Cathay Pacific Haitong: Controlled nuclear fusion accelerates the industrial chain and is expected to continue to benefit

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that recently, domestic controlled nuclear fusion has received major technological breakthroughs, and related entities have intensively tendered; fusion companies have successively received investment from various sources. As a key area in the game between China and the US, China's controlled nuclear fusion is advancing at an accelerated pace, and the industrial chain is expected to continue to benefit. The bank recommended focusing on midstream and upstream segments such as high-temperature superconducting magnets. 1) Midstream equipment: Lianchuang Optoelectronics (high temperature superconducting magnets), Guoguang Gas (deflectors, cladding systems), Antai Technology (polarizer), HeDuan Intelligence (vacuum chamber components), Strain Flow (fusion reactor materials and components); 2) Upstream materials: Yongding Co., Ltd. (subsidiary Dongdong Superconducting, High Temperature Superconducting Strips), Jingda Co., Ltd. (participating in Shanghai Superconductivity, High Temperature Superconducting Strips).

Cathay Pacific Haitong's main views are as follows:

Its core projects have received major technological breakthroughs, and relevant entities have intensively tendered.

1) On January 20, the fully superconducting tokamak device (EAST) under the Institute of Plasma Physics of the Chinese Academy of Sciences successfully achieved steady state long pulse high constraint mode plasma operation at hundreds of millions of degrees Celsius for 1,066 seconds, once again setting a new world record for high-restraint mode operation of tokamak devices. On March 5, as a follow-up project to EAST, the first roof of the Compact Fusion Energy Experimental Device (BEST) project was successfully poured, marking the full acceleration of the construction of this world-class scientific research facility.

2) On March 28, the new-generation artificial sun “China Circulation 3”, a subsidiary of CNNC's Southwest Institute of Nuclear Physics, achieved the first domestic nuclear temperature of 117 million degrees and an electron temperature of 160 million degrees. The trifecta of comprehensive parameter fusion achieved a sharp jump, which meant that China's fusion advanced combustion tests. 3) Furthermore, in December 2024, Lianchuang Optoelectronics won the bid for CNNC's “Starfire 1” project, with an initial order amount of 41.8 million yuan, marking the official launch of the project. Since 2025, Fusion New Energy (Anhui) Co., Ltd. and the Institute of Plasma Physics of the Chinese Academy of Sciences have been intensively tendering, involving various projects such as water cooling systems.

Fusion companies have successively received investment from various sources, and the industrialization process of controlled nuclear fusion is progressing at an accelerated pace.

1) On March 1, in response to the country's future industrial strategy development requirements, China Nuclear Power Co., Ltd. and Zhejiang Zhejiang Electric Power Co., Ltd. issued successive announcements to participate in China Fusion Energy Co., Ltd. (hereinafter referred to as “Fusion Company”) through a capital increase, with an investment amount of 1 billion yuan/750 million yuan. Fusion's technology research and development direction and future industrialization development are highly consistent with the country's energy security strategy goals. 2) On April 1, Shanghai Future Industry Fund announced plans to strategically invest in fusion companies. This is the fund's first direct investment project since its establishment in 2023. It marks the official entry of the Shanghai International Investment Corporation into the core circuit of the future energy sector, and also injects 10 billion capital momentum into the industrialization process of controlled nuclear fusion technology in China.

The market size is expected to grow significantly in the next 10 years, and industrial chains such as high-temperature superconductivity will continue to benefit.

According to the “Nuclear Fusion and Nuclear Fission Reactor Market Report (2025-2034)” released by Precedence Research on April 10, 2025, the fusion reactor market will grow significantly in the next ten years thanks to clean energy demand, advances in materials science, and government support. According to Maximize Market Research, the global nuclear fusion market is expected to reach US$496.55 billion in 2030, with a CAGR of about 7.4% from 2024 to 2030. Currently, Tokmak is still the mainstream in controlled nuclear fusion technology solutions. Taking the ITER experimental reactor stage as an example, magnet systems account for 28% of the cost. High-temperature superconductivity has significant advantages, not only providing a stronger magnetic field, but also effectively reducing the cost and size of fusion devices. As technology continues to break through and controlled nuclear fusion enters a stage of rapid development, it is expected that related links in the middle and upstream of the industrial chain will continue to benefit.

Risk warning: The viability of controlled nuclear fusion projects falls short of expectations; commercialization progress falls short of expectations.