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Veteran IT firm Armitage Technologies is ready to spearhead mainland lifestyle magazine.

Felix Lee, chairman & CEO, told China Daily that the company would be in the publishing business because of the boom on the mainland market.

Founded in 1980, Armitage is mainly engaged in software and technology business in early days. The company began its foray into the mainland in 1998. It teamed up with a Guangzhou-based company to develop hotel management software Pegasus Hotel Management System (PMS).

"With the project, we discovered how prosperous and affluent the mainland living standard is, which inspired us in organizing a magazine related with luxury products and lifestyle," Lee said.

The magazine made its debut in 2004. To fit into the elegant style, it only looks to three-star or higher class hotels. "The hotels have high occupancy rate of business travelers. It helps to increase the exposure of our middle class-orientated advertisements to their potential clients," he said.

"The magazine is still in embryonic stage, accounting for 5 percent of the group's turnover, but it will serve as a growth driver for our mainland expansion," he said, adding that the company will scale up the business proportion.

The company reported 216 percent increase in advertisement sales in interim result, to HK$579,000. "About 80 percent of our clients are timepiece makers that we hope to broaden the spectrum despite that we have no intention to increase the fees."

Speaking about PMS, Lee said that the company has bought back all the shares from its partner. "We find the business mature," said Lee. "The PMS network currently covers more than 1,000 mainland hotels and has become the second largest player in the industry."

Given that 60 percent of the clients come from the southern region, the company will increase its presence in the eastern region, especially in Shanghai. "We hope to snatch the market shares from our main opponent there," Lee said.

He pinned high hope on the prospect of hotel industry. "Hotel business on the mainland is under double digit growth every year. 2008 Olympic Games and 2010 World Expo, will substantially boost up the demand," he said.

With the Olympic Games just 19 months away, Lee expected the PMS's turnover will gain 10 percent in 2007, from HK$10 million in the previous year. It currently accounts for 20 to 30 percent of the group turnover.

However, Lee said the company would not package PMS with the hotel magazine. "Although 60 percent of the PMS users avail the magazine for their customers, we do not deliberately bundle two businesses together since the variety of PMS is much wider," he said.

The company has no plan to raise money from the equity market in current stage, Lee said.