(Yicai) Dec. 31 -- Wingtech Technology’s shares surged by their daily trading limit after the Chinese smartphone assembler said it plans to sell its unprofitable business in original design manufacturing to Luxshare and focus on its chip business.

Wingtech [SHA: 600745] closed 10 percent higher at CNY38.78 (USD5.31) a share in Shanghai today. The stock has fallen 6.4 percent this year.

Wingtech plans to sell nine subsidiaries to Luxshare, the parent company of Apple supplier Luxshare Precision Industry, the Jiaxing-based company announced yesterday.

The sale is intended to consolidate resources, bolster Wingtech’s position among global semiconductor industry leaders, and improve profitability in response to evolving geopolitical dynamics and the company’s business development priorities, it said.

Wingtech’s Nexperia semiconductor business is mainly in auto chips, which has little synergy with its ODM business, an analyst told Yicai, adding that Luxshare is seizing this opportunity to expand its contract manufacturing capabilities.

Semiconductors and product integration are Wingtech's two main business lines. According to its financial reports, losses from its ODM work have weighed on overall earnings. The ODM business had a first-half net loss of CNY850 million, compared with a CNY1.1 billion (USD150 million) net profit at its chip business, with revenue falling 7.9 percent to CNY7 billion.

In the first three quarters of this year, Wingtech's total net profit shrank over 80 percent to CNY410 million (USD56.2 million) from a year earlier, while revenue rose 20 percent to CNY53.2 billion (USD7.3 billion).

Editors: Shi Yi, Futura Costaglione