(Yicai Global) July 27 -- Shares in Jiangsu Tongrun Equipment Technology surged as much as 7.1 percent today after the Chinese firm said it will raise CNY1.3 billion (USD193 million) to build two factories that make photovoltaic and energy storage inverters to boost production amid surging demand.

Tongrun’s share price [SHE:002150] was trading up 1.6 percent at CNY16.39 (USD2.30) as of 1.45 China time. Earlier in the day it hit CNY17.28.

Tongrun plans to secure CNY1.7 billion (USD238 million) in a private placement, CNY1.35 billion of which will go towards building the two factories and the remainder will be used to supplement working capital, the Suzhou, eastern Jiangsu province-based firm said yesterday. The company’s owner, Chint Electrics, will subscribe to 29.99 percent of the new shares.

Both factories will be built in Shanghai’s Songjiang district. The solar and energy storage inverter plant will have an annual capacity of 18 gigawatt hours and the energy storage system factory a yearly output of 5 GWh, Tongrun said. Construction will take around two years.

PV inverters convert the direct current generated by solar panels into alternating current at mains frequency while energy storage inverters store direct current in batteries and convert it back to alternating current when there is a power failure.

Chint injected its solar inverter-related assets into Tongrun when it took over in November last year, and since then, Tongrun, which used to produce the sheet metals used in the devices, has become a major PV inverter supplier with an annual capacity of 10 GW, a company executive said in June.

Editor: Kim Taylor