Summary of Controlled Nuclear Fusion Industry Conference Call Industry Overview - The controlled nuclear fusion industry is recognized as a potential ultimate energy source due to its high energy release, easy access to reactants, and low radioactive waste, making it a focal point of technological competition among major countries [1][3][7]. Key Points and Arguments - **Q Value as a Key Indicator**: The current critical indicator for the development of controlled nuclear fusion technology is the Q value, which measures the ratio of energy produced by the fusion reaction to the energy input required to sustain the reaction. Achieving a Q value greater than 1 is essential for energy balance, while a Q value greater than 10 is necessary for commercialization [1][5]. - **Global Investments and Plans**: Major countries, including China, the EU, the US, Japan, Russia, and India, are increasing their policy support and financial investments in the controlled nuclear fusion sector. For instance, the US company Helion plans to build the world's first fusion power plant by 2028, and China has included controlled nuclear fusion in its "15th Five-Year Plan" [1][6]. - **Domestic Development Transition**: The domestic controlled nuclear fusion sector is transitioning from scientific feasibility verification to engineering feasibility verification. From 2025 to 2027, approximately 60 billion RMB will be invested in experimental reactors, while from 2027 to 2035, commercial demonstration reactors will be the focus, with each project expected to require an investment of 80 to 100 billion RMB [1][8]. - **Recent Capital Expenditure Trends**: There has been a significant acceleration in capital expenditures, particularly for key projects such as BEST, Chengdu, and Nanchang. The bidding activities for these projects are increasing, indicating a ramp-up in development [1][9]. Important but Overlooked Content - **Investment Focus Areas**: Investors are advised to focus on high-value segments of the nuclear fusion supply chain, including superconducting materials, core equipment and components (like magnets and vacuum chambers), and power and heating systems. The successful advancement of experimental reactor construction and order confirmations are critical for investment decisions [1][4][12]. - **Industry Chain Development**: The nuclear fusion industry chain includes upstream raw materials, midstream core components, and downstream applications. Government capital expenditures are primarily concentrated in the upstream and midstream segments, which are now entering the order fulfillment phase [1][10]. - **Emerging Technologies**: The development of new technologies, such as high-temperature superconductors, is expected to significantly impact the industry. The supply-demand tension in high-temperature superconducting materials presents investment opportunities in leading companies [1][12]. - **Cost Breakdown**: In the Tokamak technology path, the cost distribution is approximately 28%-30% for magnets and superconducting materials, 15% for core components, and around 40% for heating systems and power supply [1][11]. This summary encapsulates the essential insights from the conference call regarding the controlled nuclear fusion industry, highlighting its potential, current developments, and investment opportunities.

Investment Rating - The report does not explicitly state an investment rating for the controlled nuclear fusion industry. Core Insights - Controlled nuclear fusion is regarded as the "ultimate energy" solution due to its high energy density, safety, and environmental friendliness. Recent breakthroughs in high-temperature superconductors and artificial intelligence, combined with global energy transitions and strategic competition among major powers, are accelerating its shift from basic research to engineering validation and commercialization [14][26][32]. Summary by Sections Overview of Controlled Nuclear Fusion - Controlled nuclear fusion aims to harness the immense energy released from the fusion of light atomic nuclei under controlled conditions, similar to the processes occurring in the sun. The primary technical approach involves fusing isotopes of hydrogen (deuterium and tritium) at extremely high temperatures and specific confinement conditions [15][23]. Global Landscape of Controlled Nuclear Fusion Industry - The industry is characterized by a dual-track system of large scientific projects and commercial companies. The main technical routes for achieving controlled fusion include gravitational confinement, inertial confinement, and magnetic confinement, with magnetic confinement being the most promising for engineering applications [39][46]. Current Status of China's Controlled Nuclear Fusion Industry - China is systematically building a self-sufficient fusion energy development system through a multi-layered project layout, focusing on basic research, engineering validation, and demonstration pre-research. Key projects include the EAST superconducting tokamak and the CFETR experimental reactor, which aims to achieve significant fusion power output by the mid-21st century [36][37][60]. Technical Routes and Key Institutions - The report outlines various technical routes for achieving controlled nuclear fusion: - **Inertial Confinement**: Utilizes high-precision laser or particle beams to compress fuel targets to achieve fusion [41]. - **Magnetic Confinement**: Employs strong magnetic fields to confine high-temperature plasma, with tokamaks being the most developed and widely researched approach [46][60]. - **Stellarators**: Offer stable plasma confinement but are complex and costly to construct [50][52]. Investment and Market Dynamics - The report highlights the increasing capital investment in the controlled nuclear fusion sector, driven by the need for energy security and the transition to new energy sources. The global investment in fusion projects is expected to grow significantly, with major players in the field receiving substantial funding [39][46].

