(Yicai) May 28 -- ​​Shares of Friendship & Apollo Commercial soared after the major mall operator in central China announced plans to acquire chipmaker Sanrise Tech for CNY1.58 billion (USD219 million) in a strategic move into the power semiconductor sector.

Friendship & Apollo [SHE: 002277] hit the daily limit with a 10 percent jump to CNY6.59 (US 90 cents) in Shenzhen today. The stock has nearly tripled in value over the past year.

The department store operator will pay around CNY500 million (USD69.4 million) in cash and issue new shares to acquire Sanrise, the Changsha-based firm said yesterday. The total deal price represents a 10 percent discount to Sanrise's assessed equity value of CNY1.76 billion.

Following the acquisition, Friendship & Apollo plans to pivot into the power semiconductor sector, aiming to build a “second growth curve” and diversify its profit streams to enhance long-term profitability, per the seller of home appliances and cosmetics.

Sanrise specializes in designing and selling high-performance power semiconductor devices. Its flagship products are super-junction metal-oxide-semiconductor field-effect transistors (MOSFETs), which account for over 60 percent of its revenue. These power MOSFETs are widely used in electric vehicle charging stations, automotive electronics, solar energy storage, and data centers. Sanrise's clients include Enpower Electric, Shinry Technologies, BYD, EV-Tech, and ZTE.

Last year, Sanrise reported CNY606 million in revenue and a net profit of CNY45.7 million (USD6.3 million). The acquisition implies a price-to-sales ratio of 2.61x and a price-to-earnings ratio of 34.59x -- both below industry averages for similar deals and listed peers, according to the company.

The acquisition is part of Friendship & Apollo’s broader restructuring strategy. Earlier this month, the company signed a strategic agreement with Changsha State-Owned Capital and Tsinghua University’s Department of Electronic Engineering to establish a semiconductor-focused mergers and acquisitions fund. The fund will target investments in industrial chain opportunities and projects aimed at transforming, commercializing, or industrializing scientific and technological breakthroughs by listed companies.

Editor: Emmi Laine