Auckson Opto (the company), recently announced the reason behind its suspended trade on the Chinese bourse since July 20, 2016, according to a report from China Securities Journal.

The company signed a single crystal sapphire growth furnace deal with China Iron and Steel Research Institute Group (CISRI) valuing RMB 720 million (US $107.89 million), and will be supplying 600 of its ARD-85kg sapphire growth furnaces through two phases.

Under the agreement signed in Beijing, China on July 22, Auckson Opto will be supplying half of the equipment in 2016, and the remaining 300 sapphire growth furnaces by 2017.

The agreement valuing RMB 615 million after taxes will be included in the company’s revenue for the fiscal year of 2015, and amounting to 53.47% revenue share for the year. The company projected its revenue for 2016 would increase by RMB 308 million, which would positively impact its revenue.

CISRI was founded on July 8, 2015, and is based in Beijing. The company’s registered capital totals RMB 50 million, and its business scope includes R&D, services, consulting, software development, product promotion and design. Its main shareholder is New Metallurgy Hi-tech Group (NMT), a CISRI affiliated company, that has a 40% stake, followed by a Beijing technology company’s (北京弘睿天蓝科技中心) 25% stake.

CISRI has mostly been implementing sapphire substrate and renewable energy projects under NMT, after completing registration. The latter company was established on May 10, 1993, and has a registered capital of RMB 75 million. It is a state-owned enterprise that was founded by China’s Ministry of Metallurgical Industry, Central Iron and Steel Research Institute, Automation Research and Design Institute of Metallurgical Industry (ARIM), and others. The company is an advanced technology enterprise listed under China’s State Administration for Industry and Commerce, and first signed its sapphire investment project in September 9, 2015. The company initiated the project in October 23 that year. As of December 31, 2015, NMT’s total assets reached RMB 1.39 billion, recording net assets of RMB 350 million, revenue of RMB 458 million, and net profits of RMB 26.83 million.

According to Auckson Opto’s financial report for 2015, the company’s revenue reached RMB 1.15 billion, net profits climbed up to RMB 300 million, respectively soaring 85.77% YoY and 128.25% YoY. The company’s main revenues include sapphire material, sapphire ingot growth equipment, precise processing of hard and brittle material. The company’s sapphire growth furnace revenue soared about 341.51% YoY, and has become a main profit driver. The company’s gross margin for single crystal sapphire furnaces was about 40.84%, and if it maintains gross margin in the next two years, it will be able to contribute a gross margin of RMB 251 billion.