UPDATE 1-Digital China to spend $66 mln on Japan IT firm

* Digital China, affiliate may take 40.9 pct in SJI

* Move latest M&A by China electronics firm

* Digital China CEO says more deals could come

(Adds background, executive comment)

TOKYO, Nov 4 (Reuters) - Digital China Holdings (0861.HK: Quote, Profile, Research) and an affiliate will invest up to 6 billion yen ($66 million) in Japanese system developer SJI Inc (2315.Q: Quote, Profile, Research), underlining the growing appetite for overseas acquisitions among Chinese firms.

Digital China, an information technology distributor unit of Legend Holdings [CNASCA.UL] -- also the parent company of PC maker Lenovo (0992.HK: Quote, Profile, Research) -- will take a maximum 40.9 percent stake through the deal, along with Japan-based affiliate King Tech Service, SJI said on Wednesday.

The move, aimed at bolstering Digital China's advanced systems technology, will also help SJI expand its sales network in China and tap growing demand, SJI said.

The deal is one of a growing number from China's electronics firms, many of them cash rich on growth from their home market, as they look for expansion abroad.

Earlier this year, Suning Appliance 002024.SZ agreed to pay 800 million yen for 27.4 percent of Laox (8202.T: Quote, Profile, Research), a loss-making Japanese electronics retailer. [ID:nPEK126668]