(Yicai) April 26 -- Shares of Junzheng Energy & Chemical Group rose after the Chinese chemical company said it plans to spend CNY3.2 billion (USD442 million) to build five new ships to enhance the competitiveness of its business of shipping liquid chemicals.

Junzheng [SHA: 601216] ended the day 4.3 percent higher at CNY4.11 (60 US cents) in Shanghai today.

A Dubai-based subsidiary of Junzheng has penned an agreement with a Yangzhou-based affiliate of China Merchants Industry Holdings to build five vessels with a capacity of 25,900 tons deadweight each, the Wuhai-headquartered firm announced yesterday. The ships will be delivered in two to four years, it said, without disclosing more details. 

Moreover, Junzheng has the option to construct up to five more vessels of the same type, the firm whose core chemical products include polyvinyl chloride and quicklime said.

The plan should expand and optimize the structure of Junzheng's fleet to better satisfy customers’ demand while consolidating the firm's positioning in the global market of shipping liquid chemicals, as well as improving the sustainability of its business.

Last year, Junzheng's business of logistics services earned about CNY7.5 billion (USD1 billion) in revenue, accounting for 39 percent of the total while getting quite close to its main revenue source of chemical production, which contributed about 45 percent, according to its 2023 annual report also released yesterday.

The company had a fleet of vessels for chemical shipping with a total of almost 1.2 million tons deadweight, as of Dec. 31, 2023. Junzheng also owns two 50,000-ton-capacity terminals for chemicals plus storage facilities in Lianyungang, a coastal city in Jiangsu province. Its shipping network covers major nations and cities in the Americas, Europe, the Middle East, and Asia, according to the annual report. 

Editor: Emmi Laine