(Yicai Global) Jan. 10 -- Shares of Ronbay New Energy Technology jumped after China’s top producer of electric vehicle battery cathode materials said it will supply battery giant Contemporary Amperex Technology with ternary cathode materials.
Ronbay [SHA: 688005] closed 8.5 percent higher today at CNY126.51 (USD19.85), after earlier surging as much as 9.8 percent. The stock gained 124 percent last year.
Ronbay will supply CATL with about 100,000 tons of high-nickel ternary cathode materials this year, it said in a filing on Jan. 8. From next year to 2025 Ronbay will become the battery maker’s largest supplier of ternary cathode materials, according to the agreement the pair signed on Jan. 7. Ningbo-based Ronbay did not disclose the value of the deal.
Ternary cathode materials for lithium batteries are made by processing compounds of nickel, cobalt, and manganese. The capacity density of batteries made of ternary cathode materials is high so their profit margin is also high.
Ronbay inked a long-term supply agreement with Farasis Energy last July. It will supply the Chinese battery maker with 36,500 tons of high-nickel ternary cathode materials over one and a half years starting from the signing date, including 31,000 tons this year.
The company expects to have made net profit of between CNY890 million and CNY920 million (USD140 million and USD145 million) in the 12 months ended Dec. 31, a 318 percent to 332 percent gain from a year earlier, due to surging demand for its products.
Ronbay had the capacity to turn out 40,000 tons of ternary cathode materials in 2020 and that is expected to have reached 120,000 tons at the end of last year. It could more than double to 250,000 tons by the end of this year.
Editor: Futura Costaglione