Core Viewpoint - China's nuclear fusion energy engineering has entered a substantial and systematic phase of industrial collaborative breakthroughs, with significant advancements in key technologies and partnerships being established [1] Group 1: Industry Developments - On January 16, at the 2026 Nuclear Fusion Energy Science and Industry Conference, the Hefei Comprehensive National Science Center Energy Research Institute signed a series of cooperation agreements with leading enterprises and research institutions in the industry chain [1] - Multiple joint laboratories focusing on key nuclear fusion technologies are being established, including advanced divertor laboratories, high-end metal materials research laboratories, high-multiplication energy storage devices and high-performance equipment laboratories, and nuclear fusion vacuum equipment development laboratories [1] Group 2: Market Outlook - CITIC Securities views nuclear fusion as the ultimate energy source for humanity, with significant long-term growth potential and a current phase driven by major events [1] - Domestic capital expenditure (CapEx) is progressing orderly, and overseas advancements are expected to exceed expectations, establishing a long-term growth trend for the industry [1] - Under the accelerated construction of international and domestic facilities, orders for component manufacturers are expected to be fully released, leading to a positive outlook for the industry [1] Group 3: Policy and Strategic Support - Ping An Securities emphasizes that controllable nuclear fusion is becoming an important energy solution globally, with increasing attention from various countries and the introduction of relevant policies and strategic plans [1] - With the continuous development of China's industrial chain and ongoing technological advancements, breakthroughs in controllable nuclear fusion are expected, supported by increasing policy backing [1] - The industrialization process of controllable nuclear fusion in China is anticipated to accelerate, benefiting related companies in the industry chain [1]

Group 1 - The core viewpoint of the article emphasizes the high energy release from nuclear fusion, particularly the deuterium-tritium reaction, which is currently the mainstream approach due to its efficiency and lower fuel demand [3][12] - Deuterium-tritium fusion releases energy equivalent to 11.2 tons of standard coal per gram, which is about four times the energy released from one gram of uranium-235 fission [3][12] - The advantages of deuterium-tritium fusion include abundant fuel availability, high technical feasibility, and significant energy gain potential, making it a viable path for achieving net energy gain and commercial power generation [3][12] Group 2 - Global electricity demand driven by data centers is projected to double from approximately 415 TWh to about 945 TWh by 2030, with a growth rate of around 15% per year, significantly outpacing other sectors [4][13] - Controlled nuclear fusion is seen as an ideal energy solution amidst rising electricity demand and carbon neutrality goals, with advancements in technology moving towards stable and economical operation [4][13] - Major projects like EAST and ITER are progressing towards achieving long-term stable operation and energy gain targets, with domestic and international companies actively pursuing fusion power generation [4][13] Group 3 - The value of midstream equipment manufacturing in the tokamak device sector is significant, with over 50% of the value chain attributed to midstream components such as vacuum chambers and superconducting magnets [5][14] - In the ITER project, the magnet system accounts for the highest value share at 28%, while other components like vacuum chamber internals and heating systems also contribute significantly [5][14] - The DEMO demonstration project is expected to shift focus towards high-temperature superconducting technology, further enhancing the value of midstream manufacturing [5][14] Group 4 - Domestic capital expenditure in the nuclear fusion sector is expected to exceed 95 billion yuan over the next five years, benefiting local companies involved in key projects [6][15] - Major projects like CFETR are estimated to require around 100 billion yuan in investment, with significant contributions from domestic enterprises in both upstream materials and midstream equipment manufacturing [6][15] - Companies such as Western Superconducting, Antai Technology, and China Nuclear Power are positioned to benefit from the ongoing advancements and investments in the nuclear fusion industry [6][15]

