CGN Power eyes doubling installed nuke power capacity by 2020

It's grabbing 60% of market share.

According to Barclays, the growth story for nuclear power in China has strong fundamentals and CGN Power (CGN) is the market leader with a 60% market share.

CGN’s 13GW of planned projects would double installed capacity by 2020, with 70% of this capacity coming on stream in the next two years. 

Here's more from Barclays:

The earnings visibility for nuclear power in China is relatively high compared with other forms of power.

While we forecast earnings CAGR of 14% (2015-17E), valuation multiples do not reflect its growth and better earnings visibility, in our view. IPO proceeds have shored up its balance sheet, and growing cash generation should result in the company turning FCF positive in 2017, on our estimates. We initiate coverage on CGN with an Overweight rating and a DCF-based 12-month PT at HK$4.0, for 27% potential upside.

Pure exposure to a secular growth story: The penetration of nuclear power in China is low at 1.2% of 2013 installed capacity compared to 17% in Japan and 10% in US.

Re-balancing of the power mix in favour of clean energy is a policy priority in China and nuclear appears to be the preferred way. The share of renewable energy as a percentage of China’s installed capacity is already higher than its developed market peers.