(Yicai Global) Jan. 27 -- Shares of China's Sokon Industry Group slumped after the car manufacturer which counts Huawei Technologies as one of its partners said it has suspended its secondary listing plan in Hong Kong but will raise up to CNY7.1 billion (USD1.1 billion) via private placement in Shanghai.

Sokon's stock price [SHA:601127] closed 4.8 percent down at CNY46.25 (USD7.30). The shares have slid by a third since late December after the automaker's first car model with the Shenzhen-based software giant was rumored to have exited production lines.

The vehicle manufacturer decided to suspend its Hong Kong listing plan due to changes in the global economy and capital market conditions, the Chongqing-based company said in a statement today. In another statement, it revealed its new share issuance plans in Shanghai.

The firm has been getting bad press lately. An owner of Seres SF5, an electric crossover sport utility vehicle that has Huawei's software, posted a screenshot of a conversation with a distribution center manager, which suggested that the model's production has been canceled. However, Huawei responded that production is not discontinued even though new orders are not accepted. Sokon confirmed that the brand hasn't gone out of production.

The suspicion arose around the time of another release. Sokon and telecoms giant Huawei unveiled their second vehicle Aito M5 on Dec. 23, 2021. Consequently, many Seres outlets, along with the brand website and mobile application, have changed their logo to Aito.

Sokon intends to fuel its product development via the share issuance. Some of the top priorities are electric vehicle model development and technological upgrades, according to the document.

The firm intends to splurge as much as CNY4.8 billion (USD754.4 million) to develop six electric models, as well as to upgrade its DE-i platform, and improve its technology. Some CNY4.3 billion of that should come from the private placement proceeds.

Moreover, the company plans to spend CNY633 million (USD100 million) to upgrade its plants. Enhancing its customer care facilities should require CNY227 million. Some CNY2 billion of the gathered funds will be considered working capital.

Sokon sold 41,440 new energy vehicles in 2020, more than doubling from a year ago. Early this month the firm said its unit and entities backed by Chongqing's municipal government established a joint venture known as Chongqing Seres Electric Vehicle to enhance the company's product delivery.

Editor: Emmi Laine, Xiao Yi