(Yicai Global) July 14 -- Internet giant Xiaomi will invest CNY134 million (USD 19.24 million) in cash to buy 5 percent of shares in Dong Yi Ri Sheng Home Decoration Group to collaborate with it on new product research and development and share customer and sales channels. The news boosted Dong Yi Ri Sheng's shares to the daily limit this morning.

Dong Yi Ri Sheng [SZE:002713] hit the 10 percent price ceiling at lunch to stop trading at CNY9.75 (USD1.39) after the Beijing-based architectural decoration service provider announced the investment in a statement yesterday.

The company will issue 22.08 million new shares to the tech giant’s wholly-owned Xiaomi Technology unit for CNY6.07. Proceeds will go to top up Dong Yi Ri Sheng's working capital after issue expenses, it said.

The two will supply comprehensive home furnishing services to property developers and customized home furnishing and smart home appliance solutions to homeowners, per the statement.

Dong Yi Ri Sheng will promote Xiaomi's various smart home products to upstream and downstream companies and customers in the industry chain through its existing sales channels. Xiaomi will also offer technical support for Dong Yi Ri Sheng to improve its market coverage and grow its business.

The two will also cooperate in internet advertising and supply chain finance.

Founded in 2010, Beijing-based Xiaomi owns the world’s fourth-largest smartphone brand and an Internet of Things consumer platform that connects approximately 252 million smart devices.

Xiaomi has actively invested in industry chain companies to form a business ecosystem synergizing smart hardware, internet services and new retail over recent years. It had invested in over 300 companies as of the end of the first quarter.

Editors: Tang Shihua, Ben Armour