(Yicai Global) Nov. 9 -- Sunway's stock shot up by the exchange-imposed daily trading limit after the Chinese cable maker bought a majority stake in the e-commerce platform used by famous live sales host Luo Yonghao.

Leshan, Sichuan province-based Sunway [SHA: 603333] closed 10 percent higher today at CNY8 (USD1.21). The company’s shares are down 22 percent this year.

Sunway plans to pay CNY589 million (USD89.1 million) for a 40.27 percent stake in Chengdu Xingkong Yewang Technology, it said yesterday. Xingkong Yewang, which only started business in April, had a net profit of CNY40 million (USD6 million) in its first five and a half months on revenue of CNY369 million. All of the platform’s sales were driven by sole live-streaming anchor Luo.

The flamboyant businessman, who once said he planned to acquire Apple, founded failed Smartisan Digital, a smartphone and consumer electronics maker that for a time was worth CNY1 billion (USD141.7 million). Luo went on to lecture and write books about his entrepreneurial experience and in March he announced his intention to join the legions of retailers live-streaming product sales during the pandemic.

Luo has 16 million Weibo followers and many manufacturers have expressed an interest in working with him, an industry insider said previously.

Sunway said it will acquire the stake in Xingkong Yewang from shareholders Li Jun and Luo Yongxiu as well as three companies, Aqua Venture, digital product maker Shenzhen Vvild Technology and Tianjin Meiwei Technology Partnership.

Li and Luo Yongxiu will sell their 18.19 percent and 17.23 percent holdings for CNY270 million and CNY260 million respectively. As part of the deal, they have pledged that Xingkong Yewang will have a minimum net profit of CNY5.23 million (USD792,000) over four years starting from this year.

Vvild Technology, Meiwei Technology, and Aqua Venture will sell 1.5 percent, 0.57 percent, and 2.79 percent of their equity in Xingkong Yewang for CNY18 million, CNY33 million and CNY6.84 million respectively. The three made no performance commitments.

Editor: Kim Taylor