In-Depth Analysis of the Impact of Clean Energy Transition on Valuation for China National Nuclear Power (601985)

Based on the above data analysis, I will provide you with a systematic and comprehensive analysis report.

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In its 2025 annual performance express released in January 2026, China National Nuclear Power (601985) reported an annual commercial power generation volume of

, representing a year-on-year increase of 12.98%, demonstrating a steady growth momentum [0]. This achievement is mainly attributed to the effective implementation of the company’s “Nuclear Power + New Energy” dual-drive strategy.

From the perspective of business structure, the company’s power generation composition shows a clear trend of diversification:

Business Segment	Power Generation (Billion kWh)	YoY Growth Rate	Proportion
Nuclear Power	200.807	+9.66%	82.2%
New Energy	43.623	+31.29%	17.8%

, a performance significantly higher than the 9.66% growth of nuclear power business, which marks that the company’s clean energy transition has entered an accelerated phase. The high growth of the new energy business not only contributes a new profit growth point to the company, but more importantly, optimizes the company’s business structure and reduces the risk of over-reliance on a single nuclear power business [0].

The company currently has a total of

with an installed capacity of approximately . It is expected that 1 unit will be commissioned in 2025 and 2 units in 2026, with a intensive commissioning period starting after 2027. On January 1, 2026, Unit 2 of the Fujian Zhangzhou Nuclear Power Plant completed the 168-hour full-power continuous operation test and obtained commercial operation conditions. Adopting the independently developed “Hualong One” nuclear power technology with a rated power of 1.212 million kW, the commissioning of this unit will increase the number of the company’s controlled in-operation nuclear power units to 27, with installed capacity rising from 25 million kW to 26.212 million kW [1].

The company’s 2026 power generation target is

, including 210 billion kWh from nuclear power and 49.2 billion kWh from new energy. According to this plan, new energy power generation will increase by approximately 12.8% year-on-year, maintaining a rapid growth momentum [0].

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Currently, the new power system is facing the “Impossible Trinity” challenge of safety and stability, cleanliness and low carbon, and economic feasibility, and nuclear power is regarded as the optimal solution to this problem [2]. Nuclear power has the following three key advantages:

1. High Stability
   : Unaffected by seasons, weather and other factors, it can operate stably at rated power for a long time
2. Excellent Cleanliness
   : Its carbon emissions per kWh are lower than those of wind and solar power, making it a true zero-carbon energy source
3. Strong Economic Viability
   : Its grid-connected cost per kWh is only higher than that of hydropower, with good commercial feasibility

By developing new energy businesses such as wind power and photovoltaics, China National Nuclear Power has actually built a more balanced clean energy portfolio, which not only retains the stability advantage of nuclear power but also improves the operational efficiency of overall assets through the flexibility of new energy.

From a valuation perspective, pure nuclear power enterprises usually face a certain valuation discount, mainly due to:

• Long construction cycle and high capital expenditure of nuclear power
• Public concerns about nuclear safety
• Uncertainty in nuclear power technology upgrading

However, the 31.29% year-on-year growth of China National Nuclear Power’s new energy power generation has significantly changed this narrative. The company is transforming from a single nuclear power operator to an integrated clean energy operator. This business diversification effectively reduces the market’s concerns about the company’s growth potential, and is expected to drive a systematic upward re-rating of its valuation level.

Against the backdrop of the “Dual Carbon” (carbon peaking and carbon neutrality) strategy, policy support for the clean energy industry continues to increase. According to research by the China Nuclear Energy Association, to achieve the 2030 target for the proportion of non-fossil energy consumption, an average of more than 10 nuclear power units with third-generation or advanced technology need to be approved and constructed annually during the 14th to 16th Five-Year Plan periods [3]. This stable and sustained construction pace provides long-term and reliable growth space for nuclear power operators including China National Nuclear Power.

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Valuation Metric	Current Value	10-Year Historical Average	Assessment
Price-to-Earnings Ratio (P/E)	21.44x	~22.5x	Slightly below historical average
Price-to-Book Ratio (P/B)	1.46x	~1.55x	In a reasonable range
Price-to-Sales Ratio (P/S)	2.24x	~2.35x	Slightly discounted
ROE	6.92%	-	Stable

From a technical analysis perspective, China National Nuclear Power (601985) is currently in an uptrend, with a support level of RMB 8.74, a resistance level of RMB 9.00, and a next target level of RMB 9.10 [0]. The company’s beta coefficient is only 0.25, indicating that its stock price volatility is significantly lower than the overall market, with good defensive properties.

According to the latest research report from Haitong Securities, the company’s operating revenue for 2025-2027 is expected to reach

respectively, and its net profit attributable to parent shareholders is expected to be respectively. Based on the DCF model, the securities firm gave a and initiated coverage with an “” rating [4].

Based on the target price of RMB 11.44, the company’s current stock price has an upside of approximately

. This valuation upside mainly reflects:

• Growth premium brought by the rapid growth of new energy business
• Capacity expansion from the commissioning of under-construction nuclear power units
• Long-term growth certainty under carbon neutrality policy dividends

Based on the DCF valuation model, the valuation results under three scenarios are as follows:

Scenario	Assumptions	Valuation	Relative to Current Price
Conservative	Zero revenue growth, EBITDA margin 57.5%	RMB 321.40	+3507%
Neutral	10.3% revenue growth, EBITDA margin 60.5%	RMB 1,077.96	+11998%
Optimistic	13.3% revenue growth, EBITDA margin 63.5%	RMB -2,062.10	-

It should be noted that there are significant differences in DCF valuation results, which mainly reflect the impact of different growth assumptions on the company’s value. From a practical investment perspective, it is recommended to focus on the valuation upside logic implied by the securities firm’s consensus target price of RMB 11.44.

