Utility industry weekly: nuclear power: underestimated direction under carbon neutralization

Key investment points:

Under the dual carbon target, the importance of nuclear power has increased, and relevant policies have been expressed more actively. It is expected that China is expected to approve 7-8 units per year from 2022 to 2025. The 2021 government work report proposed to actively and orderly develop nuclear power on the premise of ensuring safety. Liaoning, Jiangsu, Hainan, Guangxi, Guangdong, Fujian, Shandong and other provinces mentioned specific objectives for the construction of nuclear power bases or the growth of installed capacity in the 14th five year plan and 2035 long-term objectives. According to the prediction of China Nuclear Energy Industry Association, the installed capacity of China National Nuclear Power Co.Ltd(601985) in operation will reach 70 million kW in 2025. Based on this calculation, assuming that the construction cycle of nuclear power units is 5 years and the average capacity of a single unit is 1.1 million KW, China needs to approve 7-8 units per year from 2022 to 2025.

It is estimated that the average annual investment in nuclear power from 2022 to 2025 will exceed 100 billion yuan, and will effectively drive the localization of core equipment in the industrial chain. According to the above calculation, assuming that China approves 7 units per year during the 14th Five Year Plan period and the cost of a single unit is 16000 yuan / kW, the average annual construction investment of nuclear power will exceed 100 billion yuan from 2022 to 2025. In 2021, China National Nuclear Power Co.Ltd(601985) annual investment is 53.8 billion yuan, and nuclear power construction will usher in rapid development in the middle and late period of the 14th five year plan. In addition, the world's first pile of hualong-1 project has driven more than 5300 upstream and downstream enterprises to realize the localization of 411 core equipment, which has a significant pulling effect on the processing technology and process level of dozens of industries such as materials, metallurgy, chemical industry and machinery, and contributes hundreds of billions of yuan to the industrial chain in the whole life cycle.

In terms of nuclear power technology, Hualong 1 is connected to the grid for power generation, and the third generation technology is mature. The third generation nuclear power plant has high safety, long service life, large single machine capacity, high degree of automatic control and obvious modular characteristics. On January 30, 2021, unit 5 of Fujian Fuqing nuclear power plant of China nuclear power plant in the first reactor of Hualong 1 was put into commercial operation; On January 1, 2022, unit 6 of Fuqing nuclear power plant, the second Hualong unit in China and the third Hualong unit in the world, was connected to the grid for power generation. China has become one of the few countries that independently master the third generation nuclear power technology and has the conditions for building the third generation nuclear power in an autonomous, batch and large-scale manner. Hualong 1 has a variety of safety guarantees, higher seismic standards, a design life of up to 60 years, and its safety, economy and performance indicators exceed the needs of international third-generation nuclear power users. It is one of the third-generation nuclear motor types with the highest acceptance in the current nuclear power market.

Shidaowan project has realized nuclear operation, and the fourth generation technology is the world's leading. It is expected to be ready for industrialization in 2025. China's high temperature gas cooled reactor technology is the world's leading. Shidaowan No. 1 and No. 2 reactors reached their first criticality in September and November 2021 respectively; On December 20, 2021, reactor 1 was connected to the grid for power generation; The commercial operation of double reactor is expected to be realized in the middle of 2022. High temperature gas cooled reactor (HTGR) has inherent safety and is internationally considered as "a reactor that will not melt down"; The power generation efficiency is higher, and the original site can replace thermal power, which is more economical than the third generation nuclear power; Cogeneration can be realized by steam extraction of steam turbine; High temperature gas cooled reactor hydrogen production is clean and efficient, and it is expected to be industrialized in 2025. According to the data of CNNC, a Shanghai Pudong Development Bank Co.Ltd(600000) kW high-temperature gas cooled reactor unit can meet the energy demand of 1.8 million tons of steel for hydrogen, electricity and some oxygen, reduce about 3 million tons of carbon dioxide and 1 million tons of standard coal per year.

Investment suggestion: in terms of industry, China National Nuclear Power Co.Ltd(601985) technology is the world leader, the third generation nuclear power has achieved commercial operation, the technology is mature, and the fourth generation high temperature gas cooled reactor has achieved major breakthroughs. Maintain the industry "recommended" rating.

In terms of individual stocks, it is recommended to recommend the leader of nuclear power operation China National Nuclear Power Co.Ltd(601985) , and it is recommended to pay attention to the end target of nuclear power operation Cgn Power Co.Ltd(003816) ; Nuclear industry construction leader China Nuclear Engineering & Construction Corporation Limited(601611) ; Equipment manufacturer Harbin Electric Corporation Jiamusi Electric Machine Co.Ltd(000922) , Suzhou Hailu Heavy Industry Co.Ltd(002255) , Jiangsu Shentong Valve Co.Ltd(002438) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) .

Risk tips: the construction progress of nuclear power projects is less than expected, the technological progress is less than expected, the demand for electricity is less than expected, the risk of electricity price decline and the risk of policy change.

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