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Shares of Huilyu Ecological Technology Group surged following its announcement of a CNY700 million (USD98 million) investment to expand production of optical communication modules used in artificial intelligence data transmission. The stock rose as much as 8.7% during morning trading and closed up 2.9% at CNY13.46 (USD1.88) per share. The company’s shares have increased by 76% since the end of last year, with stocks in Shenzhen also experiencing a 2.3% gain.
The subsidiary, Junheng Technology, signed an investment deal with the administrative committee of Ezhou Airport Economic Zone in central China’s Hubei province, according to the parent company based in Wuhan. The project will occur in two phases, aiming to produce an annual total of 4.5 million optical modules operating at speeds of 400 gigabits per second or higher to meet rising market demand for high-speed, high-capacity optical communication components.
These modules are primarily used in AI server clusters, ultra-large data centers, and core backbone network nodes. Junheng Technology currently operates two factories in China and one in Malaysia, with an overall annual production capacity exceeding 1.2 million units.
In the first phase, the Ezhou project will involve a CNY200 million investment and target an annual output of 1.5 million optical modules. The local government will provide leased factory space and staff accommodations, with trial production expected to commence within four months of leasing. The second phase, with a CNY500 million investment, will expand capacity to 3 million units annually, aiming to begin production within two years after securing necessary land use rights and permits.
Huilyu Ecological’s core business centers on landscaping. Last year, it acquired a minority stake in Junheng Technology, diversifying into optical communication components, and in February, it increased its stake to 51%, gaining control of the company. Last month, the company announced plans to acquire full ownership through a capital-raising initiative.
Ezhou is notable for housing Asia’s first dedicated cargo air transport hub, Ezhou Huahu International Airport, and boasts highly developed logistics operations. The Ezhou Airport Economic Zone surrounds the airport area.
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