Hong Kong constructor Hsin Chong Construction yesterday announced that it would tie up with its largest shareholder, Mission Hills, to explore the mainland's real estate market.

Second- and third-tier cities on the mainland would be the top priority of the Hong Kong-listed firm, Mission Hills Group Executive Vice-Chairman & CEO Wilfred Wong told reporters yesterday.

Mission Hills would prefer to help Hsin Chong Construction find a foothold in the market rather than directly inject assets.

"We will help them tap mainland property market by outsourcing some property management to it," said Wong.

"Meanwhile, Hsin Chong Construction could also conduct property businesses under its own brand or collaborate with other developers," he said.

The plan came after Mission Hills - which runs golf and hotel resort businesses - spent HK$700 million on a 59 percent stake of Hsin Chong Construction despite a lull looming over the mainland's property market, and in big cities like Shanghai, Guangzhou and Shenzhen, in particular.

Explaining that Hsin Chong Construction has focused on some second-tier cities because of lower development cost, he said: "Prices of first-tier cities are growing too fast and that's why we shift the focus to developing regions."

Mission Hills Group is a veteran golf and leisure conglomerate in Shenzhen and Dongguan of Guangdong Province, which runs 12 golf courses and enormous resorts in Dongguan.

The company reaped about HK$3 billion in property sale turnover last year.

Hsin Chong Construction, set up in 1939, now has HK$13 billion worth of contracts in Hong Kong and Macao special administrative regions and Singapore.

The firm posted a 37 percent profit of HK$44 million for the six months ended on September, 2007. It currently has about HK$600 million cash in hand.

Editor: Yan