Contents. China Nuclear Energy Report DECEMBER Platinum Broking IMPORTANT DISCLOSURES ARE PROVIDED ON THE LAST PAGE OF THIS REPORT

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1 China Nuclear Energy Report DECEMBER 2015 Source: Platinum Research Website Source: Behind Energy, Fast Company, Philip Andrews-Speed, TodayIfoundout Contents IMPORTANT DISCLOSURES ARE PROVIDED ON THE LAST PAGE OF THIS REPORT

2 1) Nuclear Power Overview Why Nuclear Power?. 3 Nuclear Power Market share 4 Nuclear Reactors. 4 Evolution of Reactors. 5 Nuclear Fuel Cycle... 6 Supply of Uranium... 7 Radioactive Waste Material 7 2) Global Nuclear Program ) China s Nuclear Program Annual Electrical Power Production China s Nuclear Power. 11 China s Nuclear Reactors. 12 Nuclear Operators. 12 Market Share Safety and Construction Sites of Nuclear Power Plants.. 12 China Nuclear Supply Chain 13 4) China s Global Push for Nuclear. 14 Nuclear Technology Export ) Recommendations Recommended: China Water Affairs (855.HK) Boer Power (1685.HK) Wider Focus: CGN Power (1816.HK) Huaneng Power (902.HK) CGN New Energy (1811.HK).. 22 Appendix. 23 Operation Nuclear Reactors in China Operating Uranium Mines in China Nuclear Reactors Under Construction and Planned in China Chinese Equity in Uranium Mines in Other Countries Commodity Price Charts (Thermal Coal, Uranium 308, Crude Oil, Natural Gas)...26 Nuclear Energy Consultant (Dr. Su Yumian)

3 1) Nuclear Power Overview Why Nuclear Power? Nuclear power is one of the cleanest forms of energy. It is cleaner and more reliable than wind and hydroelectric power which depend on climates. The operating costs are very low, and thus more affordable than gas, wind, and solar power. Nuclear power plants can operate continuously and uranium is still plentiful in the world. LCOE is the cost per MWh. Inputs include CAPEX, financing costs, OPEX, capacity, tax and policies, discount rate, and the life of the assets. It excludes subsidies, and the cost of connecting and maintaining the grid. Exhibit 1: Range of levelized cost of electricity (LCOE) by energy source. US$/MWh Coal Gas Hydro Solar PV Wind (Onshore) Wind (Offshore) Nuclear Source: World Energy Council (2013). LCOE reported is the average of North America, Western Europe, China, India and Japan. Exhibit 2: Grams of carbon dioxide produced by energy source Grams of Carbon Dioxide Produced per kwh by Energy Direct Emissions Indirect Emissions Coal Gas Hydro Solar PV Wind Nuclear Source: CGN Power 3

4 Nuclear Power Market Share China aims to dominate the market by Nuclear energy contributes 11% of the world s electricity by source. 60 reactors are under construction in 15 countries as of October China would account for the largest increase in nuclear capacity by 2050 in terms of number of reactors and production capacity. Exhibit 3: Nuclear power production by region (2014). Region Status (end of 2014) OECD Europe 132 Operational reactors, net capacity: 122,000 MW, 25% of total electricity supplied. Three countries phasing out (Belgium, Germany and Switzerland). United States Russia Japan China India 99 Operational reactors, net capacity: 98,639 MW, 19.5% of total electricity supplied 34 Operational reactors, net capacity: 24,654 MW, 18.6% of total electricity supplied 48 Operational reactors, net capacity: 42,388 MW, all were idle in 2014 due to shut down 23 Operational reactors, net capacity: 19,007 MW, 2.4% of total electricity supplied 21 Operational reactors, net capacity: 5,308 MW, 3.5% of total electricity supplied Source: Nuclear Energy Agency, International Energy Agency Nuclear Reactors Uranium-235 is required for nuclear reactors. In nuclear reactors, a controlled chain reaction breaks down heavy nuclei to generate heat, which in turn makes steam to generate electricity. The most common type of nuclear reactor is the pressurized water reactor (PWR), which uses water as coolant and moderator (for example the Westinghouse AP1000 in exhibit 9). o The water used can be recycled, clean or salt water. PWRs use uranium-235 as fuel. Naturally occurring uranium contains 99.3% uranium-238 and 0.7% uranium-235. o The isotope uranium-235 is enriched to 3-5% for PWRs to operate the reactor (note that this is much less than weapon-grade uranium which contains more than 90% of uranium-235). 4

