Shares of Huadian Heavy Industry advanced after the Chinese engineering and construction contractor said it will provide a CNY5.6 billion (USD776 million) comprehensive service package for a coal transportation project in Indonesia.
Huadian [SHA: 601226] was trading up 4.1 percent at CNY6.61 (92 US cents) as of 1.05 p.m. in Shanghai today, after opening 9.9 percent up.
Huadian will provide design, equipment supply, construction, operation, and maintenance services to a coal storage yard and a long-distance transportation system of Indonesian coal miner PT Sembada Makmur Sejahtera, the Beijing-based company announced yesterday.
The value of the design, equipment supply, and construction contracts exceeds CNY2.5 billion, including taxes, with the coal transportation system expected to come on stream by July 30, 2027. The operation and maintenance contract is valued at nearly CNY3.1 billion and will be settled annually over the project’s 12-year service period.
The design and equipment supply contracts are denominated in Chinese yuan, the construction contract in Indonesian rupiah, and the operation and maintenance contract in US dollars, but will be paid in Indonesian rupiah, Huadian noted.
The coal transportation system will feature digitalization, intelligence, high belt speed, and energy efficiency, the company said, adding that the project’s implementation will strengthen its market leadership in the material handling sector.
This project establishes a new engineering, procurement, and construction plus operation and maintenance business model for Huadian’s international operations, facilitating its transformation from an equipment exporter to a full lifecycle service provider for engineering projects, the firm pointed out.
Moreover, the project marks a significant breakthrough for the company’s global material handling business, Huadian noted.
Material handling systems are one of Huadian’s core businesses. Last year, it generated revenue of CNY1.5 billion (USD205 million), accounting for about 19 percent of the company’s total annual revenue, according to its 2024 financial report.
