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]

Investment Rating - The report maintains a "Buy" rating for the controlled nuclear fusion industry, highlighting its potential for significant growth and investment opportunities [4]. Core Insights - The controlled nuclear fusion industry is entering a capital expenditure expansion phase, driven by the strategic value of fusion energy and increased financing activity [1][2][11]. - The global fusion energy sector has seen a substantial increase in financing, with a total of $9.7 billion raised by July 2025, indicating strong investor interest [1][50]. - The industry is characterized by diverse technological pathways, with a focus on magnetic confinement fusion and inertial confinement fusion, reflecting a competitive landscape among major economies [24][57]. Summary by Sections Section 1: Global Trends and Strategic Value - Fusion energy is positioned as a key solution to long-term energy supply challenges, with its high energy density and safety profile making it a viable alternative to fossil fuels and renewable energy sources [21][23]. - The demand for clean energy is expected to grow significantly, with projections indicating that clean energy sources will dominate by 2050, creating opportunities for fusion energy [21][27]. Section 2: Domestic Developments - China is transitioning from a participant in the ITER project to a leader in the fusion industry, with significant investments exceeding 150 billion yuan in planned or ongoing projects [2][24]. - The domestic fusion industry is expected to enter a construction phase for experimental reactors around 2027, further expanding investment and project scale [2][11]. Section 3: High-Value Components Analysis - Key components such as magnet systems, vacuum chambers, and power systems are expected to benefit significantly from increased capital expenditures, with their cost contributions being 28%, 25%, and 15% respectively [3][11]. - The report emphasizes the importance of high-temperature superconductors in magnet systems, which are anticipated to see widespread application [3][11]. Section 4: Key Companies and Investment Recommendations - The report recommends several companies that are well-positioned to benefit from the industry's growth, including: - 合锻智能 (HGD Intelligent) - Positioned in the vacuum chamber segment with potential for increased value [12]. - 应流股份 (Yingliu Co.) - Benefiting from a strong order book and deep reserves in fusion and aerospace sectors [12]. - 冰轮环境 (Ice Wheel Environment) - Expected to see growth from rising demand for temperature control equipment in data centers [12]. - 王子新材 (Wangzi New Materials) - Anticipated breakthroughs in fusion applications for its film capacitor products [12]. - 派克新材 (Parker New Materials) - A key supplier of precision forged components for high-value fusion applications [12]. Section 5: Market Dynamics and Future Outlook - The report highlights the increasing competition in the fusion sector, with major economies investing heavily in domestic fusion projects while also participating in international collaborations like ITER [24][26]. - The expected timeline for commercial fusion energy is set around 2035, with a significant number of companies anticipating operational demonstration plants by then [61].

Investment Rating - The report maintains an "Overweight" rating for the nuclear fusion industry, indicating a positive outlook for investment opportunities in this sector [6]. Core Insights - Nuclear fusion is expected to become the ultimate energy source, with accelerated industrial progress driven by policy, capital support, and advancements in AI technology [1][6]. - The industry is optimistic about the feasibility of nuclear fusion power generation, with approximately 84% of surveyed companies believing it can be achieved by 2040 [1]. - Various technical routes for nuclear fusion are being explored, with the Tokamak being the most mature and widely applied technology [2][6]. Summary by Sections 1. Nuclear Fusion as the Ultimate Energy Source - Nuclear fusion combines light atomic nuclei under high temperature and pressure to release significant energy, offering high energy density and safety advantages [1][18]. - The industry is optimistic about the engineering feasibility of nuclear fusion, with AI developments accelerating the commercialization process [30][36]. - Current challenges include energy balance, material performance, and tritium self-sustainability, which are being addressed through increased industrial efforts [41][42]. 2. Diverse Technical Routes for Nuclear Fusion - Nuclear fusion can be categorized into gravitational, magnetic, and inertial confinement, with magnetic confinement being the most viable option [46]. - The Tokamak technology is highlighted as the most mature and widely used, with significant advancements in plasma stability and engineering feasibility [55]. 3. Cost Structure of Tokamak Components - Major cost components of Tokamak include magnets, vacuum chambers, and other supporting systems, with superconducting magnets being a key focus for enhancing plasma confinement [3][4]. - The report emphasizes the importance of high-temperature superconducting materials in improving fusion reaction rates and reducing cooling costs [3]. 4. Global Support for Nuclear Fusion Industry - Governments and capital markets worldwide are increasingly investing in nuclear fusion, with several demonstration projects planned for construction between 2035 and 2040 [36]. - Key companies to watch include those involved in superconducting magnets, vacuum chambers, and other critical components, such as Western Superconducting Technologies and Shanghai Electric [4]. 5. Related Companies - The report suggests monitoring companies like Western Superconducting Technologies, Lianchuang Optoelectronics, and others involved in various aspects of the nuclear fusion supply chain [4].

