(Yicai Global) July 24 -- Shares in Jiangsu Transimage Technology surged by the exchange-imposed daily limit today after the Chinese printed circuit board producer said that its sodium-ion battery subsidiary has been appointed supplier to a well-known German carmaker.

Transimage’s share price [SHE:002866] was trading up 10 percent at CNY27.17 (USD3.85) as of 1 p.m. China time today.

Transimage's unit will supply the German client with sodium batteries for passenger vehicles, the Gaoyou, eastern Jiangsu province-based company said yesterday, citing the deal recently penned between the two parties.

The tie-up will enable Transimage to get a supplier code from the car manufacturer, which was not named due to a confidentiality agreement, meaning it has officially entered the supply chain of the firm that operates a number of famous marques, Transimage said.

Although no further details about the deal were released, Transimage said that the procurement amount, pricing, delivery times and payment methods have all been clearly stated in the contract.

Transimage branched into sodium batteries in 2018 and has since secured 19 patents in the field. The first phase of its sodium battery factory, with an annual capacity of two gigawatt hours, started trial production at the end of March.

That month Transimage said it hopes to raise CNY3 billion (USD417.1 million) through private placements to fund the building of the second phase, which will have a yearly output of 5.5 GWh, as well as to boost working capital. The second phase is due to be ready 18 months after construction starts.

The company’s performance in the first half was badly affected by weak global demand for printed circuit boards as well as the high investment in its sodium battery business. Transimage is bracing for an up-to 60 percent plunge in net profit in the six months ended June 30 from a year ago, according to its earnings forecast released on July 14.

Sodium batteries, which replace lithium with cheaper sodium salt, cost significantly less to produce and are also safer. They perform better than lithium batteries in some scenarios, such as low temperatures, which have lower requirements for energy density. As production technologies continue to be upgraded, sodium batteries have started to be used in electric cars.

Editor: Kim Taylor