5 Exhibit 4: A schematic of a typical pressurized water reactor. Source: World Nuclear Association. Evolution of Reactors: Nuclear reactors are usually characterized into generations. The International Forum aims to make Generation IV reactors to operate longer than the current years. This will further impact the LCOE. Generation I: developed in the s. Very few still running today. Generation II: Active safety system (activated by human controllers, use electrical power supply). Largely custom-built. 90% of reactors operating today belong to this generation; many of these reactors have added some passive safety features. Generation III: Further passive safety features (operating without human intervention or electrical power supply). Built to withstand natural disasters and aircraft impact. Standardized designs to reduce construction cost. Examples are the Westinghouse AP1000, China s Hualong One and the European EPR (all three are pressured water reactors). Generation IV: Still in the design stage; innovative technology, more safety features, efficient fuel burning and proliferation-resistant. Generation II and III reactors can operate for 50 to 60 years. Research on Generation IV reactors aims to make them operate longer, safer and more economical. o This is done through international cooperation of 13 members of Generation IV International Forum. The members include Argentina, Brazil, Canada, China, Euroatom (European Atomic Energy Community), France, Japan, Russia, South Korea, South Africa, Switzerland, UK, and US. Businesses are also joining the effort in developing generation IV reactors. For example, Bill Gate s Terrapower, in collaboration with China National Nuclear Corporation, aims to develop a prototype reactor (600 MWe) by the mid-2020s and larger commercial plants (1150 MWe) by late The reactor will use recycled uranium as fuel, which is currently a waste byproduct of the uranium enrichment process. 5

6 According to Terrapower, the goal of the reactor is to greatly reduce proliferation risks and create new, affordable options for converting lowlevel waste into energy resources. Industrial large reactor units have grown from 1960 s 60 MWe to today s >1600 MWe. Currently, there is also a revived interest in small (<300 MWe) and medium (<700 MWe) reactors, which are suitable to supply power to remote areas or to be installed on a floating nuclear power plant. o In 2014, four prototype of small reactors were under construction worldwide (one in Argentina, two in Russia including a floating power unit (classified as a small plant), and one in China). Exhibit 5: Evolution of nuclear reactors. Source: World Nuclear Association. Note - LWR Light Water Reactor, PWR Pressurized Water Reactor, BWR Boiling Water Reactor, CANDU Canadian Deuterium Reactor, VVER/RBMK developed by Soviet Union. ABWR Advanced Boiling Water Reactor, System 80+ pressurized water reactor designed by Combustion Engineering, AP 600 pressurized water reactor designed by Westinghouse, EPR European Pressurized Reactor designed by Framatome (now Areva NP), É lectricité de France (EDF) and Siemens. Nuclear Fuel Cycle. Naturally occurring uranium contains 99.3% uranium-238 and 0.7% uranium-235. The isotope uranium-235 is enriched to 3-5% for use as reactor fuel for PWRs. Typical nuclear fuel cycle includes the following: mining, enrichment, fuel fabrication, fuel in reactors, temporary storage of spent fuel, reprocessing/recycling spent uranium, and disposal of waste (which is usually buried underground). o Up to 96% of spent uranium can be recycled. 6

7 Exhibit 6: Nuclear Fuel Cycle. Source: World Nuclear Association. Supply of Uranium. In 2014, Kazakhstan produces 41% of uranium from mines, followed by Canada (16%) and Australia (9%). China produces 3%. Exhibit 7: Known Recoverable Resources of Uranium (2013). Country Tonnes of Uranium % of world Australia 1,706,100 29% Kazakhstan 679,300 12% Russia 505,900 9% Canada 493,900 8% Niger 404,900 7% Namibia 382,800 6% South Africa 338,100 6% Brazil 276,100 5% USA 207,400 4% China 199,100 4% Other 191,500 10% World total 5,902, % Source: World Nuclear Association (2013). Radioactive waste management. China aims to become a leader in recycling spent uranium. Government regulations require nuclear power plants to put aside a levy to manage radioactive waste. This typically amounts to 5% of the total cost of the electricity generated. Nuclear fuel elements can operate 3-7 years in a reactor core. After that uranium-235 is depleted from 3-5% to about 1%. The spent fuel is removed from the core and stored under water for 9-12 months to reduce heat and radiation level. 7

