《Investment Insights》Against the backdrop of accelerated global energy transition and continuously rising demand for low-carbon electricity, nuclear power, as a stable and clean baseload energy source, is increasingly demonstrating its strategic value. CGN Power (01816), as one of the two leading oligopolists in China's nuclear power industry, possesses business developments and core advantages worthy of in-depth understanding by investors.
I. Business Development: Emphasizing Both Scale and Quality
From an operational perspective, CGN Power maintains high-quality operations. All 28 nuclear power units under its management achieved "zero unplanned shutdowns," with over 85% of WANO indicators reaching world-advanced levels and an average capacity factor of approximately 93%. In 2025, the company's total grid-connected electricity reached 232.648 billion kWh, an increase of 2.36% year-on-year, demonstrating its leading capabilities in safety and efficiency.
From a growth perspective, the company has ample reserves. During the 14th Five-Year Plan period, the total installed capacity of units operated and under construction managed by CGN Power increased from approximately 35.35 million kW to about 56.06 million kW, with cumulative grid-connected electricity exceeding 1.07 trillion kWh. In 2025, six new units achieved Full Commercial Development (FCD), laying a solid foundation for future performance growth. Strategically, the company is expanding projects through joint ventures, such as co-establishing the Lufeng Nuclear Power Project Company with CATL and others, in which the company holds a 70% stake, exploring synergistic development between nuclear power and new energy.
II. Core Advantages: Wide Moat and High Growth Certainty
First, the dual-oligopoly position establishes an extremely wide moat. CGN Power is the sole nuclear power generation platform of the CGN Group, and together with another nuclear power enterprise, holds approximately 94.55% of the country's nuclear power units. The industry entry barrier is extremely high, ensuring a long-term stable competitive landscape.
Second, normalized approvals bring high growth certainty. The state has approved more than 10 nuclear power units annually for several consecutive years, marking the nuclear power approval process as entering a normalized phase. With abundant site reserves and consistently top-tier installed capacity among peers, the company can continuously benefit from increased approvals.
Third, technological self-reliance and controllability, with iterative upgrades of "Hualong One." The independently developed third-generation technology "Hualong One" has achieved batch construction. Based on this, the upgraded "Hualong One" 2.0 version significantly improves nine key safety indicators, enabling 72-hour non-intervention operation and 7-day accident self-management, with 100% domestic production capability for critical equipment, simultaneously optimizing both economic efficiency and safety.
Fourth, sound financials and emphasis on shareholder returns. In 2025, the company achieved operating revenue of RMB 75.697 billion and net profit attributable to shareholders of RMB 9.765 billion, with a dividend payout ratio of approximately 44.47%. The dividend payout ratio maintained moderate growth from 2021 to 2025, demonstrating strong cash flow management and willingness to return value.
III. Challenges to Monitor
Short-term operations face certain pressures. In the first half of 2026, the company's grid-connected electricity decreased by 3.3% year-on-year, and the average unit utilization hours declined by 6.1% year-on-year. Meanwhile, the proportion of market-traded electricity increased to 65.9%, and downward electricity prices exert pressure on profit margins. Although power companies face significant pressure, nuclear power enterprises still possess medium- to long-term growth advantages.
IV. Overall Assessment
Overall, CGN Power demonstrates significant advantages in industry position, technological self-reliance, and installed capacity growth. Its dual-oligopoly structure, normalized approvals, iterative Hualong One technology, and stable dividends constitute the core support for medium- to long-term investment value. However, profit volatility risks arising from market-oriented electricity price reforms cannot be overlooked. For investors focusing on China's nuclear power development, CGN Power is undoubtedly an important target worthy of long-term tracking. Future focus should be on the progress of new unit commissioning, changes in electricity pricing policies, and the continuity of dividend policies. Based on the current stock price, the group's valuation is attractive; hence, investors are advised to accumulate positions at current levels for medium-term holding, with a target price of HK$3.80 and a stop-loss at HK$2.90. Pan Tieshan, Investment Director, Hongchang Capital (The author does not hold relevant shares; clients hold relevant shares) (This column is published every Thursday)
*Articles published in Economic Times under named or unnamed authorship reflect the authors' personal opinions and do not represent the stance of Economic Times. Economic Times serves merely as a platform providing free expression.
