(Yicai) Aug. 10 -- Xinxiang Tianli Energy’s shares rose after the Chinese supplier of battery cathode materials said it plans to invest CNY100 million (USD13.9 million) in energy storage battery giant Guangzhou Great Power Energy and Technology.

After jumping by as much as 6.6 percent in Shenzhen this afternoon, Tianli Energy [SHE: 301152] closed up 4.5 percent at CNY51.77 (USD7.18) a share. Great Power [SHE: 300438] gained 2.1 percent to CNY44.43.

Tianli Energy will subscribe to Great Power’s private placement, the Henan province-based company announced late yesterday.

The two parties also signed a strategic cooperation deal on Aug. 8 to explore market opportunities for joint acquisitions and investment in high-quality energy storage projects, while also establishing long-term supply partnerships.

Tianli Energy will supply 80,000 tons to 150,000 tons of lithium battery cathode materials to Great Power from this year to 2027, with an annual average of 16,000 tons to 30,000 tons, it said.

Tianli Energy produced 9,768 tons of ternary materials last year, down from 10,967 tons in 2021, according to last year’s annual earnings report. So its sales of lithium battery cathode materials are set to grow significantly if the long-term supply deal with Great Power goes smoothly.

Tianli Energy did not make any financial projections for the cooperation, nor did it say how much of Great Power it will own after the private placement of new shares or give details of the other participating investors.

Great Power has not yet released a final report about the placement. The company said in January that it planned to raise a total of CNY3.4 billion (USD471.5 million) mainly for an energy storage battery project with annual production capacity of 10 gigawatt-hours, with the remaining funds going to supplement working capital.

Great Power was one of the first companies in China to enter the energy storage battery business. Its products are used in power plants, power grids, and by other industrial and commercial clients. Its energy storage battery shipments rank among the top three in China, according to its website.

The firm unveiled three capacity expansion plans for energy storage batteries from April to May, involving total investment of CNY20.3 billion (USD2.8 billion). The largest project, with an annual production capacity of 36 GWh, has total investment of CNY13 billion.

Editor: Tom Litting