(Yicai Global) Feb. 17 -- Shares of four Chinese industrial companies, including Yuntianhua and Huayou Cobalt, jumped after they joined hands on an electric vehicle battery materials project in southwestern China's Yunnan province.

Fertilizer producer Yuntianhua [SHA:600096] rose by the daily upper limit of 10 percent to CNY21.31 (USD3.40). The shares are more than 9 percent up this year.

Cobalt supplier Huayou [SHA: 603799] climbed 4.9 percent to close at CNY112.48 (USD17.80). The stock price is almost 7 percent up this year.

Battery manufacturer Eve Energy [SHE: 300014] edged up 3.2 percent to CNY88.83. The shares have slid more than 20 percent this year.

Packaging product maker Yunnan Energy New Material [SHE:002812] rose 1.8 percent to close at CNY248.88. The shares are 2 percent down this year.

The four firms will set up two joint ventures in Yuxi to develop and sell upstream and downstream battery materials, Kunming-based Yuntianhua said in a statement today.

Yunnan Energy New Material will have 22 percent of the two JVs' equity. Eve will hold a 20 percent stake in them while the figure will be 18 percent for Huayou. Yuntianhua's share is 17 percent.

The facility will produce battery separators, ferric phosphate, lithium iron phosphate, as well as copper foil. The first phase of the project should require an investment of about CNY18.1 billion (USD2.9 billion) and be ready by December 2023. The CNY33.7 billion second phase should be finished by 2025. The third part is scheduled to be completed by 2030.

The partners have advantages. Yuntianhua is entering the new energy battery sector via the project but the company has abundant phosphate ore reserves, it said.

Yunnan Energy New Material is a leader in the field of lithium battery separators, according to the statement. Eve is also one of the battery sector's leading names. Meanwhile, Huayou is powerful in its own category of battery materials, it added.

However, the quickly expanding sector has some risks. Many firms have released lithium iron phosphate plans lately so the supply and demand relationship may change, said Yuantianhua. Prices may drop, which could affect the company's profit outlook, it added.

Editor: Emmi Laine, Xiao Yi