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 - The nuclear energy sector is experiencing significant growth, with leading companies like NuScale Power seeing stock increases of over 120% this year, indicating strong market interest and investment in nuclear fusion technology [2] - Global competition in nuclear fusion is intensifying, with countries like China and the U.S. ramping up investments and strategic initiatives to secure technological and material advantages [4][5] Investment Trends - China has invested at least $6.5 billion in nuclear fusion since 2023, significantly outpacing the U.S. Department of Energy's budget for fusion research [4] - The total investment in the global fusion industry is projected to rise from $1.9 billion in 2021 to $9.7 billion by 2025, reflecting a more than fivefold increase [6] Technological Advancements - The pace of technological development in nuclear fusion is faster than anticipated, with 35 out of 45 surveyed fusion companies expecting to operate commercial demonstration plants by 2030-2035 [6] - China's "Eastern Super Ring" Tokamak device has achieved a world record by maintaining plasma at 1 million degrees Celsius for 1066 seconds [6] Industry Opportunities - The nuclear fusion supply chain is becoming clearer, with key components like superconducting magnets and vacuum chambers showing significant market potential [7][10] - Companies like China National Nuclear Corporation and Dongfang Electric are well-positioned to benefit from the growing demand for nuclear power, especially in the context of AI data centers [12] Market Dynamics - The explosion of AI data centers is driving demand for stable, zero-carbon energy sources, with nuclear power emerging as a preferred option for tech giants [12] - In China, the procurement of nuclear power for AI data centers surged by 120% in the first half of 2025, leading to increased orders for nuclear fuel and equipment [12] Future Outlook - The nuclear energy sector is expected to continue its upward trajectory, with companies that can leverage technological breakthroughs and secure orders likely to see substantial growth [14] - Ongoing monitoring of policy, technology, and market dynamics will be essential for identifying investment opportunities in the complex nuclear fusion landscape [14]

Summary of Key Points from Conference Call Industry Overview - The conference call discusses the **controlled nuclear fusion** industry, particularly focusing on the **BEST project** and its implications for the market. The industry is entering a new phase with accelerated bidding for key components like power supplies and superconducting materials in the second half of the year [1][2][3]. Core Insights and Arguments - The **BEST project** has made significant progress, with the successful installation of the **Dewar base** into the main device, marking a new stage for the project [2][3]. - Other notable projects in the controlled nuclear fusion sector include those by **China Nuclear Group** and **Chengdu and Jiuyuan**, which are expected to have more bidding activities next year, impacting the market from 2026 onwards [1][4]. - The **controlled nuclear fusion supply chain** is centered around structural components such as vacuum chambers, divertors, blanket cold screens, magnets, and Dewars, along with upstream materials like low-temperature superconducting wires and tungsten materials [1][5]. - The **module power supply industry** is benefiting from the recovery of defense demand and the growth of AI applications, with the military market projected to reach **59 billion RMB** by 2028 [1][12][13]. - The demand for **AI servers** has significantly increased power consumption, leading to a need for high-performance, high-density, and reliable power supply systems, which in turn accelerates the application of modular and integrated power systems [1][14][16]. Additional Important Insights - The **magnet system** is crucial in controlled nuclear fusion, accounting for approximately **28%** of the experimental pile's value, with a shift towards high-temperature superconductors expected to reduce cooling requirements and costs [1][7]. - The **power supply system** plays a significant role, comprising about **8%** of the overall system, with domestic and international companies likely to secure contracts in upcoming bidding processes [1][8]. - The **controlled nuclear fusion supply chain** includes upstream materials, midstream equipment, and downstream research institutions, with key players identified in each segment [1][9]. - **West Superconducting** is a key supplier of low-temperature superconducting wires, with a projected market value of **500 million RMB** in 2025, despite currently lower market attention [1][10][11]. - The **module power supply industry** is expected to enter a high-growth cycle, driven by defense and AI applications, with the military module power supply market projected to exceed **10 billion RMB** by 2025 and **15 billion RMB** by 2028 [1][12][13]. - The global AI market is anticipated to exceed **11 trillion USD** by 2030, with related supply equipment markets growing even faster, indicating significant investment opportunities [1][17][18]. Conclusion - The controlled nuclear fusion industry is poised for growth with ongoing projects and increasing demand for related technologies. The module power supply sector is also expected to thrive due to rising defense and AI needs, presenting various investment opportunities in the coming years [1][12][13][17].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The controlled nuclear fusion sector is experiencing steady progress in research and construction, with continuous order releases, indicating a positive long-term development outlook [8][35] - The BEST device construction has fully commenced, and the core component bidding is expected to accelerate [6][22] - Recent breakthroughs in plasma discharge frequency and intensity by Zap Energy mark significant advancements towards commercialization [20][21] Summary by Sections Sector Review - In the week of October 9-10, 2025, most segments within the controlled nuclear fusion sector saw price increases, with notable gains in individual stocks such as Hahai Huadong (+29.6%), Hezhuan Intelligent (+21.0%), and Antai Technology (+21.0%) [5][15] - The magnetic materials segment rose by 10.9%, vacuum chamber and metal forgings by 10.8%, and upstream metal materials by 7.6% [17] Industry Dynamics - The BEST device's key component, the Dewar base, has been successfully installed, marking a new phase in the project [22] - Germany announced a €2 billion fusion action plan aimed at establishing a demonstration reactor by the 2040s [25] - Gauss Fusion released a concept design report for Europe's first commercial fusion power plant, with an estimated investment of €15-18 billion [31] Company Developments - Hangyang Group won a bid for a low-temperature liquid helium testing system project, which is crucial for the controlled nuclear fusion low-temperature system [34] Weekly Perspective - The ongoing development of nuclear fusion devices and the release of orders are viewed positively for the sector's long-term prospects, with a focus on core components such as magnets, main units, and power supplies [35]

