(Yicai) Jan. 22 -- Shares of Leapmotor Technology plunged after the Chinese new energy vehicle startup announced it received a strategic investment worth a total of HKD659 million (USD84.3 million) from two Chinese investment institutions.

Leapmotor [HKG: 9863] was trading down 9.3 percent at HKD23.40 (USD3) as of lunch break in Hong Kong today, after opening up 8.1 percent.

Jinhua Industrial Fund and Wuyi County Financial Investment Holding Group will purchase about five million Leapmotor shares each at prices of HKD43.80 and CNY39.86, respectively, the Hangzhou-based carmaker announced late on Jan. 19. The prices are 70 percent higher than Leapmotor's closing price on that day.

With the investment, Jinhua Industrial Fund will receive 0.4 percent of Leapmotor's total equity, while Wuyi County Financial Investment will get a 0.7 percent stake, Leapmotor pointed out.

Forty percent of the proceeds will be used to expand and upgrade Leapmotor's electric vehicle portfolio, expand the research and development team, and improve electric and intelligent automotive technologies, such as autonomous driving and smart cockpit systems, the firm noted.

Twenty-five percent of the proceeds will go to expand the NEV maker's sales and service network, enhance brand awareness, and expand overseas, another 15 percent will be used to enhance production capacity, and the remaining 20 percent will supplement working capital and for general corporate purposes, Leapmotor added.

European auto giant Stellantis announced in October it would spend EUR1.5 billion (USD1.6 billion) to buy around 20 percent of Leapmotor to take advantage of the Chinese startup's competitiveness in production technologies and marketing capabilities.

Leapmotor delivered 144,200 vehicles last year, up over 29 percent from the year before, but missing its annual sales target of 200,000 units. The company has delivered over 300,000 vehicles since its inception.

Leapmotor achieved a sales revenue of CNY5.7 billion (USD792.4 million) in the third quarter of last year, up 32 percent from a year earlier. Its net loss shrank to CNY986 million (USD137.1 million). The firm's gross profit margin turned positive for the first time ever in the period.

Editor: Futura Costaglione