Group 1 - Controlled nuclear fusion is considered a future ideal energy source due to its high energy output compared to nuclear fission, with 1 gram of deuterium-tritium fusion fuel releasing energy equivalent to 11.2 tons of standard coal, which is about four times that of 1 gram of uranium-235 fission [12][13] - The deuterium-tritium reaction is the mainstream application in nuclear fusion, offering advantages such as feasible fuel acquisition, high technical feasibility, and significant energy gain, making it the most viable path for achieving net energy gain and commercial power generation [18][19] - Magnetic confinement is recognized as the most promising method for achieving large-scale controlled nuclear fusion, with superconducting technology being key to future device miniaturization and cost reduction [1][25] Group 2 - The global demand for electricity is increasing, driven by data centers, which currently consume about 415 TWh and are expected to double to approximately 945 TWh by 2030, making controlled nuclear fusion an ideal energy solution [2][3] - The progress in controlled nuclear fusion has shifted from "can it ignite" to "can it operate long-term, stably, and economically," with significant advancements in devices like EAST and ITER laying the groundwork for commercial viability [2][3] - Major domestic projects in China, such as EAST and BEST, are expected to see capital expenditures exceeding 92 billion yuan over the next five years, benefiting local companies involved in the supply chain [4][6] Group 3 - The manufacturing value of midstream equipment in the tokamak devices is significant, with over 50% of the value chain attributed to midstream equipment, including key components like vacuum chambers and superconducting magnets [3][6] - Domestic companies are expected to benefit from the nuclear fusion sector, with investments in upstream materials and midstream equipment manufacturing, including companies like Western Superconducting, Antai Technology, and China Nuclear Power [6][4] - The capital expenditure in China's controlled nuclear fusion sector is projected to maintain around 92 billion yuan from 2026 to 2030, with annual investments exceeding 10 billion yuan [6][4]

Core Viewpoint - The A-share market shows positive momentum with significant gains in major indices, particularly in the retail and consumer sectors, driven by government initiatives to boost new consumption models [3][6]. Market Performance - As of midday, the Shanghai Composite Index rose by 0.59% to 3899.31, the Shenzhen Component Index increased by 0.93% to 13175.13, and the ChiNext Index climbed by 0.99% to 3137.73 [4]. - The retail sector led the market with a 4.01% increase, followed by duty-free shops and dairy industries, indicating strong consumer sentiment [5]. Sector Highlights - The consumer sector, including retail and food and beverage, continues to perform well, with several stocks reaching their daily limit up [6]. - The business environment is supported by a recent notice from the Ministry of Commerce and the Ministry of Finance to pilot new consumption models in 50 cities, which is expected to further stimulate growth in the consumer sector [6]. Stock Movements - Notable stock performances include Horizon Robotics rising nearly 7% and XPeng Motors increasing by nearly 5% within the technology sector [8]. - The innovative pharmaceutical sector saw a rebound, with stocks like Yifang Bio rising nearly 10% [9]. Trading Volume - The total trading volume in the Shanghai and Shenzhen markets reached 1.09 trillion yuan, an increase of 42.1 billion yuan compared to the previous trading day, with nearly 4700 stocks rising [5].

