(Yicai) Aug. 28 -- Shares of Huayu Automotive Systems rose after the Chinese auto parts supplier said it will spend CNY206 million (USD28.9 million) buying a 49 percent stake in a developer of solid-state batteries entering mass production.

After surging by its 10 percent daily trading limit in Shanghai earlier today, Huayu Automotive [SHA: 600741] closed 3.1 percent higher at CNY18.80 (USD2.63) a share. The stock has risen 5.6 percent so far this year.

Huayu Automotive will buy the stake in Shanghai SAIC Qingtao Energy Technology, a joint venture between its controller SAIC Motor and solid-state battery startup QingTao Kunshan Energy Development, from SAIC Motor, which owns 51 percent of the target firm, the Shanghai-based company announced late yesterday.

SAIC Qingtao Energy researches and develops semi-solid-state and all-solid-state batteries, Huayu Automotive noted, adding that SAIC Motor's passenger vehicle unit is its main client. The firm had a first-half net loss of about CNY40.7 million (USD5.7 million).

SAIC Qingtao Energy's factories nationwide have an annual production capacity of 12 gigawatt-hours of semi-solid-state or all-solid-state batteries. The semi-solid-state battery version of the MG4 hatchback, SAIC Motor's latest model, uses the JV's cells and is the world's first mass-produced car with such a battery.

Huayu Automotive will enter the solid-state battery field via the acquisition, helping it achieve synergy in developing the battery business with its existing electric and thermal management auto parts business, while also supporting the target company in improving its R&D and production capabilities and attracting more carmaker clients, it pointed out.

Editor: Martin Kadiev