(Yicai Global) Nov. 11 -- Guibao Science and Technology’s shares surged after the Chinese supplier of silicone sealants said it will spend CNY560 million (USD87.6 million) to build a new plant for lithium battery anode materials.

Guibao Science and Technology [SHE:300019] ended the day up 8.5 percent at CNY24.58 (USD3.84), after earlier soaring by as much as 19.3 percent.

The new plant will be built in Sichuan province and will be capable of producing 10,000 tons of silicon-carbon anode materials for lithium batteries a year, the Chengdu-based firm said in a statement, adding that it will also have a research and development center for materials.

Once complete, the project will help broaden Guibao's new energy business and form a new earnings driver, with return on investment expected to reach 23.05 percent, it said.

The project is scheduled to be built in two phases. The first will be completed and ready to start production within 30 months, while the second will be ready a year after that.

Compared with graphite, a commonly used anode material, silicon-carbon composite is a new anode material with the advantage of high specific capacity, which can greatly increase the energy density of lithium batteries, the company said.

Guibao has built a pilot production line with an annual output of 50 tons of silicon-carbon anode materials, and the products have been assessed by several battery manufacturers, it said.

Editor: Tom Litting