(Yicai Global) Nov. 11 -- Shares of China's Yunnan Energy New Material jumped after the battery separator supplier said it will join hands with power unit giant Contemporary Amperex Technology to build two lithium battery separator plants.

ENM's stock price [SHE: 002812] rose as much as 5.4 percent to CNY278.66 (USD43.50) intraday. The shares are almost three-quarters up this year.

The pair will form a joint venture to construct the factories, jointly spending CNY8 billion (USD1.3 billion), the Yunnan province-based firm said in a statement yesterday. ENM will have 51 percent of the JV's equity and the Ningde-headquartered partner will have the remainder.

The combined annual capacity of the production bases will be 3.6 billion square meters of separators. One of the plants will use a wet process, making up 44 percent of the total output, and the other one a dry one. The latter will be built in collaboration with ENM's affiliate Enpo New Materials.

Amid the booming new energy vehicle sector, wet-process separators are becoming more popular than dry ones due to the rising market share of ternary lithium batteries. Separators are directly linked to battery prices as they make up about one-third of each power unit's total cost.

The partnership is advantageous to the electric vehicle battery giant. In addition to the two new plants, ENM's factories around the world will prioritize CATL as a wet-process separator buyer in the next five years.

Set up last January, Enpo specializes in dry-process lithium battery separators, public data show. Besides ENM, one of the company's major shareholders is microporous membrane producer Polypore under Japan’s Asahi Kasei Group.

Editor: Emmi Laine, Xiao Yi