Core Viewpoint - The article outlines the investment opportunities and strategic directions for China's "14th Five-Year Plan" (十四五) and "15th Five-Year Plan" (十五五), emphasizing the importance of emerging industries and future technologies as key drivers for economic growth and development in the coming decade [1][24]. Summary by Sections Introduction - Great Power Responsibility - The article highlights China's transition from being an adapter of global rules to a co-builder and responsible stakeholder in international governance, as evidenced by recent speeches from Chinese leaders [2][3]. Comparison of 14th and 15th Five-Year Plans - The 15th Five-Year Plan places greater emphasis on modernizing the industrial system and enhancing technological self-reliance, reflecting a shift in priorities compared to the previous plan [8][10]. Top Ten Investment Directions of the 15th Five-Year Plan - The article identifies ten key sectors for investment during the 15th Five-Year Plan, including: 1. Artificial Intelligence 2. Robotics 3. Aerospace 4. Drones/Low-altitude Economy 5. Strategic Resource Metals 6. Shipping 7. Controlled Nuclear Fusion 8. Energy Storage 9. Brain-Computer Interfaces 10. Innovative Pharmaceuticals [1][24][25]. Emerging Pillar Industries and Future Industries - The plan aims to develop emerging pillar industries such as new energy and new materials, which are expected to create trillion-yuan markets. It also emphasizes the need for forward-looking layouts in future industries like quantum technology and hydrogen energy [24][27]. Focus on Future Industries - The article stresses the importance of focusing on future industries, including future information, future space and security, future energy, and future health, as key areas for capital market attention [28][29]. National Security and Technological Development - The article discusses the integration of national security with technological advancements, particularly in aerospace and defense, highlighting the need for a robust national security framework that supports innovation and development in these sectors [11][18][35]. Conclusion - The overall message of the article is that the 15th Five-Year Plan represents a significant opportunity for investment in emerging technologies and industries, which are crucial for China's economic transformation and global competitiveness in the next decade [24][27].

Core Viewpoint - The A-share market has shown strong performance this year, driven by the AI technology boom, with significant growth in various tech sectors, including optical modules, PCB, AI chips, liquid cooling, humanoid robots, and controllable nuclear fusion [2] Optical Modules - The optical module sector has seen a surge in demand due to increased investment in AI computing infrastructure, with expectations for strong demand for 800G and 1.6T optical modules by 2026 [2] - Eleven leading stocks in the optical module sector have doubled in value this year, with an average increase of 135.52% [2] - Key players like Zhongji Xuchuang, Xinyi Technology, and Tianfu Communication reported significant revenue and profit growth in the first three quarters of 2025 [3][4] PCB (Printed Circuit Board) - The PCB market is experiencing a boom due to the explosive demand for AI servers and high-end switches, with global PCB market value projected to reach $73.6 billion in 2024 [5] - Twelve leading PCB stocks have seen an average increase of 199.26% this year [5] - Major companies such as Shenghong Technology and Shenyin Technology reported substantial revenue and profit growth in the first three quarters of 2025 [6] AI Chips - The AI chip market is accelerating domestic substitution due to export restrictions on high-end chips, with significant growth expected in the coming years [7][8] - The domestic AI chip market is projected to grow from ¥142.54 billion in 2024 to ¥1.34 trillion by 2029, with a compound annual growth rate of 53.7% [8] - Leading companies like Cambricon and Montage Technology have reported impressive revenue and profit growth in 2025 [8][9] Liquid Cooling - The liquid cooling market is gaining traction as a solution for efficient heat dissipation in AI computing facilities, with the global market expected to reach $2.84 billion in 2025 [10][11] - Six leading liquid cooling stocks have shown an average increase of 88.09% this year [11] - Companies like Yingweike and Yinlun reported strong revenue and profit growth in the first three quarters of 2025 [12] Humanoid Robots - The humanoid robot market is expanding rapidly, with significant advancements from both domestic and international companies [14] - The global humanoid robot market size forecast has been raised from $3 trillion to $5 trillion by 2035 [15] - Leading firms such as Wolong Electric and Zhejiang Rongtai have reported notable revenue and profit growth in 2025 [15][16] Controllable Nuclear Fusion - Controllable nuclear fusion is becoming a strategic focus for major countries, with significant growth expected in the sector [17] - The market for controllable nuclear fusion is projected to see an average increase of 80.17% among leading stocks this year [17] - Companies like Shanghai Electric and Jintian Co. reported strong performance in the first three quarters of 2025 [18]

