(Yicai Global) March 22 -- Shares in Jiangsu Dingsheng New Materials Joint-Stock advanced by as much as 4.6 percent today after the Chinese aluminum materials processor said it and two of its units have signed new contracts with Contemporary Amperex Technology and will be supplying more than half of the electric car battery giant’s aluminum foil requirements.

Dingsheng’s share price [SHA:603876] ended the day up 1 percent at CNY40.81 (USD5.92). Earlier in the day it hit CNY42.25.

Dingsheng and two of its subsidiaries will supply the aluminum foil used in new energy vehicle batteries to CATL’s factories in China and Europe, the Zhenjiang, eastern Jiangsu province-based firm said yesterday.

In China, it will provide no less than half of the factories’ aluminum foil needs between 2023 and 2025, while its production base in Europe, known as European Metals, will supply a certain amount to CATL’s factory on the continent between 2024 and 2026, it added.

The procurement amount and pricing were not specified and will be determined between the pair at a later stage, Dingsheng said. The deal will not have a big impact on its performance this year, it added. The two parties also plan to co-operate in other overseas markets.

Just last month, Dingsheng received a large order for aluminum foil for EV batteries from South Korean battery giant LG Energy Solution and will supply LG Energy and its three China subsidiaries with 61,000 tons of the foil over the next four years.

Dingsheng has been hiking output of the aluminum foil for lithium batteries in recent years to meet surging demand. The product has a high profit margin at around 29 percent and the increased capacity has had a noticeable effect on the firm’s performance.

Dingsheng’s sales of aluminum foil for EV batteries more than doubled in 2021 from the year before to 55,700 tons, according to its annual financial report. As a result, revenue jumped over two-and-a-half fold to CNY1.8 billion (USD261.3 million), accounting for about 10 percent of total revenue.

The firm expects net profit in 2022 to more than triple, soaring between 214 and 237 percent to between CNY1.4 billion (USD203.3 million) and CNY1.5 billion, it said on Jan. 30.

Editor: Kim Taylor