(Yicai Global) Jan. 27 -- Shares of Huayou Cobalt, China’s largest supplier of cobalt products, reached an all-time high after lithium battery maker Eve Energy said it and its parent will buy CNY1.8 billion (USD278 million) of the firm’s new shares to cement cooperation with the key raw materials supplier.

Huayou Cobalt [SHA: 603799] ended up 9.6 percent today at CNY107 (USD16.55), the highest-ever close for the Zhejiang province-based company’s shares. The stock has surged almost 170 percent since the end of October on expected growth in demand for power lithium batteries and their raw ingredients.

Eve Energy plans to subscribe to CNY300 million (USD46.4 million) of Huayou Cobalt’s new equity in a private placement, while Eve Holding will buy CNY1.5 billion worth, the Guangdong province-based firm said yesterday. Eve’s first ever investment in an upstream supplier will fortify cooperation with Huayou and generate income, it added.

Huayou plans to sell as many as 342 million shares -- 30 percent of its total share capital before the issuance -- to raise about CNY6 billion. Chen Xuehua, its actual controller, plans to sign up for CNY180 million. The firm did not name any other investors.

Eve Energy [SHE: 300014] gained 6.8 percent to end at CNY113.83, also a record closing price, after climbing as much as 7.8 percent earlier in the day. Eve’s stock has climbed about 130 percent since mid-September and notched up an intraday record at the start of this week.

CNY3 billion of the placement’s proceeds will go to build a nickel ore processing project in Indonesia with an annual output of 45,000 tons of the metal that, after processing, will be mainly used as the raw material for Huayou’s battery ternary precursor project, per a financing plan announced in September for the issue.

About CNY1.3 billion will finance construction of a high-nickel-content power lithium battery ternary precursor material project with an annual output of 50,000 tons in Zhejiang. The remainder will be mainly used to build a research institute in the company's headquarters and to supplement working capital.

Huayou has a production capacity ranked among the world’s top echelon. Its customers include LG Chem, SK, Contemporary Amperex Technology, BYD and many other major global power battery makers. The company supplies 20 percent of the cobalt in Apple's batteries, the US tech giant told The Washington Post in 2016.

Editor: Ben Armour, Xiao Yi