SM Prime Holdings Inc. (SMPH.PH), operator of the largest shopping mall chain in the Philippines, will start construction on its fourth shopping mall in China in the third quarter, company president Hans Sy said Thursday. 

Sy told reporters after the company’s annual meeting that SM Prime will spend PHP1 billion (US$ 23.9 million) to build the 140,000-square-meter shopping mall in Chongqing, home to around 35 million people.

He said the shopping mall would open in 2010. Jeffrey Lim, an executive vice president at SM Prime, said the goal is to build three or four more shopping malls in China in the next five years to add to the three already operating in the mainland.

Lim said shopping mall operations in China aren’t expected to be a major contributor to SM Prime’s earnings, likely accounting for only 3% of group net profit.

Spending for projects in China is excluded from SM Prime’s PHP33 billion budget for the next five years.

The company plans to build more shopping malls and expand existing facilities in the Philippines.

It will open three more malls this year to boost its gross floor area to 4.2 million square meters from 3.9 million last year.

‘We see another growth story for the whole company this year,’ said Sy.

He said half of the capital expenditures of PHP6 billion for this year will come from borrowing, while the rest will come from internally-generated funds.