Midea's Hong Kong stock with "buy" rating, target price of HK$90.08

** Says Midea and Haier are its top buys in China home appliance sector

** Citi also maintains "buy" rating on Midea's Shenzhen shares and lifts target price to 81.89 yuan on 15x 24E P/E, from 14x previously, on improved earnings prospects

** Midea's Shenzhen-listed stock rise 2.7% to 67.86 yuan, highest since May 27

** Hong Kong shares of Midea, which raised nearly $4 billion in the city's largest share offering in almost four years, have surged as much as 26.2% from the offer price of HK$54.80 apiece so far since debut last Tuesday

** Haier's Hong Kong shares rise 2.3% and Shanghai stock up 1%

** In China, CSI 300 Index and Shanghai Composite Index both add 0.7%

** In Hong Kong, Hang Seng Commerce & Industry Index climbs 0.1% and Hang Seng Index gains 0.4%

(Reporting by Donny Kwok)

((donny.kwok@thomsonreuters.com))