(Yicai Global) Sept. 14 -- Contemporary Amperex Technology’s shares jumped after the Chinese battery giant revealed a plan to invest CNY13.5 billion (USD2.1 billion) in a new production base to improve its lithium battery output.

Shares of CATL [SHE:300750] rose as much as 7.5 percent to CNY540.67 (USD83.85) in the morning trading session.

The production base will be located in Yichun, in China’s Jiangxi province, the company announced late yesterday. The project will be completed in no more than 30 months, and will cover an area of 866,670 square meters. The funds will be self-raised, CATL added.

The Ningde, Fujian province-based firm launched a CNY58.2 billion (USD9 billion) private placement plan last month. Some CNY41.9 billion of the proceeds will be used to expand the production capacity of five power battery projects.

The China Securities Regulatory Commission has not yet approved the plan.

The private placement was questioned by some investors, as the amount equaled to CATL’s profits in the past 10 years. Meanwhile, the company had a capital balance of CNY74.7 billion by the end of the second quarter, meaning that it does not lack funds.

Some investors asked CATL via the investor platform of the Shenzhen Stock Exchange if it had verified the necessity of expanding production capacity, and considered all factors for the positive and sustainable development of the industry before planning such a huge private placement plan. The battery giant has not replied yet.

Editor: Futura Costaglione