Lyon: China Approves Eight New Nuclear Power Units, Optimistic About Nuclear Equipment Stocks

17:10 04/08/2026

Lyon believes that investments in nuclear power have counter-cyclical characteristics, providing nuclear equipment suppliers with years of profit visibility. They are optimistic about related stocks such as Shanghai Electric (02727) and Harbin Electric (01133).

Lyon released a research report stating that on July 31, the State Council approved eight new nuclear power units, with the first batch expected to be approved in 2026. The projects are located in Guangdong, Liaoning, Zhejiang, and Shandong, with a total new installed capacity of approximately 10 gigawatts and a total investment of around 170 billion yuan. Lyon believes that nuclear power investment has counter-cyclical characteristics, providing nuclear equipment suppliers with several years of profit visibility, favoring related shares such as Shanghai Electric Group (02727) and HARBIN ELECTRIC (01133). Chinas 14th Five-Year Plan aims for installed nuclear power capacity to reach 110 gigawatts by 2030, a significant increase from the 63 gigawatts expected in 2025. This implies that between 2026 and 2030, at least 9.5 gigawatts of new installed capacity must be added each year, far exceeding the average of 2.2 gigawatts during the 13th Five-Year Plan period. Lyon pointed out that from 2021 to 2025, the compound annual growth rate for nuclear power investment is expected to reach 35%, while capital expenditures in the power sector are projected to grow by 12% during the same period, significantly higher than overall fixed asset investment (3%) and GDP growth (5%), reflecting the role of power investment as a stabilizing force for the economy. Lyon believes that Shanghai Electric Group and HARBIN ELECTRIC are the major manufacturers of nuclear power equipment in China, while Anhui Yingliu Electromechanical (603308.SH) supplies reactor casting components. All three companies are expected to benefit from the growth in nuclear power business. The firm has raised its earnings forecast for HARBIN ELECTRIC to reflect strong growth in the nuclear power business and improved profit margins, increasing the target price from HKD 18 to HKD 21, maintaining an "outperform" rating; the H shares of Shanghai Electric Group and the A shares of Shanghai Electric Group (601727.SH) are both rated "outperform," with target prices of HKD 3.9 and RMB 8, respectively; Anhui Yingliu Electromechanical has a target price of RMB 80, with a rating of "outperform."

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