(Yicai Global) Feb. 16 -- Shares of Hikvision Digital Technology rose after the Chinese surveillance gear maker unveiled a plan to increase the registered capital of its auto electronics subsidiary and bring in external investors.

Hikvision [SHE: 002415] climbed 3.3 percent to close at CNY37.39 (USD5.45) today, having surged 6.5 percent in the early afternoon.

Hikvision will raise the registered capital of Shijiazhuang Sensortech Intelligent Technology, a wholly owned unit, to CNY2.4 billion (USD350 million) from CNY10,000 through equity transfer and new investors, with the aim of speeding up development of Hikvision’s auto electronics business, the Hangzhou-based firm said late yesterday.

To achieve the goal, Hikvision intends to transfer its 60 percent stake in Hikvision Automotive Technology and 44.4 percent stake in Wuhu Sensortech Intelligent Technology to Shijiazhuang Sensortech with a value of CNY1.3 billion, and bring in nearly CNY1.1 billion in external investment via a public bid.

Hikvision’s stake in Shijiazhuang Sensortech will decline to 56.1 percent after the changes are completed. The unit’s remaining shares will be owned by external investors.

Set up in February last year, Shijiazhuang Sensortech has not yet started operation. Hikvision hopes to provide sufficient working capital for the unit through this capital increase to meet the needs of future development, and optimize the corporate governance structure by introducing external investors, it said.

Hikvision has been committed to developing innovative businesses beyond electronic security systems in recent years. In 2016, it invested in Wuhu Sensortech, a startup focusing on car radar products, which had a net profit of CNY45.7 million (USD6.7 million) and revenue of CNY3.6 billion in 2021, the announcement said.

Hikvision’s revenue from the auto electronics business grew 49 percent in the first half of 2022 from a year earlier to CNY823.8 million (USD120.2 million), accounting for 2.2 percent of the company’s total revenue in the period, according to its semi-annual report.

Editor: Peter Thomas