Hong Kong's largest drug-store chain, Mannings, has been granted permission to set up wholly owned operations in the mainland under the closer economic partnership arrangement and plans to open five such stores in the next two years. The approval comes as Japanese-controlled Aeon Stores (Hong Kong) - the first foreign-owned general merchandise store operator in the mainland - was granted permission to set up its own 100 per cent-owned store in the country. Mannings chief executive for Greater China Caroline Mak believes being able to run the business on a wholly owned basis will allow the company to be more 'free and flexible'. Next month, the chain will open a 3,000-square-foot store in Guangzhou. 'We have also committed to take up retail spaces for two stores in Guangzhou and another two in Shenzhen,' Ms Mak said. The chain, the retail unit of Dairy Farm International Holdings, has more than 200 stores in Hong Kong. Ms Mak said the investment was minimal as each store only required a capital outlay of about $1 million. In addition, cosmetic retailer Sa Sa International Holdings, which sells three of every 10 bottles of perfume sold in Hong Kong, expects to gain simialr approval by the end of this year. A spokesman at Sa Sa said its first store would be in Shanghai. 'We have applied for a hygiene licence on about 50 imported fragrances and cosmetics in preparation for the new store,' he said. Sa Sa is the exclusive agent of a variety of cosmetics, fragrance and skin-care product brands. It said it planned to make its first foray into the mainland with an investment of about $50 million. Dickson Concepts (International), which operates two department stores in Shenzhen, said it was awaiting approval to set up wholly owned operations.