Zhongtong Finance and Economics APP learned that Guolian Securities released a research report stating that after the construction of nuclear power units from 2020 to 2023 speeding up, nuclear power equipment manufacturers are expected to achieve high performance in 2024. The delivery period of nuclear power equipment is generally two years after FCD. China approved 10/10 nuclear power units in 2022/2023, and started the construction of 5/5 nuclear power units. It is expected to push the industry into the equipment order fulfillment period. It is suggested to pay attention to nuclear power industry chain equipment suppliers, such as Dongfang Electric Corporation (600875.SH), Jiangsu Shentong Valve (002438.SZ), etc.; 2) Nuclear power industry chain power operators: With the continuous installation of nuclear power units, the profitability of operators has increased. It is suggested to pay attention to operators with incremental installation capacity, such as China National Nuclear Power (601985.SH), CGN Power Co., Ltd. (003816.SZ), etc.

Guolian Securities' main points are as follows:

The US and Europe are accelerating the restart of nuclear power and installation.

At present, countries around the world are restarting nuclear power one after another. In March 2024, the US Department of Energy announced that it will provide a loan guarantee of $1.52 billion for the restart of the Michigan nuclear power station. In December 2023, 22 countries reached the "Triple Nuclear Energy Declaration" at COP28, and nuclear power installed capacity needs to achieve a three-fold increase by 2050. In April 2023, Japan joined the Nuclear Fuel Strategic Alliance, and plans to restart the Shimane Nuclear Power Station No. 2 unit, the Onagawa Nuclear Power Station No. 2 unit, and the Kashiwazaki-Kariwa Nuclear Power Station No.7 unit in 2024.

The progress of domestic nuclear power construction and production has accelerated. In April 2024, China's nuclear power generation reached 36.6 billion kilowatt hours, a year-on-year increase of 6.1%. China approved 10 nuclear power units in 2022/2023, and it is expected to approve 10-12 units in 2024. From the perspective of construction, China started construction of 5 nuclear power units in 2022/2023, and nuclear power units approved in 2022H2 and part of those approved in 2023 are expected to start construction in 2024. The newly built units are expected to be close to 12.02GW in 2024. From the perspective of production, it is estimated that the capacity of nuclear power production units from 2024 to 2026 will be 4.31/6.50/6.20GW. It is expected that the annual production capacity of units will reach 12GW by 2030.

Pay attention to the domestication rate improvement opportunities of the industrial chain. In the sub-item cost structure of the total investment of nuclear power plants, nuclear power equipment has the characteristics of a large investment proportion and high profit margin. Equipment costs account for 50.5% of the total investment, and the nuclear island equipment has a relatively high proportion, accounting for 26.2% of the total equipment investment. With the acceleration of the approval and construction progress of nuclear power stations, nuclear power equipment is expected to achieve accelerated performance realization. At present, the comprehensive domestication rate of China's nuclear power has reached more than 90%, of which, the domestication rate of Taipingling 3/4 units and Tianwan 5/6 units reaches 95%, and the domestication rate of Shidao Bay fourth-generation high-temperature gas-cooled pile nuclear power station is 93.4%. It is expected that the domestication rate of newly approved projects this year can reach more than 95%.

The breakthrough in fourth-generation nuclear power and the core equipment are worth paying attention to.

In the sub-item cost structure of the total investment of nuclear power plants, nuclear power equipment has the characteristics of a large investment proportion and high profit margin. Equipment costs account for 50.5% of the total investment, and the nuclear island equipment has a relatively high proportion, accounting for 26.2% of the total equipment investment. With the acceleration of the approval and construction progress of nuclear power stations, nuclear power equipment is expected to achieve accelerated performance realization. At present, the comprehensive domestication rate of China's nuclear power has reached more than 90%, of which, the domestication rate of Taipingling 3/4 units and Tianwan 5/6 units reaches 95%, and the domestication rate of Shidao Bay fourth-generation high-temperature gas-cooled pile nuclear power station is 93.4%. It is expected that the domestication rate of newly approved projects this year can reach more than 95%.

Risk warning: Approval and approval progress are not as expected, construction progress is not as expected, and there is a risk of nuclear power safety accidents.

In recent years, China has accelerated the research and development of five fourth-generation piles: high-temperature gas-cooled pile, sodium-cooled fast pile, supercritical water-cooled pile, lead-cooled fast pile, and molten salt pile. In December 23, the Shidao Bay high-temperature gas-cooled pile nuclear power station demonstration project was officially put into commercial operation. The main helium fan is the most core equipment of the high-temperature gas-cooled pile, which is known as the "heart" of the high-temperature gas-cooled pile. At present, China has the design and manufacturing capabilities of main helium fans. The main helium fan of Jiamusi Electric Machine Co., Ltd. has been supplied to the Shidaowan project and has obtained nuclear power project orders from CX, Jiangsu Lvneng, and XX Lvneng, etc.