(Yicai) Aug. 27 -- Shares in Shenzhen Inovance Technology surged by as much as 4 percent today after the Chinese automation equipment and industrial robot core parts maker said that it is investing CNY5 billion (USD701.3 million) to build a factory that will manufacture electrical parts for new energy vehicles as demand from its NEV clients soars.

Inovance’s share price [SHE:300124] closed up 2.8 percent at CNY41.70 (USD5.80) apiece, despite sustained declines in the country’s major stock indexes. The Shenzhen bourse's ChiNext Board, on which Inovance is listed, closed down 0.9 percent.

Unit Suzhou Inovance Automotive will construct a plant for NEV electric controlling systems, power systems and general assembly parts in Suzhou, eastern Jiangsu province, Inovance said yesterday. The facility will be built in stages over a period of five years, it said. The funds will be invested in batches depending on how the industry is faring and how strong demand is.

The move aims to meet fast-growing demand from electric car customers, the Shenzhen-based company said. Once up and running, the project will greatly enhance Inovance's product delivery, market status, competitive advantages and brand awareness.

Inovance’s net profit surged 10.7 percent in the first six months year on year to CNY2.1 billion (USD294 million), while revenue soared 30 percent to CNY16.2 billion (USD2.3 billion), buoyed by its NEV parts business, according to the semi-annual results released yesterday. Revenue from NEV and rail transport equipment and parts accounted for 38 percent of total revenue.

Inovance supplies electric motor controllers, e-drive general assembly, electric motors, power systems, and other kinds of electric products to NEV makers. The firm ranks second in the country after BYD in controllers for electric passenger cars with 11 percent of the market, Inovance said in its earnings report, citing NEV industry data provider NE Times.

Editor: Kim Taylor