(Yicai) Oct. 12 -- Shares of Xiling Power Science & Technology surged after the Chinese auto parts supplier said it had penned a deal with an investment group in the United Arab Emirates to build a factory in China.

Xiling Power [SHE: 300733] finished 8.3 percent higher at CNY12.91 (USD1.75) a share in Shenzhen today, after soaring by as much as 12.4 percent in the morning trading session.

Xiling Power and Abu Dhabi-based Bin Omeir Holding Group will spend CNY700 million (USD96 million) to set up a parts factory for new energy vehicles with an annual output of 2 million NEV subframes and 500,000 electric scroll compressors, the Chengdu-based firm announced late yesterday, citing a deal the pair inked on Oct. 9.

The Chinese firm will own 80 percent of the joint venture plant, investing technologies and cash, while Bin Omeir will make a cash investment for the rest, Xiling Power said. The two firms will also build a JV factory in the Middle East after the first plant makes substantial progress, with preferred locations being the United Arab Emirates, Saudi Arabia, and Qatar, it pointed out.

The Middle East factory is expected to have a registered capital of USD100 million, with Bin Omeir investing cash for an 80 percent stake and Xiling Power holding the rest after providing technologies, according to the agreement. Its products will be decided based on local demand.

Bin Omeir also plans to become a shareholder in Xiling Power via a private placement of shares and further its partnership with the Chinese firm as a strategic investor, Xiling Power noted. The corporation will help the car parts supplier to develop and mass produce new NEV components, improve its product mix, and expand in overseas markets, it added.

Bin Omeir owns Autostrad Rent a Car, one of the largest auto rental service providers in the UAE and the Middle East, and was a dealer for France's Peugeot and South Korea’s Kia. On Oct. 10, Arcfox, a premium electric car brand owned by China’s BAIC Group, said it will partner with Bin Omeir to expand in the UAE and Saudi Arabia.

Editor: Martin Kadiev