(Yicai) Dec. 3 -- Shares in Zhejiang Jinggong Integrated Technology surged by the exchange-imposed limit today after the Chinese specialized equipment manufacturer said it has secured a major order for carbon fiber production lines from Saudi Arabia’s GIM GrapheneFibre, in a deal worth as much as USD500 million.

Jinggong’s share price [SHE:002006] closed up 10 percent at CNY21.12 (USD3) today.

In the first instance, Jinggong will supply a full set of production equipment for six production lines to Riyadh-based GIM GrapheneFibre for USD172 million, the company said yesterday, citing the deal penned by the two parties on Dec. 2. The equipment will be delivered by 2026 and Jinggong will provide installation guidance, commissioning and acceptance services to GIM GrapheneFibre upon delivery in Saudi Arabia.

In the contract, GIM GrapheneFibre, which was set up in September this year, also agreed to order another three production lines a year once the first order is fulfilled, bringing the final purchase volume to at least 18 production lines with a value of around USD500 million, Jinggong said. No further details, including the annual production capacity and product specifications, were given.

The equipment part of the first purchase represents 76.7 percent of Jinggong’s annual revenue in 2023. If more production lines are added in the future as per the contract, it will have a significant positive impact on the Shaoxing-based firm's financial performance in the coming years, it added.

Each production line provided by Jinggong can produce as much as 1,000 tons of carbon fiber a year. The products, which are used in the automotive, aerospace, wind power equipment, medical devices, and construction industries, can be tailored according to the customer’s needs.

Last year, Jinggong’s carbon fiber equipment business generated CNY728 million (USD99.7 million) in revenue, accounting for 47.3 percent of total revenue, according to the company's 2023 annual report.

Editor: Kim Taylor