Core Insights - The report from China Merchants Securities highlights the accelerated industrialization process of controllable nuclear fusion, transitioning from experimental validation to engineering demonstration, with a focus on material performance breakthroughs as a core bottleneck [1][2] - The overall domestic production rate of key nuclear fusion equipment exceeds 96%, with significant advancements in core components such as tungsten-based divertors and high-temperature superconducting materials [1] - The industry is entering a new phase characterized by "multiple routes racing + capital resonance," with a recommendation to focus on leading companies and suppliers of domestically replaced materials and core components [1] Group 1: Industrialization Progress - The urgency of global energy transition is propelling controllable nuclear fusion as a clean energy solution, moving towards engineering and commercialization [1] - The magnetic confinement tokamak route currently dominates the industrialization process, while inertial confinement and hybrid routes are also developing in parallel [1] - China is leveraging major scientific devices like EAST and BEST to achieve breakthroughs in key areas, with the BEST device expected to demonstrate fusion energy generation by 2027 [1] Group 2: Material Innovation - Material innovation is identified as the core bottleneck and breakthrough point for current industrialization, with extreme operational environments demanding near-limit performance from materials [2] - Key materials include high melting point and radiation-resistant materials for first walls/divertors, and the transition from low-temperature to high-temperature superconductors to enhance magnetic field strength [2] - Domestic companies have made significant progress in areas such as tungsten-copper divertors and superconducting wires, but challenges remain in material reliability verification and cost control [2] Group 3: Market Opportunities - The energy equipment sector is seeing significant growth, with leading enterprises establishing clear paths for core component R&D and industrialization [3] - Companies involved in superconductors, first walls, and divertor materials are expected to benefit significantly from this growth [3] - Military enterprises are extending their high-precision manufacturing capabilities into civilian sectors, with companies like Sui Chuang Electronics and Wangzi New Materials gaining early advantages in supporting roles [3] Group 4: Recommended Companies - Companies to focus on include Guoguang Electric, Hezhu Intelligent, Lianchuang Optoelectronics, Western Superconducting, Sui Chuang Electronics, Wangzi New Materials, Parker New Materials, Antai Technology, Yongding Co., Xuguang Electronics, Sui Rui New Materials, Zhongzhou Special Materials, and Jiuli Special Materials [4]

Core Insights - Jiu Li Special Materials (久立特材) reported significant revenue growth in Q3 2025, achieving 9.7 billion yuan in revenue, a 36.45% year-on-year increase, and a net profit of 1.26 billion yuan, up 20.73% year-on-year [1] - The company attributes its growth to increased R&D investment and expansion into both domestic and international high-end markets, particularly in composite and seamless pipes [1][2] - The demand for stainless steel pipes in the oil and gas sector continues to drive market growth, with emerging applications in hydrogen energy storage and solar thermal power systems further increasing demand [2] Financial Performance - For the first three quarters of 2025, the company reported a net cash flow from operating activities of 598 million yuan, a 61.63% increase year-on-year [1] - In Q3 alone, revenue reached 3.64 billion yuan, marking a 57.46% increase year-on-year, while net profit was 434 million yuan, up 8.29% year-on-year [1] - High-value products in high-end equipment manufacturing and new materials accounted for approximately 20% of total revenue, generating 1.22 billion yuan, a 15.42% increase year-on-year [2] Market Position and Product Development - Jiu Li Special Materials has established itself as a benchmark enterprise in the domestic industrial stainless steel pipe sector, with an annual production capacity of 200,000 tons of finished pipes [3] - The company’s core products, composite pipes and seamless pipes, generated revenues of 2.05 billion yuan and 2.32 billion yuan respectively, with year-on-year growth rates of 219.26% and 11.63% [3] - The company has successfully broken foreign technology monopolies in high-end products, filling domestic market gaps and enhancing its technological leadership in special stainless steel materials [3] Strategic Partnerships and Global Reach - The company has built strong partnerships with major domestic and international clients, including China National Petroleum Corporation and Saudi Aramco, with overseas revenue reaching 3.22 billion yuan, a 92.94% increase year-on-year [4] - Jiu Li Special Materials is actively participating in nuclear fusion projects, focusing on the development of key materials like PF conduits, aiming to support advancements in controlled nuclear fusion research [6] Industry Trends and Future Outlook - The global stainless steel pipe market is projected to reach 41.74 billion USD by 2025, with a compound annual growth rate (CAGR) of 4.6% expected until 2035 [2] - The nuclear fusion market is anticipated to grow significantly, with estimates suggesting it could exceed 647.5 billion USD by 2035, highlighting the potential for Jiu Li Special Materials to capitalize on this emerging sector [5][6] - The company’s proactive approach in R&D and collaboration with research institutions positions it well to capture future technological innovations and market opportunities [6]

Core Viewpoint - The company acknowledges the growing global research efforts in controllable nuclear fusion and emphasizes its commitment to enhancing research and development in materials relevant to this field, while also managing traditional product lines [2]. Group 1: Company Strategy - The company is actively participating in the ITER project, focusing on the research and production of key materials, including PF conduits [2]. - Although the nuclear fusion materials segment currently represents a small portion of the company's overall operations, the company is closely monitoring technological innovations and market dynamics in the nuclear power sector [2]. - The management is committed to improving communication with investors and conveying the company's value to the market [2]. Group 2: Research and Development - The company is increasing its research investment in controllable nuclear fusion materials and is open to exploring supply chain opportunities in this emerging field [2]. - The company will carefully consider suggestions to strengthen research in controllable nuclear fusion materials and adapt its development strategy accordingly [2].