(Yicai) May 16 -- Shares in Hainan Haiyao surged as much as 7.7 percent today after the Chinese pharmaceutical company announced a strategic partnership with Elken Global, a Malaysian supplier of health and beauty products. The deal will enable them to promote each other’s products in their respective home markets.

Hainan Haiyao’s share price [SHE:000566] was trading up 5.7 percent at CNY5.74 (USD0.80) as of 2 p.m. today. Earlier in the day it hit CNY5.85. Yesterday the stock gained by the daily limit.

Hainan Haiyao will be the exclusive distributor for Elken’s premium health products in mainland China, responsible for product promotion, sales and after-sales services, the Haikou-based firm said. In return, Kuala Lumpur-based Elken will exclusively market and sell Hainan Haiyao’s traditional Chinese medicines in Malaysia.

This tie-up will help complement the business of both companies, Hainan Haiyao said. It will bolster Hainan Haiyao’s layout in the health and beauty market and give it a bigger foothold in the Southeast Asian traditional Chinese medicine market, it added.

The two parties plan to make full use of the Hainan Free Trade Port’s favorable trade policies that will facilitate the import of Elken’s products and reduce logistics costs.

Hainan province is also home to the Boao Lecheng International Medical Tourism Pilot Zone, which allows foreign healthcare professionals to practice for short periods in the region and which permits the use of urgently needed drugs and medical devices that have not yet been approved for use in China.

Elken, which focuses on health supplements, beauty products, household items, and everyday consumer goods, has already set up a wholly owned subsidiary in the zone, Hainan Haiyao said.

Hainan Haiyao is a supplier of antibiotics and chemical raw materials. Its traditional Chinese medicine business includes the manufacture and sale of loose Chinese herbs and also patented Chinese medicines.

Only about 6 percent of the company’s revenue came from overseas markets in 2024, according to its annual report. The report did not mention its health product business and did not disclose detailed revenue figures for its traditional Chinese medicine segment.

Editor: Kim Taylor