8 After that, the spent fuel is either sent to reprocessing facilities or stored in on-site (off-side) pools for a few years before disposal. Currently, France, Russia, Japan, India and China reprocess most of the spent fuel. The US, Canada, Finland and Sweden opt for direct disposal. o Direct disposal refers to storing the nuclear waste on-site for years until it stable to be compressed for long-term storage underground. Research will aim to improve efficiency in reusing spent fuels. Exhibit 8: China s Hualong one Source: CNNC Note - Hualong one - an artist s impression. Exhibit 9: The Westinghouse AP1000 Source: Westinghouse Note - AP1000 nuclear power plant 8

9 2) Global Nuclear Program Exhibit 10: Nuclear options of various countries. Source: MIT Technology Review Note No significant changes in policies since enacted in

10 Exhibit 11: Total number of reactors under construction in the world (2014). Source: International Atomic Energy Agency (2014) Exhibit 12: CAP1400 Source: SNPTC Note CAP1400 designs are based on AP

11 3) China s Nuclear Program Annual Electrical Power Production. The Chinese government has been increasing investment in total nonfossil sources (including nuclear, hydroelectricity, wind and solar) aiming to provide 15% of overall energy consumption by 2020 and 20% by Exhibit 13: Energy mix in China (m MWh) Others Solar Wind Bio Hydro Nuclear Gas Coal Source: Energy Information Administration (EIA)(2014) Note EIA s projections China s Nuclear Power. In 2014, the gross total electricity production including nuclear was 5,463.8m MWh, of which nuclear electricity production was m MWh. Even though the nuclear currently only occupies 2% market share in the PRC, China is adding more reactors much faster than any other country. Exhibit 14: Nuclear generating capacity of top 6 countries ( 000 MWe) Source: World Nuclear Association 11

12 Currently, there are 30 nuclear reactors in operation, 21 under construction, and more are planned. The number of reactors being constructed is larger than anywhere else in the world (see appendix: pages 24-25). China s Nuclear Reactors. The main reactor type in China is the pressurized water reactor (PWR). The most advanced models include China s newly launched generation III reactor, Hualong One (exhibit 8) and the Westinghouse AP1000 (exhibit 9). Building and improving upon the existing technology from the West, China has become largely sufficient in reactor design and construction. Nuclear Operators. CGN Power currently dominates the nuclear landscape. The reactors are operated by three main developers: (1) China General Nuclear Corporation (CGN), (2) China National Nuclear Corporation (CNNC) and (3) State Power Investment Corporation (SPIC, merger of China Power Investment Corporation (CPI) and Nuclear Power Technology Company (SNPTC)). CGN oversees more than half of the nuclear projects in China. The three companies, CGN, CNNC and SPIC, are state-owned. Market Share. The market share of the three developers is: 44% for CGN, 18% for CNNC and 10% for SPIC (the rest for foreign companies). Safety and Construction. In China, upcoming nuclear power plants that are planned, and under construction make use of generation III reactors, like Hualong One and AP1000. These are built to withstand natural disasters (floods, earthquakes) and attacks (by airplanes e.g.), and to minimize radiation pollution to humans and environment. Added safety margins prevent the reactor core from melting down. Modular design shortens the construction time on site and this reduces the total cost. The plants normally take 3 years to complete and the reactors can operate for 60 years. Sites of Nuclear Power Plants. Nuclear power plants need water for cooling. o Nuclear energy, like all other alternative sources of energy, requires substantial amount of water for cooling. All of the existing nuclear power plants in China are in the coastal region. 12

13 Nuclear plants, including those in remote and inland areas, MAY be cooled with recycled water. o Platinum believes water treatment companies like China Water Affairs (855.HK) will benefit as these energy producers migrate construction inland. Nuclear energy: 400 gallons/mwh for once-through cooling and 720 gallons/mwh for wet cooling towers. Coal: gallons/mwh for once-through cooling depending on size of plant. Natural gas-fueled power plants: 100 gallons/mwh for once-through, and 370 gallons/mwh for combined-cycle plants. Hydropower: 4,500 gallons/mwh mainly caused by evaporation from reservoirs. Geothermal and solar thermal: consume 2-4x more water than nuclear power plants. Exhibit 15: Location of nuclear reactors in China and their statuses (2013). Source: SNPTC China Nuclear Supply Chain. China will produce 1/3 of uranium domestically. Spent fuel is stored on site. At present, less than a quarter of the fuel needs are supplied domestically. With the number of reactors under construction and planned, China plans to own the nuclear supply chain by building uranium stockpiles through overseas purchases and domestic production. The aim is to produce one-third of uranium domestically, obtain one-third through Chinese equity in uranium mines overseas, and buy one-third on the open market. China is also developing nuclear fuel reprocessing facilities in partnership with France s Areva technology and centralized storage. Currently, most of the used fuel is stored at reactor sites. 13

