Shares of Lizhong Sitong soar by 3.9% on heels of lucrative US$118 million aluminium alloy wheels deal

Lizhong Sitong Light Alloys Group experienced a surge in its stock value following the announcement of a substantial order worth approximately RMB 840 million (US$ 118 million) from a leading Chinese supplier of aluminium alloy materials and wheels.

The order, received for high-end electric vehicle parts, propelled Lizhong's shares to close 3.9 per cent higher at RMB 21.12 (US$2.99) per share in Shenzhen as of today, with an earlier peak increase of 6.4 per cent. The broader Shenzhen market also saw a positive trend, gaining 1.1 per cent.

The Baoding-based company disclosed that the order is for aluminium alloy wheels and anticipates the project to commence mass production in the first half of 2025, with an expected life cycle of five years. Further specifics, including delivery time, supply price, supply quantity, and other pertinent details, will be determined upon the formalization of an agreement between the two parties. However, due to a confidentiality agreement, Lizhong refrained from disclosing the client's identity.

Last year, Lizhong produced 18.2 million wheels, including 1.4 million for new energy vehicles, and of the 17.4 million aluminium alloy wheels it sold, 1.2 million were for NEVs. Nio, BYD, Li Auto, and Xpeng Motors were among its NEV customers. The previous year's revenue from NEV wheels was RMB 562 million (US479.7 million), accounting for about 7.9 per cent of Lizhong's total revenue from wheel sales.