(Yicai) Aug. 13 -- Shares of Zhongding Sealing Parts rose by their limit for a second trading day in a row after the Chinese supplier of auto seals and cooling systems confirmed a potential alliance with Tencent Holdings’ cloud computing arm spanning areas such as liquid-cooling technology for data centers and artificial intelligence factories.

Zhongding [SHE: 000887] surged 10 percent to close at CNY23.69 (USD3.51) a share in Shenzhen today, after also gaining by the exchange-imposed limit yesterday in the wake of Tencent announcing the potential partnership late on Aug. 11.

The agreement is only a framework outlining the intention to cooperate, with no substantive projects yet in place, Anhui province-based Zhongding announced late yesterday. As the agreement does not meet the stock exchange’s mandatory disclosure threshold, the company said it was not required to disclose it earlier.

One of the possible projects with Tencent Cloud involves liquid-cooling systems for computing centers, Zhongding said.

AI infrastructure would be a key area of cooperation, according to Tencent Cloud. The pair intends to combine Zhongding’s computing infrastructure resources, liquid-cooling tech, and industry expertise with Tencent Cloud’s technological capabilities and experience in building infrastructure to jointly explore the investment, construction, and operation of AI computing hubs, it added.

AI infrastructure was a major focus of Tencent Holdings’ capital expenditure in the second quarter, making the potential alliance a new source of growth for Zhongding that investors may be watching.

Tencent’s quarterly results underscored the scale of its AI ambitions. After nearly tripling capital expenditure from a year earlier to more than CNY52.8 billion (USD7.8 billion) so as to ramp up spending on AI infrastructure, founder Pony Ma said the internet giant is making great strides in becoming an AI-empowered version of itself.

Under the framework agreement, Zhongding also plans to use Tencent Cloud’s basic services, including cloud computing, storage and databases, as needed, while receiving technical support and service guarantees, it said. The firm also plans to use Tencent’s Hunyuan large language model, AI agents, and other AI products and capabilities to build the AI factory in the future, it pointed out.

Zhongding has been expanding its business into humanoid robot parts, thermal management components for AI data centers and low-altitude aircraft, and other emerging areas in recent years.

Editor: Martin Kadiev