PING An Insurance (Group) Co will buy a strategic stake in traditional Chinese medicine maker Yunnan Baiyao Group via a private placement, the drug maker said today.

Ping An will take up to a 10 percent stake in Yunnan Baiyao, the medicine maker said in a statement to the Shenzhen Stock Exchange.

The company didn't disclose the price of the transaction.

Ping An is seeking to grow into a diversified financial group that will generate two-thirds of its revenue from banking, securities and asset-management services.

The slumping stock market this year has curbed investment returns of insurers like Ping An.

The benchmark Shanghai Composite Index has lost 46 percent in the first half, pushing insurers to seek more sources of revenue.

Ping An and its peers are also under increasing pressure from banks.

China's four banks -- Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications and Bank of Beijing -- have applied to invest in insurance firms.

Yunnan Baiyao, based in Kunming, Yunnan Province, specializes in making a powder that is used in traditional Chinese medicine to treat wounds and bruises. The powder is also used to improve blood circulation.

The pharmaceuticals company has been suspended from trading since July 29. It will resume trading on August 12 after the deal is formalized, it said in the statement.