14 4) China s Global Push for Nuclear Nuclear Technology Export. China aims to become the leading exporter of nuclear technology. China aims to become the world leader in nuclear technology and has led a determined policy to export its technology. This is evident from the newly signed nuclear power deal with the UK, Malaysia, and the agreement between Bill Gates nuclear power company (TerraPower) with CNNC to develop generation IV reactors. Exhibit 16 shows the Chinese export of nuclear technology and financial assistance in Pakistan, Romania, Argentina, UK, Turkey, South Africa and Malaysia. Exhibit 16: China s export of nuclear plans overseas. Estimated Country Plant Type Company Status and Financing cost Chasma CNP-300 US$2.37 b CNNC Under construction, Chinese finance 82% of $1.9 billion 3&4 Pakistan Romania Argentina Karachi Coastal Hualong One US$9.6 b CNNC Planned, $6.5 billion vendor finance, maybe 82% China finance Cernavoda Candu b CGN Planned, Chinese finance 3&4 Planned, with local involvement and $2 billion Chinese Candu 6 - CNNC Atucha 3 financing Atucha 4 or other site Hualong One - CNNC Vendor financing envisaged Hualong UK - CNNC/CGN - Bradwell One AP1000 or Turkey - SNPTC Exclusive negotiations involving Westinghouse - CAP CAP SNPTC Prepare for submitting bid South Africa - HTR600 - CNEC - Malaysia -? - CGN Finance construction Source: International Atomic Energy Agency Note - CAP1400, jointly developed by Westinghouse, SNPTC and Shanghai Nuclear Engineering Research & Design Institute. Hualong One, developed by CNNC and CGN based on a French reactor with modern features. 14

15 China is buying world market share. Source: SCMP, Telegraph, AFP, Wall Street Journal, Daytoday GK, Malaysiakini 15

16 5) Recommendations It is tempting to be bullish based on the long term trend and direction set by policy. However, we are concerned about the high level of debt in the pure plays and the electricity distribution sector in general. Instead, we have chosen to concentrate on the names with a focus on water and transmission. We expect these will benefit as they become more entrenched as service sector suppliers. The theme of recycling and treatment of waste will impact both providers of power and those that move it around. Our discipline forces us to screen out companies with excessive gearing, whilst favoring China Water Affairs (855.HK) and Boer Power (1685.HK). We have included the companies most commonly associated with the nuclear theme, but feel that need more evidence that debt isn t an issue. We expect the State will lead the way in alleviating this burden to some degree and will report on recommendations in a future outlook. Recommended China Water Affairs (855.HK) Boer Power (1685.HK) Wider Focus, No Recommendations CGN Power (1816.HK) Huaneng Power (902.HK) CGN New Energy (1811.HK) 22 Exhibit 17: Valuation table of affiliated energy companies. Name Ticker FY14 Total Assets (HK$m) Mkt cap EV (HK$) (HK$m) Closing price (HK$) 52-week (HK$) Cur. FY15E FY16E Cur. FY15E FY16E Cur. FY15E P/S FY16E FY15E FY16E ROA ROA P/E (x) P/E (x) P/E (x) P/B (x) P/B (x) P/B (x) P/S (x) P/S (x) (x) (%) (%) FY15E FY16E Gross Gross Margins Margins (%) (%) Energy affiliated companies 1 Boer Power Holdings Ltd 1685 HK 4,097 11,637 10, / China Water Affairs Group 855 HK 15,102 6,079 12, / Cgn Power Co Ltd-H 1816 HK 156, , , / Huaneng Power Intl Inc-H 902 HK 275, , , / Cgn New Energy Holdings Co L 1811 HK 2,487 6,822 7, / Simple avg Mkt cap wtd avg Source: Bloomberg 16

