(Yicai Global) March 14 -- Shares of Chinese gas supplier Heyuan Gas surged after the firm said it will invest CNY5 billion (USD789 million) to build a high-purity gas project to serve semiconductor manufacturers.

Heyuan Gas [SHE: 002971] jumped by the daily limit of 10 percent to CNY22.35 (USD3.50). But the shares are still 8 percent down this year.

The project in Yichang, near the Three Gorges Dam, will produce electronic gases containing fluorine or silicon element, the Hubei province-based company said in a statement recently. The products will be used in the production of semiconductors and integrated circuits.

The investment can give full play to the local chemical resources in Yichang, said the firm. Moreover, it can promote the company’s gas products to extend into high-end application while introducing a new profit driver, it added. 

After the first 24 month phase and an investment of CNY2 billion, the facility will be able to produce 150,000 tons of electronic gases annually. That should increase the company's sales revenue by CNY2.5 billion per year. After the second phase is completed, the amount of added revenue should rise to CNY6 billion.

China National Chemical Engineering No. 16 Construction will become the engineering, procurement, and construction contractor for the first part of the project, Heyuan Gas said in another statement the same day.

Editor: Emmi Laine, Xiao Yi