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Investing.com -- China’s nuclear power sector is entering a significant growth phase, with several key players well-positioned to benefit from the country’s expanding nuclear reactor fleet and technological advancements, according to recent UBS analysis.
The investment bank has identified three standout companies leveraging China’s nuclear upcycle, highlighting their strong growth potential and attractive valuations compared to global peers.
1. Harbin Electric Company
UBS initiated coverage with a Buy rating and a HK$9.60 price target, identifying Harbin as a top-tier Chinese power equipment manufacturer with the highest nuclear gross profit exposure among listed domestic OEMs.
The bank forecasts a 19% EPS CAGR over 2024-29, driven by China’s expanding nuclear reactor fleet, potential upside from small modular reactor development, and growing subscription-based maintenance services. Trading at 6x 2026E PE, Harbin offers an attractive valuation discount compared to both global and domestic competitors.
2. Dongfang Electric Corporation
UBS initiated coverage with a Buy rating and HK$23.60 price target for Dongfang Electric-H shares. As a diversified power equipment manufacturer serving multiple energy sectors, Dongfang is projected to achieve a 27% EPS CAGR from 2024-29, significantly outpacing its 11% growth from 2020-24.
This acceleration is expected to come from scaling subscription-based maintenance services, the nuclear equipment upcycle, and potential gains from next-generation technologies including small nuclear reactors and fusion.
UBS’s EPS estimates for 2025-27 exceed consensus by 4-29%, while the stock trades at just 10x 2026E PE compared to the 44x average for global peers. The bank specifically highlighted Dongfang Electric-A shares as its top sector pick.
3. China National Nuclear Power
UBS reiterated its Buy rating while raising the price target to Rmb11.30. The bank views CNNP as offering a more balanced risk-reward profile than some competitors, citing its partial exposure to renewables that could benefit from potential policy support and lower fuel cost risk with nuclear fuel supply contracts secured until 2030.
With stable operations, higher cost visibility, and a stronger balance sheet, UBS sees upside potential at 1.4x 2026E P/BV, which remains below the historical average of 1.8x forward PB while offering an implied 2% dividend yield.
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