China New Energy (LON:CNEL) shares rallied on Wednesday, following the announcement that it had secured a series of new contracts.
The bio-energy engineering and technology solutions provider revealed its success in obtaining various new contracts across West and North China.
According to an update, CNE has obtained a total of seven contracts since the start of the year, in order to facilitate the development of its processing equipment and plants and expand its ethanol production capabilities.
The contracts are set to be worth an estimated £12.8 million, providing a considerable boost for the company and initially causing shares to jump as much as 45 percent in early morning trading.
Mr Yu, Chairman of CNE commented, “We are delighted to win these contracts with Yinshan Hongzhan Industry Co., Ltd, Inner Mongolia Liniu Biochemical Co., Ltd, Jilin Boda Biochemical Co. Ltd and Heilongjiang Weikete Biotechnology Co., Ltd.
“These confirmed orders, when added to our previously announced contracts with COFCO and Supercare Group comprise a significant order book for 2017 into 2018 and, on the current timetable, we anticipate being able to recognise much of that revenue this year.”
He added: “The board is very pleased that our decision to intensify the marketing of our products and services to the north Chinese markets following the modification of Chinese legislation to relax restrictions on the use of corn as a feedstock for ethanol production.”
The company revealed that the contracts will commence by the end of next month and are set to be commissioned by the following year.
China New Energy was founded back in 2006, and has since constructed in excess of 100 bioethanol and biobutanol plants. The company is considered a market leader provider of bio-energy, with a Chinese market share of 60 percent.
Alongside its strong presence in China, CNE has completed various projects globally including Thailand, Taiwan, Indonesia, Romania and Russia.
Shares in the company are rallying substantially, up 29.79 percent as of 11.47PM (GMT).