JPMorgan has released a research report indicating that China's nuclear power industry is benefiting from an increasingly favorable electricity pricing mechanism. Recent policy changes at both the central and local levels, including in Guangzhou, Liaoning, and Guangxi, are advantageous for the sector's development. A global nuclear energy revival, coupled with the scarcity of nuclear power assets and a more supportive regulatory environment, is driving a revaluation of CGN Power (01816). The firm has upgraded its rating on CGN Power from "Neutral" to "Overweight" and significantly raised its target price from HK$2.9 to HK$4.5. The report notes that Liaoning Province introduced a one-year pilot Contract for Difference (CfD) mechanism for nuclear power this year. Guangxi has also begun charging end-users for nuclear power CfDs, suggesting its CfD policy will be announced soon. JPMorgan assumes that CfDs will cover approximately 70% of nuclear power sales in the medium term, boosting the comprehensive electricity price by 1.5% and 1% in 2026 and 2027, respectively. Consequently, the firm has raised its profit forecasts for CGN Power by 5% to 8% for 2026 and 2027.