Core Insights - Controlled nuclear fusion, often referred to as "artificial sun," is approaching commercialization as a clean energy solution, with significant advancements in technology and capital investment [1][2] - The ITER project is a key international initiative in nuclear fusion research, with experts emphasizing its potential to address energy and carbon emission challenges [1] - China is focusing on compact magnetic confinement fusion using high-temperature superconducting materials, aiming to accelerate the development of fusion engineering experimental reactors [2] Group 1: Technology and Development - The main raw materials for fusion energy are isotopes of hydrogen, deuterium, and tritium, which produce helium as a byproduct, posing no radioactive pollution [1] - The primary technical routes for achieving controlled nuclear fusion include magnetic confinement, inertial confinement, and magnetic inertial confinement, with the "tokamak" being the mainstream device for magnetic confinement [1] - China has achieved significant milestones in fusion research, including the "Chinese Circulation No. 3" experimental device reaching temperatures of 117 million degrees Celsius for atomic nuclei and 160 million degrees Celsius for electrons [2] Group 2: Challenges and Collaborations - China Fusion Company faces three main scientific and technical challenges: stable self-sustaining operation of burning plasma, high-energy neutron bombardment and high-heat-load materials, and tritium breeding and self-sustaining cycles [3] - The company is collaborating with various institutions, including Shanghai Jiao Tong University and Shanghai Electric Group, to form a fusion innovation consortium to tackle these challenges [3] - Shanghai's government is committed to supporting the establishment of a fusion energy innovation alliance to facilitate the transition from laboratory research to engineering and commercialization [3]

Core Viewpoint - The controlled nuclear fusion industry, referred to as the "artificial sun," is becoming a focal point for capital investment, with significant funding and policy support driving its commercialization in China [3][4]. Investment Trends - Nova Fusion Energy Technology (Shanghai) Co., Ltd. completed a record angel round financing of 500 million yuan, marking a significant milestone for private nuclear fusion companies in China [3]. - China Fusion Energy Co., Ltd. received a total of 11.492 billion yuan in strategic investments from various state-owned enterprises and funds, indicating strong backing for the "national team" in nuclear fusion [3][5]. - The global nuclear fusion industry has seen explosive growth, with total investment rising from 1.9 billion USD in 2021 to 9.7 billion USD, and the number of fusion companies increasing from 23 to 53 [4]. Industry Structure - The nuclear fusion sector in China is characterized by a dual structure of "national team" and "private team," with significant investments flowing into both [3][5]. - The "national team" includes companies like China Fusion Energy and Fusion New Energy, which have received substantial capital support from state-owned enterprises and local governments [5]. - Private companies, while receiving less capital, have attracted investments from notable venture capital firms like Sequoia Capital and Kunlun Capital [5]. Technological Development - Various technological routes exist in nuclear fusion, with magnetic confinement being the most widely adopted globally, while the field-reversed configuration (FRC) is gaining attention for its cost-effectiveness [6]. - The majority of companies are focusing on the Tokamak route, while the U.S. exhibits a more diverse approach to technology development [6]. Policy Support - The Chinese government has increased its support for the nuclear fusion industry through various policies aimed at fostering innovation and commercialization [7]. - Local governments, such as those in Anhui and Sichuan, have also introduced strategic plans to accelerate the commercial application of fusion energy [7]. Commercialization Goals and Challenges - A report indicates that 35 companies globally expect to establish commercial fusion demonstration plants capable of net energy gain between 2030 and 2035 [8]. - Companies like Helion are already initiating construction of commercial fusion plants, with plans to supply power to major tech firms [8]. - Despite optimism, experts caution that significant technical and economic challenges remain before true commercialization can be achieved [9].

