Shares of CRRC (01766) plummeted 5.31% in early trading on Friday, following the announcement of a significant acquisition by its subsidiary. The sharp decline comes as investors react to the news that Changchun Railway Vehicles Co., Ltd., a non-wholly owned subsidiary of CRRC, has agreed to acquire 100% equity of Equipment Technology Company for approximately RMB186 million.

The acquisition, announced late Thursday, is part of CRRC's strategy to establish a high-end intelligent equipment manufacturing demonstration base in Beijing and expand its urban rail transit market in the city. The primary asset of Equipment Technology Company is the Douidian Industrial Park, which is expected to provide Changchun Railway Vehicles with necessary land and space resources for development.

Despite the company's positive outlook on the deal, which aims to support the implementation of strategic new businesses such as intelligent equipment and new materials, investors appear to be concerned about the immediate financial implications and potential risks associated with the acquisition. The market's negative reaction suggests that shareholders may be worried about the cost of the deal and its impact on CRRC's short-term financial performance, overshadowing the long-term strategic benefits touted by the company.