Jiutian Chemical is up around a-fifth on heavy volume, following its announcement over the weekend that it is planning to invest RMB1.6 billion to diversify into synthetic ammonia
In its Jan 13 announcement, the Singapore-listed, China-based chemicals producer says by producing its own ammonia, it can have better control over its supply chain.
The company's main product is dimethylformamide, which is used in the production of acrylic fibres and plastics.
Jiutian is tapping on the right to undertake such a project in Henan now held by Anyang Chemical Industry Group, deemed as its controlling shareholder.
Jiutian plans to fund the investment via RMB480 million in internal funds and borrow the remaining RMB1.12 billion.
The deal will be put forward to shareholders to approve at an EGM to be called.
The company suffered heavy losses recently no thanks to lower sales and new competition. For its 3QFY2023 ended Sept 30, 2023, Jiutian reported a net loss of RMB68.6 million, from earnings of RM93.5 million recorded in the year-earlier period. Sales in the same period plunged by 85% y-o-y to RMB80.2 million.
As at the trading break, Jiutian shares were up 0.5 cent, or 19.23% to change hands at 3.1 cents. The counter is the second-most traded, after Seatrium.
