On Friday (18th), Premier Li Keqiang of the State Council pointed out at the first meeting of the National Energy Commission that under the premise of ensuring safety, new nuclear power projects should be started in the eastern coastal areas in a timely manner. Deutsche Bank pointed out that this is the highest level signal from the central government on the restart of nuclear power since the end of 2012.
The bank believes that Li Keqiang’s position will help increase orders for nuclear equipment stocks such as Dongfang Electric, Shanghai Electric and Harbin Electric, and the delivery speed of existing orders will also increase. All three stocks soared today, including Shanghai Electric, which is the strongest, rising 6.3%.
In addition, Huadian Fuxin may also benefit, if the company's Fuqing nuclear second-phase project is approved later this year, it is expected to contribute RMB 500 million in profits by 2019.
The Bank of Germany also stated that due to the economic growth rate of the Mainland which was below 7.5% in the first quarter, the timely restart of nuclear power also reflected that the Central Government plans to stimulate the economy by increasing infrastructure investment. It is believed that the government will officially restart the inland nuclear power project next year.
The State Council also proposed a series of small stimulus measures such as increasing the railway budget. According to Deutsche Bank, these measures can stimulate demand for different industries, including steel, cement, and machinery. In the next five years, nuclear power, high-speed rail and high-voltage power transmission may become China's major export of high-end equipment.
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