(Yicai Global) March 15 -- Huazhong Numerical Control, a leading Chinese maker of computer numerical controls, unveiled a plan to raise CNY1 billion (USD150 million) in a private placement of shares to fund the research and design of CNC systems.

Huazhong Numerical will use CNY510 million (USD74 million) of the sale proceeds for key technology research and industrialization projects of a five-axis CNC system and a servo motor, the company said late on March 13. The Wuhan-based firm’s controlling shareholder will provide the funds, among other sources, it added. 

Huazhong Numerical’s shares [SHE: 300161] rose 1.4 percent to close at CNY29.32 (USD4.25) each today, taking its market capitalization to more than CNY5.8 billion (USD841 million). The broader Shenzhen market ended little changed.

Five-axis CNC machines process complex surfaces and are the only tool capable of processing marine propellers and large diesel engine crankshafts.

A high-end CNC system is the most crucial component of high-performance machine tools, it has high technical barriers and strong user engagement, according to a research report by Kaiyuan Securities. Huazhong Numerical will likely take a larger share of the high-end CNC system market after the latest investment.

A survey commissioned by the Ministry of Industry and Information Technology in 2020 showed that Chinese brands had about a 50 percent share of the domestic high-end CNC system market, with Huazhong Numerical having around 20 percent, the company added.

Editor: Martin Kadiev