Core Insights - The establishment of China Fusion Energy Co., Ltd. marks a significant step in integrating nuclear fusion into China's strategic industrial layout, focusing on overall design, technology validation, and digital R&D [1] - Controlled nuclear fusion, often referred to as "artificial sun," has advantages over nuclear fission, including high energy density, abundant raw materials, low radioactive pollution, and enhanced safety [1] - The global competition in nuclear fusion is intensifying, with other countries like the US, Germany, and the UK advancing their national strategies, prompting China to form a "national team" to secure a leading position in future energy landscapes [2] Industry Development - China's nuclear energy development strategy, proposed in 1983, aims to ensure sustainable nuclear energy development, with the current period being crucial for the industry's growth [2] - The last decade has been a "golden window" for global nuclear fusion research, with significant breakthroughs in both international and domestic projects [2] - The transition to clean energy is urgent for China, as the current energy structure heavily relies on fossil fuels; commercialized fusion energy could provide a stable, low-carbon power source [2] Company Functionality - The newly formed China Fusion Energy Co., Ltd. aims to integrate innovation chains and transition technology from feasibility to commercialization [3] - The company is backed by major stakeholders, including China National Nuclear Corporation, which provides engineering experience and resource integration capabilities [3] - A dual-platform model combining technology and capital is expected to enhance commercialization efficiency by attracting social capital and supporting startups in the industry [3] Challenges Ahead - The path to commercializing fusion energy is fraught with challenges, including the need for long-term research and substantial funding, with high uncertainty [4] - The complexity of technology development and the lengthy industrialization process pose risks for short-term profitability in fusion energy investments [4] - Successful commercialization will require strong commitment, resilience, and stable policy support, with each incremental progress bringing the vision of the "artificial sun" closer [4]

Core Viewpoint - The establishment of China Fusion Energy Co., Ltd. marks a significant step in integrating nuclear fusion into China's strategic industrial layout, aiming to advance the commercialization and engineering of fusion energy [1] Group 1: Industry Context - Nuclear fusion is seen as a potential ultimate solution for clean energy, offering advantages such as high energy density, abundant raw materials, low radioactive pollution, and enhanced safety compared to nuclear fission [1] - China's nuclear energy development strategy, proposed in 1983, emphasizes a three-step approach: thermal reactors, fast reactors, and fusion reactors, addressing sustainable nuclear energy development [2] - The past decade has been a "golden window" for global nuclear fusion research, with significant breakthroughs in both international and domestic projects [2] Group 2: Company Overview - China Fusion Energy Co., Ltd. will focus on overall design, technology validation, and digital R&D, supported by a robust platform for technology development and capital operations [1][3] - The company is backed by major stakeholders, including China National Nuclear Corporation, which provides engineering experience and resource integration capabilities essential for fusion commercialization [3] Group 3: Market Dynamics - The dual-platform model of "technology + capital" aims to innovate market mechanisms, addressing the long R&D cycles and substantial investment required for fusion energy [3] - The introduction of social capital is expected to mitigate R&D risks and accelerate technological iterations, fostering a collaborative ecosystem between large enterprises and SMEs [3] Group 4: Future Implications - Successful commercialization of fusion energy could fundamentally reshape the global energy landscape, although the path is fraught with challenges, including high uncertainty and long development timelines [4] - The journey towards fusion energy commercialization demands significant patience, determination, and financial backing, alongside stable policy support [4]

Investment Rating - Industry investment rating: Overweight [2] Core Viewpoints - The nuclear fusion industry is an emerging sector that warrants attention, with policies potentially influencing investment hotspots [3][4] - The development of nuclear fusion technology is progressing, and there is optimism for future industrial applications [4][5] - Investment suggestions indicate that if technological breakthroughs occur, the nuclear fusion industry could see significant growth, with companies like Western Superconducting Technologies as potential investment targets [5][95] Summary by Sections 1) Overview of Nuclear Fusion - Controlled nuclear fusion is a reaction where light atomic nuclei combine under specific conditions, releasing substantial energy [15] - Nuclear fusion is considered a strategic energy source due to its high energy density and sustainability [19] 2) Literature Descriptions of the Nuclear Fusion Industry - The nuclear fusion technology research has gained attention from various countries, with ongoing advancements since the 1970s [51] - Multiple international projects, including the ITER initiative, are underway to promote nuclear fusion research [52] 3) Attention on Nuclear Fusion - The global nuclear fusion industry has seen significant financing recently, indicating a shift in investment strategies that favor industry development [74] 4) Investment Recommendations - The report suggests that the nuclear fusion industry could have a promising future if relevant technologies continue to advance [95]