(Yicai Global) May 17 -- Shares of Changhai Composite Materials soared after the Chinese manufacturer said that it will invest about CNY6.4 billion (USD986 million) to hike its glass fiber output by four times to meet a demand coming from wind power equipment makers.

Changhai's stock price [SHE:300196] surged as much as 18.9 percent to CNY19.40 (USD3) intraday today, the highest since February.

The glass fiber supplier will build four production lines in eastern China's Changzhou to raise its annual output by a total of 600,000 tons, the Jiangsu province-based company said in a statement on May 14.

The field of new energy, including wind power, is demanding more fiber glass so the industry is expected to enter an era of high returns, the company predicted.

China’s investment in the wind power sector is expected to tally CNY350 billion (USD54.4 billion) this year, and 20 percent of that should go into wind power blades which require fiber glass, according to the same firm.

By last December, Changhai's annual production capacity reached 200,000 tons. Its capacity utilization rate was over 95 percent in 2020, according to its earnings report.

The company expects to add about CNY3.8 billion in annual sales through the new project. Its net profit should be elevated by about CNY1.5 billion. Hence, the cost of the project should be covered in a bit more than six years.

China produced 5.4 million tons of fiber glass yarn last year, making up more than 66 percent of the world's total, according to the China Fiber Glass Industry Association.

Editor: Emmi Laine, Xiao Yi