(Yicai Global) March 9 -- Sunwoda Electronic’s stock fell after the Chinese supplier of lithium-ion battery cells and modules unveiled a plan to raise CNY4.8 billion (USD689 million) in a private placement of shares to fund the building of two consumer lithium battery plants and top up working capital.

Shares of Sunwoda [SHE: 300207] finished 3.2 percent lower at CNY20.93 (USD3) apiece today. They have fallen nearly 30 percent in the last 12 months.

Sunwoda will use CNY2 billion of the sale proceeds to build a system in a package lithium battery plant, CNY1.4 billion to construct a cylindrical consumer lithium battery plant, while the rest will go to replenish working capital, the Shenzhen-listed company said late yesterday.

A private placement, in which additional stock is issued to specific investors, dilutes the number of a listed firm’s outstanding shares, often leading to a short-term decline in the stock price.

The SiP lithium battery project has a planned annual capacity of 110 million units, while the cylindrical lithium battery project will be able to make 310 million units a year. The plants will be located in China’s eastern Zhejiang province and take three years to complete, Sunwoda said.

Lithium batteries will be packaged and integrated into a miniature module using advanced packaging technology at the SiP plant, making the battery thinner, shorter, and more reliable while reducing overall manufacturing costs, the firm pointed out.

Smartphones are becoming thinner and lighter, and the market share of lithium batteries with SiP technology is increasing, Sunwoda said. The projects seek to seize the opportunity brought by the supply chain shift of downstream high-end clients, which can form a technical barrier in future competition, it noted.

Cylindrical batteries are mainly used in handheld consumer electronics, which are sensitive to form and shape, including floor-sweeping robots and power tools, Sunwoda said.

Editor: Martin Kadiev