(Yicai Global) Sept. 29 -- Shares in Victory Precision Manufacture surged as much as 4.6 percent today before investors cashed in after the Chinese maker of consumer electronics parts said it is investing CNY5.6 billion (USD778 million) to construct a production base for electric vehicle components.

Victory Precision’s share price [SHE:002426] plunged 5.4 percent at CNY2.62 (USD0.36) at close. Earlier in the day it hit CNY2.90.

The new facility, to be located in the Shucheng Economic Development Zone in eastern Anhui province, will have an annual output of 1.2 billion square meters of high-performance composite copper foil and 850,000 square meters of 3A optical film once completed, Victory Precision said yesterday. Copper foil is used to make lithium batteries and optical film is used in automotive displays.

The plant will be built in two phases. The first phase, costing CNY850 million (USD118 million), will have 15 copper foil production lines and two for optical film. The second phase, costing CNY4.7 billion, will consist of 100 copper foil production lines.

The investment will boost Victory Precision’s business and expand its footprint from automotive display and dashboard parts sectors to EV batteries, the Suzhou, eastern Jiangsu province-based company said.

The consumer electronics parts manufacturer has started to branch into the rapidly growing new energy vehicle components sector in recent years to counter a slump in revenue.

The firm lost CNY47.1 million (USD6.5 million) in the first half and revenue slumped 25.8 percent year on year largely due to the disruptions caused by outbreaks of Covid-19, according to its latest earnings report. However, revenue from its auto parts business jumped 6.4 percent to CNY96 million over the period, accounting for 5 percent of total earnings.

Editor: Kim Taylor