(Yicai) March 28 -- Shares of Jinfei Kaida Wheel advanced after the Chinese manufacturer of aluminum alloy wheel hubs announced its third capacity expansion plan of the year.

Jinfei Kaida [SHE: 002863] was trading up 3.5 percent at CNY4.77 (66 US cents) as of lunch break in Shenzhen today.

Jinfei Kaida will invest CNY557 million (USD77 million) to build a plant in Thailand's Thai-Chinese Rayong Industrial Zone with an annual production capacity of two million aluminum alloy wheel hubs for new energy vehicles, the Jinhua-based company announced yesterday. Construction is expected to be completed in two years.

After reaching the designed capacity, the plant will bring Jinfei Kaida sales revenue of CNY578 million and profit of about CNY95.6 million (USD13.2 million) each year, the firm noted.

The new plant will help Jinfei Kaida seize the advantages of having overseas production base and market channels, better adapt to the needs of the international and local markets, and optimize its product structure, the company said.

Earlier this year, Jinfei Kaida announced two other capacity expansion plans in China to meet the surging demand from the NEV market, which prefers lighter parts to save energy. The firm pledged to invest a total of CNY538 million to build factories with a total annual production capacity of 2.4 million auto aluminum alloy wheel hubs in eastern Anhui province and southwestern Yunnan province.

Jinfei Kaida mostly supplies customized aluminum alloy wheel hubs to car and motor manufacturers and provides replacement parts for various foreign markets. According to its 2022 annual earnings report, revenue from the auto wheel hub business accounted for 52 percent of the total that year, while its overseas sales revenue made up 34 percent of the total.

Chinese NEV startup Leapmotor and NEV brands under Chinese auto giants BAIC Group, Changan Automobile, Great Wall Motor, and Geely Auto are among Jinfei Kaida's main domestic clients.

Editor: Futura Costaglione