(Yicai) Oct. 23 -- Shares in Xingmin Intelligent Transportation Systems plunged by the exchange-imposed limit today after the Chinese car parts manufacturer said it is buying a stake in loss-making Zhejiang East Coast Shipbuilding, which specializes in building vessels under 100,000 tons, to enter the shipbuilding industry and boost profits.

Xingmin’s share price [SHE:002355] closed down 10 percent at CNY7.28 (USD1). However, the stock has gained 88 percent in value from Sept. 13 to yesterday, and is near the peak reached in June 2022.

Xingmin will pay CNY360 million (USD50.5 million) for a 30 percent stake in East Coast Shipbuilding through its investment company, the Longkou-based firm said yesterday.

East Coast Shipbuilding, which is a high-value added, high-tech ship manufacturer and exporter, has been losing money for the past two years. In the first eight months, it racked up net losses of CNY93.7 million (USD13.1 million) on revenue of CNY260 million (USD36.4 million).

However, Xingmin has linked arms with Wuhu Shipyard to secure shipbuilding orders worth USD424 million for the Zhoushan-based shipbuilder, which makes car carriers, container vessels, bulk carriers, as well as chemical tankers, ultra-low temperature tuna fishing boats and other special vessels, for next year, it said.

East Coast Shipbuilding will undertake to build 37 ships of various types over the next five years in the form of commissions and joint manufacturing for Wuhu Shipyard, Xingmin said. This includes eight 89,000-ton bulk carriers and one Pure Car and Truck Carrier with space for 7,000 vehicles in 2025.

Editor: Kim Taylor