HONG KONG (Reuters) - Citigroup Inc (C.N) is considering setting up an onshore cash equities business in China and expanding research coverage of Chinese stocks, to boost its share of the business in Asia, said the head of its regional equities unit.

The U.S.-headquartered bank is also looking to add at least 10 people to the unit, including bankers and technology staff, mainly at its Hong Kong and Singapore hubs, Richard Heyes told Reuters.

Citi's sharpened focus on its Asia equities business, which includes stock trading and research, is part of its global effort to bolster trading technology, hire senior bankers and boost financing to hedge funds.

"It's an interesting opportunity, one we are looking very closely at," Heyes said, referring to setting up an onshore cash equities business in China, which he said was in its early stages. He declined to give details.

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"At the moment we don't feel we have a competitive disadvantage doing it from Hong Kong in the way the majority of people do. But over time, do I think we should strongly think about on-ground presence? Yes."

Analysts said China-listed shares' inclusion in the U.S. index publisher MSCI's emerging-markets benchmark this year, a milestone for global investing, would lead to a jump in demand for brokerage and research services.

That came on top of the introduction of programs allowing two-way trading between stock markets in Hong Kong and Shanghai and Shenzhen, as part of Beijing's efforts to open up capital markets.

China's brokerage revenue pool touched $41 billion in 2015, showed a report last year by Quinlan & Associates.

Assuming institutional broking revenue is 10 to 15 percent of the total, a 1 percent market share would bring $40 million to $60 million in annual revenue to an equities house in the world's second-largest economy, the consultancy said.

To tap into an expected demand surge, Citi, which provides research on 175 China-listed firms, plans to increase coverage to 200 by year-end and 250 in the longer term, Heyes said.

"We have seen very clearly, as one of the biggest players in (the Hong Kong stock) connect, a very significant ramp up in the opening of accounts. It's very clear that many people are getting prepared for future activity in the China market."

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Citi is also looking to bolster financing support for hedge funds, to help win more trading business and boost its Asia equities market share.

"We have had very meaningful success with some very important, large global hedge funds in the U.S. We are now expecting or have commitments from many of them to on-board us in Asia either by end of this year or early next year."

(Reporting by Sumeet Chatterjee; Editing by Christopher Cushing)