(Yicai) April 8 -- Eve Energy's shares climbed after the leading Chinese maker of lithium batteries said it expects profit to have risen by as much as 35 percent in the first quarter and announced an CNY11 billion (USD1.61 billion) plan to expand production capacity.

Eve Energy [SHE: 300014] closed up 5.9 percent at CNY64.25 (USD9.41) a share in Shenzhen today.

Net profit likely rose 25 percent to 35 percent to between CNY1.4 billion and CNY1.5 billion (USD205 million and USD220 million) in the three months ended March 31 from a year earlier, the Huizhou-based company said yesterday. Excluding non-recurring gains and losses, it probably jumped 30 percent to 40 percent to between CNY1.06 billion and CNY1.15 billion, it said.

Eve Energy attributed the gain to its diversified supply chain strategy, strategic procurement planning, and prudent use of financial instruments, which helped offset volatility in raw material costs, as well as ongoing efforts to upgrade products and services, optimize processes and capture growth opportunities in the market.

In a separate announcement, Eve Energy set out new capacity expansion plans. It intends to sign a deal with the Qidong city government in China’s Jiangsu province and another with Shanghang county in Fujian province to build power battery plants with an annual capacity of 50 gigawatt-hours and 60 GWh and total investment of about CNY5 billion and CNY6 billion, respectively. The second agreement may include third-party investors.

For the first project, Eve Energy will set up a joint venture with Fujian Longking. The environmental protection firm will have a 20 percent stake in the new company, which will have a registered capital of CNY900 million (USD131.2 million), for a cash injection of CNY180 million and a total investment of up to CNY240 million. Eve Energy will own the rest.

The two projects will let all parties better use their respective resources and strengths, help them seize opportunities in the energy storage and power battery markets, and expand capacity, according to Eve Energy.

They will also enable Eve Energy to optimize its industrial structure, advance its lithium-ion power-battery business, and strengthen its influence and competitiveness in the new energy sector, in line with its strategic plan, the company added.

In addition, Eve Energy also revealed a plan to provide a guarantee of as much as EUR42 million (USD49 million) to subsidiary Eve Power Hungary. That proposal needs shareholders' approval.

Editor: Martin Kadiev