(Yicai Global) Jan. 18 -- Jiangsu Sidike New Material Science & Technology surged today after the company announced it is to supply US tech giant and new energy vehicle maker Tesla with battery materials.

SDK New Material Science [SHE:300806] closed up 5.51 percent at CNY60.49 (USD9.33) after rising over 10 percent this morning on the news.

Its wholly-owned US unit SDK New Material is expected to ink the agreement with Palo Alto, California-based Tesla, while its 100-percent controlled subsidiary in Taicang in China’s eastern Jiangsu province has already penned a battery raw material contract with the EV maker, the parent and supplier of adhesive materials said in a Jan. 15 statement.

Tesla will buy a product needed to manufacture batteries for NEVs from Suqian, Jiangsu province-based SDK, the statement noted, without specifying its name or financial data such as pricing and projected sales, merely saying Tesla will determine the details of procurement per its own demand via purchase orders that will be forthcoming from time to time.

The announcement also omitted mention of the product type and its expected supply volume. The company’s adhesive products and functional thin-film materials and supporting devices are essential in production of new energy batteries. They include special-use gummed tape, materials to join battery cells, and aluminum coated electrical insulating materials, information on SDK’s official site shows.

These contracts mark Tesla’s recognition of SDK’s research and development and production capabilities as well as its comprehensive competitiveness, the statement also noted. They also expand the scope of the company’s collaboration with Tesla and confirm its competitiveness in NEV battery manufacturing, it added. The deals are also expected to positively influence the company’s operating performance, it stated.

SDK’s other prominent customers are US tech giant Apple, South Korean electronics- titan Samsung Electronics, China’s renowned cell phone maker Guangdong Oppo Mobile Telecommunications and communication device supplier ZTE, according to SDK’s website.

Editor: Ben Armour, Xiao Yi