(Yicai Global) Feb. 6 -- Shares of Shenzhen Gas climbed today after the Chinese gas supplier to the Shenzhen region said that a unit which makes the encapsulation films that protect solar panels plans to invest CNY1.4 billion (USD201 million) to build another factory and hike capacity by nearly 50 percent.

Shenzhen Gas’ stock price [SHA:601139] was trading up 1.4 percent at CNY7.21 (USD1) as of 1.30 p.m. China time today. Earlier in the day it climbed 3.6 percent to CNY7.37. The Shanghai Composite Index was trading down 1 percent at the time.

Subsidiary Jiangsu Sveck Photovoltaic New Material will locate the new facility in Yancheng, eastern Jiangsu province, Shenzhen Gas said on Feb. 3. It will be the photovoltaic adhesive film supplier’s fourth factory in the east of China. Encapsulation film protects solar modules, extending their service life and improving their power generation efficiency.

Once complete, the plant will have an annual output of 420 million square meters, just under half of the firm’s current capacity of 900 million sqm, Shenzhen Gas said. The first phase, with a yearly output of 120 million sqm, should be ready of the second quarter this year, it added.

The project is expected to rake in CNY177 million (USD26.1 million) in net profit a year and revenue of CNY3.4 billion (USD501.5 million) once it is fully up and running, with a payback period of seven and a half years, according to a feasibility study by a third-party institution.

Editor: Kim Taylor