Core Insights - The concept of nuclear fusion is gaining traction in the stock market, with several stocks in the sector doubling in price since the beginning of the year, with the highest increase reaching 271.94% [2][5] - Recent developments in nuclear fusion engineering and commercialization have heightened market interest, particularly following progress on the BEST nuclear fusion device in Hefei [2][5] - Despite the excitement, industry insiders caution that current projects are primarily experimental and not yet commercially viable, indicating that significant advancements are still needed before practical applications can be realized [2][5] Market Performance - As of October 10, the nuclear fusion sector has seen an overall increase of 60.62% this year, with net inflows of 2.041 billion yuan, ranking it among the top sectors in the A-share market [5][6] - Individual stocks have shown remarkable performance, with Zhongzhou Special Materials rising by 271.94%, Hezhong Intelligent by 247.15%, and Yongding Co. by 200.39% [5][6] Technological Developments - The nuclear fusion technology aims to replicate the sun's energy production through extreme conditions, primarily using magnetic confinement methods like the Tokamak [7] - Significant breakthroughs have been achieved in China's nuclear fusion research, including the successful operation of the China Circulation No. 3 device, which reached temperatures exceeding 100 million degrees Celsius [7][8] Investment and Funding - Major state-owned enterprises and private capital are increasingly investing in nuclear fusion projects, with plans for new experimental facilities and significant funding commitments exceeding 10 billion yuan [8][9] - The construction of the BEST device is progressing, with key components being installed, marking a significant step towards demonstrating fusion energy generation [8][9] Industry Outlook - The nuclear fusion sector is expected to continue attracting investment due to the growing demand for clean and renewable energy sources, particularly in the context of increasing energy needs driven by advancements in artificial intelligence [6][8] - The current phase of nuclear fusion development is characterized by experimental setups, with substantial investments required for future commercial viability [9]

Company Overview - Xinlai Clean Application Materials Co., Ltd. is located in Kunshan, Jiangsu Province, established on July 12, 2000, and listed on September 6, 2011 [3] - The company specializes in the research, production, and sales of high-purity stainless steel materials for clean applications, including vacuum chambers, pumps, valves, flanges, pipelines, and fittings [2][3] Financial Performance - For the first half of 2025, the company achieved operating revenue of 1.409 billion yuan, a year-on-year decrease of 0.62% [3] - The net profit attributable to shareholders was 108 million yuan, down 23.06% year-on-year [3] - Since its A-share listing, the company has distributed a total of 185 million yuan in dividends, with 85.065 million yuan distributed in the last three years [3] Stock Performance - On September 23, the stock price increased by 3.40%, with a trading volume of 1.891 billion yuan and a turnover rate of 15.51%, bringing the total market capitalization to 18.098 billion yuan [1] - The average trading cost of the stock is 40.19 yuan, and it is currently near a resistance level of 45.97 yuan, which, if broken, could trigger an upward trend [3] Institutional Holdings - As of June 30, 2025, the top ten circulating shareholders include Southern CSI 1000 ETF with 1.8736 million shares and Hong Kong Central Clearing Limited with 1.8397 million shares [4] - Notably, Bosera Credit Bond A/B has exited the list of top ten circulating shareholders [4] Market Position - The company is involved in multiple sectors, including photolithography machines, photoresists, and semiconductor applications, with clients including major manufacturers like Applied Materials, LAM, and Northern Huachuang [2] - The main business focuses on high-purity applications in semiconductor chip manufacturing processes such as Physical Vapor Deposition (PVD), Chemical Vapor Deposition (CVD), photolithography, and etching [2]

