(Yicai Global) Feb. 22 -- Shares of Chinese Apple supplier Luxshare Precision Industry declined after the firm said it intends to raise up to CNY13.5 billion (USD2.1 billion) to invest in wearable devices and new energy vehicles production.

Luxshare's stock price [SHE: 002475] opened 4 percent lower at CNY41.20 (USD6.50). The shares are almost 20 percent down this year.

The electronic components manufacturer will issue no more than 2.123 billion new shares to as many as 35 investors, the Shenzhen-based company said in a statement yesterday. The price per share should not be lower than 80 percent of the average price logged during the past 20 trading days before the day when the price is determined.

The private placement proceeds will be spent on packaging and testing, as well as display modules. Some of the funds will go into producing parts and assembling smartphones, wearables, and smart cars. Moreover, part of the sum will be used to replenish Luxshare's working capital to optimize the company's capital structure and to reduce its financing costs, it added.

The demand for electronic devices and components has been growing in the fifth-generation wireless mobile phone era, said the firm. The global shipment value of smartphones is expected to rise to nearly USD600 billion in 2022 and that for wearables should reach USD632 million in 2024, it added.

The scale of the global automotive electronics market is likely to widen by more than four-fifths to USD400.3 billion by 2028 from USD217.9 billion in 2020, with a compound annual growth rate of about 8 percent, Luxshare wrote, citing Statista’s forecast.

The major player in the iPhone supply chain has lately been eyeing smart cars. On Feb. 12, Luxshare said it will invest CNY10.1 billion in Chery Holding Group, becoming the Chinese carmaker’s fourth-largest shareholder, while marking Luxshare's first entry in the NEV market.

It is necessary for Luxshare to grasp development opportunities to improve its product and business layout of consumer electronics and automotive electronics through the private placement, it concluded.

Editor: Emmi Laine, Xiao Yi