Hong Kong investment holding company Tongfang Kontafarma will help the True Group fitness chain establish 20 clubs in China over the next three years in a US$36.7 million venture.

Under the deal, Tongfang Kontafarma will acquire a 51 per cent stake in True Group’s Singapore and China businesses and a 29 per cent holding in its Taiwan unit.

The partnership will expand the business through corporate-owned and franchised clubs across first- and second-tier Chinese cities.

True Group founder/group chief executive Patrick Wee says the Singapore company has an annual revenue of about US$100 million and about 1800 employees across its 26 centres in Singapore, China and Taiwan.

He says the fitness market in China has doubled in size over the past two years, presenting growth opportunities.

“We are looking at bringing in sporting talents to train customers in sports academies, as well as managing sports centres and condominium-run fitness centres. There are many low-hanging fruit for us.”

As part of the partnership, True Group intends to open clubs in industrial parks, many of which have high demand for fitness centres.

Wee says the collaboration also paves the way for a True Group IPO on the Hong Kong Stock Exchange. “We want to use Hong Kong as a platform and spin True Group off as a listed company.”

True Group, which has 10 clubs and 47,000 members in Singapore, plans to open one to two more a year in the city fringe over the next few years.

Wee says Asia’s growing affluent population is adopting a healthier lifestyle, sparking a demand for fitness options.

While other companies target specific segments, True Fitness caters to the entire spectrum from senior executives to retirees, says Wee. “We aim to create a local atmosphere where customers feel like they are exercising with their own familiar community.”