(Yicai) Jan. 8 -- Shares of Aokang Shoes plunged by their daily trading limit after the Chinese footwear giant said it had failed in a plan to acquire a memory chip producer, a move aimed at transforming the company’s business.

After resuming trading in Shanghai today, Aokang’s shares [SHA: 603001] closed down 10 percent at CNY6.37 (87 US cents) apiece.

Trading in the stock was halted on Dec. 24 after the Zhejiang province-based firm announced the day before that it intended to acquire a controlling stake in United Memory Technology for an undisclosed sum. Negotiations failed, so Aokang gave up on the idea, it said yesterday.

Founded in 2021 and headquartered in Wuxi, United Memory has research and development centers in Shanghai and Shenzhen in China as well as Seoul in South Korea. Its memory chips are used in communication devices, smart homes, and industrial and medical fields, according to the company’s website.

Aokang was founded in 1988 as a men’s leather shoe maker. It grew into one of China’s largest footwear companies, with annual revenues of CNY3.5 billion (USD477.4 million) when it went public in 2012. It went on to acquire the rights to distribute international sneaker brands Skechers and Puma in China.

But the brand has fallen out of fashion, and has been losing money since 2022. In the first three quarters of last year, its net loss widened 51 percent to CNY136 million (USD18.6 million) from a year earlier, while revenue fell 19 percent to CNY1.9 billion.

Editors: Dou Shicong, Tom Litting