(Yicai Global) July 27 -- Shares of Zhonghang Electronic Measuring Instruments rose by their daily trading limit after the firm said it plans to issue CNY17.4 billion (USD2.4 billion) of stock to Aviation Industry Corporation of China in return for the unit that trailblazed the country’s military jet aircraft development.

On the Shenzhen stock market today, Zhonghang Electronic [SHE: 300114] surged 20 percent to close at CNY57.91 (USD8.12) a share. The stock has skyrocketed 466 percent this year.

Zhonghang Electronic will issue nearly 2.1 billion new shares, equal to about 78 percent of the total after the issuance, according to the draft proposal, making AVIC its controlling shareholder. The new stock will be priced at CNY8.36 (USD1.17) apiece after Zhonghang Electronic distributes a cash dividend of 30 Chinese cents for every 10 shares.

The Xi'an-based gauge and sensor maker first set out the plan to acquire Chengdu Aircraft Industrial Group, which makes China's most advanced stealth fighter planes, on Jan. 11.

Zhonghang Electronic's main business has been aircraft measurement and control products and power distribution systems. It will now start developing and making aviation equipment and accessories and focus on the aviation segment, according to the company.

CAIG's revenue was CNY53.4 billion in 2021 and CNY67.3 billion last year, with a net profit attributable to the parent company of CNY1.9 billion and CNY1.3 billion (USD266.7 million and USD182.2 million), respectively, according to the draft proposal.

China has been promoting the restructuring and listing of centrally administered state-owned firms in recent years, actively supporting those with excellent or main business assets to go public. AVIC plans to merge its helicopter business with Avicopter, it announced on July 19.

Editor: Martin Kadiev