Hony Capital, the private equity arm of Lenovo Group, agreed to pay more than 200 million yuan (HK$192 million) for a 30 percent stake in mainland drugmaker Jiangsu Simcere Pharmaceutical, marking its first investment in the industry.

The acquisition will be one of Hony's first major moves since selling a minority stake in China Glass Holdings in a Hong Kong initial public offering last June to raise HK$196 million. It retains almost 63 percent of the glass firm, which it hopes to build into a market leader on the mainland by buying up smaller operators.

Hony chairman John Zhao has said in the past that drugs and agriculture are among the industries the company considers ripe for consolidation.

Simcere, a Nanjing-based, state- owned drugmaker, owns two modern pharmaceutical plants, two drug distribution companies and a pharmaceutical research institute.

Hony provided no details on Simcere's finances other than to say that it has booked four billion yuan in sales since it was first set up in 1995.

Zhao said Hony hopes to transform Simcere into a leading mainland drugmaker. As part of the deal it will gain seats on the company's board.

Hony was established in 2003 with initial capital of 300 million yuan provided by Legend Holdings, the flagship enterprise of the Chinese Academy of Sciences and parent of Lenovo, Asia 's biggest personal computer maker.

Hony subsequently raised another 725 million yuan from Goldman Sachs, Singapore government investment vehicle Temasek, and Hong Kong 's Sun Hung Kai Properties and its principal owners, the Kwok family.

Zhao said earlier that he prefers to invest in mature but highly-fragmented industries. His basic strategy is to buy one of the better firms, restructure it, then sell shares to the public to raise capital, which is then reinvested in building market share through mergers and acquisitions.