Guotai Haitong: Controllable nuclear fusion accelerates progress, industry chain expected to continue benefiting.

Guotai Haitong released a research report stating that since 2025, China has made significant technological breakthroughs in the field of controlled nuclear fusion. The EAST device set a new record of 1066 seconds of steady-state operation, and the "Chinese Circulating No. 3" achieved a plasma temperature of 1.17 billion degrees Celsius, marking the entry of China's fusion research into the stage of combustion experiments. With the advancement of the country's future industrial strategies and accelerated capital layout, the industrialization process of controlled nuclear fusion is expected to speed up. The focus of the bank is on the high-temperature superconducting magnet and other upstream and midstream segments. Benefited targets include: 1) midstream equipment; 2) upstream materials. Guotai Haitong's main views are as follows: The two main core projects have achieved significant technological breakthroughs, and related entities are actively participating in tenders. 1) On January 20, the Institute of Plasma Physics of the Chinese Academy of Sciences successfully achieved the steady-state operation of plasma with a temperature of over one billion degrees Celsius for 1066 seconds in the all-superconducting tokamak device (EAST). This once again set a new world record for high-confinement plasma operation in tokamak devices. On March 5, as a follow-up project of EAST, the first block of the compact fusion energy experimental device (BEST) project was successfully cast, marking the comprehensive acceleration phase of the construction of this world-class research facility. 2) On March 28, the Southwest Institute of Nuclear Physics under China National Nuclear Corporation achieved a plasma temperature of 1.17 billion degrees Celsius and an electron temperature of 1.6 billion degrees Celsius for the first time domestically with the new generation artificial sun "Chinese Circulating No. 3", significantly improving the comprehensive parameters of fusion triple products, indicating that China is advancing towards fusion combustion experiments. 3) In addition, in December 2024, Jiangxi Lian Chuang Optoelectronic Science and Technology won the bid for the China National Nuclear Corporation's "Spark I" project, with the first order amounting to 41.8 million RMB, marking the official start of the project. Since 2025, Fusion New Energy (Anhui) Co., Ltd., the Institute of Plasma Physics of the Chinese Academy of Sciences, and others have actively tendered for projects related to water cooling systems. Fusion companies have successively received investments from various sources, and the industrialization process of controlled nuclear fusion is accelerating. 1) On March 1, in response to the development requirements of the country's future industrial strategies, the China Nuclear Energy Power Co., Ltd. and Zhejiang Zheneng Electric Power Co., Ltd. successively announced plans to invest in China Fusion Energy Co., Ltd. by way of capital increase, with investment amounts of 1 billion/750 million RMB. The direction of technological research and development of the fusion company is highly consistent with the future industrial development and national energy security goals. 2) On April 1, Shanghai Future Industries Fund announced a strategic investment in the fusion company. This is the fund's first direct investment project since its establishment in 2023, marking Shanghai Guotou Company's formal entry into the core track of future energy and injecting significant capital momentum into the industrialization process of China's controlled nuclear fusion technology. The market size is expected to significantly increase in the next 10 years, and the high-temperature superconducting industry chain will continue to benefit. On April 10, 2025, Precedence Research published a "Market Report on Nuclear Fusion and Fission Reactors (2025-2034)", stating that driven by the demand for clean energy, advances in materials science, and government support, the fusion reactor market will grow significantly in the next ten years. According to Maximize Market Research, the global nuclear fusion market is expected to reach $496.55 billion by 2030, with a CAGR of approximately 7.4% from 2024 to 2030. Among the current controlled nuclear fusion technology solutions, tokamak remains the mainstream. For example, in the ITER experimental reactor stage, the magnetic system costs account for as much as 28%. High-temperature superconductors have significant advantages, not only providing stronger magnetic fields but also effectively reducing the cost and size of fusion devices. With continuous technological breakthroughs, controlled nuclear fusion is entering a stage of rapid development, and the upstream segments of the industrial chain are expected to continue to benefit. Risk warning: Feasibility of controlled nuclear fusion projects may fall short of expectations; Commercialization progress may fall short of expectations.