Investment Rating - The report maintains an investment rating of "Outperform the Market - A" [5] Core Insights - Nuclear fusion is considered one of humanity's ultimate energy solutions, currently in the engineering verification stage, characterized by its infinite resources, high energy density, safety, and cleanliness [1][15] - The D-T (deuterium-tritium) reaction is the most feasible fusion reaction on Earth, with global research primarily focused on magnetic confinement fusion and inertial confinement fusion technologies [2][22] - The global fusion industry is experiencing active financing, with a total of $9.766 billion raised by 2025, and 78% of companies expect to have their first commercial demonstration plant operational between 2030 and 2035 [3][4] Summary by Sections 1. Transition from Laboratory to Engineering in Controlled Nuclear Fusion - Controlled nuclear fusion is viewed as the ultimate energy solution, with characteristics such as infinite resources, high energy density, safety, and cleanliness [1][15] - Achieving fusion ignition requires meeting the Lawson criteria, with energy balance being a crucial indicator for commercial viability [17][20] - The main technical paths for achieving fusion include magnetic confinement and inertial confinement [25] 2. Magnetic Confinement Fusion: Tokamak as the Main Pathway - The Tokamak is recognized as the most promising method for achieving controlled nuclear fusion, with ITER being the largest experimental Tokamak reactor [27][29] - The core components of the Tokamak include superconducting magnet systems, vacuum chambers, and blanket systems, which are critical for maintaining plasma stability and achieving fusion [42][43] 3. Global Acceleration of Nuclear Fusion Commercialization - The fusion industry is seeing a surge in financing, with a total of $9.766 billion raised by 2025, and a fivefold increase in new financing from 2024 to 2025 [3][4] - In China, a dual-driven model involving state-owned enterprises and private companies is emerging, with significant milestones such as the establishment of China Fusion Energy Co., which is pivotal for commercialization [3][4][11] 4. Investment Recommendations - Focus on companies involved in materials and equipment manufacturing that have received validation or orders from large scientific installations in the short term [11] - Long-term attention should be directed towards operational companies in the fusion energy sector [11]

Investment Rating - The report suggests a focus on key manufacturers in the controllable nuclear fusion sector, particularly in components such as magnets, power supplies, and other subsystems [6][26]. Core Insights - The demand for procurement in the nuclear fusion sector is increasing, with significant bidding activity observed in components like magnets and power supplies, leading to a notable acceleration in industry contracts [4][26]. - China has joined the "Triple Nuclear Energy Declaration," which aims to triple global nuclear energy capacity by 2050, enhancing the momentum for sustainable nuclear energy development [2][13]. - Recent breakthroughs in superconductivity, achieving a transition temperature of 151K under normal pressure, could significantly impact the efficiency and cost of fusion reactors [12][17]. - The European Union has announced a new strategy for small modular reactors (SMRs) with a €200 million guarantee fund to support nuclear energy projects, addressing the strategic importance of nuclear energy in the current geopolitical landscape [24][25]. Summary by Sections Market Performance - During the week of March 9-13, the nuclear fusion index rose by 0.51%, outperforming the broader market indices [7][10]. Bidding Information - Significant procurement activities were reported, including projects with budgets exceeding 50 million RMB, focusing on critical components for nuclear fusion [9][10]. Domestic and International News - The announcement of China's participation in the "Triple Nuclear Energy Declaration" and the establishment of a technical seminar on tritium factory engineering highlight the country's commitment to advancing nuclear energy [13][18]. Investment Dynamics - The collaboration between Jinchuang Group and Huazhong University of Science and Technology aims to develop predictive technologies for plasma disruptions, indicating a strategic move towards enhancing nuclear fusion technology [4][22]. - The EU's new strategy for SMRs, including a financial guarantee mechanism, aims to revitalize nuclear energy's role in Europe, reflecting a shift in energy policy [24][25]. Investment Recommendations - Key companies to watch include: - For magnets: Lianchuang Optoelectronics, Yongding Co. - For power supplies: Wangzi New Materials, Xuguang Electronics, Aike Saibo, and Sichuan Chuangxin Electronics. - For structural components: Hangyang Co., with related companies including Hezhu Intelligent, Guoguang Electric, and Antai Technology [26][27].