17 China Water Affairs 855.HK, Price: HK$ 3.82, TP: HK$ % BUY Company specific China Water Affairs (CWA) operates city water supply projects across various provincial cities and regions in China. The State Council s policy of the Water Ten Plan focuses on reducing polluted water bodies, improving quality of drinking water, and improve efficiency through water management. China Water Affairs (855.HK) Current Price (HK$) 3.82 Market Cap (HK$) 5,806M P/E 14.29x 52W H/L (HK$) 5.10/3.00 Yield 1.83% Net Gearing 55.00% Interest Cover 7.9x Free Float 45.23% Major Shareholder: Chairman Mr. Duan Chuan Liang (25.1%) The company generates 79% of its revenue from supplying water, 9.9% from sewage treatment, and the remaining from property and concrete product sales. Currently, CWA operates 23 operating units, providing over 440,000 tonnes of raw water and 4.1m tonnes of tap water each day. The company continues to expand through acquisitions and mergers, with the most recent being Goldtrust Water and its subsidiaries. It is also planning to spin-off its non-core businesses, including its supply of concrete products, and will then focus extensively on water solutions. These include sales of: Property - 1.1% of revenue and 8.8% of profits. Concrete - 9.1% of revenue and 3.0% of profits. 855.HK, Price: HK$ HK$ 3.82, TP: HK$ % BUY Our TP is based on a FY16E forecast of HK$ 0.30, and a PER of 18x. PER is in-line with peers. Water projects overlap with projected growth of inland nuclear plants. Exhibit 18: CWA s water supply projects and their capacities. Source: Company Data 17

18 Boer Power 1685.HK, Price: HK$ 13.80, TP: HK$ % BUY Poised to benefit from green energies shifting inland. Revenue Breakdown: Company Background Boer s services the power utilization of Boer Power (1685.HK) Current Price (HK$) end-users for energy consumption. Market Cap (HK$) 10,678M P/E 16x Principal activities: 52W H/L (HK$) 18.50/6.57 Design, manufacture and sale of Yield 1.88% electrical distribution equipment. Net Gearing (34.36%) Provision of system control, Interest Cover 26.24x smart grid applications. Free Float 32.51% Provision of electrical Major Shareholder: distribution systems solution Chairman Mr. Qian Yixiang and wife (66.92%) services. Boer operates four core segments with one complementing another: 0.2% Electrical Distribution System Solutions ( EDS Solutions ) ; 60.2% Intelligent Electrical Distribution System Solutions ( ieds Solutions ); 30.3% Energy Efficiency Solutions ( EE Solutions ); and 9.3% Components and Spare Parts Business ( CSP Business ). Exhibit 19: Boer Power s business coverage Source: Company Data It has a strong track record of continued execution and development of valueadding business segments with higher margins, underpinned by rising R&D expenses, which grew at CAGR of 12%. Huge beneficiary of energy savings initiatives and smart grid development. Order backlog rose, up 26% in September-15 from June-15. Numbers are driving top line growth in the years ahead. Strong operating cash flow provides medium term visibility and sustainability for dividend payout ratio of 62%. Boer cashed in the most of their trade receivables through factoring and expects 60% of FY15 revenue to come from factoring service HK, Price: HK$ 13.80, TP: HK$ % BUY Our TP reflects a FY16E PER of 17x, in line with peers and its historical P/E. Growing EPS above 25% for the next 3 years. 18

19 Exhibit 20: China Water Affairs (855.HK) - 2 Year Price Chart China Water Affairs Group (855.HK) Last price (Dec 10,15) = HK$3.92 SMA(50) = 4.1 SMA(100) = 3.81 SMA(200) = Volume (m shares) Share price (HK$) Volume (m shares) Share price (HK$) Volume (Dec 10,15) = 1.2m 6M avg. = 9.4m Source: Bloomberg Exhibit 21: Boer Power Holdings (1685.HK) - 2 Year Price Chart Dec-13 Dec-13 Dec-13 Boer Power Holdings Ltd (1685.HK) Last price (Dec 10,15) = HK$14.7 SMA(50) = SMA(100) = SMA(200) = Volume (Dec 10,15) = 0.5m 6M avg. = 22.4m Dec-13 Jan-14 Jan-14 Feb-14 Feb-14 Mar-14 Mar-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 May-14 May-14 Jun-14 Jun-14 Jul-14 Jul-14 Jul-14 Jul-14 Aug-14 Aug-14 Sep-14 Sep-14 Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 Apr-15 Apr-15 May-15 May-15 Jun-15 Jun-15 Jun-15 Jun-15 Jul-15 Jul-15 Aug-15 Aug-15 Sep-15 Sep-15 Sep-15 Sep-15 Oct-15 Oct-15 Nov-15 Nov-15 Nov-15 Nov-15 Source: Bloomberg 19

