KUALA LUMPUR (Nov 10): Electronics, properties, and utilities company GUH Holdings Bhd is teaming up with Chinese battery manufacturing firm Shenzhen Xixin Electronic Technology Co Ltd to jointly establish a battery assembly plant in Malaysia.

In a bourse filing on Friday (Nov 10), GUH Holdings announced that its wholly owned subsidiary GUH Capital Sdn Bhd had entered into a cooperation agreement with Shenzhen Xixin, resulting in the formation of a joint venture (JV) company named GUH Power Sdn Bhd. GUH Capital will hold a 75% stake in the JV firm, while the remaining 25% will be held by Shenzhen Xixin.

With the collaboration, GUH Holdings said both parties will jointly establish a battery assembly plant in Malaysia to provide high-quality lithium battery products and services to markets outside China.

GUH Holdings stated that the plant will be fully funded by GUH Capital, with Shenzhen Xixin providing technology and assistance in planning the entire plant layout, production line, and detailed specifications. Shenzhen Xixin will also help set up a power battery pack production line.

"Shenzhen Xixin shall not receive dividends from the JV until after the JV makes and retains profits equivalent to the amount invested by GUH Capital into the JV. The composition of the board of directors shall be determined later based on the equity shareholding in the JV," it added.

GUH Holdings stated that the initial investment cost is estimated to be approximately 20 million yuan (RM12.87 million), funded by internally generated funds.

The collaboration represents an opportunity for the group to participate in the lithium battery business, which is one of the global industries with high growth potential, according to GUH Holdings.

GUH Holdings shares dropped 2.5% or one sen to close at 39 sen on Friday, giving the group a market capitalisation of RM109.73 million.