(Yicai Global) April 20 -- Shares in Cnano Technology plunged as much as 19.7 percent today after the Chinese producer of the conductive additives used in electric car batteries posted a huge drop in first-quarter profit as orders slump following the winding up of government subsidies for new energy vehicles at the end of last year.

Cnano’s stock price [SHE:688116] was trading down 17.1 percent at CNY55.87 (USD8) as of 1 p.m. China time. Earlier in the day it sank to CNY54.21, a two-year low.

Net profit plummeted 60 percent in the three months ended March 31 from a year earlier and revenue tumbled 42 percent, the Zhenjiang, eastern Jiangsu province-based firm said yesterday.

This is very different from its 2022 results when there was huge demand from the EV battery sector, which accounted for 70 percent of its revenue, according to its annual report that was also released yesterday. Profit surged 43.3 percent year on year to CNY424 million (USD61.5 million) while revenue soared 39.5 percent to CNY1.8 billion (USD261.2 million).

Cnano is one of the few companies in the world to have achieved breakthroughs in the mass production of single-walled carbon nanotubes. The conductive paste can significantly improve battery performance when added to the surface of a battery anode or cathode. And the firm is investing heavily to build three factories to make these novel battery materials.

Cnano also said yesterday that it will build a CNY3 billion (USD435 million) new plant in Meishan, southwestern Sichuan province with an annual capacity of 100,000 tons of battery cathode materials that use its nanotube conductive paste as performance enhancing additive, The first phase should begin production a year after construction starts. The investment will be made through a subsidiary in which it holds a 70 percent stake.

On June 26, 2022, Cnano said it would build invest CNY3.3 billion to build factories in Zhenjiang, Meishan and Hanover in Germany to make the conductive paste. That day the firm’s share price soared to close to its record high of CNY184. But the stock has lost 70 percent of its value since then.

Cnano commanded 40.3 percent of China’s carbon nanotube conductive paste market in 2022, according to market research firm Gaogong Industry Institute. The country’s sales of the paste reached 117,000 tons last year.

Editor: Kim Taylor