HONG KONG (Jan 8): Singapore state investment firm Temasek Holdings is exploring options for its stake in global retailer A.S. Watson Group, including a partial sale, people with knowledge of the matter said.

Temasek is working with an adviser to consider possibilities for its 25% holding in A.S. Watson after receiving some preliminary interest, according to the people, who asked not to be identified because the information is private. It bought the stake in A.S. Watson, which is a unit of Hong Kong tycoon Victor Li’s CK Hutchison Holdings Ltd., for HK$44 billion ($7.6 billion) in 2014.

At the time, A.S. Watson’s owner said it planned to list the retailer in the next two to three years in Hong Kong and Singapore, pushing back an earlier 2014 target for an initial public offering.

“Temasek bought A.S. Watson on the expectation that it would go public soon,” Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd., said Monday by phone. “Now that the IPO hope is fading, it’s understandable why Temasek seeks to sell down its stake.”

Deliberations are at an early stage, and there’s no certainty they will lead to a transaction, the people said. A spokesman for the Singapore state investment firm said Temasek doesn’t comment on rumors or speculation. A representative for CK Hutchison declined to comment.

A.S. Watson accounted for 37% of CK Hutchison’s HK$224.5 billion of revenue for the six months ended June, the most of any division, its interim report shows. Its health and beauty businesses helped the unit’s sales rise 14% year on year, according to the report.

The retailer has more than 14,500 stores in 24 markets, including its Superdrug chain in the U.K. and Rossmann pharmacies in Germany, according to its website. It also runs the Watsons chain of health-care and beauty shops across Asia, as well as groceries, electronics shops and wine stores in its home market of Hong Kong.