(Yicai Global) May 19 -- Shares in Changyuan Technology Group soared by the exchange-imposed daily trading limit today after the Chinese electromobile materials supplier and intelligent equipment maker announced that it has bought at 26 percent stake in a unit of Sinoma Science and Technology that makes separators for the lithium-ion batteries used in electric cars.

Changyuan’s share price [SHA:600525] soared 10 percent to reach CNY5.93 (USD0.92). Sinoma Science’s stock [SHE:002080] closed up 5.84 percent at CNY20.84 (USD3.24).

Shenzhen-based Changyuan and the parent firm Sinoma Science will pump CNY1 billion (USD155.6 million) into Sinoma Lithium Battery Separator, the two companies said yesterday. The move will give Changyuan a 26 percent stake and raise Beijing-based Sinoma’s holdings to 59.43 percent from 53.33 percent.

They will also transfer all assets from Hunan Chinaly New Material, in which Sinoma Science owns 60 percent equity and Changyuan 30 percent, to Sinoma Lithium, they added.

The money will be used to help fund the building of a lithium battery separator plant in Nanjing, eastern Jiangsu province, with an annual output of 1.04 billion square meters, Sinoma Science added. The separators are essential components of new energy vehicle batteries and provide a barrier between the battery’s anode and cathode points while allowing the exchange of lithium ions from one side to another.

Costing CNY3.75 billion (USD583 million), the new plant will have 18 production lines for a variety of products. Revenue is expected to reach CNY1.91 billion a year, with profit of CNY549 million (USD85.4 million), it added. The factory should start operating in 16-months’ time and it will take six years to recoup the cost of construction.

The Yangtze River Delta region around Nanjing is a lithium battery industry cluster where a number of domestic and foreign electric car battery manufacturers are based, Sinoma Science said. By locating the factory in this area, the company can better serve its clients and enhance competitiveness.

Editor: Kim Taylor