(Yicai) Dec. 28 -- Lotus Health Industry Group, a Chinese maker of monosodium glutamate, said it will acquire at least 50 percent of a Malaysian peer as part of its global expansion strategy.

Lotus Health inked a non-binding deal with Ajinoriki MSG Malaysia's local shareholders Loo Siew Kim and Kee Seok Chean to purchase the stake, the Zhoukou-based firm announced late yesterday. The sellers own 49 percent and 51 percent of the target company, respectively, it added, without disclosing any financial details.

Ajinoriki MSG, previously a dealer for Lotus Health in the Malaysian market, had a net profit of CNY11.5 million (USD1.62 million) last year on revenue of CNY221 million (USD31.2 million). This year’s net profit will likely reach CNY18.9 million (USD2.7 million), with revenue of CNY215 million.

China's seasonings industry has entered a mature phase, with greater competition and increasingly limited space for market growth, leading to Lotus Health halting construction of two bio-fermentation product projects in the country, the firm noted. It had planned to use the proceeds from a 2020 private placement of shares to fund the projects. 

After jumping by as much as 5.4 percent in the morning, Lotus Health’s shares [SHA: 600186] ended 0.7 percent lower at CNY5.69 (80 US cents) apiece in Shanghai today, giving it a market capitalization of CNY10.2 billion (USD1.4 billion). The stock has more than doubled in value this year.

Lotus Health's net profit surged 94 percent to CNY94.6 million in the nine months ended Sept. 30 from a year earlier. Revenue jumped 23 percent to CNY1.6 billion (USD225.2 million), with income from its MSG and chicken essence businesses accounting for 88 percent of the total.

Editor: Martin Kadiev