China's nuclear-related stocks rallied on Monday after the Chinese government said it will embark on construction of some nuclear power projects.
According to a statement posted on the government's website Sunday, Premier Li Keqiang said it is now the time to launch a batch of major power generation projects so as to help enhance energy self-sufficiency and upgrade energy structure.
The construction of nuclear power plants in eastern coastal regions will be started "at the appropriate time," said Li.
"This is good news for the whole nuclear power sector and our company as well, as we also develop and sell materials applied in nuclear radiation," a PR representative with Shenzhen Woer Heat-Shrinkable Material Co told the Global Times Monday.
Shares of Shenzhen-listed Woer saw the biggest surge after the announcement, jumping 6.59 percent during trading on Monday. It closed at 9.26 yuan ($1.49) per share, up 1.76 percent, while the Shenzhen Component Index nudged down by 1.37 percent.
Shanghai-listed Shanghai Electric Group, which has long been devoted to develop new energy such as nuclear power, also saw its share price rise by 1.82 percent to 3.92 yuan at close on Monday.
Han Xiaoping, chief information officer at energy portal china5e.com, said that Li's remarks cannot generate long-lasting positive effect on the capital market, but indicate the government's determination of developing nuclear power.
"The government is likely to accelerate the approval and construction of nuclear plants. And companies from industries like equipment manufacturing, engineering construction and power distribution will benefit from the construction in terms of capacity relief," Han told the Global Times Monday.
According to a report released by the World Nuclear Association earlier in April, China's planned reactors will lift the country's nuclear capacity to at least 58 gigawatt electric (GWe) by 2020, then 150 GWe by 2030.
There are 20 nuclear power reactors in operation in China, and 28 under construction, said the report.
The Chinese government hopes the cost-efficient nuclear power can replace coal-fired plants for the sake of environmental protection, Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, told the Global Times on Mnday.
Overseas nuclear power companies have already seen massive potential in China, flocking into the market in great numbers.
Delegates from the Canadian Nuclear Association reached a cooperation agreement on nuclear power development with a nuclear enterprises alliance in Haiyan, East China's Zhejiang Province, on April 11.
US-based Westinghouse Electric Co reportedly plans to sell its third-generation WestinghouseAP 1000 reactors to Chinese companies and may sign contracts next year.
Li emphasized in the statement that the strictest international safety standards will be applied to the projects before they get approved.
The government has hardly approved construction of new nuclear reactors since its ban on inland nuclear reactor construction in 2012, following the Fukushima nuclear disaster in Japan in 2011, said Han, noting that this created difficulties for many domestic nuclear companies and some even suffered capacity pressure.
Lin noted that the surplus capacity pressure is unlikely to be relieved soon, as the government still appears to be very prudent with the approval of new nuclear plant projects, making enterprises to wait for several years for final construction of new reactors.
Domestic major nuclear power companies may find some opportunities overseas with their gradually mature technologies and price advantage, said Han.