(Yicai Global) March 15 -- Shares of Shuangliang Eco Energy Systems rallied to a nearly six-month high after the solar power equipment supplier said that it will spend at least CNY7 billion (USD1.1 billion) to build a large-size solar wafer plant to meet rising demand.

Shuangliang's stock price [SHA:600481] rose by the daily limit of 10 percent to CNY5.40 (84 US cents) this morning, the highest price since last September.

The machinery maker has penned an agreement with an economic development zone in the Inner Mongolia Autonomous Region to enter midstream and upstream solar wafer fields, the Wuxi-based company said in a statement yesterday.

Chinese silicon wafer suppliers, such as Zhonghuan Semiconductor and Trina Solar, have recently announced plans to expand their capacities to larger products that are more cost-effective than smaller ones amid the increasing number of solar power plants in the country.

The first phase of Shuangliang's project will cost the firm CNY7 billion. It will involve production lines for monocrystalline silicon wafer crystal pulling and slicing with annual capacities of 20 gigawatts each. Some production should take place by December 2022 but the full capacity is likely to be reached in 2023.

Shuangliang expects to add CNY10.8 billion in revenue each year by the plant, it added. The second phase will raise the two production lines’ capacity to 40 GW each, but the firm didn't disclose its roadmap toward that goal.

Editor: Emmi Laine, Xiao Yi