Nuclear review hits Shanghai Electric

PUBLISHED : Tuesday, 29 March, 2011, 12:00am
UPDATED : Tuesday, 29 March, 2011, 12:00am

Shanghai Electric Group said yesterday a government review of nuclear power plants prompted by Japan's nuclear crisis might delay some of its projects.

Miao Deming, a deputy director of the company's nuclear power management department, told reporters the government safety review might delay some projects by up to a year.

'This year, we were supposed to complete 35 projects in nuclear equipment, and 47 nuclear projects next year,' Miao said.

From now to 2013, the state-owned manufacturer of nuclear equipment has 20 billion yuan (HK$23.76 billion) worth of orders for equipment to be installed in nuclear power plants already approved by the State Council, he said.

'These contracts will maintain our nuclear growth for the next three years,' he said.

However, one analyst report said the government review would act as a brake on the company.

Masterlink Securities said the negative impact of the review on Shanghai Electric would be small this year but more significant in subsequent years.

On March 16, the State Council suspended approval of all new nuclear power projects and ordered a safety check of existing plants, in reaction to Japan's nuclear crisis following the earthquake and tsunami on March 11.

The State Council has also said it would review plans for nuclear power development.

'The worst long-term impact on China's nuclear industry by the review is the State Council has not given a timetable for its suspension of nuclear projects, which may be delayed indefinitely,' the Masterlink report said.

However, Shanghai Electric chief financial officer Yu Yingui said the group still planned to grow revenue contribution from the nuclear equipment sector to 10 per cent by 2013 from 3.7 per cent now.

The company's net profit rose 13.5 per cent to 2.78 billion yuan last year while turnover grew 9.3 per cent to 62.96 billion yuan.

Revenue from new energy, including wind and nuclear power, rose 55.1 per cent to 6.2 billion yuan and industrial equipment sales grew 13.6 per cent to 18.57 billion yuan. Clean-energy revenue fell 1 per cent to 27.16 billion yuan.

Shanghai Electric will pay a final dividend of 6.51 fen per share.

The company's share price yesterday fell 6.5 per cent to close at HK$3.86 in Hong Kong and 0.74 per cent to 8.01 yuan in Shanghai.