The company has invested US$5 million (£2.5 million) in a beauty spa franchise group based in Beijing.
The investment is in the form of a convertible loan due in 2011. On conversion this would give Yangtze a stake of roughly 25 per cent in Aesthetic International, the holding company of the beauty franchise business.
The terms of the deal allow Yangtze to appoint two directors to the board of Aesthetic, whose main business is the sale of beauty and skincare products through a network of some 1,300 beauty centres in China.
Wilfred Wong, Yangtze’s chairman, says Aesthetic is ideally placed to benefit from increasing disposable income in China. He adds: ‘There is still considerable growth in the Chinese cosmetics and toiletries industry, and we are confident that Aesthetic will benefit from this ongoing trend.’
Aesthetic International is incorporated in the British Virgin Islands and was created to facilitate the investment by Yangtze. The company has 24 full-time staff and its profitability is currently close to break-even.