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The report focuses on "Controlled nuclear fusion" in the six future industries of the "15th Five-Year Plan". It aims to screen theme - related ETF targets from an individual stock perspective, using the core stock pool of industrial chain links such as upstream raw materials and core components, mid - stream core equipment manufacturing, and downstream construction and operation services of controlled nuclear fusion. Then, through the benchmark index weight penetration method, it calculates the equity weights of each ETF benchmark index and retains the indices and ETF products with higher weights [1] Summary by Related Catalogs Technology Overview - Controlled nuclear fusion is a cutting - edge energy technology that aims to simulate the energy - generating mechanism inside the sun. Its core goal is to achieve safe, continuous, and stable release of nuclear fusion energy on Earth, and it is vividly called the "artificial sun" [1] Industrial Chain Companies - **Upstream: Raw Materials and Core Components** - Superconducting magnets: Xuguang Electronics, Orient Lithium [3] - Superconducting tapes and alloys: Western Superconducting, Antai Technology, Yongding Co., Ltd. [3] - Power supply systems: Xuguang Electronics, Sichuang Electronics, Yingjie Electric [3] - Other: Structural components include Antai Technology, Jiulite Materials, etc. [3] - **Mid - stream: Core Equipment Manufacturing** - Chain leaders: Guoguang Electric, Heforging Intelligent, Lianchuang Optoelectronics [3] - **Downstream: Construction and Operation Services** - Construction and operation: Jingda Co., Ltd., Western Superconducting, China Nuclear Engineering, China National Nuclear Power, Zhejiang Energy Electric Power, etc. [3] - Core module construction: Libert, China Energy Engineering [3] Key ETF Targets | Fund Code | Fund Name | Index Code | Index Name | Holding Weight (%) | | --- | --- | --- | --- | --- | | 562550 | Huaxia CSI Green Power ETF | 931897.CSI | Green Power | 12.20 | | 588010 | Boshi SSE STAR Market New Materials ETF | 000689.SH | STAR Market Materials | 11.41 | | 562350 | Yinhuazhong CSI All - Index Electric Power Utilities ETF | H30199.CSI | Electric Power Index | 10.70 | | 159669 | Guotai SZSE Green Power ETF | 399438.SZ | Green Power | 10.12 | | 159301 | Huaxia CSI All - Index Utilities ETF | 000995.CSI | All - Index Utilities | 10.06 | | 561260 | ICBC CSI Guoxin Central State - owned Enterprises Modern Energy ETF | 932037.CSI | Central State - owned Enterprises Modern Energy | 8.19 | | 516970 | GF CSI Infrastructure Engineering ETF | 399995.SZ | Infrastructure Engineering | 7.45 | | 515760 | Huaxia CSI Zhejiang State - owned Assets Innovation and Development ETF | 931372.CSI | Zhejiang State - owned Assets | 6.15 | | 05695 | Yinhuazhong CSI Infrastructure ETF | 930608.CSI | CSI Infrastructure | 6.06 | | 589120 | Huitianfu SSE STAR Market Innovative Drugs ETF | 950161.CSI | STAR Market Innovative Drugs | 6.06 | [4]

Core Viewpoint - The development of artificial intelligence (AI) is increasingly dependent on computing power, which in turn relies on energy supply, leading to a renewed focus on controllable nuclear fusion as a potential ultimate solution to humanity's energy problems [1] Group 1: Industry Trends - The strategic technology sector of controllable nuclear fusion is receiving significant support from both policy and capital, indicating a growing interest and investment in this area [1] - Since 2026, various controllable nuclear fusion projects, such as Xinghuan Fusion, Zhongke Qingneng, Dongsheng Fusion, and Shuyuan Juchuang, have reported financing progress, highlighting the increasing momentum in this field [1] Group 2: Investment Landscape - Investment institutions that previously took a solitary approach to controllable nuclear fusion are now joined by state-owned enterprises, industrial capital, and market-oriented funds, accelerating their involvement in this sector [1] - Controllable nuclear fusion is evolving from a grand narrative into a more concrete hard technology investment opportunity, following trends in AI, commercial aerospace, and quantum computing [1] - Industry experts suggest that failing to invest in controllable nuclear fusion could mean missing out on critical energy transformation opportunities in the next technological revolution [1]

Investment Rating - The report rates the controlled nuclear fusion industry as "Outperform the Market" [1][8] Core Insights - Controlled nuclear fusion is considered the "ultimate energy solution" due to its potential for near-infinite energy, high energy density, and minimal environmental impact [1][13] - The industry is experiencing a second acceleration phase driven by advancements in technology, increased capital expenditure, and supportive policies [3][38] - The market space for nuclear fusion is projected to reach 800-1000 billion yuan, with significant growth expected as the technology matures [6][8] Summary by Sections Introduction to Controlled Nuclear Fusion - Nuclear fusion involves the combination of two light atomic nuclei to form a heavier