Town Health International, a Hong Kong health services provider, plans to open 30 dental hospitals and clinics on the mainland within two years, part of a trend of professional service firms shying away from the saturated Hong Kong market.

Town Health has earmarked HK$80 million to acquire mainland hospitals, CEO Cho Kwai-chee told China Daily. "Hospitals sized 20,000 to 30,000 square feet will be our target. We plan to acquire six to 10 hospitals this year," he added.

Town Health opened its first dental hospital on the mainland in April.

Under a joint-venture agreement, Town Health and Hua Xia Healthcare Holdings will open a dental hospital in Fuzhou of east China. Town Health will hold a 60 percent stake and the initial investment is HK$10 million.

Town Health is also interested in running wholly owned hospitals on the mainland once overseas company are given the green light to do so, Cho said.

At present, overseas investors are not allowed to run wholly owned hospitals, though the restriction is expected to be lifted soon.

Therefore, the Hong Kong-listed company will continue to expand its mainland presence by running hospitals with local partners. But it insists on holding a controlling stake.

The company would also provide expertise to train mainland doctors to maintain efficiency. "We won't deploy too many human resources from Hong Kong. It is more cost-effective if they can eventually be run by locals," Cho said.

"We hope to keep the profit margin of our mainland businesses on par with Hong Kong, which is 15 percent to 20 percent," he said.

The company also plans to capitalize on the rise of mainlanders traveling to Hong Kong. He said the company's medical chain subsidiaries -Hong Kong Health Check and Laboratory Holdings - coordinate with mainland agents to organize body checks for mainlanders coming to Hong Kong.

"We issue VIP cards to our mainland customers, which encourages them to come back to Hong Kong more frequently for medical check-ups," he said.

(China Daily June 15, 2007)