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TheStreet Open House

Here Come Made-in-China Nuclear Power Plants

BEIJING (TheStreet) -- Anyone who follows the nuclear power industry is familiar with engineering powerhouses Fluor (FLR) and Bechtel in America, Siemens (SI) and Alstom in Europe, Westinghouse's parent Toshiba in Japan, and the GE Hitachi partnership.

Now it's time to get to know China's up-and-coming, state-owned nuclear power plant contractors such as China General Nuclear Power, State Nuclear Power Technology, Dongfang Electric and Shanghai Electric.

These and other Chinese engineering companies are currently building dozens of nuclear plants at home, while at the same time ambitiously hawking their products, skills and low-cost advantages overseas.

The Chinese have already built plants in Pakistan and last year signed a deal to expand an existing facility in Britain with France's EDF. Moreover, Chinese companies in February emerged as front-runners for proposed contracts to build up to three nuclear plants in South Africa.

Investors soon could be trading stock in China General, the country's largest nuclear player and recent developer of China's first and only homegrown reactor for power plants. The company, formerly called China Guangdong Nuclear Power, plans to launch dual initial public offerings to raise more than US$3.2 billion on the Hong Kong and Shanghai exchanges this year.

Because China's nuclear contractors are state-controlled, they have plenty of friends in high places who have been happy to drum up business abroad.

Chinese Prime Minister Li Keqiang promoted nuclear power cooperation last fall while meeting leaders from around East Europe at a conference in Romania. Chinese President Xi Jinping, during a 10-day European tour that began March 22 and is slated to end April 1, recently discussed nuclear power cooperation with France's President Francois Hollande and British Prime Minister David Cameron.

"Xi Jinping Becomes a Nuclear Power Peddler" declared a headline in China's Securities Times newspaper for a March 28 story about the president's talks with Hollande and Cameron.

Also March 28, a China Merchants Securities report recommended investors buy stock in nuclear-sector companies listed on Chinese exchanges such as Jiangsu Shentong and China Nuclear Science & Technology. "China's exports of nuclear technology and industry confidence will accelerate China's nuclear rebound," the report said.

That rebound began in early 2012, when the Chinese government gave a green light to nuclear power projects that had been idled since the mid-2011 Fukushima reactor disaster in Japan. Projects were put on ice to facilitate safety inspections, with particular attention paid to several reactors that China is building at sites which, like Fukushima, are on the seacoast.

China currently has 19 reactors operating and plans to add another 28 by 2020. As many as six new plants could come on line by the end of this year.

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