Investment Rating - The report assigns a "Hold" rating to the company, reflecting a downward adjustment in performance expectations due to challenges in the hazardous waste recovery business [6]. Core Insights - The company reported a revenue of 16.16 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 5.9%, while the net profit attributable to shareholders decreased by 4.8% to 740 million yuan [4]. - The third quarter of 2025 saw revenues of 5.51 billion yuan, with a quarter-on-quarter decline in net profit of 40.7% [4]. - The report highlights the global revival of nuclear power, with significant investments in modular small reactors, which the company is well-positioned to benefit from [5]. - The pumped storage industry is expected to continue its development, with a mismatch between supply and demand potentially leading to improved profitability in the equipment sector [5]. Summary by Sections Company Overview - The latest closing price is 4.15 yuan, with a total market capitalization of 21.7 billion yuan [3]. - The company has a total share capital of 5.219 billion shares, with a debt-to-asset ratio of 53.4% and a price-to-earnings ratio of 21.84 [3]. Financial Performance - For 2025-2027, the projected revenues are 21.61 billion yuan, 22.37 billion yuan, and 23.20 billion yuan, respectively, with net profits expected to be 980 million yuan, 1.24 billion yuan, and 1.51 billion yuan [6]. - The report notes a decrease in expense ratios, contributing to a slight improvement in profitability [4]. Industry Outlook - The report emphasizes the potential growth in the nuclear power sector, particularly with the successful cold test of the first land-based commercial modular small reactor in China [5]. - The pumped storage industry is highlighted as a key area for growth, with government support for its development [5].

Industry Trends - The global natural uranium market continues to maintain a tight supply-demand balance, with a projected supply-demand gap of 6,000 tons by 2030 and 31,000 tons by 2035 according to UxC [1] - Supply-side challenges include a 9.3% reduction in nominal production from Kazakhstan's uranium mines for 2026 and delays in new mining projects in Niger and West Africa, increasing supply uncertainty [1] - On the demand side, China's nuclear power approvals remain steady, and the U.S. plans to start construction on 10 large nuclear power plants by 2030, driven by surging electricity demand from AI [1] - Global uranium inventories are decreasing, with UxC predicting secondary supply will drop from 11,000 tons in 2025 to 6,000-7,000 tons by 2030, reinforcing the view of a tight supply-demand situation [1] Market Activity - Since May, the natural uranium spot market has seen increased activity, with long-term contract prices showing signs of rising, reflecting expectations of future supply-demand gaps [2] - In the first half of 2025, the spot transaction volume of natural uranium was approximately 10,000 tons, nearing the total volume for 2024, driven by U.S. tariff policy and increased procurement by Sprott Fund [2] - Nuclear power owners accounted for 35% of the spot transaction volume in the first half of the year, as difficulties in long-term contract negotiations pushed them towards the spot market [2] - The expectation of a Federal Reserve interest rate cut in September may lead traders and financial institutions to increase procurement, potentially raising spot prices closer to long-term contract prices [2] Company Trends - The international trade segment's impact may have been concentrated in the first half of the year, with expectations for the second half to recover from previous losses [3] - The company reported a net profit of -68 million HKD in the first half of 2025, a 160% year-on-year decline, primarily due to price fluctuations in international trade contracts and inventory accounting methods [3] - Approximately 55% of contracts delivered in the first half were signed at low prices between 2021-2023, with an average selling price of 48 USD per pound, below the weighted average cost of 60-70 USD per pound [3] - The company anticipates an increase in high-priced contract deliveries starting in the second half of 2025, with 4,256 tons of unsold contracts signed at an average price of 80.8 USD per pound, indicating significant future profit growth potential [3] - The company has adjusted its international trade contracting strategy to shorten delivery cycles, reducing risks associated with price fluctuations and mismatches [3] - Profit forecasts for the company indicate a recovery in net profit for 2025-2027, with expected figures of 348 million, 1.039 billion, and 1.123 billion HKD, corresponding to year-on-year growth rates of +1.84%, +198.42%, and +8.04% [3]

Investment Rating - The investment rating for China General Nuclear Power Corporation (1164 HK) is maintained at "Buy" with a target price of HKD 3.01 [5]. Core Views - The report highlights an expected improvement in international trade contracts starting from the second half of 2025, driven by high-priced order deliveries and adjustments in signing strategies [3][10]. - The global natural uranium market is projected to remain tight, with a significant supply-demand gap anticipated by 2030, supporting a bullish outlook for uranium prices [10]. - The company's international trade business experienced a loss in the first half of 2025 due to one-time impacts, but profitability recovery is expected in the second half as high-priced contracts are delivered [3][10]. Summary by Sections Profit Forecast and Valuation - The company is expected to recover from a loss of HKD 0.68 billion in the first half of 2025, with projected net profits of HKD 3.48 billion, HKD 10.39 billion, and HKD 11.23 billion for 2025-2027, representing year-on-year growth of +1.84%, +198.42%, and +8.04% respectively [3]. - The estimated EPS for the same period is projected to be HKD 0.05, HKD 0.14, and HKD 0.15 [3]. - The target valuation for 2026 is set at 21.5x PE, with a target price of HKD 3.01 based on comparable company analysis [3]. Industry Trends - The global natural uranium market is expected to maintain a tight supply-demand balance, with a projected shortfall of 6,000 tons by 2030 and 31,000 tons by 2035 [10]. - The demand for nuclear power is anticipated to remain high, driven by China's nuclear approvals and the U.S. plans for new nuclear plants, alongside increasing electricity needs from AI [10]. - The report notes a resurgence in the spot uranium market since May, with long-term contract prices showing signs of increase, reflecting market expectations for future supply-demand gaps [10]. Company Trends - The international trade business's losses in the first half of 2025 were primarily due to price fluctuations in contracts and inventory cost accounting methods [10]. - The company has adjusted its signing strategy to shorten delivery cycles and mitigate risks associated with price volatility [10]. - The average selling price of contracts signed but not yet delivered is projected at USD 80.8 per pound, significantly higher than the average cost of inventory, indicating potential for profit growth [10].