Core Insights - L1 Long Short Fund's portfolio achieved a return of 12.2% in Q2 2025, outperforming the ASX200 Accumulation Index's 9.5% [1] - Over the past five years, the fund has delivered a compound annual return of 21.0%, significantly exceeding the ASX200AI's 11.8% [1] Company Overview: Nexgen Energy Ltd. - Nexgen Energy Ltd. (NYSE:NXE) focuses on the acquisition, exploration, evaluation, and development of uranium properties in Canada [3] - The company's shares increased by 24.69% in the past month and gained 37.69% over the last 12 months, closing at $8.93 with a market capitalization of $5.22 billion on September 22, 2025 [3] Investment Thesis on Nexgen Energy Ltd. - Nexgen Energy Ltd. saw a 47% increase in value as spot uranium prices rose by 16% during the June quarter, closing at US$74/lb [4] - The increase in uranium prices recovered losses from Q1 2025, which were attributed to low volumes and uncertainty regarding U.S. tariff policy [4] - The company is preparing to develop the Arrow deposit, the world's largest undeveloped uranium deposit, located in Saskatchewan, Canada [4] - Arrow is expected to generate over C$2 billion in annual cash flow, assuming conservative uranium prices, with the company nearing final federal approval for project construction [4]

Investment Rating - The report maintains a "Hold" rating for both H and A shares of Dongfang Electric, with target prices raised to HKD12.30 and RMB19.30 respectively [5][9]. Core Insights - Dongfang Electric-H has significantly outperformed Dongfang Electric-A, with a year-to-date increase of 50% compared to 6% for A shares, attributed to improved sentiment towards global power equipment, particularly nuclear [2][9]. - The report indicates that the current share price has largely priced in the positive outlook for global nuclear investment, suggesting limited upside potential without meaningful earnings growth [2][5]. - The company anticipates a steady increase in revenue from nuclear equipment, projecting RMB5 billion in 2025, RMB6 billion in 2026, and RMB7 billion in 2027, which will account for 11% of total revenue by 2027 [3][22]. Summary by Sections Nuclear Power - Global nuclear investment is gaining momentum, with China expected to approve the construction of 10 nuclear plants annually from 2026 to 2030, leading to a projected revenue increase from nuclear equipment [3][22]. - The gross profit margin for nuclear equipment is expected to be between 18-20% from 2025 to 2027, down from previous estimates of 20-30% [3][22]. Coal Power - Orders for coal power equipment are expected to peak in 2026, with a decline in tender sizes from 100GW in 2023 to an anticipated average of 50GW from 2026 to 2030 [4][22]. - The company expects thermal equipment margins to gradually recover, reaching approximately 20% in 2025 [22]. Financial Estimates - Earnings estimates for 2025 have been cut by 9%, while estimates for 2026 and 2027 have been raised by 6% and 14% respectively, reflecting the latest order cycle for thermal and nuclear power equipment [5][25]. - The report highlights that the earnings estimates for 2025 are 12% below consensus, indicating a potentially overly optimistic market outlook [5][9]. Market Performance - The H/A discount for Dongfang Electric has reached a 10-year low of 26%, reflecting the strong performance of H shares compared to A shares [2][5]. - The report notes that the buoyant expectations for global nuclear investment have likely been factored into the recent rally in share prices, suggesting a cautious outlook moving forward [5][9].