Shares of Western Power Industrial surged after the Chinese power plant builder announced energy infrastructure contracts worth USD1.7 billion in total in Laos.
Western Power [SHE: 002630] leaped 9.9 percent to close at CNY5.09 (US 70 cents) in Shenzhen today, extending its year-to-date gains to over 50 percent.
The company and its partners signed agreements with the project owner Xekong Thermal Power Plant for a 1,800-megawatt supercritical power station project and a 500-kilovolt transmission and transformation project in southern Laos, the Sichuan province-based firm announced midday today.
Supercritical power stations are thermal power plants that operate at higher steam pressure and temperature, making them significantly more efficient and environmentally friendly than traditional plants.
This marks another large order of supercritical boilers for Western Power, underscoring the growing recognition of its products both domestically and internationally, the firm said.
Western Power will be responsible for the design, procurement, and supply of equipment and raw materials for the power plant, charging USD1.45 billion. Meanwhile, its partner, Singapore-based Embark Aspiration, will handle construction, which is expected to take four years and nine months, the Chinese firm said without disclosing Embark's cut.
The power transmission project will cost its owner USD229 million to build. It represents a significant milestone for Western Power, marking the company’s first overseas project as a general contractor. The deal is expected to strengthen its brand presence abroad and support its expansion in Southeast Asia. Construction is expected to take two years and two months.
The company said the successful execution of these projects would significantly boost its financial performance in the coming years. The supercritical power station contract alone is valued at nearly six times Western Power’s total revenue in 2023, while the power transmission deal is equivalent to almost 88 percent of that year’s revenue.
According to the 2023 annual report, power engineering construction was Western Power's largest revenue source, accounting for 67 percent of total earnings at CNY1.3 billion (USD174 million). Sales of power plant boilers and ancillary products contributed CNY556 million (USD76.6 million), making up 30 percent of the tally. That year, overseas sales accounted for just 4 percent of its total income.
