Eu Yan Sang International Ltd. climbed by the most in more than three years after the distributor of traditional Chinese medicine signed a joint venture agreement to process and export herbs from China.
The stock rose 9.6 percent to 74.5 Singapore cents at the close in the city-state, the biggest advance since Aug. 28, 2009. The benchmark Straits Times Index added 0.3 percent. The joint venture between Eu Yan Sang and Sichuan Neautus Traditional Chinese Medicine Co. will be among the largest exporters of TCM herbs from China, the Singapore-based company said in a statement today.
“This is a positive move,” said Melissa Yeap, an analyst at DMG & Partners Securities Pte. in Singapore. “The Chinese market is a very significant market.”
The equally-owned joint venture will operate a processing plant in Chengdu, China that could help Eu Yan Sang cut the cost of raw materials for its products and improve the group’s profit margins, according to the statement. The partners will invest 40 million yuan ($6.5 million) to set up the facility, it said.