CITIC Securities: Nuclear power projects at home and abroad are progressing in an orderly manner, focusing on the layout of key components.

CITIC SEC released a research report stating that recent progress has been rapid in the controllable nuclear fusion project, with the domestic STAR Fire 1 hybrid reactor project passing the environmental impact assessment and the first-stage project accelerating financing; internationally, the ITER organization has signed a tritium factory procurement agreement with South Korean domestic institutions. By 2024, major countries such as the United States, China, and Germany are accelerating the implementation of controllable nuclear fusion research and gradually promoting commercial projects. Short-term experimental reactor investments will drive the growth of related companies, with a positive outlook on the commercial progress of hybrid reactors in the medium term. In the long term, fusion technology will become the ultimate energy solution, and it is recommended to focus on key materials and equipment in the nuclear fusion industry chain. The main points of CITIC SEC are as follows: Short-term outlook on project catalysis, with progress both domestically and internationally. On March 28, China National Nuclear Corporation announced that the Southwest Institute of Physics of Nuclear Industry (referred to as SWIP) achieved "double billion-degree" in the new generation artificial sun "China Circulating Fusion Test Facility," marking the first time in China that the nuclear temperature reached 117 million degrees and the electron temperature reached 160 million degrees. The comprehensive fusion triple product has seen a significant increase, propelling China's fusion experiment towards fusion ignition. According to a report by Caixin on March 29, the China Nuclear Engineering Corporation issued a tender notice for the first phase of the China Fusion Engineering Test Reactor (CFETR) project. On April 10, Yixi Technology, a global leader in high-temperature superconducting magnet technology, announced the completion of nearly 100 million yuan in angel funding, securing a leading position in core research areas such as fusion magnet high-strength cable technology, quench protection technology, and magnet robustness technology. ITER organization signed a procurement agreement with South Korean domestic institutions, with South Korea responsible for delivering the core system of the tritium plant - the tritium storage and transport system that will occupy an entire floor of the tritium plant. China's fusion energy research is showing a diversified and rapid development trend, with multiple key projects expected to continue to make progress in technology development and commercial exploration. According to various company websites and announcements, the "STAR Fire 1" in Jiangxi, as a benchmark project for fusion-fission hybrid reactors, has an initial investment of 16 billion yuan (total investment of 30 billion yuan), with a design Q value exceeding 15. The Hefei Institute of Physical Science of the Chinese Academy of Sciences (CAS) adopts mixed magnet technology and is planned to be completed by 2027, becoming the first in the world to demonstrate fusion energy generation. The China Circulating Fusion Test Reactor (CFETR) continues to use the pure deuterium-tritium route, achieving 100% high-temperature superconductor operation and is expected to enter the demonstration phase around 2045. Xinghuan Fusion Energy focuses on high-temperature magnet research, while Chengdu Xianjue explores the laser confinement path. The 170 planning high-temperature superconducting scheme of Energy Singularity (Infinite) is worth paying attention to. The national major science and technology infrastructure CFETR and the "China Fusion" project are moving towards further capitalization, with the CFETR project planned to be completed by 2035. The progress of the above projects signifies that China's fusion research has formed a comprehensive layout of "national team + private institutions," "fusion + mixed reactors," and is expected to continue to make progress in technology and commercial exploration. Core components are accelerating domestic substitution, focusing on investment opportunities in the core industry chain. The main components of compact tokamak devices include superconducting magnets, the first wall, vacuum vessel, core pump and valve, cooling system, divertor, etc. According to the breakdown of ITER construction costs, the core components including magnets, vacuum vessels, internal components account for more than 50% of construction costs. In addition, due to the characteristics of fusion industry requirements, the core also involves upstream material segments, mainly special metals and superconducting tapes. Special metals include special steel, tungsten, copper, etc., while superconducting tapes are divided into low-temperature superconducting materials (niobium-titanium, niobium-tin, etc.) and high-temperature superconducting materials (YBCO, etc.) based on the magnets. It is suggested to focus on core materials and equipment segments for investment opportunities in the process of accelerating the implementation of fusion devices. Risk factors: Breakthrough in controllable nuclear fusion technology is not as expected; Approval progress of investment plans is not as expected; Nuclear power policy changes pose higher-than-expected risks; Nuclear power safety risks.