(Yicai) June 26 -- Shares of Wujin Zhongrui Electronic Technology rose after the Chinese cylindrical lithium battery cap supplier said it plans to set up a joint venture to produce precision structural components for lithium batteries in South Korea.

Zhongrui [SHE: 301587] was trading up 3.2 percent at CNY30.64 (USD4.22) as of lunch break in Shenzhen today. The stock has fallen around 25 percent since its listing on April 8.

Zhongrui yesterday signed a deal with South Korean automation machinery manufacturer KNS to establish a 70:30 venture with a registered capital of KRW5 billion (USD3.6 million), the Changzhou-based company announced late yesterday.

The move will help Zhongrui deepen its partnerships with international clients by better meeting their needs, increase its international market share, and improve its product visibility, the firm noted, without adding any further details about the JV.

Zhongrui is one of China’s leading suppliers of precision structural components for cylindrical lithium batteries, mainly cap assemblies, which are components providing security for lithium batteries in abnormal situations, such as overcharging, discharging, or short-circuiting.

Zhongrui’s largest customer is South Korea’s LG Energy Solution, the world’s second-largest lithium battery manufacturer. Last year, the company’s revenue from LG Energy Solution accounted for more than 50 percent of the total.

Tesla’s Model 3 and Model Y are the main end users of Zhongrui’s products, according to Zhongrui’s initial public offering prospectus.

Editor: Futura Costaglione