(Photo courtesy of Hero)
The high prosperity of the nuclear industry is gradually realized into the production of equipment //
On April 24, the A-share Wind Nuclear Power Concept Index (884046) rose 2.65% to 2001.58 points, and the index rose 12.79% in the past three months. It is worth noting that as of the same day, many stocks in the index have risen strongly in the past three months, with Wall Nuclear Materials, China Nuclear Technology, Jiadian Shares, China Nuclear Construction, and China Nuclear Power rising by 105.90%, 53.27%, 43.19%, 23.76%, and 21.52% respectively.
Among them, Jiadian Co., Ltd. announced its 2023 annual report, with revenue of 5.321 billion yuan in 2023, a year-on-year increase of 16.69%, and a net profit attributable to the parent company of 399 million yuan, a year-on-year increase of 4.75%. Based on the company's annual report, Industrial Securities pointed out that the nuclear power products segment achieved revenue of 686 million yuan, a year-on-year increase of 52.78%.
Recently, the Blue Book of China's Nuclear Energy Development Report 2024 was released, showing that up to now, the mainland has 26 nuclear power units under construction, with a total installed capacity of 30.3 million kilowatts, continuing to rank first in the world. China's nuclear power generation continues to grow, reaching 433.371 billion kWh in 2023, ranking second in the world.
At present, the prosperity of the mainland's nuclear industry chain continues to rise, and the number of nuclear power units approved per year will be maintained at a high level of 10 units in 2022 and 2023. Zhongtai Securities believes that nuclear power, as an important means of low-carbon power generation, is expected to stabilize in the future as the dual carbon goal is approaching. Correspondingly, the capital expenditure on the industrial side is relatively strong. In March 2024, China Nuclear Power announced its 2024 investment plan, and capital expenditure increased sharply by about 52% year-on-year.
Kaiyuan Securities said that the nuclear industry maintained a high boom, and the high increase in approvals was gradually realized into the volume of equipment. The industrial chain will enter the performance cashing period from 2023. Nuclear power is expected to maintain the annual approval of 6-8 units, corresponding to more than 100 billion yuan of equipment investment. Fourth-generation nuclear power, spent fuel, etc., drove additional increments.
Entering the performance release period, pay attention to the three main investment lines //
Looking ahead, the China Nuclear Energy Association expects the proportion of nuclear power generation in mainland China to increase from 5% in 2022 to about 10% in 2035.
From the perspective of the construction cycle, China Post Securities pointed out that it will take half a year to one year after the general approval to start the concrete pouring (FCD) of the first unit, complete the hoisting of the dome of the nuclear island in two years, and deliver the main equipment in the nuclear island at this stage. With the intensive approval of projects in 2022-2023, the equipment will enter a centralized delivery period from 2024-2025, and the performance of the industrial chain is expected to be released.
For investment opportunities in the industrial chain, Cinda Securities said that the acceleration of nuclear power approval is expected to bring about the performance growth of related companies, and the increase in fusion investment is expected to bring about a significant increase in orders for related companies. The Shidaowan Nuclear Power Plant, the mainland's fourth-generation nuclear power technology, has been put into commercial operation. In addition, in the field of fusion, 25 units such as China Nuclear Power have established a controllable nuclear fusion innovation consortium, which has clarified the direction of technology research and development, and industrial investment in the field of nuclear fusion may have a significant growth.
In the context of the positive development of nuclear power, it is recommended to pay attention to three main investment lines: (1) downstream operators that obviously benefit from the acceleration of nuclear power approvals and nuclear power generation is expected to continue to increase, (2) midstream equipment manufacturing companies that benefit from the increase in the number of approvals in recent years and are expected to continue to improve their performance in recent years, related companies that benefit from the construction of spent fuel plants and can supply equipment, and (3) benefit from the increase in investment in the nuclear fusion industry, and it is recommended to pay attention to companies that have technical reserves and have obtained orders for relevant scientific research projects at this stage。
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