(Yicai Global) March 25 -- Shares in Sunwoda Electronic have jumped today after the lithium battery maker unveiled it would splurge CNY5.2 billion (USD735 million) on two new production facilities.

Its stock [SHE:300207] closed up 7.06 percent at CNY15.92 (USD2.24) today.

The Shenzhen-based firm and the Lanxi municipal government in Zhejiang province penned a deal today to set up a joint venture that will build a battery plant with Sunwoda taking a 60 percent stake. The company also set aside CNY100 million (USD14.1 million) to form a wholly owned subsidiary that will build a factory capable of producing lithium battery modules.

Sunwoda produces batteries for phonemakers like Huawei, Oppo, Vivo and Xiaomi, and carmakers Geely Holding, Donfgeng Liuzhou Motor and Xiaopeng Automotive Technology, according to public data. It said it hopes the factory will move production closer to its buyers.

The firm will build the battery plant in three phases, ultimately taking daily production capacity to 800,000 units. The first stage will cost CNY1.6 billion and allow for production of up to 200,000 units a day, the statement said, without disclosing how much it will spend on the lithium battery module facility.

The Lanxi government will also provide 27 hectares of land for the two projects and will transfer this to the company by the end of May. Construction will begin within six months of the transfer, with each phase of the battery plant taking no more than 18 months.

Editor: James Boynton