National financial support for nuclear science and technology to force nuclear power valve

China National Nuclear Technology Corp. has announced that the company’s production capacity of key nuclear-level valves and high-quality castings and forgings in nuclear power plant projects will be included in the national nuclear power equipment autonomy and energy innovation in 2010, and will receive state funding support of 29.6 million yuan. At the same time announced that the company and the US-funded FlowserveUSInc. FlowservePte registered in Singapore. Ltd. The Sino-Foshan Foss Nuclear Power Equipment Co., Ltd. established by the joint venture has been approved for establishment. The company stated that it has received the above-mentioned national special funds on the 26th, which will be used for the independent technological innovation of the company's nuclear-grade key valves and high-quality castings and forgings in the company's nuclear power plant engineering projects and related production facilities. It is reported that the registered capital of Suzuofusi Nuclear Power Equipment Co., Ltd. is 10 million U.S. dollars, including 55% contributed by China Nuclear Technology and 45% by foreign parties.

The company also announced its three quarterly report today. The net profit for the first three quarters was 27.1114 million yuan, a slight increase of 0.34%. However, net profit for the third quarter was RMB 7,606,800, a decrease of 34.12% year-on-year. Shows a large decline in the third quarter.

People in the industry believe that although CNE's ordinary valve business still accounts for about 80% of its total volume, competition in this area is fierce and the company's advantage is not obvious. Therefore, China National Nuclear Technology Co., Ltd. has issued financing for nuclear power valve business since last year. This time, we have obtained nearly 30 million state financial support for nuclear power valve research and development, and set up a nuclear power equipment company with foreign capitals. The sign company has focused on the future performance highlights of nuclear power valves. The company said that this joint venture with the US-funded establishment of Suowei Fusi nuclear power equipment company, mainly to absorb the introduction of the United States advanced nuclear power valve technology.

Last year, CNNC's nuclear power valve business income was less than 80 million, accounting for only about 10% of total revenue. However, as a company controlled by China National Nuclear Corporation, its market share is expected to increase rapidly as its technological innovation capability improves and the localization rate of nuclear power valves increases.

China will enter the peak of nuclear power construction during the 12th Five-Year Plan period. It has been estimated that China’s nuclear power construction will maintain a relatively steady pace afterwards. About 6-8 units will be built each year, and the corresponding installed capacity will be close to 8 million kilowatts. According to the nuclear power plant unit cost of 15,000 yuan / kilowatts, equipment costs account for 60% of the total project investment, the annual nuclear power equipment investment will reach 72 billion yuan.

China Merchants Securities believes that nuclear power valves are important control devices and their localization is of great significance to the safe operation of nuclear power in China. It is expected that the market demand will reach 500 million yuan each year during the "12th Five-Year Plan" period, and replacement of valve repairs will bring new demand after 2015.

However, it should be noted that, as the aforementioned special support funds need to be completed after the completion of the project in 2011, the deferred income will be recognized based on the assets formed, and will be recorded in profit or loss over the useful life of the relevant assets. Therefore, it will not have a significant impact on its 2010 operating results.