Photo/Shetuwang

Aug. 27 (NBD) – Stock of CGN Power Co Ltd (003816, SZ), China's largest nuclear energy company, closed 44.18 percent higher at 3.59 yuan (50 cents) per share on Monday on the Shenzhen Stock Exchange's small and medium-sized enterprise board, hopping over the first-day limit set by the Shenzhen bourse. 

Shares of CGN Power continued to reach the daily limit by climbing 10.03 percent Tuesday, closing at 3.95 yuan per share.

National Business Daily (NBD) noticed as of the closing time on Tuesday, CGN Power gained a market cap of 199.5 billion yuan (28.2 billion U.S. dollars), outperforming its Shanghai-listed counterpart China National Nuclear Power Co Ltd (CNNC) (601985, SH), of which the market cap was logged at around 86.5 billion yuan. The price-to-earnings ratio (trailing 12 months) of CGN Power was 21.2, compared to 18.01 of CNNC.

Dong Dengxin, director of Wuhan University of Science and Technology's Finance and Securities Institute, said in a media interview that the company's strong share performance is an indication of investor belief in the future prospects of CGN Power.

According to the BP Statistical Review of World Energy 2019, nuclear power made up 4.1 percent of the total electricity production in China last year, much lower than the proportion in Europe and North America, which implies a huge development space in the market. 

NBD noticed that as early as 2014, CGN Power landed on the Hong Kong stock exchange and is now the first nuclear power firm to go public both on the H- and A-share market. 

The company's new share offering is the largest on the A-share market so far this year. The prospectus revealed CGN Power issued 5.05 billion shares and raised around 12.6 billion yuan, posting a record for the year to date on the A-share market.

With regard to the reason of CGN Power's debut on the A-share market, NBD observed that one of the vital reasons lies in the unsatisfactory valuation of the nuclear power company on the H-share market, where its stock price has been below the issue price of 2.78 Hong Kong dollars per share for years, and once dipped to 1.6 Hong Kong dollars per share at its bottom, lagging far behind that of CNNC which is now 1.6 times of its issue price.

Before CGN Power entered the A-share market, it delivered an interim report. According to the financial report released on August 21, for the first half of 2019, the company's operating revenue was 26.5 billion yuan, an increase of 15.3 percent over the corresponding period in 2018, and net profit attributable to shareholders of the parent company was registered at 5.0 billion yuan, a year-on-year rise of 10 percent.

Email: lansuying@nbd.com.cn