SINGAPORE -- Sinopharm Capital will launch a $150 million investment fund to tap into the growing Southeast Asian healthcare market.
The private equity arm of state-owned pharmaceutical giant China National Pharmaceutical Group, Sinopharm Capital will partner with Singapore's Novena Global Lifecare and Chinese private equity firm Cedarlake Capital in the hunt for acquisitions mostly in areas such as ophthalmology and renal care -- as well as new drugs and biomedical projects.
"In the Singapore market, the healthcare service is very matured and developed, while in China better services and updated services are needed," Wu Aimin, president Sinopharm Capital, told the Nikkei Asian Review in an interview. "This is where Sinopharm sees opportunities to bring the good models and services into the Chinese market," Wu said.
Wu said Sinopharm Capital and Cedarlake Capital had already invested $20 million in medical aesthetic services provider Novena Global Lifecare. Since it was established in 2012, Sinopharm Capital's only investments outside China have been in the U.S.
Sinopharm Capital and Novena Global Lifecare both expect China's aesthetic industry to continue to grow, Wu added.
Last year the whole Sinopharm Group earned revenues of about $60 billion, mostly from the distribution, sale and production of pharmaceutical products.
More than 90% of the group's revenue came from the domestic market, but the company has been on the lookout for new business and technology acquisitions abroad.
While Sinopharm will remain focused on the Chinese market in the next five years, Wu said, the group also hopes that investing in Southeast Asia will help open new markets for its advanced medical technologies including in artificial intelligence.
Southeast Asia's medical market is expected to grow as the middle class expands and the population ages.
According to a study last year by consulting firm YCP Solidiance, total medical expenditure in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam is expected to reach $740 billion by 2025, up from $420 billion in 2017.
Other companies also investing heavily in the Southeast Asian healthcare market Chinese online healthcare app operator Ping An Healthcare and Technology, known as Ping An Good Doctor, which had 54 million monthly-active users in China as of December.
It has partnered with the region's largest ride-hailing app Grab to provide smartphone-based telehealth services in Southeast Asian countries starting from later this year.
In March, Japanese trading house Mitsui & Co. raised its stake in Malaysia's IHH Healthcare, one of Asia's largest private hospital groups, to 33%, investing an additional 8.4 billion ringgit ($2 billion) to become the company's largest shareholder.
IHH operates hospitals mainly in Malaysia and Singapore.