(Yicai Global) July 24 -- Zexing Investment, the second-largest shareholder in China's LBX Pharmacy Chain, plans to shed its near 29.8 percent stake in the firm to generate capital for its own expansion.

Zexing will sell up to 85.3 million shares through centralized bidding, block trades and negotiated transfers, Hunan province-based LBX said in a statement yesterday. The seller picked up the shares prior to LBX's initial public offering and their lock-up ended in April 2018.

Shares in LBX [SHA:603883] slumped as much as 4.3 percent this morning, before shooting to a 7 percent gain then settling to CNY60.72 (USD8.82), up 2.9 percent, as of 2.10 p.m.

LBX went public in 2015 and as of the end of March this year, Laobaixing Pharmacy Group was its largest shareholder with a 34.8 percent stake.

The firm, established in 2001, runs more than 4,000 stores across 21 Chinese provinces. It has over 20,000 employees, CNY7.7 billion (USD1.1 billion) in assets and generates more than CNY10 billion in annual revenue. It made CNY435 million (USD63.2 million) in net profit last year, up 17.3 percent annually.

Editor: James Boynton