(Yicai Global) July 7 -- Shenzhen Baoming Technology surged by the exchange-imposed daily limit today after the Chinese LED light manufacturer said it is branching out into the electric car battery component sector and will invest CNY6 billion (USD893 million) to build a factory that makes ultra-thin copper for electric car batteries.

Baoming’s stock price [SHE: 002992] closed up 10 percent at CNY19.18 (USD2.86), the highest since April last year.

The new business will be a driving force for future performance, the Shenzhen-based company said yesterday. Although the production capacity was not mentioned, another firm, Hangzhou Cable, recently said it is building a similar factory for CNY5 billion with a yearly output of 50,000 tons of copper foil.

The facility will be located in eastern Jiangxi province and will be built in two phases, Baoming said. The first phase, costing CNY1.2 billion, will be completed in 12 months. The second phase will start when market conditions allow.

The surge in popularity in new energy vehicles has meant huge demand for batteries and their components, attracting a large number of external investors such as Baoming.

There is plenty of room for growth in the EV battery copper foil market, according to the Gaogong Industry Institute. The market scale is expected to grow at a compound annual rate of 33.9 percent between 2020 and 2025, and demand for EV battery copper foils will reach 970,000 tons by 2025, it said.

Editor: Kim Taylor