(Yicai Global) Feb. 20 -- Shares in Shunho New Materials Technology hit the 10 percent maximum allowed daily gain on the Chinese stock market again today after it received the formed a joint venture to develop electronic cigarettes and other products based on industrial hemp.
The Shanghai-based firm's stocks [SHE:002565] rose 10.06 percent to CNY8.64 today, having previously hit the limit up for seven consecutive days in January when it got the nod to start hemp-planting in the country's southwestern Yunnan province.
Shunho majority-held unit Luxin Electronic Technology, Yunnan Hansu Biotechnology and its controlling shareholder Hanma Investment Group, a major industrial hemp-planter and processor, have agreed a cooperation agreement for the JV, Shunho said in a statement.
Luxin will contribute CNY20 million (USD3 million) in cash and hold a 65 percent stake in the unit, while Hansu will invest CNY10.8 million in trademark-exclusive rights, proprietary technologies and equipment, and hold the remaining 35 percent, according to the agreement.
The proposed JV will use the basic materials extracted from industrial hemp leaves to produce solids which don't combust under heat, liquid electronic atomizers and buccal tablets, as well as liquid fragrances.
Hansu engages in scientific research on plants and sells industrial hemp products. It has obtained an industrial hemp planting and processing license from authorities in the Yunnan provincial capital of Kunming to legally sell basic materials extracted from the crop.