nucleus, releasing significant energy [1][15] - It is viewed as a solution to energy challenges, offering advantages over traditional energy sources [1][17] Advantages of Nuclear Fusion - Fusion fuel sources are abundant, and the energy density is significantly higher than that of fission [2][21] - It has inherent safety features, reducing the risk of catastrophic failures [2][21] Development of Nuclear Fusion in China - China is pursuing multiple technological pathways, primarily focusing on the Tokamak route for commercial power generation [3][38] - The country aims to demonstrate controlled nuclear fusion power generation by around 2030 and achieve commercial viability by 2050 [3][38] Industry Catalysts - The industry is currently in a phase of rapid development, with increased investment and participation from both state-owned and private enterprises [3][38] - The integration of AI and advancements in high-temperature superconductors are expected to further accelerate progress in the nuclear fusion sector [3][38] Market Potential - The nuclear fusion market is expected to generate substantial demand for engineering and equipment, with annual investments projected at around 20 billion yuan during the 14th and 15th Five-Year Plans [6][8] - Long-term projections suggest that fusion power plants could replace a significant portion of current electricity generation, contributing to carbon neutrality goals by 2060 [6][8] Industry Chain Overview - The nuclear fusion industry chain includes key components such as superconducting materials, vacuum systems, and various auxiliary systems [4][6] - Major companies involved in the sector include 应流股份, 许继电气, and 中国核电, all rated as "Outperform the Market" [8]

Group 1: Biomass Gasification Project - The "Donghua Furnace" is a biomass gasification core device developed by Donghua Engineering Technology Co., which successfully produced synthesis gas from agricultural waste [4][5] - The gasification process can reduce carbon emissions by 70% to 90% compared to fossil fuels, producing high-value green chemicals and sustainable aviation fuel [4][5] - The project aims to enhance the value of agricultural waste and promote local economic development while reducing reliance on coal [6][7] Group 2: Hydrogen Production Project - The "Hydrogen Boat" project in Panzhihua is set to launch the world's first commercial production line based on "concentrated solar water electrolysis" technology, with an expected annual hydrogen output of 200 tons by December 2025 [8][9] - This innovative technology allows for a direct energy conversion from solar to hydrogen, significantly improving production efficiency [9][10] - The project has attracted interest from multiple government and corporate entities, indicating strong market potential for green hydrogen applications in industries such as metallurgy and chemicals [11][12] Group 3: Geothermal Heating in Xiong'an - Xiong'an New Area has implemented geothermal heating, replacing traditional coal heating and significantly reducing carbon emissions [15][16] - The geothermal energy system utilizes underground heat sources, achieving a heating area of 2.6 million square meters and reducing CO2 emissions by 14,140 tons annually [16][17] - The integration of geothermal heating with solar energy and smart grid technology aims to create a near-zero carbon energy microgrid [17][18] Group 4: Controlled Nuclear Fusion Research - New Hope Group is advancing controlled nuclear fusion technology, with the goal of making it a viable energy source within the next 20 years [19][20] - The team has achieved significant milestones, including the world's first megampere-level hydrogen-boron fusion discharge, positioning them at the forefront of global fusion research [20][21] - The initiative emphasizes the importance of talent development and collaboration with various research institutions to support the long-term goals of fusion energy commercialization [21]

Core Viewpoint - Controlled nuclear fusion is considered the "ultimate dream" in the energy sector, offering significant advantages over traditional nuclear fission, including abundant fuel sources, enhanced safety, and reduced radioactive waste [5][6]. Group 1: Current Development Status - Global fusion research has entered a critical verification phase, with the ITER project aiming for ignition by around 2035, and the NIF achieving net energy gain in 2022, marking a milestone in fusion science [8]. - China has made significant breakthroughs in fusion, with the EAST setting records for plasma operation time and the CFETR design progressing steadily [8]. - Challenges remain in material endurance, energy extraction, and economic viability, with commercial fusion power plants expected to take several decades to realize [8]. Group 2: Technical Pathways - The main technical pathways for fusion include magnetic confinement and inertial confinement, with magnetic confinement represented by tokamak devices and inertial confinement exemplified by high-energy lasers [8]. - Each technical route has