Investment Rating - The report assigns an "Outperform" rating for the general equipment industry, marking its first rating change [2]. Core Insights - The nuclear power sector is at a turning point, with a sustained high level of activity expected due to continuous approvals exceeding expectations. The number of approved nuclear power units from 2021 to 2025 is projected to be 5, 10, 10, 11, and 10 respectively, totaling 46 units during the "14th Five-Year Plan" period [6][18]. - The investment in nuclear power construction is expected to reach a historical high, with 146.9 billion yuan completed in 2024, an increase of 52 billion yuan from the previous year, reflecting a growth rate of 54.79% [6][25]. - The domestic nuclear power industry is shifting towards self-sufficiency, with significant progress in the localization of key equipment, particularly in the midstream sector, where core equipment is increasingly being replaced by domestic alternatives [6][44]. Summary by Sections Section 1: Nuclear Power Growth Potential - The nuclear power sector is entering a rapid development phase, with the government emphasizing the need for safe and orderly growth. The target for operational nuclear capacity is set to reach 70 million kW by 2025 [11][14]. - The long-term outlook suggests that by 2060, nuclear power capacity could reach 400 million kW, necessitating an average annual addition of approximately 9.4 million kW over the next 36 years [14][15]. Section 2: Sustained Nuclear Power Demand - The demand for nuclear power is expected to remain robust, driven by the need for stable and clean energy sources amid increasing reliance on renewable energy [11][12]. - The "Hualong One" technology has matured, and the domestic nuclear equipment manufacturing process is accelerating, with a significant portion of the supply chain now localized [32][44]. Section 3: Key Companies in the Sector - Jiangsu Shentong is highlighted as a key player focusing on nuclear valves, with a strong outlook for growth supported by recent capital increases [6][7]. - Other notable companies include Zhongke Technology, which specializes in nuclear fuel transportation containers, and Jingye Intelligent, which focuses on nuclear industrial robots, both benefiting from the domestic demand for nuclear fuel processing [6][7][8]. Section 4: Investment Recommendations - The report recommends focusing on companies with established delivery capabilities in the nuclear sector, such as Jiangsu Shentong, Zhongke Technology, and Jingye Intelligent, as they are well-positioned to capitalize on the growing domestic market [6][7][8].

Core Viewpoint - China National Petroleum Corporation (CNPC) and its subsidiaries are increasing their investment in Kunlun Capital to support controlled nuclear fusion projects, indicating a strategic shift towards emerging industries and energy transformation opportunities [1] Group 1: Investment and Financials - Kunlun Capital's three major shareholders will invest a total of 3.275 billion yuan (approximately 0.47 billion USD) in the company, with CNPC contributing 1.6705 billion yuan, China Petroleum contributing 949.5 million yuan, and China Oil Capital contributing 655 million yuan [1] - The investment aims to enhance Kunlun Capital's competitive advantage and potential profitability in the energy and chemical sectors [1] Group 2: Technological Developments - Controlled nuclear fusion is recognized as a long-term energy solution, offering abundant energy, zero emissions, and high safety, with 1 gram of deuterium-tritium fusion releasing energy equivalent to 11.2 tons of standard coal [2] - China has achieved international leadership in controlled nuclear fusion, with significant advancements in the "Chinese Circulation No. 3" device, which has set multiple operational records since its completion in December 2020 [2][5] Group 3: Market Outlook and Trends - The global nuclear fusion market is expected to reach 2.26 trillion yuan (approximately 0.33 trillion USD) by 2030-2035, driven by ongoing research and development efforts [7] - Investment in controlled nuclear fusion is increasing, with the U.S. private market alone raising over 12 billion USD since 2024, accounting for 62% of global funding [3][4] Group 4: Industry Structure - The nuclear fusion industry in China is characterized by a dual structure, with state-led initiatives and rapidly emerging commercial companies complementing each other [4][6] - Major state-owned enterprises like China National Nuclear Corporation and the Chinese Academy of Sciences are leading the charge, while private companies are innovating with smaller, modular fusion reactors [6][7]

Investment Rating - The report maintains a positive outlook on the controllable nuclear fusion industry, indicating a strong belief in the investment opportunities across the entire industry chain [3][4]. Core Insights - The controllable nuclear fusion technology is transitioning from laboratory research to engineering verification, with significant advancements in China and international collaboration through the ITER project [3][5]. - The global controllable nuclear fusion market is projected to grow from $331.49 billion in 2024 to $479.5 billion by 2029, with a substantial construction phase expected between 2025 and 2035 [3][4]. - The report emphasizes the importance of high-barrier and high-value segments within the industry chain, recommending specific companies for investment [4][5]. Summary by Sections 1. Controllable Nuclear Fusion: Progress Towards the "Eternal" 50 Years - The D-T reaction is identified as the mainstream approach for nuclear fusion, offering high energy density and sustainability compared to traditional nuclear fission [14][21]. - The magnetic confinement route is confirmed as the dominant technical pathway, with significant research and development efforts in China [26][27]. 2. Global Fusion Landscape: ITER and International Cooperation - The ITER project is highlighted as the largest international scientific collaboration aimed at developing a self-sustaining nuclear fusion reactor, with China playing a crucial role [48][51]. - Various countries are increasing their investments in fusion energy, with significant funding allocated to projects like ITER and national initiatives [61][63]. 3. China's Rise in Fusion Technology - China is advancing rapidly in nuclear fusion technology, with multiple research institutions and private companies contributing to the development of various fusion routes [3][5]. - The BEST project in China has commenced ahead of schedule, indicating a robust pace in fusion technology development [3][5]. 4. Market Potential and Investment Opportunities - The report forecasts a market space of approximately $203.5 billion for controllable nuclear fusion from 2025 to 2035, with a focus on high-value segments such as superconducting materials and core components [3][4]. - Recommended companies for investment include Lianchuang Optoelectronics, Guoguang Electric, and others involved in the high-barrier segments of the industry [4][5].