Summary of Key Points from the Conference Call Industry Overview - The focus is on controlled nuclear fusion, which utilizes fuel derived from seawater, making it a virtually limitless and low-carbon energy source. The primary byproducts are neutrons and helium, with no carbon emissions and high safety standards. The energy density is extremely high, with a million-kilowatt power station consuming only 150 kilograms of fuel annually [1][7]. Core Insights and Arguments - **Research and Development**: The global research on controlled nuclear fusion primarily revolves around thermonuclear fusion, which includes inertial confinement, magnetic confinement, and magnetic inertial confinement. Various reactor types, such as tokamaks and stellarators, are actively being explored, with commercialization expected around 2035. The U.S. has released a related technology roadmap [1][6]. - **Investment Trends**: There has been a significant increase in investment in the nuclear fusion sector, with private capital pouring in. Approximately 60 to 70 private fusion companies globally have attracted over $10 billion in total investment, with $4 to $5 billion expected in 2025 alone. In China, several companies have been established, with state-owned enterprises leading the way, such as the establishment of Jiu Bian Energy with a registered capital of 15 billion yuan [1][6][8]. - **Safety and Efficiency**: Controlled nuclear fusion is considered a safer alternative to traditional nuclear power plants, as the fusion reaction can be halted at any time, preventing continuous heat generation. The energy density is also highlighted, where a million-kilowatt power station can supply energy to one million households with just 0.5 kilograms of fuel daily [7][8]. - **Artificial Intelligence Integration**: There is a close relationship between nuclear fusion and artificial intelligence. Fusion can provide the necessary power for AI, while AI can be utilized to control plasma in fusion reactions. NVIDIA's CEO has mentioned using AI for digital simulations of controlled nuclear fusion [9]. Additional Important Content - **Neutron Applications**: Neutrons have various applications in nuclear technology, including sustaining fission reactions, detecting materials, burning nuclear waste, producing rare isotopes, and cancer treatment. The nuclear technology application industry in China (excluding traditional nuclear energy) is nearing a scale of 1 trillion yuan [10][11]. - **Clinical Applications**: The Boron Neutron Capture Therapy (BNCT) is a notable innovation in cancer treatment, utilizing neutrons to precisely target and kill cancer cells while sparing healthy tissue. Clinical trials are ongoing, with facilities established in Shandong University and Anqing, expected to treat around 2,000 patients annually [13][14]. - **Market Dynamics**: The nuclear fusion industry chain encompasses various industrial sectors, including magnets, power supplies, control systems, diagnostic measurements, materials, and radiation protection. Significant investments have been attracted in these areas, particularly in high-temperature superconductors and diagnostic equipment, which are crucial for the development of the fusion industry chain [19]. - **Global Supply Chain**: The U.S. has restricted the export of neutron source systems and related software since 2019. However, China has made significant advancements in neutron technology, achieving self-sufficiency in certain areas while still relying on imports for larger proton source accelerators, which are expected to be developed domestically in the coming years [18]. - **Future Projections**: The widespread expectation for achieving fusion power is around 10 years, with some optimistic estimates suggesting it could be realized by 2030. Current applications of fusion technology are already being explored in fields like oil logging and imaging detection, with significant progress anticipated in the next five years [16][17].

Core Insights - The exclusion of new energy vehicles (NEVs) from the "14th Five-Year Plan" strategic emerging industries list indicates a shift in focus towards other technologies such as quantum technology, biomanufacturing, hydrogen energy, and controllable nuclear fusion, reflecting new trends in industrial development [1][3][6] Industry Challenges - The NEV industry is currently facing significant challenges, including overcapacity, with utilization rates dropping below 40% in 2024, leading to substantial resource waste [1] - The average annual sales for 60% of car manufacturers are below 10,000 units, highlighting a severe imbalance in supply and demand [1] - The automotive industry's revenue is projected to grow by 4% to 10.6 trillion yuan in 2024, but profits are expected to decline by 8% to 462.3 billion yuan, resulting in a profit margin of only 4.3%, which is below the average of 6% for downstream industrial enterprises [2] Market Dynamics - Intense price competition has emerged in the domestic NEV market, with major manufacturers like Tesla and Geely reducing prices by 10%-15% to maintain market share, which has pressured profit margins [2] - The shift in focus from NEVs to broader new energy sectors, such as hydrogen energy and controllable nuclear fusion, suggests a diversification of the new energy industry [3][6] Strategic Directions - The "14th Five-Year Plan" emphasizes the importance of collaboration and integration across industries, with opportunities for NEVs to merge with low-altitude economy sectors, such as flying cars [4] - Companies are encouraged to innovate their business models and enhance resource integration capabilities, particularly through overseas investments and partnerships in emerging markets [5] Future Outlook - The strategic adjustment towards a more diversified and collaborative industrial landscape is expected to drive the overall competitiveness and added value of the industry [4][6]