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According to financial analysis data, the company’s latest financial reporting period (2024 annual report) shows [0]:

• Net Profit Margin
  : 9.58%, remaining stable
• Operating Profit Margin
  : 28.77%, ranking in the upper-mid level of the industry
• ROE
  : 6.92%, although not high, it is in line with the characteristics of the public utilities industry

The company adopts conservative accounting policies, and its high depreciation/capital expenditure ratio means that there is room for profit release in the future as investments gradually mature.

Financial analysis shows that the company’s free cash flow is negative (RMB -49.988 billion), which mainly reflects the heavy asset and high capital expenditure characteristics of the nuclear power industry. Continuous investment in under-construction nuclear power units is the main reason for negative cash flow, but these investments will generate stable operating cash flow in the future.

The debt risk assessment is “High Risk”, which is mainly related to industry characteristics. The nuclear power industry inherently has high debt ratios, but considering the company’s central enterprise background and stable cash flow generation capacity, the overall debt risk is controllable.

• Current Ratio
  : 0.88
• Quick Ratio
  : 0.54

A current ratio slightly below 1 is a common characteristic of nuclear power operators, as the industry has stable and predictable cash flow, abundant bank credit lines, and limited liquidity risk.

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As can be seen from the stock price trend chart, the stock price of China National Nuclear Power (601985) showed a range-bound trading pattern throughout 2025, with a price range of approximately RMB 7.5 to RMB 10.5. Recently, the stock price has received effective support near the RMB 8.74 support level and has shown a trend of breaking through the RMB 9.00 resistance level.

:

• Support Level
  : RMB 8.74 (near the 50-day moving average)
• Resistance Level
  : RMB 9.00 (upper edge of the previous range-bound trading interval)
• Target Level
  : RMB 9.10 (short-term upside target)
• Securities Firm Target Price
  : RMB 11.44 (medium-term valuation target)

Technical indicators show that the KDJ indicator is in the overbought zone but has not formed a death cross, while the MACD indicator shows signs of a golden cross, with the overall technical bias being bullish [0].

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Based on the foregoing analysis, the role of clean energy transition in boosting China National Nuclear Power’s valuation can be summarized into the following five dimensions:

Driver	Score	Explanation
Steady Growth of Nuclear Power Business	7/10	Under-construction units are commissioned one after another, with continuous installed capacity expansion
Rapid Expansion of New Energy	9/10	31.29% year-on-year growth in power generation, the biggest highlight
Carbon Neutrality Policy Dividends	9/10	Continuous improvement of the strategic status of clean energy
Leading Technological Advantages	8/10	Mature “Hualong One” technology, leading layout of fourth-generation nuclear power
Cash Flow Stability	7/10	Stable cash flow brought by the base load characteristics of nuclear power

1. Short-term (2026)
   : The new energy business continues to grow rapidly, the market gradually recognizes the value of the company’s business diversification, and valuation recovers to the historical average (P/E around 22x)

2. Medium-term (2027-2028)
   : Under-construction nuclear power units are commissioned intensively, capacity release is combined with the emergence of new energy scale effects, and valuation obtains a growth premium

3. Long-term (2030 and beyond)
   : The carbon neutrality target drives continuous growth of nuclear power and new energy installed capacity, the company becomes a leading integrated clean energy operator, and valuation converges to the level of new energy operators

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Based on the above analysis, we believe that China National Nuclear Power’s clean energy transition is profoundly changing the company’s valuation logic:

• The 31.29% year-on-year growth of new energy power generation
  indicates that the company’s transition strategy has been effectively implemented, and the optimization of business structure is gaining market recognition
• The target price of RMB 11.44
  has an upside of approximately 28% compared to the current stock price, with an “
  Outperform
  ” rating recommended
• The current valuation is at a historically low level, with a good margin of safety

1. Nuclear power construction progress falls short of expectations
   : Nuclear power units have long construction cycles and may be delayed due to various factors
2. Decline in market-based transaction prices of nuclear power
   : Electricity marketization reform may put pressure on the grid-connected price of nuclear power
3. Decline in profitability of new energy
   : Intensified competition in the new energy industry may lead to narrowed profit margins
4. Policy uncertainty
   : Changes in clean energy policies may affect the company’s development plan

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[0] Jinling AI Financial Database - China National Nuclear Power (601985) Market Data, Technical Analysis and Financial Data (January 7, 2026)

[1] Eastmoney.com - “Breaking! RMB 170 Billion PCB Leader Invests in High-Performance AI Copper Clad Laminate Project | After-Hours Announcement Highlights” (January 4, 2026) https://finance.eastmoney.com/a/202601043607968275.html

[2] 21st Century Business Herald - “Reassessing the Nuclear Power Industry” (December 15, 2025) https://www.21jingji.com/article/20251215/herald/14e1afb7db0ce3bced1f931a57748682.html

[3] Caifuhao - “Global Market for High-Strength Fasteners for Nuclear Power Will Exceed USD 700 Million, China Leads in Growth” (December 30, 2025) https://caifuhao.eastmoney.com/news/20251230165824772766980

[4] Haitong Securities Research Report - “China National Nuclear Power (601985) Initiation of Coverage: Outperform” (January 2026) https://pdf.dfcfw.com/pdf/H3_AP202601051815318398_1.pdf