(Yicai) Jan. 6 -- Shares in Xusheng Group climbed today after the Chinese maker of aluminum alloy auto components said it has bagged a letter of nomination worth CNY7.8 billion (USD1.1 billion) from a North American new energy vehicle manufacturer.

Xusheng’s share price [SHA:603305] closed up 3.1 percent at CNY16.91 (USD2.42). Earlier in the day it jumped 4.6 percent to hit CNY17.16.

Xusheng will supply car parts including powertrain components, body parts, subframes and battery housings to the automaker, who remained unnamed due to the signing of a confidentiality agreement, the Ningbo-based company said yesterday. The project is expected to run for about eight years with mass production slated to start at the end of this year.

Production will take place at Xusheng’s plants in China and Mexico, it said. Winning the project deepens the firm’s long-term partnership with this client and reflects the customer’s recognition of Xusheng’s innovation levels, research and development capabilities, manufacturing strengths, quality control and service standards.

Unlike a purchase order, a letter of nomination does not confirm the customer’s actual purchase quantity. The project value is still only an estimate and the actual execution may vary, Xusheng said.

The project will further consolidate Xusheng’s leading position in the NEV lightweighting sector and continue to boost its core competitiveness and market share, in line with the company’s overall development strategy. The deal will not affect the firm’s operational independence, it added.

Xusheng has four main business divisions of die-casting, forging, extrusion and assembly. The company makes electric drive systems, electronic control systems, battery systems, chassis and suspension systems, high-performance body systems as well as energy storage and robotics systems for electric cars. Set up in 2003, it has R&D centers and manufacturing bases in China, the United States, Mexico, and Thailand.

The firm’s net profit slumped 7.1 percent in the first three quarters of last year from the year before to CNY300 million (USD42.9 million) while revenue dipped 1.4 percent to CNY3.2 billion (USD458.4 million).

Editor: Kim Taylor