(Yicai) March 20 -- Shares of Haowu Electromechanical surged by their daily trading limit after the Chinese auto dealer and machinery parts maker said it plans to invest CNY200 million (USD27.7 million) on two new production lines for new energy vehicle crankshafts.

Haowu [SHE: 000757] closed 10 percent higher at CNY4.82 (67 US cents) a share today. The broader Shenzhen market dropped 0.9 percent.

Haowu will install the new production lines at a plant under its crankshaft subsidiary in Neijiang, China's southwestern Sichuan province, the parent firm announced late yesterday. The production capacity will expand by 600,000 units a year, with construction scheduled to last 16 months, it added.

The crankshaft is a core component of extended-range and hybrid vehicle engines. Haowu produced 1.77 million such parts in 2023, with more than 30 percent made for NEVs.

The investment will be made considering that the production capacity for extended-range and hybrid autos for core customers in the NEV sector will continue to increase while the related supply gap will likely widen, Haowu noted, without disclosing further details.

Haowu is a major supplier of crankshafts for several leading NEV manufacturers, including Li Auto, Seres Group, and BYD, according to its 2023 annual financial report. Its production capacity topped 2.4 million units a year as of the end of that year.

Revenue from Haowu's crankshaft business reached CNY693 million in 2023, accounting for 18 percent of its total income.

Editor: Martin Kadiev