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China Resources Eyes Botox Distributor in $3bn Take-Private Deal

The state-owned enterprise has noticed sharp growth for its medical aesthetics business after the company became the exclusive distributor in China for Letybo, a botox product


Medical aesthetics, such as use of botox, is a booming sector in China.
A patient awaits a medical aesthetic procedure in Shanghai. Photo: Reuters.

 

China Resources is in early-stage talks with the chairman of Sihuan Pharmaceutical, a botox distributor, about jointly taking the Hong Kong-listed company private in a deal valuing it at nearly $3 billion, according to sources.

The state-owned enterprise has noticed sharp growth for its medical aesthetics business after the company became the exclusive distributor in China for Letybo, a botox product made by South Korea’s Hugel.

Che Fengsheng, Sihuan’s chairman and largest shareholder with a 36.2% stake, are considering offering HK$2.50 per share, a 60% premium to the firm’s average share price over the past three months of HK$1.53.

Che, China Resources and Sihuan did not respond to a request for comment.

China Resources and Che aim to eventually list Sihuan on the mainland to take advantage of higher valuations there, a source said.

The company, which also has generics and innovative drugs businesses, is trading at 12 times trailing earnings in Hong Kong.

But that is far below multiples of 89 and 70 for Imeik Technology Development and Bloomage Biotechnology, both mainland-listed peers in medical aesthetics.

Amid surging demand for plastic surgery and products like botox, revenues for China’s medical aesthetics market almost tripled to 177 billion yuan ($26 billion) in 2019 compared to 2015 levels, according to iResearch. It predicts the market will be worth 312 billion yuan by 2023.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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