Red chip plans to move from tourism and concentrate on core operations Red chip Beijing Enterprises Holdings, the Hong Kong-listed investment arm of the capital's municipal government, is planning a retreat from the increasingly competitive tourism sector to focus on its core business operations. Deputy chairman Zhang Honghai said the company would move gradually away from tourism and direct its resources to infrastructure and utilities. He did not provide further details. Last month, Mr Zhang said the company planned to put aside 600 million yuan for infrastructure projects in the capital city, including a water treatment facility, an expressway linking the airport with the city centre, and a waste management project. Yesterday's remarks reinforced Beijing Enterprises' longstanding plan to discard non-core businesses and strengthen its infrastructure operations. It also underlines a common strategy pursued by many listed mainland conglomerates, such as fellow red-chip China Resources Enterprise, to rejig their assets and specialise. These firms - once known as 'window companies' offering foreigners investment opportunities in an otherwise inaccessible mainland market - have become less attractive in recent years as China has opened further to foreign investment. 'Historically, red chips have a broad earning base,' said Cusson Leung, an analyst at ING Financial Markets. 'Even if management is sincere in making the transformation, they can't rush.' China Resources, which has been working to transform into a retail play since the late 1990s, has yet to see substantial earnings contribution from the sector. The company said in April that it expected the retail business to turn around this year after last year's HK$99 million loss. Beijing Enterprises' tourism business includes the Jianguo Hotel in Beijing and the operation of tourist facilities at the Great Wall. Profit contribution from the sector last year plunged 90.7 per cent to HK$2 million due to the Sars epidemic. By comparison, the infrastructure division contributed profits of $453.26 million last year, or 62 per cent of earnings.