Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

China National Nuclear Power Prepares $2.6 Billion IPO

By

The listing could be the biggest on the mainland since the Agricultural Bank of China debuted in 2010.

PrintPRINT
China National Nuclear Corp. (CNNC), a subsidiary of China National Nuclear Power Co. (CNNP), one of China's three state-owned nuclear power developers, is planning its first IPO, intended to raise at least $2.6 billion.

CNNP's Shanghai stock market IPO listing could be the biggest on the mainland since the Agricultural Bank of China debuted in July 2010. CNNP currently has 12 nuclear power projects, including operating nuclear power plants in Zhejiang and Jiangsu and others under construction or being planned in Fujian, Hainan, Liaoning, Zhejiang, Hunan, and Henan. CNNP intends to use the money raised by the IPO to fund the construction of four plants containing a total of 10 reactors in Fuqing, Fujian, Sanmen, Zhejiang, Changjiang, Hainan, and Tianwan, Jiangsu.

In its February 2014 "China Analysis," the US Energy Information Administration noted, "At the end of 2013, China had 31 reactors with almost 35 GW of additional capacity under construction -- almost half of the global nuclear power capacity being built. These plants are slated to become operational by 2017, more than tripling China's current capacity."

Three years ago, in the wake of Japan's Fukushima Daiichi nuclear power plant accident, China suspended government approvals for new nuclear plants until safety reviews of all facilities were completed and the state council had approved a new safety framework. Construction resumed in October 2012.

CNNP is seeking to broaden its expertise base. In October 2013, Palo Alto-based Electric Power Research Institute (EPRI) announced that CNNP had joined two of its nuclear-related research programs. CNNP President Chen Hua remarked, "CNNP's participation in EPRI will enhance our mutual understanding, and I'm convinced that CNNP will expand its engagement with EPRI soon to become a full member in all of its nuclear research programs."

There is, however, a potential question hanging over CNNP's IPO. According to the World Nuclear Association, CNNP's parent company, CNNC "combines military with civilian production, taking nuclear industry as the basis while developing nuclear power and promoting a diversified economy." CNNC's "military production" and its relationship to CNNP makes CNNP's nuclear power generation capacity potentially "dual use" technology, raising potential questions under the Non-Proliferation Treaty, which China has signed and ratified.

Chinese President Xi Jinping has proven his commitment to nonproliferation. When North Korean leader Kim Jong-un conducted his country's third nuclear test in 2013, Beijing temporarily ended top-level official visits with Pyongyang and implemented the UN sanctions on North Korea. In such a context, more transparency on the exact nature of the relationship between CNNC and CNNP would be useful, but in any case, given China's projected electricity needs, the CNNP IPO looks headed for success.

This article was written by John C.K. Daly of Oilprice.com.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE