(Yicai) June 17 -- Shares in Uroica Precision Information Engineering surged as much as 15.5 percent today after the Chinese mining safety equipment supplier said it plans to invest CNY1 billion (USD148 million) to build a factory for key rocket engine components as it looks to tap growing demand from satellite launch service providers.

Uroica’s share price [SHE: 300099] closed up 3.4 percent at CNY8.18 (USD1.21) apiece today. Earlier in the day it hit CNY9.14.

The facility, which will be located in Tai’an in eastern Shandong province, will produce 120 sets of core rocket engine parts, including thrust chambers and turbopumps, a year, the firm said yesterday. Construction is expected to take about two years.

The thrust chamber is where fuel is burned to generate thrust, while the turbopump delivers propellant at high pressure. Both are essential core components of a liquid rocket engine.

Uroica did not provide further details about the project but said that production will use 3D printing technology. It also said it has plans to raise CNY1 billion (USD148 million) through a private share placement to fund the project, although target investors and pricing have not yet been determined.

The project focuses on precision manufacturing and mass production of rocket engine core parts, mainly serving low-Earth-orbit satellite constellation projects, the Tai'an-based firm said. If successful, the company will take part in the mass production of components for reusable rocket engines.

In the feasibility report released alongside the announcement, Uroica said the move into the sector is driven by strong and rising demand for satellite launches, which creates clear growth opportunities. It also pointed to its long experience in precision machining and quality control as providing sufficient support for entering the new business.

In March, Uroica signed a strategic cooperation agreement with private Chinese space firm Deep Blue Aerospace covering collaboration in mechanical processing, outsourced production and supply chain coordination for core reusable rocket engine components, marking the company’s first clear signal that it plans to move into commercial aerospace key parts.

Deep Blue specializes in reusable liquid-fueled rockets and commercial launch services. The Beijing-based firm’s small test rockets have been reused multiple times, but it has not yet completed the first orbital launch of its commercial rocket.

Editor: Kim Taylor