Cathay Capital Makes an Investment in Kunming Shenghuo Pharmaceutical Group

May 4, 2020

Cathay Capital recently announced that it has successfully made an investment in Kunming Shenghuo Pharmaceutical Group Co., Ltd. (“Shenghuo“ or “The company”) through Cathay Capital II and the Sino-French Fund for SMEs, for a total amount of RMB 150 million. The deal was closed at the end of June.

Established in 1995, Shenghuo is a leading pharmaceutical company specialized in Traditional Chinese Medicine (“TCM”). Lixuewang Xuesaitong Soft Capsule, the main product of the company, is made from Sanchi (Panax notoginseng), a precious traditional medicinal herb, by applying modern pharmaceutical manufacturing technology. It is used in the treatment of cardiovascular diseases. In addition, the company owns several famous pharmaceutical products in Yunnan Province such as Fibrauretinum Soft Capsule, Ban Lan Gen Granule and Sulfadiazine Silver Cream. Shenghuo is a private enterprise supported by Yunnan provincial government and is listed among the Top 100 Industrial Companies in Kunming, capital of Yunnan province.

With recent advances in pharmaceutical manufacturing technology and academic research, TCM will lead the growth in China pharmaceutical market, especially in the treatment of chronic diseases. With the increasing popularity of traditional medicine in the European and American regions, and the strong support from Chinese government, TCM will have great international growth potential in the coming 5 to 10 years. Meanwhile, given ongoing evolutions inside the pharmaceutical industry, this outstanding company and team will have the chance to become a platform for integrating resources.

The partnership with Cathay Capital will bring to Shenghuo the experience in corporate governance and merger & acquisition, and help the company to transform from a family business to a mature group company. Meanwhile, Cathay Capital will take advantage of resources from the overseas pharmaceutical market and introduce high potential products to Shenghuo to diversify the product portfolio of the company.

Mr. Mingpo Cai, President of Cathay Capital indicates, “Cathay Capital has confidence in the development of Chinese pharmaceutical market and Traditional Chinese Medicine market. Shenghuo has products with great potential, a strong sales network covering the whole country and an experienced team. We believe that the partnership with Cathay Capital will instill new concepts and bring an international vision to the company. The following years will see the rapid development of Shenghuo and we hope to help the company to grow into a TCM market leader.”