(Yicai) Oct. 27 -- Shares of Capchem Technology jumped after the Chinese supplier of fine chemical products said it will invest CNY800 million (USD109.4 million) to build a factory to make chemicals for power batteries and semiconductors.

Capchem [SHE: 300037] closed up 8.3 percent at CNY44.06 (USD6.10) a share in Shenzhen today, after earlier soaring by as much as 9.1 percent.

The plant, to be located in Jiangsu province's Nantong, a city at the mouth of the Yangtze River, will have an annual output capacity of 125,000 tons of semiconductor chemicals and 205,000 tons of battery chemicals, the Shenzhen-based firm announced late yesterday.

The project will be divided into two investment and construction phases, Capchem said. The first will have a capacity of 55,000 tons of semiconductor chemicals and 205,000 tons of battery chemicals a year and will come on stream in two years, it noted. The second, producing the remaining semiconductor chemicals, will begin construction based on the market situation.

The Chinese mainland, the world's largest maker of display panels, has strong demand for the factory's semiconductor chemicals, Capchem added, without disclosing further details.

Capchem, one of the leading Chinese suppliers of power battery chemicals, mainly produces components of lithium-ion battery electrolytes. It has multiple domestic bases, a Polish factory that became operational in April, and plans to set up plants in the United States and the Netherlands. 

Capchem’s battery chemicals business had revenue of CNY7.4 billion (USD1 billion) last year, accounting for 77 percent of the total, while income from its semiconductor chemicals was CNY323 million, or 3.3 percent of the total, according to the firm’s annual earnings report.

Its semiconductor chemicals include ultra-high purity ammonium hydroxide, hydrogen peroxide, and display panel etching fluid.

Net profit tumbled 45 percent to CNY797 million in the three months ended Sept. 30 from a year earlier, while revenue was CNY5.6 billion because product prices slumped amid weaker-than-expected growth in demand from the new energy vehicle and storage markets, Capchem said.

Editor: Martin Kadiev