20 CGN Power 1816.HK, Price: HK$ 2.64 China Nuclear Energy 2015: For the first half of 2015, total power consumption increased by 1.3% YoY. Nuclear generation was 77.2m MWh, an increase of 34.8% YoY. On-grid nuclear power generation was 70.6m MWh, representing 2.65% of total power consumption and 33.92% YoY growth. CGN Power (1816.HK) Current Price (HK$) 2.64 Market Cap (HK$) 119,985M P/E 12.93x 52W H/L (HK$) 5.53/2.61 Yield 0.12% Net Gearing % Interest Cover 1.9x Free Float: 24.96% Major Shareholder: CGNPC (64.20%) Hengjian Investment (7.54%) National Council for Social Security Fund (2.26%) For the first 9 months, China s utilization rate of nuclear energy rose 19 hours YoY, compared to those of thermal power, hydropower and wind power which decreased by 265 hours, 84 hours and 23 hours respectively. CGN Power specific China s only listed and largest nuclear energy company by capacity and number of plants. CGN operates and manages 13 nuclear power generating units with an installed capacity of 13,799 MW. 10 more nuclear power generating units are under construction with a proposed capacity of 12,290 MW. CGN Power holds 58.5% and 48.5% market share in terms of capacity in nuclear power generating units in operation and under construction respectively. Two new units, Yangjiang Unit 2, and Ningde Unit 3, have commenced commercial operation on June 5th and June 10th respectively. The constructions of Hongyanhe and Taishan plants have been delayed. Exhibit 22: CGN Power (1816.HK) - 1 Year Price Chart CGN Power (1816.HK) Last price (Dec 10,15) = HK$2.71 SMA(50) = 3.23 SMA(100) = 3.28 SMA(200) = Volume (m shares) Share price (HK$) ,500 1, Volume (Dec 10,15) = 86.7m 6M avg. = 353m 0 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 Apr-15 May-15 May-15 Jun-15 Jun-15 Jul-15 Jul-15 Aug-15 Aug-15 Sep-15 Sep-15 Sep-15 Oct-15 Oct-15 Nov-15 Nov-15 Dec-15 Source: Bloomberg 20

21 Huaneng Power 902.HK, Price: HK$ 6.48 Production costs to fall along with uranium and other clean energy resources. Share placement proceeds of HK$ 5.7b improves gearing, and also possible asset injection. Company Background The company operates a portfolio of coalfired, wind, and hydro across 21 provinces, municipalities and autonomous regions in the PRC. Huaneng Power is one of China s largest listed power producers with a generation capacity of 81,132 MW, and an equitybased capacity of 72,375 MW. The company also has a wholly-owned Huaneng Power (902.HK) Current Price (HK$) 6.48 Market Cap (HK$) 139,543M P/E 5.61x 52W H/L (HK$) 11.90/6.41 Yield 7.36% Net Gearing % Interest Cover 3.81x Free Float 30.70% Major Shareholder: HIPDC (35.14%) power plant in Singapore. Over the first half of 2015, the company s total power generation was 159.8b kwh, an increase of 5.32% YoY. Total electricity sold was 150.7b kwh, an increase of 4.95% YoY. The company continues to add capacity through asset-injections from its parentco. Exhibit 23: Huaneng Power (902.HK) - 2 Year Price Chart Huaneng Power Intl Inc-H (902.HK) Last price (Dec 10,15) = HK$6.68 SMA(50) = 8.12 SMA(100) = 8.57 SMA(200) = Volume (m shares) Share price (HK$) Volume (Dec 10,15) = 42.6m 6M avg. = 210.2m Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Source: Bloomberg 21

22 CGNPC s platform for non-nuclear renewable energies. CGN New Energy (formerly CGN Meiya) 1811.HK, HK$ 1.59 Likely asset injection from parent to raise renewable energy to >90% from its current 70%. Company background A diversified independent power producer (IPP) which supplies energy to the PRC and Korea. Business from PRC and Korea accounted for 44.2% and 55.8% respectively. The company continues to develop toward clean and renewable non-fossil energy, with an installed capacity 3,659.5 MW. Clean energy: o Gas-fired and Hydro: 51.6%. Conventional Energy o Coal, oil and cogen: 48.4%. CGN New Energy (1811.HK) Current Price (HK$) 1.59 Market Cap (HK$) 6,822M P/E 3.44x 52W H/L (HK$) 3.60/1.53 Yield Net Gearing % Interest Cover 3.11x Free Float Major Shareholder: CGNPC Huamei (72.29%) The company has completed the acquisition of 13 wind power projects and 6 solar power projects from its parent with an aggregate operational installed capacity of 1,400MW for RMB 3.97b. It is currently working to integrate these assets with its existing projects. Exhibit 24: CGN New Energy (1811.HK) 1 Year Price Chart 3.50 CGN New Energy (1811.HK) Last price (Dec 10,15) = HK$1.58 SMA(50) = 1.85 SMA(100) = 2.01 SMA(200) = Volume (m shares) Share price (HK$) Volume (Dec 10,15) = 9.1m 6M avg. = 27.8m Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 Apr-15 May-15 May-15 Jun-15 Jun-15 Jul-15 Jul-15 Aug-15 Aug-15 Sep-15 Sep-15 Sep-15 Oct-15 Oct-15 Nov-15 Nov-15 Source: Company Data 22

