Longzhou Group (SHE:002682) expects its attributable net profit in 2024 to be reduced by 72.4 million yuan due to an after-sales maintenance of faulty power batteries, according to a Shenzhen Stock Exchange disclosure on Tuesday.
The Chinese logistics and transportation company's unit, Dongguan Zhongqi Hongyuan Automobile, will invest 142 million yuan to purchase new power batteries that will replace lithium manganese oxide fast-charging power batteries purchased from battery maker Microvast Power System (Huzhou).
The new batteries will be from Contemporary Amperex Technology (SHE:300750) or CATL.
The Microvast batteries caused 938 out of 1,196 buses provided to five public transport companies between 2018 and 2019 to stop running.
Zhongqi Hongyuan said it will seek compensation from Microvast over the failure of the batteries' operations.
Longzhou's shares jumped over 5% in recent trade, while CATL's shares rose more than 3% in recent trade.
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