Nuclear firm to list 'premium assets' in IPO

Another State-owned nuclear company is to list in Hong Kong

State-owned China National Nuclear Corp is preparing for an initial public offering in Shanghai as it accelerates its overseas expansion.

CNNC will list its "premium assets" initially, perhaps listing other assets later, Chairman Sun Qin said on Friday.

Another State-owned nuclear giant, China General Nuclear Power Group, is planning an IPO in Hong Kong.

Their listing plans underscore how intense the race for overseas expansion has become, with the central government encouraging domestic companies to export technology and equipment.

On Wednesday, Premier Li Keqiang said in the Government Work Report that the government will promote the export of nuclear technology and equipment.

CGN's IPO would raise $2 billion in the second half of this year, IFR, a Thomson Reuters publication, reported previously, citing sources familiar with the deal.

As for the CNNC deal, Sun said: "As the first step, the nuclear technology-related part will seek an IPO.

"Whether they (other parts of the company) will be injected into the initial listed company or become new listed companies is still under consideration." He said he hopes to see the IPO take place within this year.

To facilitate exports, CNNC and CGN have adopted common third-generation nuclear technology. That development occurred under the instructions of the government, ending a longstanding dispute over the issue.

The new unified technology is known as Hualong I (first dragon), which includes a type of reactor core that's at the center of CNNC's proprietary technology, according to Sun.

Hualong I includes some other supporting parts developed either by CNNC or CGN.

The technical design phase for Hualong I is finished, and the technology is waiting for certification by government regulators, according to Sun.

The creation of the Hualong I brand was a strategy intended to avoid confusion and reduce competition when the two giants are bid-ding on overseas nuclear projects. "We have reached a consensus that whoever wins an overseas deal, we will use the Hualong brand," he said.

CGN Chairman He Yu, a member of the National Committee of the Chinese People's Political Consultative Conference, has joined with other members to submit a proposal that the government identify Hualong I as a strategic brand for exports.

China plans to build some small-scale reactors based on Hualong I. Building these reactors is crucial for China's third-generation nuclear technology exports, as foreign countries want to see such projects before they make a decision to introduce Chinese technology.

Sun said that CNCC has already exported its third-generation nuclear technology to another Asian nation, which he said could not be identified, a move that could provide assurance for potential foreign buyers.

At the end of February, CNCC finalized its construction contract with that nation. The project will use CNCC's third-generation technology.

CNCC is undertaking negotiations with other countries in South America, the Middle East and Africa, hoping to export its technology and related equipment to these countries, Sun said.

CGN has also been seeking contracts in South Africa, Turkey and Romania. Last year, it secured a deal to participate in the Hinkley Point project in the United Kingdom. CNCC also has a stake in this project.

But the Hinkley Point project won't use China's proprietary technology. CGN and CNCC are only investors and contractors for the project.

However, Sun disclosed that the UK has committed to using China's technology in future nuclear projects.

"At present, investment is not our main goal. We are focused on technology exports. This is where our strength lies," he said.