(Yicai Global) March 2 -- Shares of Hisense Group's home appliance unit rallied after the firm said that it intends to invest about JPY21.4 billion (USD200.3 million) to become the controlling shareholder of Japan's Sanden Holdings while entering the automotive air conditioning business.

Hisense Home Appliances' Group's stock price [SHE: 000921] rose by the daily limit of 10 percent to CNY16.70 (USD2.60) this morning. Sanden Holdings’ equity price [TYO: 6444] tumbled by 17.3 percent to JPY383 (USD3.40).

The Chinese electric appliance maker plans to subscribe to 83.6 million Sanden shares, resulting in 75 percent of the voting rights, via private placement at a price of CPY256 apiece due to its optimism about the electric vehicle market, the Foshan-based company said in a statement yesterday. The price is a bit more than half of the Japanese firm's closing price of JPY463 yesterday.

Tokyo-headquartered Sanden has been struggling amid the Covid-19 pandemic. The more than 80-year-old firm, which ranked second in global car air con compressor sales in 2019, logged a JPY17.3 billion loss between April and December 2020. Its revenue dropped by over 43 percent to JPY94.5 billion.

Chinese home appliance companies continue to promote globalization with more diversified cross-border acquisitions, involving all supply chain links, but especially those related to core components, Zhou Nan, home appliance branch chief at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told Yicai Global.

The pace is expected to increase. After China signed the Regional Comprehensive Economic Partnership in November 2020, leading electric appliance companies have more ways to go overseas, said Zhou, adding that in December, Midea Group acquired Hitachi Compressor Thailand.

Hisense Home Appliances will enhance Sanden's profitability by sharing technology, supply chain, talent, and manufacturing resources while expanding, the statement added.

Editor: Emmi Laine, Xiao Yi