23 Appendix Operating nuclear reactors in China Units Province Net capacity (each) Type Operator Commercial operation Daya Bay 1&2 Guangdong 944 MWe French M310 CGN 1994 Qinshan Phase I Zhejiang 298 MWe CNP-300 CNNC Apr 1994 Qinshan Phase II, 1&2 Zhejiang 610 MWe CNP-600 CNNC 2002, 2004 Qinshan Phase II, 3&4 Zhejiang 619, 610 MWe CNP-600 CNNC 2010, 2012 Qinshan Phase III, Candu 6 Zhejiang 677 MWe 1&2 PHWR CNNC 2002, 2003 CPR-1000 Fangjiashan 1&2 Zhejiang 1020 MWe^ (M310+) CNNC Dec 2014, Feb 2015 Ling Ao Phase I, 1&2 Guangdong 950 MWe French M310 CGN 2002, 2003 Ling Ao Phase II, CPR-1000 Guangdong 1007 MWe 1&2 (M310) CGN Sept 2010, Aug 2011 Tianwan 1&2 Jiangsu 990 MWe VVER-1000 CNNC 2007, 2007 Ningde 1&2 Fujian 1018 MWe CPR-1000 CGN & Datang April 2013, May 2014 Ningde 3 Fujian 1018 MWe CPR-1000 CGN & Datang Jun 2015 Hongyanhe 1&2 Liaoning 1061 MWe CPR-1000 CGN & SPI Jun 2013, May 2014 Hongyanhe 3 Liaoning 1060 MWe^ CPR-1000 CGN & SPI Aug 2015 Yangjiang 1&2 Guangdong 1020 MWe^ CPR-1000 CGN Mar 2014, Jun 2015 Yangjiang 3 Guangdong 1020 MWe^ CPR CGN (late 2015) Fuqing 1&2 Fujian 1020 MWe^ CPR-1000 (M310+) CNNC & Huadian Nov 2014, Oct 2015 Fangchenggang 1 Guanxi 1020 MWe^ CPR-1000 CGN (Dec 2015) CNNC & Changjiang 1 Hainan 610 MWe CNP-600 (Dec 2015) Huaneng Total: 30 26,889 MWe Source: World Nuclear Association Note - ^ - subject to uncertainty Operating uranium mines in China Nominal capacity Mine Province Type (tonnes U per year) Started Yining Xinjiang In-situ leach (ISL) Lantian Shaanxi Underground, heap leach Benxi Liaoning Underground, block leach Qinglong Hebei Underground, heap leach Fuzhou Jiangxi Underground, mill Chongyi Jiangxi Underground, heap leach Shaoguan Guangdong Underground, heap leach Total Plans for expansion to 2000 tu/yr 1450 Source: World Nuclear Association 23

