(Yicai) Sept. 23 -- Shares of Jinzi Ham surged by the daily trading limit today after the major Chinese ham producer announced plans to invest up to CNY300 million (USD42.2 million) in the semiconductor industry in a bid to revive growth.

Jinzi [SHE: 002515] jumped 9.9 percent to close at CNY7.85 (USD1.10), bringing its year-to-date gain to more than 70 percent. The company’s market capitalization now stands at CNY9.5 billion (USD1.3 billion).

Through its wholly owned unit Jinzi Semiconductor, the Jinhua-based firm will acquire up to a 20 percent stake in Leadingspeed Technology, a chipmaker specializing in optical communication components, the ham company said yesterday. Jinzi Semiconductor was established in July following a change in the parent firm’s controlling shareholder.

Founded in 2019 and based in Hangzhou, Leadingspeed focuses on designing high-speed chips used in artificial intelligence, cloud computing, and 5G/5.5G networks.

The investment will be executed in two phases. The first will inject CNY100 million (USD14 million) into Leadingspeed to increase its capital, while the second round will proceed once certain conditions are met. Jinzi estimates Leadingspeed’s pre-investment valuation at between CNY1 billion and CNY1.3 billion.

Despite its technological focus, Leadingspeed has yet to turn a profit. It reported a net loss of CNY20.4 million (USD2.9 million) in the first seven months of this year, with revenue of just CNY511,100 (USD71,840), according to the announcement.

Jinzi said it has faced sluggish growth in its core meat processing business due to shifts in consumer demand. To overcome these challenges, the company aims to sustain stable operations in its main business while diversifying into emerging sectors aligned with the digital economy.

Founded in 1994, Jinzi experienced a major ownership change in June when former controlling shareholder Ren Guilong transferred his 12 percent equity stake and 6.85 percent voting rights to Fujian-based entrepreneur Zheng Qingsheng for CNY870 million (USD122.3 million). Zheng has business interests in real estate and car sales.

Following the acquisition, Zheng moved swiftly to shift the company’s strategic direction. In July, he established two semiconductor firms, including Jinzi Semiconductor, which is now leading the planned investment in Leadingspeed.

In the first half of this year, Jinzi posted a net profit of CNY22.9 million, down 25 percent from a year earlier. Revenue fell 15 percent to CNY170 million, according to its latest financial report.

Editor: Emmi Laine