China’s nuclear pollution prevention stocks staged a strong rally during Wednesday’s trading session, with Jihua Group (601718.SH) hitting the 10% daily limit in afternoon trade. The defense equipment manufacturer saw trading volume reach 820 million yuan, reflecting intense investor interest. China Nuclear Science & Technology (000777.SZ) had earlier locked in its limit-up position during morning trading, marking a two-day cumulative gain of 21%.
Policy Revisions and Industry Developments Drive Sentiment
The sector’s upward momentum follows several significant developments in nuclear safety regulation and waste management. China’s Ministry of Ecology and Environment recently solicited public comments on revisions to the Nuclear Safety Law, while the State-Owned Assets Supervision and Administration Commission included nuclear environmental protection in its catalog of strategic emerging industries for central enterprises.
Industry projections indicate substantial growth potential, with the China Nuclear Energy Association forecasting the domestic nuclear environmental protection market to exceed 50 billion yuan by 2025. The sector has drawn additional attention as China General Nuclear Power Group prepares to commence operations at its first commercial nuclear waste treatment project.
Capital Flows Reflect Growing Institutional Interest
Market data reveals robust capital inflows into the sector, with net main fund inflows reaching 680 million yuan – the highest single-day total this month. The median price-to-earnings ratio for nuclear environmental protection stocks currently stands at 42, remaining below the three-year historical average of 51. Foreign investors have shown consistent interest, with northbound capital recording net purchases of 320 million yuan over three consecutive trading days.
Analysts caution that while policy tailwinds are strengthening, investors should carefully evaluate companies’ actual exposure to nuclear pollution control businesses. Some firms derive less than 10% of revenue from this sector despite being categorized as concept stocks. The high technical barriers and potential international cooperation challenges represent additional considerations for market participants.
The rally underscores growing market expectations for increased nuclear safety investment as China accelerates approval of new nuclear power units, with industry projections suggesting 10-12 new reactor approvals anticipated in 2025.
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