(Yicai) May 12 -- Shares of Hengerda New Materials Fujian soared by their exchange-imposed daily trading limit after the Chinese maker of high-precision metal-cutting machine tools said it plans to buy bankrupt German grinding machinery supplier SMS Maschinenbau.

Hengerda [SHE: 300946] closed up 20 percent at CNY49 (USD7.79) a share in Shenzhen today. The stock has surged 107 percent since an intraday low of CNY23.70 on April 9, the day before the US government unveiled its so-called reciprocal tariff policy.

Hengerda will spend EUR8.5 million (USD9.5 million) in cash to acquire SMS' tangible assets, intellectual property and rights, employees, and contracts through a German special purpose vehicle, with the transaction expected to be completed by July 15, the Fujian province-based company announced on May 9.

The firm expects the acquisition to bolster its technology in industrial mother machines -- machines that produce other machines -- and accelerate the research, development, and industrialization of rolling machine precision components to improve their precision, efficiency, and yield rate. It is also expanded to bolster Hengerda's overseas market presence, the firm added.

Founded in Stuttgart in 1995, SMS has independent research and manufacturing capabilities for grinding machines, software development capabilities to support computer numerical control systems, stable and mature process control capabilities, and large-scale delivery capabilities.

The main clients of SMS, which filed for self-administered insolvency in February, include leading producers of high-precision mechanical components, such as Swedish precision tool maker Sandvik Group and German precision rolling guide screw and ball screw manufacturer Karl Hipp. Rolling guide screws and ball screws are key components used in humanoid robots.

Editor: Futura Costaglione