Xinchen China Power (HKG:1148) said it has agreed to acquire up to a 60% stake in Zhonghang Lantian Equipment Manufacturing through a combination of equity transfer and capital injection, according to a Thursday Hong Kong bourse filing.

Under the deal, Xinchen's subsidiary Mianyang Xinchen Engine will acquire a 53% stake in Zhonghang Lantian Equipment Manufacturing from Shanxi Lantian Industrial for up to 147.1 million yuan.

While Xinchen China Power, as the parent, will inject the yuan equivalent of $5 million to raise the group's total stake in the equipment manufacturing firm to 60%.

Upon completion, Zhonghang Lantian will become an indirect non-wholly owned subsidiary of Xinchen China Power.

The company said the acquisition aligns with its strategy to expand into the special-purpose and off-road vehicle components market, strengthen operational synergies, and diversify its product portfolio.

Trading in Xinchen shares resumed after a temporary halt pending the announcement.