(Yicai) Aug. 18 -- Lingyi Itech will provide battery parts such as top covers and shells to the battery making subsidiary of a German auto manufacturer in a deal estimated to be worth as much as CNY2.2 billion (USD302 million), the Chinese structural precision parts supplier said.

Two subsidiaries in Suzhou, eastern Jiangsu province will develop and produce battery covers, auxiliary components and injection molding and stamping parts according to the German client’s specifications, Lingyi Itech said yesterday, citing the agreement penned by the two parties.

The deal, which will run from 2025 to 2029, will bring in revenue of around CNY2.2 billion (USD301.9 million), the Jiangmen, southern Guangdong province-based company said. The name of the German customer was not provided.

Lingyi iTech’s main business is the supply of precision parts for mobile phone makers, with US tech giant Apple as one of its major clients. Lingyi iTech first branched into structural parts for batteries in June 2021, when it bought 95 percent of Zhejiang Jintai Electronics for CNY38 million (USD5.2 million).

Top covers and shells are important safety components of the lithium-ion batteries used in electric cars and there is growing demand for these parts as new energy vehicle sales boom.

Lingyi Itech’s revenue from auto battery parts surged more than two-and-a-half times last year from the year before to CNY1.2 billion (USD164.6 million), accounting for 3.4 percent of its total revenue, according to the firm’s 2022 financial report. In 2021 it made up just 1.4 percent of revenue.

Lingyi Itech’s share price [SHE:002600] closed down 1.1 percent today at CNY5.81 (USD0.80).

Editor: Kim Taylor