(Yicai) Feb. 20 -- Shares in Zhejiang Zhongjian Technology and Shenzhen Sunrise New Energy both hit limit up today after the Chinese farm machinery maker and its partner, a battery materials supplier, said they intend to invest a combined USD6 million into 1X Holding AS and set up a joint venture to introduce the Norwegian firm’s humanoid robots into the Chinese market.

Zhongjian Tech’s share price [SHE:002779] closed up 10 percent at CNY28.42 (USD3.95) today while Sunrise New Energy [SHE:002256] finished up 10 percent at CNY2.15 (USD0.30).

If the deal goes through smoothly it will allow both Zhongjian Tech and Sunrise New Energy to tap into the AI robotics sector, which is a proactive move made as part of their strategic growth agenda, the two partners said yesterday.

The investment in 1X will be made through an overseas special purpose vehicle set up by the two Chinese companies, they added. Yongkang-based Zhongjian Tech will invest USD3.06 million and Sunrise New Energy’s Hong Kong unit the remainder.

The deal is still at a preliminary stage and the parties involved have inked a document of intent only, the two firms said. The payment terms and shareholding ratios still need further negotiation, they added.

The two parties will also form a JV called Shanghai Zhike Robotics which will be responsible for smart robot sales and business operations on the Chinese mainland. With a registered capital of CNY60 million, the JV will be controlled by Zhongjian Tech which will pay CNY36 million for a 60 percent stake while Sunrise New Energy will invest CNY24 million for the rest of the equity.

Zhongjian Tech logged a 64 percent jump in net profit in the first three quarters last year from a year earlier to CNY49.5 million (USD6.9 million), while revenue soared 24 percent to CNY473 million (USD65.7 million).

Sunrise New Energy, on the other hand, racked up losses of CNY160 million (USD22.2 million) in the nine months ended Sept. 30, 2023, four-times the amount in the same period in 2022, while revenue climbed 5.2 percent to CNY243 million.

Editor: Kim Taylor