its advantages; magnetic confinement shows potential for sustained operation, while inertial confinement has made breakthroughs in energy gain, but both are still far from commercialization [8]. Group 3: Industry Chain - The fusion industry chain can be divided into upstream, midstream, and downstream segments, with upstream focusing on core components and materials, midstream on system design and engineering, and downstream on energy applications [9][10]. - Key components in the upstream include superconducting magnets, lasers, and plasma heating devices, which are crucial for the operation of fusion devices [9][10]. - The midstream involves the engineering realization of fusion devices, requiring precise integration of various systems and advanced manufacturing techniques [10]. - Downstream applications include fusion power plants, research platforms, and industrial applications, with the potential to replace fossil fuels as technology matures [10]. Group 4: Investment Trends - From 2020 to 2025, financing activities in the controlled nuclear fusion sector showed significant fluctuations, peaking at 22 events in 2021 before declining to 15 in 2023 and further to 11 in 2024, indicating a rational market adjustment [12][13]. - A notable rebound in financing events is expected in 2025, with a significant increase in funding amounts, reflecting a shift towards focused investment strategies in leading companies with clear commercialization potential [12][13]. Group 5: Related Companies - **ChaoMag Energy** focuses on developing high-temperature superconducting magnet systems for controlled nuclear fusion, aiming to accelerate the commercialization of fusion energy [15]. - **XingHuan Fusion** aims to develop compact, commercial fusion devices and has achieved significant milestones in technology validation and rapid construction of experimental setups [18][19]. - **XingNeng XuanGuang** is dedicated to providing high-performance fusion energy solutions and has set ambitious goals for the construction of demonstration reactors by 2030 and 2035 [23][24]. Group 6: Recent Developments - The Fusion Financial Institutions Alliance was established in January 2026 to support the commercialization of nuclear fusion, involving 130 financial and tech service institutions [27]. - Zhejiang Province plans to accelerate research and development in advanced nuclear power and controlled nuclear fusion technologies as part of its industrialization strategy [28]. - The BEST research plan was launched to develop a compact fusion energy experimental device, aiming to demonstrate energy output exceeding input [29].

Core Viewpoint - The sustainability of emerging themes in the secondary market, such as controllable nuclear fusion, depends on continuous advancements in policy, funding, and industry developments, leading to increased capital market activity in related stocks [1]. Policy Developments - The new "Atomic Energy Law of the People's Republic of China," which encourages and supports controlled nuclear fusion, has been officially implemented, providing institutional guarantees for fusion energy innovation [2]. - Major financing events include Shanghai Xinghuan Fusion Technology Co., Ltd. completing a 1 billion yuan Series A financing, setting a record for similar domestic enterprises [2]. Industry Dynamics - The nuclear fusion sector is experiencing rapid development, with significant projects and collaborations being established, such as the 2026 Nuclear Fusion Energy Technology and Industry Conference, where multiple major procurement projects were signed [2][4]. - China's major nuclear fusion projects are expected to see investments reaching 146.5 billion yuan, with the industry entering a capital expenditure expansion cycle from 2025 to 2028 [4]. Market Trends - The global demand for electricity is expected to grow exponentially, driven by AI computing needs, with data center electricity consumption projected to reach 945 terawatt-hours by 2030 [7]. - The nuclear fusion industry is entering a phase of intensive equipment procurement and construction to meet this surging demand [7]. Investment Opportunities - The nuclear fusion sector is characterized by a "long slope, thick snow" investment model, indicating a clear investment value emerging as the industry transitions from the "year of fusion" to substantial capital expenditure [10]. - Companies like Shanghai Electric and China General Nuclear Power Corporation are positioned to benefit from national investments in nuclear energy, with Shanghai Electric achieving significant breakthroughs in core equipment [13][14]. Strategic Considerations - The investment landscape for controllable nuclear fusion is expected to evolve, with a focus on companies deeply embedded in national projects and possessing solid technological capabilities [14]. - Investors are advised to be cautious of speculative trading detached from fundamentals, as the path from engineering validation to commercial power generation remains fraught with challenges and uncertainties [14].

