(Yicai Global) Aug. 16 -- TBEA’s shares jumped after the Chinese maker of power transformers and other electrical equipment set out plans to invest CNY6.5 billion (USD957 million) on a green production plant for industrial silicon used in the photovoltaic industry in northwest China’s Xinjiang region.

After a 4 percent jump this morning, TBEA [SHA: 600089] closed 3.5 percent higher at CNY25.60 (USD3.77).

TBEA said its holding company, Xinjiang Tianchi Energy, via its wholly-owned unit Xinjiang Tbea Loulan New Material Technology, plans to build a plant with annual output of 200,000 tons of high-purity industrial silicon, helping TBEA consolidate its position as a leading supplier of raw materials in the industry, the Xinjiang-based company said in a statement.

The plant will cost CNY3.3 billion and will take two years to build, while the remaining investment will be used to finish a 425 MW wind farm, a 120 MW PV station and 70 MW energy storage facilities, the company said.

TBEA revealed that 51 percent of the energy required for the plant’s production will come from the electricity generated from these new energy facilities.

TBEA controls Hong Kong-listed Xinte Energy, whose main product is polysilicon material, while high-purity industrial silicon is the main raw material to make polysilicon. 

After reaching designated capacities, it is expected that the annual average after-tax profit of the industrial silicon project will reach CNY597 million (USD87.9 million) based on an expected average annual sales income of CNY3.5 billion. The after-tax static investment recovery period will be 9.83 years.

The continuous rise in polysilicon material prices is stimulating domestic players in the PV industry chain to expand their capacities substantially while spurring industrial players to invest in capacities of industrial silicon, a more upstream link in the PV industry. 

Apart from TBEA, solar cell maker Risen Energy, revealed a plan on Aug. 12 to invest CNY3 billion on a production line with annual output of 200,000 tons of industrial silicon.

The operating data of TBEA and Xinte Energy have benefited from the sustained sharp rise in polysilicon material prices in recent years.

Due to strong demand for polysilicon products and a sharp rise in prices, TBEA’s net profit surged 238 percent to CNY3.1 billion in the first half from a year earlier on a 25 percent jump in revenue to CNY22.5 billion.

Xinte Energy, which is increasingly relying on its silicon materials business, posted a first-quarter profit of CNY2.5 billion, greatly exceeding the CNY1.2 billion in the first half of last year. Revenue was CNY6.7 billion, close to 2021’s first-half figure of CNY7.8 billion.

Editor: Peter Thomas