Hong Kong Economic Times Holdings (HKET) will look to the mainland to diversify its revenue base in the face of increased competition in the local advertising market, according to its listing sponsor, BNP Paribas. BNP Paribas said in a research report that the publisher's ET Net News Agency, an electronic financial information service, had been approved by Beijing to provide equities quotes and news to mainland investors through its Chinese partner Qianlong, a software company. This may help to generate income from mainland brokers, BNP Paribas said. HKET has also entered into an agreement with SZ Advertising, to solicit advertising on the mainland. About 3 per cent of the 80,000 copies of daily Hong Kong Economic Times are distributed in China, but the company still relies on more than 90 per cent of its revenue from Hong Kong. However, the launch of free dailies such as Headline Daily and upcoming AM730 is likely to escalate the price war in the daily advertising market. In the financial year ending in March this year, the group's publishing and multimedia business had turnover of $501 million, up 21 per cent from a year earlier. Data from advertising agency Mindshare Hong Kong revealed that HKET's pre-discount advertising revenue last year was $1.8 billion, ranking it third among local newspapers. 'The difference in the pre-discount ad revenue and actual turnover of HKET implied the daily offered a steep discount to attract advertisers,' one media agent said. HKET is expected to start marketing its $200 million initial offering this week.