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Nuclear Companies Seek Unprecedented Listing

05-20 00:00 《财经》杂志 《财经》杂志

  By staff reporters Zhu Yue and Hu Wen

  China National Nuclear Corporation (CNNC) and China General Nuclear Power Group (CGN), two state-owned heavyweights which control more than 90 percent of the nuclear power plants in China, are both outlining plans to raise funds from the capital market in initial public offerings (IPOs) in 2014.

  On the evening of May 4, the China Securities Regulatory Commission (CSRC) published the prospectus of China National Nuclear Power (CNNP), a unit of CNNC, on the CSRC’s official website. CNNC owns 97 percent of the shares of CNNP, whose principal assets include all of the nuclear power projects under the group, a specialized nuclear operating company, and an energy company. CNNP aims to raise up to 16.2 billion yuan by listing on Shanghai’s A-shares market this year. This will likely become China’s largest domestic IPO since China Everbright Bank (601818.SH) raised 21.7 billion yuan in Aug. 2010.

  CGN’s listing platform, China Guangdong Nuclear Power Nuclear Power Co., Ltd., was established on March 27 this year. CGN will package its nuclear power assets and specialized operating company into this subsidiary and list on Hong Kong’s H-shares market later this year.

  The listing of nuclear assets is unprecedented worldwide. Never before has a company divested its nuclear power assets in an overall listing, and so far there is not a single listed company on the capital market whose main business is nuclear power, to the extent that investment banks have no appropriate references when conducting valuations of the two nuclear power giants.

  The issuance of CNNP’s prospectus can also be seen as an unprecedented disclosure of information in China’s nuclear power industry. This 300-page document, from the multiple aspects of finance, human resources, risk and project progress, provides a detailed explanation of CNNC's nuclear assets, giving Chinese investors and the public a comprehensive understanding of the nuclear power businessfor the first time.

  The discussion on nuclear power within the industry has heated up rapidly since the beginning of 2014. With controlling air pollution an urgent issue, Chinese decision-makers have deemed nuclear power one of the best solutions to achieve the transformation of energy and environmental improvement. The country’s top leaders have on several occasions declared their intent to develop nuclear power.

  China will become the world’s largest market for nuclear power. World nuclear power generation accounts for 14 percent on average, of which only 2.1 percent comes from China. To this end, China has developed a nuclear recovery program, which Reuters has dubbed the “world's largest nuclear expansion plan for civil use post-Fukushima.” By 2020, China will have 50 gigawatts of installed nuclear power capacity, which is more than three times the nation’s current installed capacity. The two nuclear power giants will play the most important role in this process.

  The plan for a massive increase in installed capacity is an indicator of nuclear power companies’ extreme thirst for capital. The cost of admission to the capital market is losing the “right to privacy.” The public outcry about the safety of nuclear power after the Fukushima nuclear accident caught the already conservative and closed Chinese nuclear power companies by surprise. Entering the capital market will force nuclear power companies to become more transparent and open, as well as adapt to the complex capital market and the modern enterprise system - no doubt, this will be an unprecedented challenge.

  Full article in Chinese:http://magazine.caijing.com.cn/2014-05-19/114191351.html

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