The news of "Watsons' IPO plans" is creating ripples in capital markets.
According to reports, CK Hutchison Holdings is considering a dual listing for its Watsons Group in Hong Kong and the UK, potentially launching as early as next year. If successful, the company's valuation could exceed $30 billion (approximately RMB 213.2 billion), making it one of the largest consumer retail IPOs in Hong Kong in recent years.
**A Long Road to Listing** Watsons' IPO plans are not new. With a history spanning nearly 200 years, the company's evolution mirrors the transformation of the retail industry.
Founded in 1828 as a pharmacy in Guangzhou by a British entrepreneur, Watsons expanded into beverages, food, and other retail sectors after establishing its Hong Kong branch in 1841. A pivotal moment came in 1981 when Li Ka-shing acquired the company, making it a wholly-owned subsidiary of Hutchison Whampoa (now CK Hutchison Holdings).
Under Li’s leadership, Watsons embarked on an aggressive expansion, acquiring retail chains such as UK’s Savers, Netherlands’ Kruidvat Group, and Superdrug.
By 2007, Watsons shifted focus to mainland China, enjoying a decade-long golden era. At its peak, the retailer opened 200 stores annually, dominating the cosmetics retail space with virtually no competition.
Rumors of an IPO first surfaced in 2014, with Li Ka-shing hinting at a dual listing in Hong Kong and another location. At the time, Watsons was reportedly valued between HKD 192 billion and HKD 312 billion. However, just a month later, CK Hutchison sold a 24.95% stake to Singapore’s Temasek for HKD 44 billion, making Temasek the second-largest shareholder.
Despite periodic IPO speculation, concrete plans never materialized—until 2024, when Temasek’s deputy CEO reaffirmed Watsons’ listing ambitions. Now, CK Hutchison appears determined to push forward.
**Dual Listing Strategy** Recent reports indicate Watsons has begun IPO preparations, including discussions with investment banks on structure and fundraising targets. The company aims to raise at least $2 billion, with Hong Kong and London as preferred listing destinations—a strategic choice reflecting its global footprint and investor appeal.
Watsons operates over 16,900 stores across 31 markets. In H1 2025, global revenue reached HKD 98.84 billion, up 8% YoY, with Europe contributing over 60%—justifying the UK listing.
Morgan Stanley notes that CK Hutchison’s retail business spans 17,000 stores globally, generating $1 billion in EBITDA (up 12.5% YoY). The bank argues that unlocking value through an IPO or asset sales could address the market’s current undervaluation of CK Hutchison’s non-listed segments (ports, retail, telecom).
Investor optimism is evident: Morgan Stanley forecasts CK Hutchison’s stock to outperform, assigning a HKD 61 target price and an "Overweight" rating.
**Challenges in China** Despite global growth, Watsons struggles in China. H1 2025 revenue there fell 3% to HKD 6.67 billion—the only declining market—while net store closures totaled 145, reducing its footprint to 3,630 locations.
Since its first revenue drop in 2016, Watsons has failed to regain momentum in China. Missed opportunities during e-commerce’s rise, coupled with lukewarm reception to its "WoSon" app and digital initiatives, have left it lagging.
The competitive landscape has shifted dramatically. Livestreaming e-commerce and trendy beauty retailers like Harmay, The Colorist, and KKV—with their Instagram-worthy stores and Gen Z appeal—have eclipsed Watsons’ traditional drugstore model.
Consumer complaints about aggressive in-store promotions contrast sharply with the hands-off approach of newer rivals. Product mix is another issue: heavy reliance on private labels and limited new brand introductions alienate younger shoppers seeking novelty.
**Turnaround Efforts** To counter these challenges, Watsons is pursuing a multi-pronged transformation.
Leadership saw a shakeup in April 2024, with Malina Ngai appointed Group CEO and Nie Wei named China co-Managing Director. Further changes followed in 2025, including new appointments in Hong Kong retail leadership.
Strategically, Watsons is pivoting to lower-tier cities, targeting 500 new stores—half in third-tier or smaller markets—and entering 100 new counties. It’s also rapidly expanding "dark stores" (mini fulfillment centers for online orders), which grew from 131 in late 2024 to 394 by mid-2025.
Other initiatives include reducing pushy sales tactics, adding popular brands, and enhancing in-store experiences. These efforts require sustained investment, making CK Hutchison’s IPO push particularly timely.
**Hong Kong’s IPO Window** Watsons’ listing revival coincides with a rebound in Hong Kong’s IPO market.
In the first 10 months of 2025, Hong Kong IPO fundraising surged to HKD 216 billion, more than doubling YoY. The consumer sector is especially hot, with domestic beauty giants like Proya, Marubi, and CHANDO eyeing listings.
As a globally recognized health and beauty retailer, Watsons holds appeal. Bankers note that a dual listing could enhance liquidity and attract diverse investors, particularly given its European exposure.
However, details—including valuation and fundraising size—remain fluid pending market conditions. CK Hutchison has declined to comment on "market rumors or speculation."
Beyond capital maneuvers, Watsons’ IPO represents a test case for traditional retailers navigating digital disruption. Whether it can leverage fresh funding to stabilize European growth while winning back Chinese consumers will determine its future valuation.
*This article incorporates AI-assisted data collection and analysis for market insights.*
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