Core Insights - Controlled nuclear fusion has emerged as a hot investment sector in 2026, with significant attention from both primary and secondary markets [3][4] - The global investment landscape for fusion technology is primarily centered in the US and China, with the US accounting for approximately 53% and China for about 34% of total investments [1][4] - The Chinese government has established a supportive policy framework for nuclear fusion, as highlighted by the implementation of the Atomic Energy Law and the inclusion of fusion energy in the 14th Five-Year Plan [3][4] Investment Landscape - The total investment in magnetic confinement fusion technology has exceeded 60 billion euros (approximately 485.74 billion RMB), with private enterprises dominating the foreign investment landscape [1] - A new venture capital fund, the Hefei Future Fusion Energy Fund, has been launched with an initial scale of 1 billion RMB, aimed at supporting key technologies in the fusion energy sector [9][10] - The Shanghai Future Industry Fund, established in September 2024, has grown to 15 billion RMB and is focused on technology commercialization in the fusion energy field [10] Key Players - The national team in China includes major entities like Fusion Energy (Anhui) Co., which is focused on developing the BEST project, a compact fusion energy experimental device [4][6] - China Fusion Energy Co. is another key player, planning to complete the HL-4 fusion experimental device by 2030, aiming for a fusion gain (Q) of ≥5 [7] - Private companies such as Xi'an Xinghuan Fusion Technology Co. and Hanhai Fusion Technology Co. are emerging, often stemming from research institutions and universities [7][14] Market Dynamics - The fusion sector is witnessing a surge in private capital, with a consortium of 15 financial institutions forming a Fusion Financial Institutions Alliance to create a collaborative ecosystem [11] - Recent financing activities include a record 1 billion RMB Series A round for Xi'an Xinghuan, indicating strong investor interest in the sector [13] - The controlled nuclear fusion index has seen a significant increase, with a 70% rise since January 2025 and a 13.5% increase in 2026 [14][15] Future Outlook - The industry is still in its nascent stages, requiring substantial funding to support research and project implementation [14] - Market focus is expected to shift towards tangible technological advancements, including breakthroughs in Q values and financing for subsequent devices [15] - The maturation of the fusion energy supply chain will take time, with investment returns likely to align with gradual industry development [15]

Investment Rating - The industry investment rating is "Positive" (maintained) [6] Core Insights - The report highlights accelerated integration in the US fusion industry, with frequent technological breakthroughs and a continuous strengthening of the "engineering" logic [1] - International cooperation is advancing, with significant policy support at both national and international levels, emphasizing the strategic urgency of major economies in seizing future energy dominance [1][13][17] - The report notes substantial progress in various technological pathways, particularly in Tokamak device construction and other fusion technology routes, indicating a robust trajectory towards commercialization [2][19][25] Policy Insights - National policies are increasingly supportive of fusion energy, with the Chinese government explicitly including fusion technology in its "14th Five-Year Plan" [1][11] - A cooperation agreement between China and France has been established, marking a new phase in international collaboration on fusion technology [13][14] - South Korea has advanced its fusion energy goals by moving the timeline for fusion power generation from the 2050s to the 2030s, highlighting the urgency among global economies [17][18] Industry Developments - Significant advancements in Tokamak devices include the completion of key plasma control coils for the JT-60SA, which is set to facilitate high-parameter experiments in 2026 [2][19] - The CRAFT facility has successfully passed its first performance test, confirming that its core components meet design specifications [21] - China's ITER project has officially commenced mass production of its first wall components, a critical step in the development of fusion reactors [22] Capital Market Activity - The US fusion industry is experiencing rapid consolidation, with notable mergers such as Trump Media and Technology Group's acquisition of TAE Technologies, which is set to launch the world's largest commercial fusion power plant [3][27][29] - Initial public offerings and significant funding rounds for startups in the fusion sector are on the rise, indicating growing investor confidence in fusion technology [3][33][36] Investment Recommendations - The report suggests focusing on midstream equipment companies such as Lianchuang Optoelectronics, Xuguang Electronics, and others, as well as upstream material suppliers like Yongding Co. and West Superconducting [4][37]