Core Insights - The report highlights the rapid development and commercialization potential of controlled nuclear fusion technology, which is seen as a key direction for future energy strategies globally [2][3][4] - The introduction of the Atomic Energy Law in China is expected to promote sustainable development in the nuclear energy sector and support research and technology development in controlled nuclear fusion [2][3] - The industry is experiencing significant growth opportunities, particularly in upstream materials and midstream processing sectors, driven by the bidding and construction activities of leading domestic fusion enterprises [4][5] Industry Overview - Controlled nuclear fusion is regarded as the "ultimate solution" in the energy sector, with the potential to lead a new technological revolution similar to the advent of the steam engine and electrification [2] - The commercialization of Tokamak fusion reactors is anticipated to occur between 2031 and 2035, according to a survey by FIA [2] Market Dynamics - The report indicates that high-temperature superconductors, first wall materials, low-temperature systems, heat exchangers, and vacuum chambers are considered critical components for fusion devices [4][5] - The domestic fusion supply chain is expected to benefit from the initial high growth phase, with upstream material suppliers and midstream processing companies poised to share in the industry's growth [4] Key Components and Technologies - High-temperature superconductors are projected to see a significant market expansion, with expectations that they will capture 25% of the global superconducting materials market by 2030 [4] - The blanket module, which includes the first wall, is identified as a critical component for the future of controlled nuclear fusion, with companies like Guoguang Electric being highlighted for their production capabilities [5] - Tungsten-copper divertors are noted as a promising solution for managing plasma contamination and heat, with companies such as Antai Technology recommended for their supply capabilities [6] Manufacturing and Processing - The vacuum chamber is emphasized for its high processing barriers and critical role in the safe operation of fusion reactors, with companies like Hezhong Intelligent suggested for their manufacturing experience [6][7] - The report suggests that companies with integrated solutions for vacuum chamber manufacturing and processing will have a competitive advantage in the market [6][7]

Core Viewpoint - The Japanese semiconductor equipment parts market is facing challenges as many manufacturers have not benefited from the AI boom, despite significant investments in hardware like Nvidia chips. There is a pressing need for industry consolidation to enhance competitiveness and profitability [2][3]. Group 1: Market Dynamics - Prices for semiconductor manufacturing equipment parts have not increased, contrasting with rising prices in other sectors across Japan [2]. - The domestic sales of Japan's semiconductor tool parts industry are less than 100 billion yen (approximately 6.8 billion USD) [2]. - Marumae Corporation, a key player in this niche market, holds a 7% market share and generates annual revenue of about 5 billion yen (approximately 34.5 million USD) [3]. Group 2: Company Strategies - Marumae's president, Maeda Toshikazu, emphasizes the need for consolidation in the industry, having recently acquired KM Aluminum for 9 billion yen [2]. - The company is exploring potential acquisitions in areas related to semiconductor manufacturing and is also looking into aerospace and defense sectors, which are seen as challenging yet profitable [2][3]. - Marumae has a current operating profit margin of approximately 20%, a significant increase from 3% in the previous fiscal year [3]. Group 3: Competitive Landscape - Smaller suppliers struggle to negotiate better prices due to their lack of scale, resulting in profit margins below 10% [3]. - Major clients like Tokyo Electron and Applied Materials maintain high operating profit margins around 30%, even amidst challenges such as order cancellations from Intel [4]. - Competitors often reject acquisition proposals, supported by local banks, and face structural barriers that hinder market consolidation [4]. Group 4: Future Outlook - The next potential acquisition for Marumae may take years, as many competitors lack succession plans and are aging [4]. - Concerns about technology leakage prevent clients from supporting supplier consolidation, as vacuum components are tailored for specific equipment [4]. - Foreign companies are also eyeing Japan's semiconductor technology, which could pose a threat to local firms if unique skills and technologies are acquired [4].

