(Yicai Global) Oct. 19 -- 360 Security Technology’s shares jumped after the Chinese cybersecurity giant said it will spend CNY2.9 billion (USD452 million) to buy into Hozon Auto, becoming the electric carmaker’s second-largest shareholder.

360 Security [SHA:601360] ended 1.9 percent higher today at CNY12.14 (USD1.89), after gaining as much as 4.8 percent in the morning session. The broader Shanghai market rose 0.7 percent.

A unit of 360 Security will buy a 10.7 percent stake in Hozon Auto from existing shareholders for CNY900 million (USD140.4 million), the Beijing-based internet firm said yesterday. The rest will be invested via the carmaker’s ongoing Series D1 financing round for another 5.9 percent.

After the latest fundraiser, Hozon Auto will be valued at about CNY33.8 billion (USD5.3 billion). It had a Series D round led by 360 Security in April, raising CNY3 billion.

Internet security is becoming an issue for the automotive industry as vehicles become smarter. At the start of this month, the Cyberspace Administration of China also issued new rules on vehicle data security, aiming to address increasing security challenges and close loopholes as vehicles gain a stronger ability to generate and process data. Under the rules, operators must avoid collecting excessive data from cars and protect the privacy of car owners and users.

360 Security will bring its experience in networks, intelligent hardware, and the Internet of Vehicles security to Hozon Auto, as well as conduct in-depth research on the safety of intelligent networked cars.

Founded in 2014, Hozon Auto unveiled its first mass-produced vehicle in 2018. Based in Tongxiang, Zhejiang province, the carmaker owns the Nezha brand. Last year it sold almost 15,100 vehicles and delivered 41,427 units from January to September this year.

The 360 Security’s announcement also disclosed Hozon’s financial status. It had CNY1.6 billion in revenue and a CNY690 million net loss in the first half of the year. Last year, the firm’s revenue was CNY1.3 billion and its net loss was CNY1.3 billion.

Editor: Futura Costaglione