Red chip conglomerate Beijing Enterprises (Holdings) aims to strengthen its mainland retail operations by joining forces with another leading operator. The company's Beijing Wangfujing Department Store (Group) subsidiary has formed a joint venture with Dong An Group, uniting two of the four largest department-store operators in the capital. Beijing Enterprises executive director Bai Jinrong said the partners aimed to create a powerful retail enterprise through an asset restructuring. The move marks another step in a trend of industry consolidation as retailers prepare for foreign competition following China's expected entry into the World Trade Organisation. It comes shortly after Beijing's two other leading department-store companies, Xidan Department Store and Beijing Friendship Store, merged their businesses to enhance competitiveness. Mr Bai said Dong An would probably inject its quality assets into the joint venture, Beijing Wangfujing Dong An Group, in return for a significant stake of perhaps 10-15 per cent in Wangfujing. But he said the two groups were studying options for how to restructure their assets and no final decision had been made. The restructuring needed approvals from shareholders and mainland authorities such as the China Securities Regulatory Commission. It was expected to be completed by early next year, he said. Wangfujing, whose A shares are listed on the Shanghai stock exchange, is a major business of Beijing Enterprises. The company, with department stores in big mainland cities such as Beijing, Chengdu and Guangzhou, posted a loss of HK$52 million last year but returned to the black in the first half of this year with a profit of about HK$11 million. Beijing Enterprises, controlled by the Beijing municipal government, has four main business areas: consumer goods, infrastructure investments, tourism and retail services, and technology. Its key assets include beer-maker Yanjing Brewery, dairy product supplier Sanyuan Food and a 50 per cent stake in Beijing McDonald's Food. Mr Bai said Beijing Enterprises would remain the single largest shareholder in Wangfujing after the restructuring. Dong An's major assets include Sun Dong An Plaza, a joint venture development with Hong Kong blue chip Sun Hung Kai Properties, which has 1.3 million square feet of residential space and 430,000 sq ft of offices. Reports have said Beijing Wangfujing Dong An will have total assets of two billion yuan (about HK$1.87 billion) and projected annual turnover of five billion yuan. Mr Bai said that apart from its retail business, the group's latest investment focus was the information technology and bio-technology sectors. Unveiling its interim results last month, the company said it would spend up to one billion yuan on its technology and traditional businesses this year. Mr Bai said the group would consider spinning off its technology-related business when it became mature. Its technology assets include a stake in Beijing International Switching System. Mr Bai said the group's overall strategy was supported by investors. It had met 17 fund managers in the United States and would begin a new roadshow on Sunday, with Singapore and London as planned destinations. It would meet Hong Kong institutional investors after the London trip.