(Yicai Global) Aug. 9 -- Shares in Shuangliang Eco-Energy Systems surged as much as 8.3 percent today after the Chinese photovoltaic wafer maker said it has secured CNY3.4 billion (USD516 million) in a private placement of new shares that will be used to build a 40-gigawatt large-size monocrystalline silicon wafer plant in northern China.

Shuangliang’s share price [SHA:600481] was trading up 5.9 percent at CNY17.57 (USD2.60) as of 2.30 p.m. China time. Earlier in the day it hit CNY17.97.

Shuangliang issued 243 million new shares at a price of CNY14.33 (USD2.12) each, a discount of 13.6 percent from yesterday’s closing price, the Jiangyin, eastern Jiangsu province-based firm said yesterday.

Sixteen investors took part in the new share sale, including Swiss lender UBS and US investment bank JP Morgan Chase’s joint venture fund manager China International Fund Management, it said. CIFM is now the seventh largest shareholder with a 1.11 percent stake, and Zurich-based UBS is the ninth biggest stakeholder with 1.04 percent equity.

CNY3 billion (USD444 million) of the proceeds will go towards constructing the new production base in Baotou, Inner Mongolia Autonomous Region, and the rest will be used to supplement working capital, it said.

Shuangliang is already building a 20 GW silicon wafer factory in Baotou, in which it has invested CNY14 billion since March last year. The first phase began operating in the second half of 2021 and is expected to reach full capacity next year. The plant has already penned long-term orders with 11 clients between last September and this July, amounting to an estimated CNY90 billion (USD13.3 billion) based on market prices.

Shuangliang is expecting net profit in the first half to as much as nearly quadruple in the first half from the same period last year to CNY390 million (USD57.7 million) on strong sales, more output and the soaring price of wafers, the firm said last month in its performance forecast for the first six months. In the whole of last year, Shuangliang only achieved profit of CNY310 million.

Editors: Tang Shihua, Kim Taylor