I. Business Development: Emphasizing Both Scale and Quality
From an operational perspective, CGN Power maintains high-quality operations. All 28 nuclear power units under its management achieved "zero unplanned shutdowns," with over 85% of WANO indicators reaching world-advanced levels and an average capacity factor of approximately 93%. In 2025, the company's total grid-connected electricity reached 232.648 billion kWh, an increase of 2.36% year-on-year, demonstrating its leading capabilities in safety and efficiency.
From a growth perspective, the company has ample reserves. During the 14th Five-Year Plan period, the total installed capacity of units operated and under construction managed by CGN Power increased from approximately 35.35 million kW to about 56.06 million kW, with cumulative grid-connected electricity exceeding 1.07 trillion kWh. In 2025, six new units achieved Full Commercial Development (FCD), laying a solid foundation for future performance growth. Strategically, the company is expanding projects through joint ventures, such as co-establishing the Lufeng Nuclear Power Project Company with CATL and others, in which the company holds a 70% stake, exploring synergistic development between nuclear power and new energy.
II. Core Advantages: Wide Moat and High Growth Certainty
First, the dual-oligopoly position establishes an extremely wide moat. CGN Power is the sole nuclear power generation platform of the CGN Group, and together with another nuclear power enterprise, holds approximately 94.55% of the country's nuclear power units. The industry entry barrier is extremely high, ensuring a long-term stable competitive landscape.
Second, normalized approvals bring high growth certainty. The state has approved more than 10 nuclear power units annually for several consecutive years, marking the nuclear power approval process as entering a normalized phase. With abundant site reserves and consistently top-tier installed capacity among peers, the company can continuously benefit from increased approvals.
Third, technological self-reliance and controllability, with iterative upgrades of "Hualong One." The independently developed third-generation technology "Hualong One" has achieved batch construction. Based on this, the upgraded "Hualong One" 2.0 version significantly improves nine key safety indicators, enabling 72-hour non-intervention operation and 7-day accident self-management, with 100% domestic production capability for critical equipment, simultaneously optimizing both economic efficiency and safety.
Fourth, sound financials and emphasis on shareholder returns. In 2025, the company achieved operating revenue of RMB 75.697 billion and net profit attributable to shareholders of RMB 9.765 billion, with a dividend payout ratio of approximately 44.47%. The dividend payout ratio maintained moderate growth from 2021 to 2025, demonstrating strong cash flow management and willingness to return value.
III. Challenges to Monitor
Short-term operations face certain pressures. In the first half of 2026, the company's grid-connected electricity decreased by 3.3% year-on-year, and the average unit utilization hours declined by 6.1% year-on-year. Meanwhile, the proportion of market-traded electricity increased to 65.9%, and downward electricity prices exert pressure on profit margins. Although power companies face significant pressure, nuclear power enterprises still possess medium- to long-term growth advantages.
IV. Overall Assessment
Overall, CGN Power demonstrates significant advantages in industry position, technological self-reliance, and installed capacity growth. Its dual-oligopoly structure, normalized approvals, iterative Hualong One technology, and stable dividends constitute the core support for medium- to long-term investment value. However, profit volatility risks arising from market-oriented electricity price reforms cannot be overlooked. For investors focusing on China's nuclear power development, CGN Power is undoubtedly an important target worthy of long-term tracking. Future focus should be on the progress of new unit commissioning, changes in electricity pricing policies, and the continuity of dividend policies. Based on the current stock price, the group's valuation is attractive; hence, investors are advised to accumulate positions at current levels for medium-term holding, with a target price of HK$3.80 and a stop-loss at HK$2.90. Pan Tieshan, Investment Director, Hongchang Capital (The author does not hold relevant shares; clients hold relevant shares) (This column is published every Thursday)
*Articles published in Economic Times under named or unnamed authorship reflect the authors' personal opinions and do not represent the stance of Economic Times. Economic Times serves merely as a platform providing free expression.
