November 14 -- Trading company Zhejiang Zhongda Group (600704) intends to inject 400 million yuan into wholly-owned subsidiary, Zhejiang Yuantong, increasing its registered capital from 665 million yuan to 1.065 billion yuan, reports yicai.com, citing a company filing.

After the capital injection, Zhejiang Yuantong will spend 50 million yuan to acquire a 25 percent stake in Zhixin Automobile, a company which sells both domestic vehicles and imported Mercedes-Benz cars.

Following the acquisition, Zhongda Group and Zhejiang Yuantong will jointly hold a 50 percent stake in Zhixin Automobile.

Zhixin Automobile, which has a registered capital of 15 million yuan, recorded sales revenue of 1.596 billion yuan and net profit of 312 million yuan in the first three quarters of 2011. It had net assets of 49.25 million yuan through the end of September.

Zhongda Group said the acquisition will help to increase the building of its sales network for Mercedes-Benz vehicles, and optimize its brand structure.