24 Nuclear reactors under construction and planned in China Plant Province MWe gross Reactor model Project control Construction start Operation, grid connect Hongyanhe unit 4 Ningde unit 4 Yangjiang unit 4 Sanmen units 1&2 Haiyang units 1&2 Taishan units 1&2 Shandong Shidaowan Fangchenggang unit 2 Changjiang unit 2 Fuqing units 3&4 Tianwan units 3&4 Yangjiang units 5&6 Hongyanhe units 5&6 Hidaowan units 1&2 Fuqing units 5&6 Fangchenggang units 3&4 Ningde units 5&6 Xudabao/Xudapu units 1&2 Sanmen units 3&4 Haiyang units 3&4 Lufeng (Shanwei) units 1&2 Fangchenggang units 5&6 Bailong units 1&2 Huizhou units 1&2 Putian, Zhangzhou units 1&2 Liaoning 1080 CPR-1000 CGN, with SPI 08-Sep early 2016 Fujian 1080 CPR-1000 CGN, with Datang 09-Oct early 2016 Guangdong 1080 CPR CGN 11-Dec 2017 Zhejiang 2x1250 AP1000 CNNC 3/09, 12/ , 2017 Shandong 2x1250 AP1000 SPI 9/09, 6/10 12/2015, 3/16 Guangdong 2x1750 EPR CGN 10/09, 4/10 early 2016, late 2016 Shandong 210 HTR-PM Huaneng 12-Dec 2017 Guangxi 1080 CPR-1000 CGN Hainan 650 CNP-600 CNNC & Huaneng 11-Oct 2016 Fujian 2x1080 CPR-1000 (M310+) CNNC & Huadian 12/10, 11/12 late 2015, 2017 Jiangsu 2x1060 VVER-1000 V-428M CNNC 12/12, 9/13 2/2016, 3/2017 Guangdong 2x1087 ACPR1000 CGN 9/13, 12/ , 2019 Liaoning 2x1080 ACPR1000 CGN, with SPI 3/15, 7/15 11/2019, 8/2020 Shandong 2x1400 CAP1400 SNPTC & Huaneng 5/15, 8/15 12/2019, 2020 Fujian 2x1150 Hualong 1 CNNC & Huadian 5/15, 2015* 2019, 2020 Guangxi 2x1150 Hualong 1 CGN late 2015, 2016* Fujian 2x1150 Hualong 1 CGN & Datang early 2016, 2017* Liaoning 2x1250 AP1000 CNNC, Datang * Zhejiang 2x1250 AP1000 CNNC * Shandong 2x1250 AP1000 SPI * Guangdong 2x1250 AP1000 CGN * Guangxi 2x1250 AP1000 CGN Guangxi 2x1250 AP1000 SPI Guangdong 2x1250 AP1000 CGN Fujian 2x100 ACP100 CNNC & Guodian

25 Tianwan units 5&6 Taishan units 3&4 Changjiang units 3&4 Zhangzhou units 1-4 Sanming units 1&2 Taohuajiang units 1-4 Pengze units 1&2 Xianning (Dafan) units 1&2 Jiangsu 2x1080 ACPR1000 CNNC 11/15, Guangdong 2x1750 EPR^ CGN Hainan 2x650 CNP-650 or ACP-600 CNNC & Huaneng Fujian 4x1250 AP1000 Guodian & CNNC 2016 Fujian 2x880 BN-800^ CNNC ^ 2025^ Hunan (inland) 4x1250 AP1000 CNNC * Jiangxi (inland) 2x1250 AP1000 SPI * Hubei (inland) 2x1250 AP1000 CGN * Under construction Planned: 2x1087 8x1080 1x1150 1x210 4x1250 2x1750 1x650 2x1060 =23,444 2x1080 5x x1250 2x1750 2x1400 2x880 2x650 2x100 =49, Under const 23,444 Total: Planned 49,970 Source: World Nuclear Association Note - * -approved by National Development and Reform Commission, but construction delayed post-fukushima. ^ - subject to uncertainty Chinese equity in uranium mines in other countries Company Country Mine Equity % Start production with China equity SinoU Niger Azelik ZXJOY 2010 Niger Imouraren 10 pending 2016 Namibia Langer Heinrich CGN-URC Source: World Nuclear Association Note - ^ - subject to uncertainty Kazakhstan Zhalpak 49^ 2014^ Namibia Husab Irkol & Kazakhstan Semizbai , 2009 Boztau black Uzbekistan shales ^ 25

26 Commodity Price Charts China thermal coal and Uranium year spot price chart China Thermal Coal FOB Qinhuangdao 5500 kcal/kg (LHS) Uranium 308 Physical Spot Price (RHS) Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Source: Bloomberg Note Thermal coal: units in RMB/metric tonne, Uranium 308: units in USD/lb Crude Oil and Natural Gas- 5-year spot price chart 120 Crude Oil Spot Price (LHS) Natural Gas Spot Price (RHS) Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Source: Bloomberg Note Crude oil: units in USD/lb, Natural gas: units in USD/MMBtu 26

27 Nuclear Energy Consultant: Dr. Su Yumian Current: Visiting Scholar at Hong Kong University of Science and Technology (HKUST) Background: Undertook research and teaching at various universities including: Technical University of Berlin (Germany) Nanyang Technology University (Singapore) University of the Philippines Diliman (Philippines) Peking University (China) Education 1997: PhD in Particle Physics from Boston University 1993: PG Dip in Knowledge Engineering from National University of Singapore 1990: MSc in Nuclear Physics from Peking University 1987: BSc in Nuclear Physics from Peking University 27

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