(Yicai) Aug. 7 -- Shares of Ellington Electronic Technology, a Chinese supplier of printed circuit boards for vehicle electronics, rose by their daily trading limit after the firm said it will invest nearly CNY3 billion (USD445 million) in a smart manufacturing project, with the aim of mass-producing advanced PCBs for high-end computing hardware.

Ellington [SHA: 603328] closed up 10 percent at CNY10.85 (USD1.60) per share in Shanghai today.

The project, to be sited at Ellington’s factory in its hometown of Zhongshan, will have an annual output capacity of 400,000 square meters of advanced PCBs, including 340,000 sqm of high-layer count PCBs and 60,000 sqm of high-density interconnect boards, the firm announced yesterday. Peak annual production is expected to reach 435,000 sqm.

Building work will commence at the start of December and take 21 months. The return on investment after tax will be around 13 percent, and the post-tax investment payback period, including construction, will be 8.5 years.

Once completed, the project will help Ellington shift its product mix towards high-tech, high-added-value products and power earnings, it pointed out. The project’s advanced PCBs will be mainly used in servers, high-speed switches, routers, acceleration cards, compute tray motherboards, and communications gear. It also reserves space for PCBs used in optical modules.

Ellington said it plans a CNY2 billion private placement of shares, with CNY1.9 billion of the proceeds earmarked for the project, with the rest going to supplement working capital. Controlling shareholder Jezetek Optoelectronics will show its support by subscribing to between CNY500 million (USD74.1 million) and CNY1 billion of the new shares.

In a separate statement yesterday, Ellington announced plans to form a CNY100 million private equity fund with an eight-year investment horizon to hasten its move into advanced PCBs. Ellington will inject CNY99.9 million (USD14.8 million), while Shanghai Yiyuan Aerospace Private Fund Management will contribute the remaining CNY100,000 (USD14,820).

The fund will target opportunities across the PCB value chain, including suppliers of critical materials, production equipment, and specialized consumables. It will also seek to invest in promising high-end PCB businesses and cutting-edge tech firms.

Editor: Futura Costaglione