As a clean base load power supply, nuclear power is expected to achieve steady development in the process of energy transformation and “double carbon” construction. At present, China National Nuclear Power Co.Ltd(601985) construction has large-scale promotion of third-generation technology and leading fourth-generation technology reserve. The future development of nuclear power industry chain (upstream raw materials, midstream equipment and downstream operators) deserves long-term attention.
Retrospection of nuclear power technology development: the three generations are just at that time, and the four generations are becoming increasingly prominent. Nuclear power is a way of generating electricity by using the heat energy released by nuclear fission in nuclear reactors. Since the completion of the first nuclear power plant, the development of nuclear power technology has experienced four generations of major technological changes. At present, it is in the stage of extensive commercial application of the third generation technology and accelerated reserve and demonstration application of the fourth generation technology. The Shidaowan high temperature gas cooled reactor demonstration project with an installed capacity of 200000 kW in China is the world’s first demonstration project to successfully commercialize the fourth generation nuclear power technology. It has been successfully connected to the grid for power generation on December 20, 2021.
The development of nuclear power in the world is spiraling and China National Nuclear Power Co.Ltd(601985) is developing steadily. Worldwide, the development of nuclear power has mainly experienced four stages: initial development, rapid development, slow development and gradual recovery. The core inflection point comes from technology evolution, energy demand and the impact of major events. The role and status of nuclear power vary greatly under the energy systems of different countries. In China National Nuclear Power Co.Ltd(601985) it has experienced the development of technological breakthroughs, technological cooperation and independent control. With the continuous development of technology, it has gradually reached the international leading level in the fields of fourth generation technology; At the same time, the scale of nuclear power in operation and under construction continues to grow. As of December 31, 2021, China has 52 nuclear power units in operation (excluding Taiwan), a year-on-year increase of 6.12%. The scale of nuclear power units in operation is about 53.26 million kW (excluding Taiwan), a year-on-year increase of 6.78%.
Many factors boost the development of nuclear power, and the prospect of incremental space is broad. With the “double carbon” development and the intensification of regional conflicts, the recent surge in energy prices has led many countries to adjust nuclear power policies to deal with energy security. At the same time, nuclear energy is also the key for some countries to build a future zero emission power system and realize energy transformation; As a basic load regulating power system, nuclear power has great development potential in the construction of new power system. We are optimistic about the safe and steady promotion of comprehensive utilization of nuclear energy and its coupling development with other energy varieties. According to the 14th five year plan, the outline of vision and objectives for 2035 and China’s nuclear energy development report (2021), it is estimated that China’s installed capacity of nuclear power in operation will reach about 70 million KW by 2025; By 2030, the installed capacity of nuclear power in operation will reach 120 million KW, accounting for about 8% of the national power generation. It is expected that China’s independent third-generation nuclear power Commission will achieve large-scale and quantitative development according to the approval rhythm of 6-8 units per year, and China’s average annual investment scale is expected to reach 66-144 billion yuan.
Risk factors: nuclear power policy change risk; Risk of nuclear power construction delay; Nuclear power safety risks.
Investment strategy. Under the dual background of “double carbon” development and steady growth, we suggest that we continue to pay attention to the construction and development of China National Nuclear Power Co.Ltd(601985) and sort out the layout targets from top to bottom according to the industrial chain, focusing on recommending Dongfang Electric Corporation Limited(600875) (a + H), the equipment leader of conventional island and nuclear island, and the “double oligarchs” China National Nuclear Power Co.Ltd(601985) , Cgn Power Co.Ltd(003816) (a + H) of operators. It is suggested to pay attention to Jiangsu Shentong Valve Co.Ltd(002438) , Harbin Electric Corporation Jiamusi Electric Machine Co.Ltd(000922) , China Nuclear Engineering & Construction Corporation Limited(601611) , Lanzhou Ls Heavy Equipment Co.Ltd(603169) , etc.
