Recently, the State-owned Assets Supervision and Administration Commission of the State Council proposed in a signed article to advance the layout and cultivate quantum technology, nuclear fusion, biological manufacturing, 6G, and other future industries, once again igniting the market's enthusiasm for the nuclear fusion industry.

In June 2024, the feasibility of the world's first fully high-temperature superconducting tokamak device was verified. Controlled nuclear fusion, also known as the 'artificial sun,' is considered to be the ultimate energy source for humanity. In September 2022, Shanghai took the lead in releasing the Five Great Action Plans for Future Industries such as future intelligence and future energy, and controlled nuclear fusion falls under the category of future energy.

On November 20, Shanghai Future Fusion Energy Technology Co., Ltd. (referred to as 'Fusion Energy') was established, with a registered capital of 1.026 billion yuan. Its business scope includes research and development of emerging energy technologies, enterprise management consultation, corporate management, investment management. It is jointly held by Shanghai Electric Group Co., Ltd. (referred to as 'Electric Group'), Shanghai Guotou Kechuang Investment Co., Ltd., and Shanghai Shenneng Chengyi Equity Investment Co., Ltd.

From the perspective of equity structure, Fusion Energy's shareholders, Shanghai Guotou Kechuang Investment Co., Ltd. and Shanghai Shenneng Chengyi Equity Investment Co., Ltd., are each 100% owned by Shanghai State-owned Capital Investment Co., Ltd. and Shenergy (Group) Co., Ltd., with the actual controllers of Shanghai State-owned Capital Investment Co., Ltd. and Shenergy (Group) Co., Ltd. being the same as Electric Group, which belong to the Shanghai State-owned Assets Supervision and Administration Commission.

The establishment of Fusion Energy this time may indicate that Electric Group is intensifying its investment in the controlled nuclear fusion industry.

Galaxy Securities stated that it values the trend of the controllable nuclear fusion industry, which focuses on new quality production factors and is the only direction for future energy. In terms of the industrial development landscape, approximately 35 countries worldwide are engaged in nuclear fusion research, with China, the United States, Russia, Europe, Japan, and others in a leading position. The industry chain mainly consists of upstream materials, midstream superconducting magnets, first wall-related structures, vacuum modules, and downstream power plant operations. It is recommended to pay close attention to core project equipment and material symbols from the perspectives of industrial development stage, high value volume, certainty, high elasticity, and AI empowerment.

Controllable nuclear fusion related Hong Kong stocks:

Shanghai Electric (02727): The announcement shows that the electric holding subsidiary Shanghai Electric Group Co., Ltd. (referred to as 'Shanghai Electric') is one of China's largest comprehensive equipment manufacturing conglomerates, and has formed a complete nuclear energy equipment manufacturing industry chain from nuclear island equipment to conventional island equipment, large castings and forgings, nuclear-grade fans, supporting electric machines, spare parts, and other equipment. The technical routes cover second-generation and second-generation plus, third-generation pressurized water reactors, fourth-generation nuclear power technology, as well as nuclear fusion large scientific devices. On the HH-70 high-temperature superconducting tokamak device, Shanghai Electric undertook the manufacturing work of three core components of the main system - the outer vacuum dewar, vacuum chamber, and inner and outer cold shields. The EXL-50U compact fusion device is another type of magnetic confinement high-temperature plasma experimental device after the tokamak fusion and stellarator fusion devices, with the vacuum chamber serving as the carrier for all its system integrations.

The announcement shows that Shanghai Electric won the first batch procurement project of the TF coil box of the compact fusion energy experimental device (BEST) designed by the Institute of Plasma of the Chinese Academy of Sciences in 2023, and also secured the key main equipment project of the Xuanlong 50 project of the Casimir Energy Group. The company has cooperated deeply with leading companies in the industry such as the Chinese Academy of Sciences, Casimir Energy Group, and Energy Singular Point to jointly layout the key equipment of fusion reactors, completed the global first HH-70 main system delivery of the high-temperature superconducting tokamak device, and delivered the vacuum chamber of the world's first EXL-50U compact fusion device.