The State Council executive meeting held on July 31st decided to approve the nuclear power projects in Shandong Shidao Bay, Fujian Ningde, and Liaoning Xudabao. The projects approved this time are Unit 1 and Unit 2 of the Shandong Shidao Bay Nuclear Power Plant Expansion Phase I Project, Unit 5 and Unit 6 of the Fujian Ningde Nuclear Power Project, and Unit 1 and Unit 2 of the Liaoning Xudabao Nuclear Power Project, totaling 6 units, with an estimated total investment of over 120 billion yuan. This is the first time this year that a new nuclear power project has been approved. According to the blue book "China Nuclear Energy Development Report (2023)" released by the China Nuclear Energy Industry Association, as of the end of April, there were a total of 24 nuclear power units under construction in China, with a total installed capacity of approximately 26.81 million kilowatts, and the overall scale continues to remain the world's largest; There are 54 commercial nuclear power units in Chinese Mainland, with a total installed capacity of 56.82 million kilowatts, ranking the third in the world.

In the first half of the year, nuclear power generation increased by 7% year-on-year. China is a major country in the utilization of nuclear energy technology, with 77 operating and under construction nuclear power units in the mainland region, ranking second in the world. With the promotion of the "dual carbon" strategy, nuclear power, as an efficient and reliable clean energy source, is increasingly becoming an indispensable part of China's energy structure transformation. Especially since last year, the demand for electricity supply has been prominent, and nuclear power has also shown an accelerating growth trend. In terms of technology, China's nuclear power technology has taken a leading position globally. China has the ability to independently produce third-generation units and has a leading advantage in fourth-generation technology. At present, the third-generation nuclear power "Hualong No.1" with fully independent intellectual property rights has been put into commercial operation at home and abroad, achieving mass and large-scale construction, marking that China's commercial nuclear power technology level has reached the forefront of the world.

02 | At the policy level, the nuclear power market is experiencing policy dividends. In 2019, China's nuclear power project approval has restarted, and from 2019 to 2021, China has approved 4-5 nuclear power units annually. In 2022, nuclear power approval accelerated, with a record high of 10 nuclear power units approved that year. According to the "China Nuclear Energy Development Report 2023" released by the China Nuclear Energy Association, as of the end of April 2023, China has 24 nuclear power units under construction, with a total installed capacity of 26.81 million kilowatts, continuing to remain the world's largest. However, due to the usual 5-year construction cycle of nuclear power, and the impact of the stagnation of nuclear power approval from 2016 to 2018, the peak production of units under construction in China is expected to arrive around 2026.

03 | The sector saw a surge, benefiting the six newly approved nuclear power units in these fields, all of which use third-generation nuclear power technology with independent intellectual property rights in China. Among them, the 5th and 6th units of the Ningde Nuclear Power Project in Fujian Province adopt the "Hualong No.1" technology of China National Nuclear Corporation, and the equipment localization ratio will exceed 90%, with a single unit rated power of 1210MW. It is reported that the project is currently steadily and orderly advancing various preparations before the start of construction. The Shidao Bay nuclear power project, which has been approved simultaneously, also adopts the technology of China National Nuclear Corporation's "Hualong No.1". The Ningde nuclear power project is located in Tailaoshan Town, Fuding City, Ningde City, Fujian Province, and officially began construction on February 18, 2008. The first phase of the project, consisting of four units, was fully completed on July 21, 2016, with a total investment of 56.2 billion yuan, driving investment in other industries by 4-5 times. The estimated investment for the 5th and 6th units of the second phase of the project is about 41.5 billion yuan. The annual power generation of a single "Hualong No.1" unit is nearly 10 billion kilowatt hours, which can meet the annual production and living electricity demand of 1 million people. During the peak period, it is expected that more than 15000 builders will be present at the project site simultaneously.

What impact can 04 | bring? After the approval of nuclear power projects, it will drive the development of relevant industrial chains, such as nuclear power equipment manufacturing, construction, operation and maintenance, and increase employment opportunities. At the same time, the construction and operation of nuclear power projects will bring investment and capital inflows, promoting economic development and growth. Nuclear power is an important component of clean energy, and the approval of nuclear power projects will increase energy supply and reduce dependence on traditional energy. Compared to traditional energy sources, nuclear power generates almost no greenhouse gases such as carbon dioxide and air pollutants during the power generation process, which is beneficial for reducing environmental pollution. As of the first half of this year, the four units of the first phase of the Ningde nuclear power project have accumulated 257.9 billion kilowatt hours of online electricity. Compared with coal-fired power plants of the same scale, it has reduced the consumption of standard coal by about 79.15 million tons and reduced carbon dioxide emissions by over 210 million tons, equivalent to planting about 580000 hectares of forest. After the approval news was released, it had a positive impact on the stock prices of some listed companies in the nuclear power sector. On August 1st, there was a fierce reaction in the secondary market. According to data from Tonghua Shun, the nuclear power sector as a whole strengthened. In terms of constituent stocks, Shengde Xintai and Guocable Testing staged a 20cm limit up, while Tianli Composite, Guoguang Electric, Huaxi Energy, Jintongling and others followed suit.

05 Jingtai Viewpoint | The large-scale production of nuclear power will bring continuous growth in performance. China National Nuclear Power Corporation recently announced that as of the end of June this year, the company has managed a total of 6 nuclear power units under construction. The earliest nuclear power unit expected to be put into operation is the Fangchenggang Unit 4 affiliated with the company, which is expected to be put into operation in the first half of next year. At the same time, in addition to the Lufeng 5 unit affiliated with the company, four units entrusted by the controlling shareholder to the management company are expected to be put into operation gradually between 2025 and 2027. China Nuclear Power has more nuclear power units under construction than China Guangdong Nuclear Power, with 9 units under construction and 2 units approved for construction as of the end of June. In the first half of this year, both companies achieved growth in their nuclear power generation. Among them, the total power generation of China's Guangdong Nuclear Power Plant is approximately 113.292 billion kilowatt hours, a year-on-year increase of 14.21%; The total power generation of China's nuclear power plant is approximately 90.268 billion kilowatt hours, a year-on-year increase of 2.77%. The lower growth rate is mainly due to the impact of major repairs carried out by multiple units during the reporting period. At present, the development of China's nuclear power market is accelerating, and the prosperity continues to improve. According to statistics from the National Energy Administration, in the first half of 2023, major nuclear power generation enterprises completed a nuclear power investment of 35.9 billion yuan in power engineering, a significant increase of 56.1% year-on-year. In the long run, large-scale production of nuclear power will bring about sustained growth in performance. From the current domestic construction and approval situation, China's nuclear power projects will enter the peak of production from 2026, with the potential for sustained growth.