2 Chinese firms eyeing to own a stake in UK's Hinkley Points

Power plant to be built by 2023.

According to Barclays, UK prime minister, David Cameron, during his visit to Beijing, jointly announced with Premier Li Keqiang that both countries will push for breakthroughs in development of nuclear power and high-speed railways in the UK, and Chinese companies will be allowed to own a stake (even a majority stake) in nuclear power plants in the UK.

China National Nuclear Corp (CNNC) and China General Nuclear Power Corp (CGNPC) are in discussions to take a minority stake (c30-40%) in Hinkley Points (a nuclear power plant to be built by 2023), with a consortium led by EDF and Areva.

Here's more:

We don't expect significant participation by Chinese equipment makers since they do not own IP rights for third-generation nuclear technology (having neither EPR100 nor AP1000), and it will take time for China to develop its own Gen III technology (CAP1000 stands for China AP1000).

Thus, we believe today's share price rally in DEC, Shanghai Electric and Harbin Electric is not justified. In addition, both CNNC and CGNPC are reportedly seeking to be listed in Hong Kong, according to WSJ (30 July 2013), giving much better exposure to the nuclear industry, in our view.

The Hinkley Points Project: The reactors at the Hinkley Points project will provide power for about 60 years and cost £16bn to fund, according to a BBC news report on 21 October 2013.

China National Nuclear Corp (CNNC) and China General Nuclear Power Corp (CGNPC) will take a minority stake in the development of the Hinkley Points project, with a consortium led by EDF, a French utility company, and Areva, a French manufacturer.

The project is estimated to be finished in 2023 and will be supplying 7% of the UK’s total electricity consumption.