(Yicai Global) Aug. 31 -- China's BOE Technology Group, which increased its net profit by 11 times in the first half, will invest in new display panel and integrated circuit production and buy back CNY3 billion (USD463.8 million) worth of its shares.

The Beijing-based electronic components maker announced the plans yesterday along with its first-half earnings report.

New Plant

The firm is planning to increase its display panel output. BOE's unit in Hefei will spend CNY3.3 billion to have a 65-percent stake in a project in eastern China's Qingdao. The facility is expected to make 15,100 liquid-crystal display modules a year, mostly used in small and medium-sized devices such as smartphones and laptops. It should take 18 months to begin production.

The Hefei plant is built with two partners. Government-backed Qingdao Haikong Group Financial Holdings will have a 30-percent stake in the project and investment firm Dongguan United Dongchuang Photoelectric Technology will own 5 percent of the equity.

The BOE unit will have the right to buy the rest of the project's equity from the two partners at a market price.

The new plant will help BOE expand its output and meet new clients' demand, while deepening cooperation with global brands, according to the firm.

IC Project

The company is increasing its spending on chip development.

BOE intends to pour CNY1 billion into a CNY4.5 billion funding program of Beijing-based affiliate Yandong Microelectronics via BOE Innovation Investment. After the transaction, BOE Innovation will have 9.1 percent of Yandong's shares.

Yandong, which already makes six-inch and eight-inch chips, plans to use the proceeds to build a 12-inch IC production line, per the statement.

The investment will be conducive to cooperation between BOE and upstream chip designers and wafer manufacturers to ensure semiconductor output and raw material supply, according to the firm.

First-Half Earnings

BOE had a stellar first half.

Net profit jumped more than 11 times to CNY12.8 billion (USD2 billion) in the six months from a year ago, the firm said in its earnings report.

Revenue climbed 89 percent to CNY107.3 billion (USD16.6 billion) due to rising display product prices and new capacity, it said.

Next, the company will repurchase some of its equity.

BOE will spend up to CNY3 billion to buy back from 35,000 to 50,000 shares, making up as much as 1.3 percent of its total, within 12 months. The price should be up to CNY8.5 (USD1.30) apiece.

The equity will be used to support the company's stock incentive plan, it added.

BOE's stock price [SHE: 000725] was 0.3 percent up at CNY5.82 in the afternoon.

Editor: Emmi Laine, Xiao Yi