(Yicai Global) Aug. 11 -- Shares in Beijing Jingyuntong Technology soared as much as 4.6 percent today after the Chinese photovoltaic wafer maker said it is investing CNY5.4 billion (USD801.4 million) to expand capacity at a silicon wafer plant in Leshan, southwestern Sichuan province as demand surges.

Jingyuntong’s stock price [SHA:601908] closed up 0.11 percent at CNY8.91 (USD1.33) today. Earlier in the day it rose to CNY9.35.

The first stage of the Leshan plant was completed earlier this year with an annual output of 12 gigawatts. Jingyuntong will now proceed with the second stage which will add another 22 GW of capacity.

Jingyuntong will use CNY2.1 billion that it raised in a private placement for the second phase of a silicon rod project in Wuhai, northern Inner Mongolia Autonomous Region, which it has not yet received a construction permit for, to build the second stage of the Leshan plant, it said.

The rest of the funds will come from bank loans and outside investors, but Jingyuntong will keep a controlling stake in the project, it said. Construction should start this year and production is scheduled to begin in December next year.

The output from the Leshan plant will be much higher than the Wuhai one, which is now on hold, the Beijing-based firm said. Jingyuntong has an annual capacity of 8.6 GW of solar silicon rods in Wuhai. Silicon rods can be sliced into wafers.

The Leshan plant also has slicing devices, the company said. Once completed, the second phase will have a 18.2 percent rate of return after income tax and will take six years to pay back, including the construction period.

Sales are booming and Jingyuntong has penned long-term sales agreements worth around CNY22.5 billion (USD3.3 billion) with six battery and solar panel manufacturers since early last year.

The firm posted a 59.2 percent jump in revenue from its solar wafer business last year from the year before to CNY2.7 billion (USD400 million) on rising prices and increased sales, according to its annual financial report. Wafer sales accounted for nearly half the company’s total revenue last year and the profit margin is around 26.8 percent.

Editor: Kim Taylor