Core Viewpoint - The skepticism surrounding the commercialization of controlled nuclear fusion is diminishing due to advancements in high-temperature superconductors, increased commercial investments, and rapid developments in artificial intelligence, making the dream of ultimate energy more attainable [1]. Group 1: Industry Developments - The global race for "artificial sun" represents a multidimensional competition involving strategic determination, endurance, and strength, as controlled nuclear fusion transitions from basic research to engineering practice and commercial application [3]. - Shanghai Electric is one of the leading manufacturers of core equipment for nuclear fusion systems in China, having participated in major domestic and international fusion device constructions such as EAST, CRAFT, BEST, and ITER [3][5]. - The matrix of fusion devices covers various technological routes and engineering stages, providing Shanghai Electric with a significant competitive advantage in the fusion technology landscape [5]. Group 2: Technological Advancements - Shanghai Electric has a long history of involvement in fusion technology, dating back to the 1980s when it supplied two sets of pulse generator units for China's first Tokamak device [6]. - In 2025, significant breakthroughs in domestic fusion research devices are expected, including the achievement of a fusion triple product of 10^20 for the HL-3 device and the installation of key components for the BEST device [6]. - The company has developed the world's largest toroidal field magnet coil box, which is 21 meters high and weighs 400 tons, showcasing its advanced manufacturing capabilities [7]. Group 3: Strategic Initiatives - In July 2023, China Fusion Energy Co., a major player in fusion engineering, was established with a registered capital of 15 billion yuan, indicating a strategic move towards fusion commercialization [8]. - Shanghai Electric's long-term investments in cutting-edge technologies are expected to yield competitive advantages and collaborative synergies in the fusion energy sector [10]. - The company aims to explore new thermal conversion systems and efficient heat exchange devices while advancing into the supply of main equipment for controlled nuclear fusion [11]. Group 4: Future Outlook - The Chinese government has included nuclear fusion energy in its 14th Five-Year Plan, indicating a clear policy direction and stable long-term expectations for the industry [12]. - The industry is currently in the "burning experiment" phase, with plans to enhance plasma parameters significantly by the end of 2027 and to develop the first engineering experimental reactor by around 2035 [12]. - Shanghai Electric is committed to deepening its involvement in the national fusion strategy and accelerating the transition of fusion technology from laboratory feasibility to industrial application [13].

Group 1: Nuclear Fusion Industry - The nuclear fusion industry is currently in a phase of accelerated investment, with significant developments occurring in both China and the United States [1] - Key components such as superconducting magnets and in-vessel components account for 28% and 17% of the reactor costs respectively, making them critical areas for capital expenditure [1] - The industry is experiencing a concentrated bidding phase, which is expected to benefit companies involved in the core components of the fusion supply chain [1] Group 2: Robotics in Service Industries - The penetration rate of industrial robots is low, indicating a substantial future application potential in various sectors [2] - Industries with high flexibility requirements, such as plastic chemicals, food processing, and home services, are identified as having significant opportunities for the application of embodied intelligent robots [2] - Labor shortages in sectors like restaurants, home services, logistics, and apparel highlight the immediate demand for automation solutions [2] Group 3: Oil Transportation Market - The escalation of geopolitical conflicts in the Middle East is expected to increase risks associated with oil transportation [3] - Potential sanctions on Iranian oil production and sales may enhance compliance demand for oil transportation [3] - The geopolitical tensions are likely to alleviate the supply-demand pressures previously faced by the oil transportation market, leading to a forecasted recovery in freight rates [3]

Summary of the Conference Call Industry Overview - The nuclear fusion energy sector in China is experiencing significant investment, projected to reach 20 billion yuan annually by 2028, with total investments potentially exceeding 200 billion yuan if demonstration projects are included, which could raise annual investments to 40 billion yuan. This is relatively small compared to traditional nuclear power investments, which exceed 100 billion yuan annually [2][3]. Company Profile: 合锻智能 (Hezhong Intelligent) - Hezhong Intelligent is a leading enterprise in the nuclear fusion industry, with its vacuum chamber and in-vessel components accounting for approximately 10% of the total device value. The company is expected to generate 4 billion yuan in revenue and 1 billion yuan in net profit from the anticipated 40 billion yuan annual investment in the sector [2][4][6]. - The company is involved in significant projects such as EAST renovation, Krafton, and BEST, and is expected to return to normal profitability by 2025, with profits gradually increasing in the following years [5][18]. Key Insights and Arguments - The vacuum chamber is a critical component of the Tokamak device, providing a stable operating environment for plasma and acting as a safety barrier. Its value contribution is about 8%, while in-vessel components increase this to 25% [2][7]. - The materials used in nuclear fusion devices include advanced metals and non-metals, such as low-activation ferritic-martensitic steel and high-entropy alloys, aimed at enhancing thermal conductivity and heat resistance [8]. - The DIB (Divertor Inner Wall) plays a crucial role in preventing impurity contamination of the plasma and dissipating heat generated by plasma radiation, typically using beryllium or tungsten as facing materials [9]. Market Position and Valuation - Hezhong Intelligent is currently valued at approximately 50 times its earnings, suggesting a market capitalization of around 50 billion yuan. The potential for market growth is significant, with estimates indicating a market cap could reach 250 billion yuan by 2027-2028 [6][25]. - The company’s market share in the nuclear fusion sector is expected to be around 10%, translating to projected revenues of 4 billion yuan and a net profit of 1 billion yuan, with a valuation of 50 times earnings [25]. Additional Important Information - The shielding modules in nuclear fusion devices are designed to protect against neutron radiation and manage heat loads, with significant components being manufactured by both domestic and international suppliers [11][13]. - The overall bidding situation for nuclear fusion components is robust, with significant tenders expected throughout 2025, indicating a healthy market environment for Hezhong Intelligent and its peers [22][23]. - The establishment of the Fusion New Energy Company, backed by the Hefei government and state-owned enterprises, is a key player in advancing nuclear fusion technology and industry development [19]. Conclusion - Hezhong Intelligent is positioned as a key player in the nuclear fusion industry, with strong growth potential driven by increasing investments and participation in major projects. The company's strategic focus on advanced materials and component manufacturing aligns well with the industry's future demands, making it a compelling investment opportunity.