Core view
Policy: actively and orderly develop nuclear power. In the 2021 government work report, the policy of nuclear power development has changed from "steadily promoting nuclear power development" in 2018 to "actively and orderly developing nuclear power on the premise of ensuring safety". This is the first time that the term "positive" has been used to refer to nuclear power development in the government work report since the Fukushima nuclear accident. At the same time, the 14th five year plan also clearly stated that "actively and orderly promote the construction of coastal nuclear power".
Technology: the third generation technology is mature and landing. After the Fukushima nuclear accident, the state required that new nuclear power projects must meet the third generation nuclear power safety standards. At present, Hualong 1 is the main unit under construction in China, and vver1200 is adopted for some projects. Many units of the two technologies have been successfully put into commercial operation, which has verified the safety and reliability of the third generation nuclear power technology and has the conditions for mass production.
Energy structure: the development of nuclear power is the inevitable choice to improve the energy structure. Carbon neutralization and carbon peaking accelerate the improvement of energy structure, and new energy power generation has become a trend. However, China's economy is developing rapidly and the demand for power is large. Therefore, low-carbon and stable power sources are needed in the reform of power structure. Compared with nuclear power, thermal power has the advantages of low carbon and clean; Compared with photovoltaic and wind power, nuclear power technology is mature and can generate power stably without energy storage equipment. Therefore, the development of nuclear power is an inevitable choice to improve the energy structure.
The approval is accelerated, and it is expected to form a trend of mass construction. Driven by the triple drive of clear policy + mature technology + carbon neutralization, the approval of nuclear power has accelerated significantly. From 2019 to 2020, the state approved 4 new units per year and 5 new units in 2021. It is expected that 6-8 sets will be approved every year in the future to realize large-scale and batch development.
Market space: the demand for nuclear power equipment will exceed 200 billion by 2025. According to the estimation of six new units each year, the annual market scale of China's nuclear power equipment is about 54.6 billion yuan, and the market scale is about 218.5 billion yuan before 2025.
Nuclear waste disposal: the market is gradually opened and the potential space is broad. It is estimated that the units in operation will produce about 1180 tons of spent fuel in 2025, with a total of 13940 tons. If the cumulative production of spent fuel exceeds the total storage, the spent fuel shall be treated as rigid demand. In the 14th five year plan, it is clearly proposed to build low-level radioactive waste disposal sites and spent fuel reprocessing plants. At present, the construction of China's first 200 ton spent fuel treatment plant began in 2019, and the bidding for the second project has been basically completed.
Fourth generation nuclear power: the future development trend of nuclear power technology. The fourth generation nuclear power has the characteristics of safer, more economical, better nuclear non-proliferation and sustainability. All countries are in the layout. China has taken the lead in the fourth generation nuclear power technology, and has successively built Shidaowan high temperature gas cooled reactor and Gansu thorium based molten salt reactor.
Risk tips: 1. Nuclear power accidents occur worldwide; 2. Changes in nuclear power development policies; 3. The demand for nuclear power equipment is less than expected; 4. Nuclear power project construction risk; 5. Nuclear fuel supply risk; 6. Risk of delayed disposal of nuclear waste; 7. The epidemic has led to the delay of nuclear power construction; 8. Breakthrough in energy storage technology.
Investment suggestion: the national attitude towards the development of nuclear power is positive and clear, the nuclear power boom continues to improve, and the batch construction + post-treatment of nuclear waste opens up the growth space of nuclear power. We are optimistic about companies with high market share and high proportion of nuclear power business in the subdivided field of nuclear power, and focus on equipment links: Jiangsu Shentong Valve Co.Ltd(002438) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Sinoseal Holding Co.Ltd(300470) .
