(Yicai) Jan. 3 -- Hailu Heavy Industry, a Chinese manufacturer of pressure vessels, announced plans to invest CNY400 million (USD54.8 million) in a new facility to produce fourth-generation nuclear power equipment.

The company has signed an investment agreement with an industry park management committee under the local government to construct the manufacturing facility in Zhangjiagang city, which is located along the southern banks of the Yangtze River with favorable waterway access, the Suzhou-based firm announced yesterday. No construction timeline was disclosed.

Fourth-generation nuclear reactors offer notable advantages over conventional reactors in terms of sustainability, safety, cost efficiency, and reliability. China achieved a significant milestone in December 2023 with the launch of the world's first fourth-generation nuclear reactor, the independently developed Shidaowan high-temperature gas-cooled reactor.

Hailu's new facility plans to manufacture 150 sets of various structural parts for nuclear reactors annually, including structural components for fourth-generation nuclear reactors, experimental and commercial fusion reactor components, and pressure vessels applied in the nuclear facilities.

Upon completion, the project is projected to generate CNY600 million (USD82.2 million) in annual revenue for Hailu while contributing at least CNY30 million (USD4.1 million) in annual tax revenue to the local government.

Hailu's primary business focuses on industrial boilers and large pressure vessels. While its nuclear equipment segment showed strong growth with a 39 percent year-over-year increase in 2023, it represented only 2.9 percent of the company's total revenue that year.

Hailu's stock price [SHE: 002255] gained as much as 4.2 percent during intraday trading in Shenzhen before settling at CNY5.37 (US 70 cents), down 2.2 percent, while the SZSE Component Index fell 1.9 percent to its lowest point in more than three months.

Editor: Emmi Laine