(Yicai Global) Aug. 22 -- Foryou’s shares rose by the daily limit after the Chinese maker of auto electronics logged higher first-half earnings and announced a CNY2 billion (USD292 million) private placement to fund capacity expansion as well as research and development for a smart driving platform project.

Foryou [SHE: 002906] soared 10 percent to end today at CNY52.25 (USD7.70) a share.

Net profit jumped almost 19 percent to CNY163 million (USD23.8 million) in the six months ended June 30 from a year earlier, the Huizhou-based firm’s latest earnings report showed on Aug. 19. Revenue soared just over 21 percent to CNY2.5 billion, with auto electronics accounting for 65 percent and high-precision castings for 24.5 percent.

Proceeds from the private placement of shares that Foryou announced the same day will be used in three capacity expansion projects as well as on R&D for a smart driving platform project. Two projects to expand its capacity to make smart vehicle electronics will cost CNY576 million and CNY522 million, while CNY703 million will be used to expand output of lightweight auto parts. The rest will go to the R&D project.

The two smart vehicle electronics projects each have an after-tax payback period of about 6.7 years, while the lightweight auto parts project will need about 6.8 years to recoup investment, the firm said. Each of the three projects have an estimated construction period of three years. It did not mention the time needed to recoup the investment in the R&D project.

Foryou counts Stellantis, Toyota Motor and other carmakers among its well-know overseas clients. Chinese joint ventures of Ford Motor, Honda Motor and Hyundai Motor use its products as well.

Chinese auto startups, including Nio, Li Auto, Xpeng, Hozon New Energy Automobile’s Neta brand and Leapmotor, are also clients in addition to tech giants venturing into the smart auto industry such as Huawei Technologies and Baidu.

Editor: Peter Thomas