(Yicai) Dec. 23 -- Shares of Highpower Technology plunged after the Chinese manufacturer of industrial batteries said it plans to link arms with a European silicon material maker to develop next-generation lithium-ion batteries with high energy density mainly for consumer electronics.

Highpower Tech [SHE: 001283] closed 8.9 percent lower at CNY57.12 (USD7.83) a share today. The broader Shenzhen market dipped 1 percent. The stock has surged around 75 percent over the past three months, nearing its record high from February last year at one point.

Highpower Tech inked a non-binding agreement with the European company to jointly develop new lithium-ion batteries that utilize pure silicon-based materials as the anode and commercialize the technology, the Shenzhen-based firm announced late on Dec. 20.

The European firm possesses advanced silicon-based anode material production technology, Highpower Tech noted, adding that there is no affiliate relationship between the two companies.

Lithium-ion battery anodes traditionally use carbon graphite materials, which are approaching their theoretical power density limit. Utilizing silicon-based anodes can increase batteries' energy density and improve safety performance, but several technical hurdles remain to be overcome before achieving commercial production.

Highpower Tech focuses on developing lithium-ion and nickel-metal hydride batteries, mainly used in consumer electronics and energy storage power stations. Its well-known clients include Hewlett-Packard, Dell, Microsoft, Sony Group, Logitech International, and Google.

Highpower Tech's revenue from lithium-ion batteries accounted for 81 percent of its total income last year, with overseas market sales contributing 60 percent, according to its annual financial report.

Editor: Martin Kadiev