(Yicai) June 24 -- China’s Tenglong Auto Parts will invest as much as EUR6 million (USD6.4 million) to form a subsidiary in Morocco after previously setting up production bases in Poland and Malaysia and plans a separate auto products joint venture in China for CNY11 million (USD1.5 million).

The new Morocco unit, which has been approved by Tenglong's board of directors, will mainly produce aluminum tubes for car air conditioning, air-con pipe assemblies, and connecting pipes for heat exchange systems, the Changzhou-based firm announced yesterday.

In the same announcement Tenglong said that it will also form a JV with Zhongshan Qingniu Refrigeration Technology and Chuzhou Jiaze Electric Appliance. The new venture will research, develop, make, and sell auto products such as refrigerators, it added.

The JV will have a registered capital of CNY20 million (USD2.8 million), with Tenglong contributing CNY11 million, according to the company.

Shares of Tenglong [SHA: 603158] closed 4.4 percent lower at CNY6.92 (95 US cents) each today. The broader Shanghai market fell 1.2 percent.

Established in 1997, Tenglong researches, develops, manufactures, and sells auto parts, including heat exchange pipes, air-con pipes and accessories, light alloy materials, exhaust gas recirculation products, and auto sensors. Its clients include BMW, Mercedes-Benz, Great Wall Motor, Chery Automobile, SAIC Motor, and Li Auto.

The firm’s net profit climbed 53 percent to CNY201 million (USD27.7 million) in the three months ended March 31 from a year earlier. Revenue jumped 27 percent to CNY858 million.

Annual net profit surged 58 percent to CNY194 million last year on a 24 percent gain in revenue to CNY3.3 billion (USD450 million). Income from thermal management systems for new energy vehicles was CNY953 million, equal to 47 percent of the firm’s total revenue from such components.

Last September, Tenglong began mass producing and supplying integrated valve modules to Volkswagen Group in Europe. 

Editor: Martin Kadiev