Dongwu Securities: Maintains "Buy" rating on China General Nuclear Power, plans to acquire Huizhou Nuclear Power to increase EPS.

The Dongwu Securities research report pointed out that China General Nuclear Power Corporation achieved a net profit attributable to the parent of 5.952 billion yuan in the first half of the year, a decrease of 16.3%; the gross profit of the engineering sector has greatly increased, while the gross profit of nuclear power has declined. The online electricity generation in the first half of 2025 increased by 8.84%, with significant contributions from Fangchenggang and Dayawan. The company plans to acquire 82% of Huzhou Nuclear Power, 100% of Huzhou II Nuclear Power, 100% of Huzhou III Nuclear Power, and 100% of Zhanjiang Nuclear Power, with a total consideration of 9.375 billion yuan, of which the transaction prices of Huzhou Nuclear Power/Huzhou II Nuclear power were approximately 8.023/1.353 billion yuan. As of the valuation reference date, the net assets of Huzhou Nuclear Power/Huzhou II Nuclear Power were 9.784/1.353 billion yuan, with corresponding value-added rates of 17.91%/10.27%, and PB ratios of approximately 1.18/1.10. After the completion of the transaction, the company will add several ongoing and reserve nuclear power projects, enhancing the certainty of profit growth. Considering the new FCD and approvals for 25 years, the scale of production before 2030 is expected to increase. As of December 31, 2024, Huzhou Nuclear Power and Cangnan Nuclear Power are still within the group, with the accelerated injection of assets with the operation of Huzhou 1 in 2025, Huzhou 2 and Cangnan 1 in 2026. Maintain a "buy" rating.