(Yicai) Nov. 3 -- Shares of Zhejiang Hechuan Technology surged after the Chinese supplier of industrial automation products said it has secured a CNY276 million (USD37.7 million) investment from German auto parts giant Robert Bosch, with the pair planning to set up a joint venture.

Hechuan Technology [SHA: 688320] finished 5.1 percent higher at CNY42.60 (USD5.86) a share in Shanghai today, after surging by as much as 11 percent at one point.

Hechuan Technology's third-biggest shareholder, Alpha Achieve, inked a deal to transfer 5 percent of its stake to Bosch China Investment for CNY276 million yesterday, the Quzhou-based firm announced on the same day.

The proposed JV will be set up with a registered capital of CNY120 million, with Hechuan Technology contributing half, Robert Bosch Internationale providing 40 percent, and Bosch China the rest. Its setup is subject to regulatory approval, the company added.

“The JV is set to become a powerful player in the Chinese automation market,” said Thomas Fechner, member of the management board of Bosch Rexroth responsible for factory automation. “Customers will benefit from a joint portfolio shaped by two strong partners, which will even better meet their needs regarding specifications, technology, and price.”

The JV will mainly research, develop, produce, and provide automation and electrification solutions and related products and services. It plans to build complete product portfolios and flexible conveyor systems, sparing no effort to meet the needs of Chinese clients on response speed and product cost-effectiveness, Hechuan Technology said.

The Chinese automation market, one of the largest in the world, has huge potential thanks to policies to support the transformation and upgrade of manufacturing industry, especially in solar energy, lithium-ion batteries, and other emerging sectors. 

Editor: Martin Kadiev