Investment Rating - The industry rating is "Outperform the Market," indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [14]. Core Insights - The report highlights a significant increase in global AI computing power and electricity demand, with major US tech companies deeply engaging in the nuclear energy sector through various models. Government policies are strengthening support for the collaboration between AI and nuclear energy [3]. - The report emphasizes the need for top-level design and policy support to promote the deep collaboration between nuclear energy and computing power, suggesting the establishment of demonstration projects and long-term power supply agreements [4]. - Small Modular Reactors (SMRs) are identified as a key solution to meet the growing energy demands of AI, with continuous attention from tech giants. The commercialization of fission is expected to occur before fusion [5]. Summary by Sections International and Domestic Opportunities - The international layout is making breakthroughs, while domestic exploration opportunities are becoming more prominent. Companies in China are actively engaging in forward-looking explorations, with the energy demand continuing to grow and the clean, stable characteristics of nuclear energy aligning well with computing power needs [3]. Policy and Market Expansion - To drive the deep collaboration between nuclear energy and computing power, it is essential to establish demonstration projects and provide policy support. The report suggests a collaborative model involving government, state-owned enterprises, and private enterprises to enhance international competitiveness [4]. Company Recommendations - The report recommends focusing on several companies, including: - Jingye Intelligent, which is developing SMR technology in collaboration with Zhejiang University [6]. - Jiadian Co., which leads in the nuclear power business with its helium fan products [6]. - Guoguang Electric, which provides key components for the ITER project [6]. - Lansi Heavy Industry, covering the entire nuclear energy supply chain [6]. - Kexin Electromechanical, which has developed high-temperature gas-cooled reactor products [6].

Core Insights - The recent trade agreement between the U.S. and South Korea marks a significant development following the framework agreement reached in July, with South Korea committing to invest $350 billion in the U.S. [1][2] - The agreement includes a reduction of tariffs on South Korean goods from 25% to 15%, which is expected to enhance the competitiveness of South Korean manufacturers in the U.S. market [2][3] - The deal is projected to have a positive impact on the U.S. economy, particularly in boosting manufacturing capacity and non-farm employment, aligning with the "America First" policy [5] Investment Commitments - South Korea plans to invest $1.5 billion in the shipbuilding sector and an additional $2 billion in various investments in the U.S. [1][2] - The investment will be supported by domestic and international commercial banks, which will help alleviate pressure on the Korean won in the foreign exchange market [3] - The agreement stipulates that annual investments from South Korea will be capped at $20 billion, ensuring that it does not negatively impact the currency market [2][3] Tariff Adjustments - The agreement ensures that tariffs on semiconductors will not be less favorable than those applied to Taiwan, a key competitor for South Korean chip manufacturers [3] - The reduction in tariffs is expected to significantly benefit South Korean automotive manufacturers, who have faced disadvantages due to higher tariffs compared to Japanese counterparts [2][3] Economic Impact - The trade agreement is anticipated to serve as a catalyst for the ongoing bull market in U.S. stocks, as substantial investments from Japan and South Korea are expected to bolster market valuations and fundamentals [4] - The investment plans from Japan and South Korea cover a wide range of sectors, including energy and AI, which are crucial for the U.S. economy [4] - The U.S. government will establish an investment committee to oversee the selection of projects, enhancing the execution and compliance of the investment agreements [4]

Core Viewpoint - The resilience of the power grid and industrial control sectors is expected to continue in the first half of 2025, with potential opportunities for performance and valuation recovery in the second half of the year [1] Power Grid Sector - Domestic power grid investment showed strong growth in the first five months of 2025, with a total investment of 204 billion yuan, a year-on-year increase of 19.8% [5] - The approval pace for ultra-high voltage projects is expected to accelerate in the second half of the year, with significant projects already approved [7] - The demand for ultra-high voltage equipment remains strong, with a projected annual growth rate of around 10% for power grid investment from 2024 to 2026 [10] - The first half of 2025 saw a robust demand for primary network investments, with a notable increase in bidding amounts for key equipment [10] Industrial Control Sector - The industrial control market has shown signs of recovery, with the OEM market experiencing a 3.3% year-on-year growth in the first quarter of 2025, marking the first positive growth in three years [24] - The demand for new technologies, particularly in automation and robotics, is expected to enhance profitability and valuation flexibility for industrial control companies [3] - The overall capital expenditure momentum remains slightly subdued, but a narrow fluctuation in the new cycle is anticipated [18] Investment Themes - Focus on new productive forces, including AIDC and humanoid robots, which are expected to bring significant valuation elasticity [3] - The revival of nuclear energy is highlighted, with a focus on nuclear power equipment and small modular reactors (SMR) as key investment areas [48] - The overseas market for power grid investment is projected to maintain high growth, driven by energy transition and grid upgrades, with a 14.4% year-on-year increase expected in 2024 [4] Nuclear Energy Sector - The global nuclear power industry is experiencing a strategic revival, with significant investments and approvals in various countries, including China and the U.S. [49] - The demand for nuclear energy is increasing due to the need for stable, low-carbon baseload power, with a focus on SMR and controlled nuclear fusion technologies [62] - The nuclear power sector is expected to see a re-evaluation of its investment value as countries prioritize energy security and decarbonization [61]