Group 1: Industry Overview - The controlled nuclear fusion, known as "artificial sun," is considered a key to achieving infinite, clean, and safe energy, and has become a strategic direction for many countries since the 20th century [3] - The nuclear fusion industry is experiencing rapid commercialization and industrialization, with significant interest in both primary and secondary markets [4] - The global market for nuclear fusion is expected to reach a scale of trillions, with various regions in China, including Shanghai, Guangdong, Zhejiang, and Sichuan, targeting nuclear fusion as a future industry [7][8] Group 2: Company Developments - Several A-share companies, including Yingjie Electric, Lianchuang Optoelectronics, Hezhong Intelligent, and Jingye Intelligent, are accelerating their layouts in the nuclear fusion field, with recent disclosures of progress [10] - Yingjie Electric provides comprehensive key power supply services for nuclear fusion projects, successfully applied in multiple national-level projects [10] - Lianchuang Optoelectronics is advancing its "3+N" product layout in high-temperature superconducting equipment, aiming for increased product and technology contract amounts [10] - Hezhong Intelligent focuses on the R&D and manufacturing of complex components for fusion reactors, participating in the preliminary research of core components [10] - Shanghai Electric Group has become one of the most comprehensive equipment manufacturers in the nuclear fusion field, achieving 36 breakthroughs in key manufacturing technologies over 20 years [9] Group 3: Recent Milestones - Hanhai Fusion announced the completion of its HHMAX-901 main unit construction, marking a transition from laboratory to application for controlled nuclear fusion technology in China [2] - The BEST project in Hefei has advanced its total assembly work two months ahead of schedule, achieving significant milestones in plasma current and ion temperature [5] - The International Fusion Association (FIA) indicates that most fusion companies expect to achieve the first power supply to the grid between 2031 and 2035 [5]

Core Viewpoint - The article emphasizes the rapid advancements in nuclear fusion projects both domestically and internationally, highlighting significant investments and technological breakthroughs that could lead to commercial viability in the near future [2][6][21]. Group 1: Recent Developments in Domestic Fusion Projects - The "BEST" project has commenced assembly ahead of schedule, with the goal of completing construction by 2027 [4]. - Various tenders related to the "BEST" and "Xinghuo No. 1" projects have been launched, indicating a robust pipeline of activities and investments [4][6]. - The "Chinese Circulation No. 3" project achieved a significant milestone with a fusion triple product reaching 10^20, marking a critical advancement in plasma performance [4]. Group 2: Investment and Financing Trends - TAE Technologies, a leading U.S. fusion company, raised over $150 million in its latest funding round, bringing its total funding to $1.35 billion, with participation from major investors like Chevron and Google [6]. - Japan announced an additional investment of 10 billion yen (approximately $69 million) into its three major fusion research institutions, aiming for commercialization in the 2030s [6]. - The UK government plans to invest £2.5 billion over the next five years to advance its fusion energy initiatives, including the STEP project [6]. Group 3: Technological Innovations Driving Progress - Innovative magnetic field structures, such as spherical tokamaks, are expected to enhance confinement performance and increase fusion power output in smaller volumes [8]. - The application of high-temperature superconductors is anticipated to significantly improve fusion output power by allowing for higher current densities and stronger magnetic fields [12][14]. - The integration of AI and supercomputing technologies is facilitating real-time predictions and optimizations in plasma behavior, thereby accelerating research and development processes [16]. Group 4: Global Competition and Market Dynamics - The U.S. and China are the largest investors in nuclear fusion, with China's investment growth outpacing that of the U.S. in recent years [18][23]. - As of 2024, the U.S. has invested $5.63 billion in fusion, while China has invested $2.49 billion, indicating a competitive landscape [23]. - The article outlines the potential for fusion energy to meet global energy demands sustainably, with significant advantages over traditional energy sources [21][24]. Group 5: Future Outlook and Application Scenarios - The most optimistic projections suggest that the first fusion power plant could connect to the grid between 2025 and 2030, while a more conservative estimate places this timeline between 2031 and 2035 [48]. - The potential applications of nuclear fusion include electricity generation, industrial heating, and propulsion for spacecraft, with key developments expected around 2030 [53][55]. - The article highlights a "three-step" strategy for China's fusion energy application, progressing from experimental validation to commercial demonstration [42].