China’s Zhongheng Electric Surges on $600M Investment Boost from CATL

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Shares of Zhongheng Electric hit their daily trading cap after announcing that battery manufacturer Contemporary Amperex Technology will invest CNY4.1 billion (USD600 million) to acquire a stake in the Chinese data center power systems provider’s controller, forming a strategic alliance in electrical equipment, including infrastructure for computing power.

The stock closed up 10 percent at CNY31.93 (USD4.67) in Shenzhen today, while CATL’s stock dipped slightly by 0.3 percent to CNY389.99 (USD57.09).

CATL plans to increase its investment in Zhongheng Technology through a capital raise, leveraging its 99.7 percent ownership in Times Tianyuan Technology, valued at CNY1.2 billion (USD175.6 million), plus approximately CNY2.9 billion in cash. Upon completion of the deal, CATL will hold a 49 percent stake in the target company.

Following the transaction, the holdings of controlling shareholders Zhu Guoding and his wife in Zhongheng Technology will be diluted to 51 percent. Additionally, CATL has announced it will appoint one director and one deputy general manager to Zhongheng Electric.

Because Zhongheng Technology owns about 35.6 percent of Zhongheng Electric’s shares, CATL will indirectly hold a 17.4 percent stake after the deal’s completion, making it the company’s second-largest shareholder.

Furthermore, Zhongheng Electric and CATL will collaborate on green information and communication technology infrastructure, electric vehicle battery charging and swapping systems, as well as supporting power systems and specialized equipment for data centers, artificial intelligence clusters, and computing centers, after the transaction closes.

This strategic move marks a significant step for CATL deeper into the downstream segment of the new energy supply chain, following previous investments in upstream battery material suppliers Canmax Technologies and Fulin Precision. It expands CATL’s footprint into essential equipment for energy infrastructure that underpins the digital economy, strengthening its role in new power systems and digital energy markets.

Zhongheng Electric is a top provider of high-voltage direct current (HVDC) power supply equipment and has become a vital partner for data center power systems of major Chinese internet firms such as Alibaba and Tencent.

Last year, Nvidia selected Zhongheng Electric as a key vendor for HVDC power solutions, focusing on delivering highly reliable, low-energy power supply solutions tailored for AI computing centers.

Times Tianyuan is a prominent supplier of manufacturing equipment for lithium batteries and new energy power systems, including assembly machinery, power conversion systems, as well as charging and swapping equipment.