Key takeaway

The company released a plan for a private placement of shares to specific investors in 2026. It plans to raise no more than RMB4bn in total. RMB2.8bn will be invested in the Jiangsu Xuwei and Zhejiang Jinqimen nuclear power construction projects, and RMB1.2bn will be used to repay bank loans. As the only company in the world that has engaged in nuclear power construction continuously for 41 years, the company currently has 36 units under construction. Revenue from nuclear power engineering reached RMB23.93bn, RMB32.21bn, and RMB37.68bn from 2023 to 2025, up 42.9%, 34.6%, and 17.0% YoY, respectively. The strong boom in nuclear power engineering is driving rising capital demand. This private placement will provide funding support for the expansion of the company’s core business, while reducing the asset? liability ratio and optimizing the capital structure.

Event

The company released a plan for a share issuance to specific investors for 2026. It plans to issue no more than 904mn shares to no more than 35 specific investors, with total funds raised not exceeding RMB4bn.

Brief analysis

The proposed non-public share issuance aims to raise no more than RMB4bn, which will be used for the construction of two nuclear power projects and the repayment of bank loans. The issuance targets no more than 35 qualified specific investors. The number of shares issued will not exceed 904mn. Of the proceeds, RMB1.3bn will be invested in the nuclear island and supporting BOP civil works for Units 1 and 2 of Phase I of the Jiangsu Xuwei nuclear energy cogeneration plant, RMB1.5bn will be invested in the nuclear island and supporting civil construction and installation works for Units 1 and 2 of the Zhejiang Jinqimen nuclear power plant, and RMB1.2bn will be used to repay bank loans. After the completion of this issuance, the company’s controlling shareholder CNNC Group and theultimate controller, the State-owned Assets Supervision and Administration Commission of the State Council, will remain unchanged, and the equity structure will remain stable.

The nuclear power engineering business continues to maintain high growth, and this private placement will strongly support project construction and optimize the financial s tructure. The company is the only enterprise in the world that has continuously engaged in nuclear power construction for 41 years without interruption. Revenue from nuclear power engineering reached RMB23.93bn, RMB32.21bn, and RMB37.68bn from 2023 to 2025, representing YoY growth of 42.9%, 34.6%, and 17.0%, respectively. Newly signed contract value reached RMB38.40bn, RMB55.14bn, and RMB56.41bn, respectively. The company currently has 36 nuclear power generating units under construction and holds a clear leading market share in the domestic market. From 2022 to 2025, China has approved 10 or more nuclear power generating units each year for four consecutive years, and demand for nuclear power engineering construction continues to increase. Nuclear power engineering features large construction scale and long project cycles. The company’s abundant orders on hand are driving rising funding demand. The projects funded by this fundraising are centered on the company’s core nuclear power business and will provide financial support for project construction. Meanwhile, as of the end of March 2026, the company’s asset? liability ratio stood at 78.72%. Of the proceeds from this issuance, RMB1.2bn will be used to repay bank loans, which will help reduce the asset? liability ratio, lower financing costs, and enhance financial stability.

Maintain earnings forecasts and buy rating unchanged. We forecast the company’s EPS for 2026–2028 to be RMB0.45/RMB0.48/RMB0.51. Based on the current share price, the corresponding PE ratios are 26.7x/25.3x/23.7x. We maintain our buy rating.

Risks

Nuclear power project progress below expectations: Nuclear power project investments are large, with long construction cycles. Factors such as nuclear safety and spent fuel handling could slow project progress, leading to potential cash flow challenges.

Risk of continued growth in debt scale:The company’s asset-liability ratio remains at a high level and its debt scale is relatively large. If cash collection falls short of expectations and liquidity tightens, the company may face certain debt repayment pressure.

PPP investment and operation risk: The company’s PPP projects require large-scale investment and have long payback periods. If the real estate sector declines and corrects more than expected, it may further affect local fiscal revenue, leading to delays in payments for the company’s PPP projects and profitability falling short of expectations.