(Adds more Healius comments, background) Jan 7 (Reuters) -...

(Adds more Healius comments, background)

Jan 7 (Reuters) - Healius Ltd (HLS) on Monday rejected a A$1.7 billion ($1.21 billion) buyout approach from Chinese construction company Jangho Group Co Ltd 601886.SS , saying it undervalued Australia's No. 2 medical centre operator.

The Australian firm, known until recently as Primary Health Care, said its board "unanimously believes that the proposal is opportunistic and fundamentally undervalues Healius."

Jangho was not immediately available for comment. Jangho, which is also Healius' biggest shareholder, with a 16 percent stake, made a bid last week to acquire the New South Wales-based company.

The deal would have made Jangho one of the mainland's biggest healthcare plays in Australia and came during a push by Chinese investors to buy Australian health-related companies in a variety of subsectors.

With an ageing population burdening existing services in the world's second largest economy, Chinese firms are increasingly looking at health-related firms as high-quality assets with possible use back home.

Healius also cited possible regulatory hurdles as one of the likely impediments to the deal. The acquisition would have required the assent of cross-border M&A regulators of both countries.

($1 = 1.4063 Australian dollars)