Tencent invests 351 million yuan in hyaluronic acid leader Freda Biotech

A few days ago, A-share listed company Lushang Development issued an announcement, disclosing that its subsidiary, Freda Biotech, has made progress in introducing strategic investors by publicly increasing capital and increasing shares. From Guangxi Tencent Venture Capital Co., Ltd., Nantong Zhaohua No. 2 Emerging Industry Investment Fund Partnership (Limited Partnership), Hangzhou Zhongdayuan Enterprise Management Partnership (Limited Partnership), Jinan Kinetic Jiafu Investment Partnership (Limited Partnership), Shanghai The five companies of Zhongyuan No. 2 Private Equity Investment Fund Partnership (Limited Partnership) jointly subscribed for 15.38 million new shares, with a capital increase of 736.24 million yuan. After the capital increase is completed, the total shareholding ratio of the joint purchaser is 16.9%.

Among them, Tencent Ventures has a subscription amount of 315 million yuan, and its shareholding ratio after the completion of the capital increase reaches 8.04%, making it the second largest shareholder of Freda Biotech. Nantong Zhaohua No. 2 holds 2.29%, Hangzhou Zhongdayuan holds 2.29%, Jinan Kinetic Jiafu holds 3.21%, and Shanghai Zhongyuan No. 2 holds 1.07%.

The five investors introduced by Freda Biotechnology this time are all extraordinary . According to the company's information, Tencent Ventures is 100% owned by Shenzhen Tencent Ruijian Investment Co., Ltd., and the actual controller behind it is Ma Huateng. Behind Nantong Zhaohua No. 2, Hangzhou Zhongdayuan, Jinan Kinetic Jiafu, and Shanghai Zhongyuan No. 2 are China Merchants Group, OneNet One, Shandong Provincial Department of Finance, and Shanghai Poster Industry Group.

In addition, the core staff of Freda Biosciences subscribed for 620,000 shares in accordance with the price agreement for the introduction of strategic investors, with a capital increase of 29.76 million yuan. After the capital increase is completed, the shareholding ratio is 0.68%, and the relevant funds have been remitted to the Freda Biologics account.

It is understood that this is not the first time Tencent has entered the medical beauty industry . In March 2016, Tencent participated in the investment in the medical beauty platform Xinyang; in July of the same year, Tencent invested in the medical beauty and health service platform Better Beauty. In August of this year, Tencent took a stake in Zongjiang Technology, a beauty equipment company.

Freda Bio, which Tencent invested in this time, was established in 1998. In 2018, it became a wholly-owned subsidiary of Lushang Development through asset replacement. It is the first domestic research and development, production, brand marketing, and ODM / OEM cosmetic technology company.

According to the company's investigation information, Freda Biotech owns multiple hyaluronic acid skin care brands including Yilian, which provides skin rejuvenating series, hyaluronic acid moisturizing series, fresh nourishing whitening series, bang moisturizing series, and high moisturizing series. , Snail series, muscle source series, hyaluronic acid undiluted solution series and other products.

Lushang Development stated in the announcement that the introduction of strategic investors this time can bring external resources to the development of Freda Bio, promote the rapid development of Freda Bio, and further optimize the company’s capital structure and broaden financing channels. Realize the synergy of industrial resources with investors, enhance the competitiveness of the cosmetics business, increase the scale and efficiency of operations, and help reduce the asset-liability ratio and investment risks. In addition, the employee shareholding platform simultaneously subscribes for new shares, which can fully mobilize and enhance the enthusiasm and creativity of core technical personnel and management personnel, and promote the sustainable development of Freda Biotech.

Lushang Development also stated that after the completion of this capital increase, Freda Bio will be changed from a wholly-owned subsidiary of the company to a holding subsidiary, and the scope of the company's consolidated financial statements will not be changed. After the capital increase is completed, it will increase Freda's liquidity, which will help reduce the debt-to-asset ratio.

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