Hong Kong-listed Media China Corp's plans to shift focus to the health industry from its media interests is a response to expectations that the demand for health maintenance and retirement services will grow strongly on the mainland, the company said.
Media China's current main operations include television advertising, property investment, and tourism.
The company said it will now focus on health projects, and it had entered into a "strategic co-operation" agreement with Tide Holdings (Hong Kong) to develop such businesses.
Before the announcement on January 28 the company's shares traded at a year-to-date high of 45 HK cents on January 14. They traded down to 34.5 HK cents on January 28 and ended yesterday at 38 HK cents.
In its statement to the exchange, Media China said a steadily increasing senior population and the government's supportive policies on the mainland would bring "golden opportunities" for health maintenance and retirement services. It added it would take an "aggressive approach in expanding related operations" in the domestic health industry.
The Chinese population is ageing at an accelerating rate. By 2015 there will be about 216 million people aged over 60 in the country, 16.7 per cent of the total population, according to estimates by the Ministry of Civil Affairs.
Media China's advertising business includes a television channel called Travel Channel and outdoor advertising at two railway stations in Beijing.
Travel Channel is operated through a joint venture in which it holds a 49 per cent stake. The other two major shareholders are Hainan Television Broadcasting Station and Poly Culture and Arts, and the three parties "have not reached a common ground in relation to the development strategy, operation and management of the Travel Channel", according to the company's interim report issued in September.
"In light of the gloomy performance of the group's exclusive advertising operations at Beijing Railway Station and Beijing West Railway Station, management has gradually retreated from this business so as to focus its resources on the expansion of high-end recreational and leisure services," the report said.
In 2011 Media China acquired Bayhood No9 Club, a membership-based luxury club with an 18-hole golf course in Beijing.
In the first half of last year the club contributed 75 per cent of the company's sales revenue, surpassing its media segment.
Tide will now join Media China, in developing several health maintenance projects, including a health maintenance hotel project in Beijing.