(Yicai Global) March 9 -- Senior Technology Material's stock price soared by the daily limit today after the Chinese battery component manufacturer said that it is getting into the face mask materials business.

Senior Tech's shares [SHE:300568] surged by 10 percent to CNY38.72 (USD5.60) by noon with a CNY8.1 billion (USD1.2 billion) market cap. 

The battery components maker will invest CNY40 million (USD5.8 million) to build face mask textile production lines that should be ready by the end of this month, the Shenzhen-based firm said in a statement today. It expects to create 1,600 tons of melt-blown non-woven cloth each year but needs to secure a license first. 

China generally needs about 20,000 tons of face mask fabric per year but amid the Covid-19 epidemic, the demand has skyrocketed with prices increasing by as much as 20 times in some regions.

Senior Tech has technological and supply chain advantages in producing the textile that is also used in making lithium battery diaphragms, it added. If the company receives government subsidies, it could make a return on its investment in just two months. Without subsidies, it should generate profit in three months.

Prevention efforts have prompted many Chinese firms to seize new business opportunities. State-owned China Petrochemical said last month that it is investing CNY1.2 billion (USD172.9 million) to produce over 12 tons of face mask fabric per day, starting from this month or in April.

Editor: Emmi Laine