(Yicai Global) May 9 -- Luoniushan Co.'s bid to build a CNY29 billion (USD4.5 billion) equestrian racecourse and related facilities in Haikou, capital of China's southernmost island province of Hainan, recently got the go-ahead, marking its entry into the entertainment service sector, including horse racing.

The Hainan international horse racing entertainment and culture town project of the company's wholly-owned Luoniushan International Equestrian Club Co.

won approval from Hainan's provincial government, the locally-based firm, whose main business is livestock breeding and real estate development, said in a statement yesterday.

The project lies in Luoniushan Farm, Haikou, per the statement.

The venture, planned to cover an area of about 500 hectares, will include an international equestrian center, international horse racing park and related facilities. It is set to break ground this year and start running in 2020, per the statement.

Luniushan's share [SHE:000735] price galloped to the daily upper limit of a 10-percent rise spurred by the news after it resumed trading yesterday afternoon.

The company released its plan to build a horse racing, entertainment and cultural town only last month. It will leverage the advantages of its land resources to cooperate with GuangzhouOnehorse Horse Racing Co. to undertake the project.

The Chinese government issued policy documents on April 14 supporting the further opening of Hainan. These measures permit horse racing on the island. Several A-share listed companies thereafter issued statements announcing their horse racing sector development plans, Luoniushan among them. It is clearly the first to gain government approval, however.

Unlike Hong Kong where the sport is popular, horse racing is almost completely in its foalhood in mainland China, which traditionally takes a dim view of such public gambling spectacles. The Chinese government did institute a pilot scheme in Guangzhou in 1993 that allowed pari-mutuel (pooled) betting but put it out to pasture again in 1999 for reasons unknown. The authorities may wish to use the island venue for its restoration as an isolation laboratory to better control their experiment this time around.

Editor: Ben Armour