Temasek is exploring options for its stake in global retailer AS Watson Group, including a partial sale, people with knowledge of the matter said.

Singapore's investment company is working with an adviser to consider possibilities for its 25 per cent holding in AS Watson after receiving some preliminary interest, said the sources, who asked not to be identified.

It bought the stake in AS Watson, which is a unit of Hong Kong tycoon Victor Li's CK Hutchison Holdings, for HK$44 billion (S$7.6 billion) in 2014.

At the time, AS 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 (IPO).

"Temasek bought AS Watson on the expectation that it would go public soon," Mr Steven Leung, executive director at UOB Kay Hian (Hong Kong), said on Monday. "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 is no certainty they will lead to a transaction, the sources said.

A spokesman for Temasek said it does not comment on rumours or speculation.

A representative for CK Hutchison declined to comment.

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

The retailer has more than 14,500 stores in 24 markets, including its Superdrug chain in Britain and Rossmann pharmacies in Germany, according to its website.

It also runs the Watsons chain of healthcare and beauty shops across Asia, as well as groceries, electronics shops and wine stores in its home market of Hong Kong.

BLOOMBERG