CGN Power Q3 Net Profit Surges 36% as New Unit Commissioning Accelerates Earnings Growth
nashnova research
CGN Power's third-quarter net profit hit RMB 3.50 billion, up 36% year-on-year, powered by three new reactors entering commercial operation in Q2–Q3. This means → the nuclear sector is shifting from "slow utility" to "capacity-release cycle," with Citi and BofA both raising price targets.
What exactly made Q3 stand out?
Nine-month revenue reached RMB 51.10 billion (+4.0% YoY); net profit RMB 9.60 billion (+12.8%).
The real highlight is Q3 alone: revenue RMB 19.62 billion (+17%), net profit RMB 3.50 billion (+36%) — well above market expectations.
This means → quarterly revenue growth swung from -13% in Q1 to +17% in Q3 — a clear quarter-by-quarter acceleration, not a one-off spike.
What drove the jump? Three new reactors went "live" at once
Huizhou Unit 1 (Apr 19), Cangnan Unit 1 (Apr 29), and Huizhou Unit 2 (Aug 3) all entered commercial operation — grid-connected and selling power — within Q2–Q3.
Subsidiary on-grid power volume reached 141.49 TWh in the first nine months, up 4.23% YoY — new units directly added sellable electricity.
In plain terms = a nuclear plant doesn't earn money until it's grid-connected; all three happened to "switch on" in the same reporting window, concentrating the profit release.
Is the quality of earnings improving too?
Gross margin hit 43.54%, up roughly 3 percentage points YoY; operating cash flow RMB 26.57 billion, up 19%.
Net margin 18.79%, annualized ROE 6.63%; R&D spending rose 20%, R&D-to-revenue ratio 2.08%.
This means → it's not just top-line growth — each yuan of revenue is retaining more profit. Earnings quality and scale are improving in tandem.
Is the debt load a concern?
Debt-to-asset ratio sits at 68%, interest-bearing debt ratio 51.38%; short-term borrowings RMB 60.05 billion, long-term borrowings RMB 249.54 billion, cash on hand only RMB 24.29 billion.
In plain terms = nuclear plants are ultra-capital-intensive — hundreds of billions to build, a decade to pay back — so high leverage is structural. The real question is whether earnings cover the interest.
Nine-month financing costs totalled RMB 3.85 billion, roughly 18% of operating profit — asset returns still comfortably exceed interest expense, so the debt is manageable for now.
Is the company still expanding?
It acquired 46% of Cangnan Nuclear and 51% of Cangnan Phase II; Ningde Phase II was reclassified as a subsidiary (CGN holds 51%); Lufeng Units 3–4 brought in six co-investors including CATL, with CGN retaining 70%.
Huizhou Units 5–6 received State Council approval; Zhaoyuan Unit 2 began full-scale construction.
The fleet now stands at 30 operating and 19 under construction, accounting for 44.47% of China's total nuclear capacity — forming a duopoly with CNNP.
Where do the stock and valuation stand?
The day after results, the A-share rose 7.22% and the H-share 3.48%; the H-share has risen for four consecutive years, cumulative gain over 135%.
Citi raised 2026–2028 net-profit forecasts by 12%–17% and lifted its target to HK$3.80 (a 55% increase); BofA raised its target to HK$4.00 (+8%).
Trailing P/E is 13.8×, P/B 1.1×, A/H premium 39.2% — this reflects a still-modest valuation, but four scheduled refuelling outages in Q4 (routine shutdowns to replace fuel rods) will weigh on near-term output. Whether the growth pace holds is the next key test.
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