(Yicai) Feb. 9 -- Shares of Ronbay New Energy Technology rose after Chinese regulators fined the battery materials producer and its executives CNY9 million (USD1.3 million) for publishing misleading information last month about the value of a contract to supply Contemporary Amperex Technology with lithium-iron phosphate cathode.

Ronbay [SHA: 688005] closed up 7.2 percent at CNY32.22 (USD4.65) per share in Shanghai today amid a broad Chinese stock market advance, with the SSE Star Market Composite Index closing 2.5 percent higher.

The stock plunged more than 11 percent on Jan. 19, the day after the Yuyao-based company said it was under investigation by the China Securities Regulatory Commission on suspicion of misleading investors about the value of the CATL deal.

The CSRC determined that Ronbay's announcement on Jan. 13 regarding the supply agreement with CATL was misleading, the firm said late on Feb. 6. The investigation found that the announcement did not make clear that the CNY120 billion (USD17.3 billion) cited was Rongbai’s own estimate of the deal’s value and that amount did not appear in the signed contract.

Moreover, the agreement said the expected procurement volume would be no less than 70 percent of the forecast 3.05 million tons and also stated that actual supply volumes would be determined by annual or individual purchase contracts. But Ronbay’s announcement simplified this into a fixed and definitive commitment of 3.05 million tons, the CSRC said.

As a result, the regulator decided to issue warnings and impose fines on Ronbay and its senior executives. The company was fined CNY4.5 million, Chairman Bai Houshan was fined CNY3 million, and Board Secretary Yu Jiyun, who was responsible for the announcement, was fined CNY2 million.

Ronbay's lithium battery cathode business has historically focused on ternary lithium battery cathode materials, and it only ventured into the LFP cathode segment last year. This raised regulatory and market concerns about whether its capacity to supply LFP cathode could meet the stipulated 3.05 million tons in five years, prompting the CSRC to initiate the probe.

Editor: Futura Costaglione