(Yicai Global) July 6 -- Shares of Kexin Communication Technologies surged today after the Chinese telecoms equipment manufacturer said that its controlling shareholder will pour CNY421 million (USD59.7 million) into the firm for it to make fifth-generation mobile networks products.

Kexin's stock price [SHE:300565] jumped by the daily limit of 10 percent to CNY16.17 (USD2.30) today, the highest since late last December.

Chen Dengzhi, who is the firm's controlling shareholder, chairman, and general manager, will buy no more than 41.6 million shares via private placement to have a 28.2 percent stake, the Shenzhen-based company said in a statement this morning. The price is CNY10.1 (USD1.40) apiece. Before this, Chen held 13.8 percent of the firm's shares.

More than 80 percent of the proceeds will be used to build capacity to manufacture lithium batteries and other types of power supplies used in 5G base stations to satisfy a growing demand for such efficient equipment, according to the statement. The remainder will be treated as working capital.

The project, to be located in southern Guangdong province's Huizhou, should be ready in 18 months, the company added, without disclosing the planned capacity or the exact type of products. However, it did say that creating such customized products should improve customer retention.

Editor: Emmi Laine