(Yicai Global) July 13 -- MLS’ stock price ended the day lower after soaring to a two-year high following an announcement from the Chinese LED products maker of a CNY500 million (USD71.4 million) investment by Xiaomi.

The shares [SHE:002745] closed 1.5 percent down at CNY17.65 (USD2.52 each, after leaping 8.3 percent to CNY19.39 at the open, the highest since April 2018.

Hubei Xiaomi Changjiang Industrial Fund, an investment fund of handset giant Xiaomi, will buy into MLS through a private placement of shares, the Zhongshan, Guangdong province-based company said in a statement yesterday. MLS will sell 40.06 million new shares at CNY12.48 each.

That is a big discount and may help to account for today’s price swings.

Proceeds from the sale will go to repay debt, the company said. MLS, which owns international LED lighting brands such as Landvance, will also cooperate with Xiaomi on developing a new generation of LED display-equipped products, while expanding sales channels.

MLS will boost its collaboration with Xiaomi in design, research and development, trial production and mass production of new consumer electronics to ensure these meet consumer requirements. The two will also cooperate to promote the application of MLS’s smart lighting products in Xiaomi's ecological chain enterprises.

Founded in 2010, Xiaomi has gradually formed a business model synergizing smart hardware, internet services and new retail. The Beijing-based company had invested in more than 300 firms by the end of the first quarter to form a complete industrial ecological chain, the statement added.

Editor: Ben Armour