As global uranium supply-demand imbalances emerge, the capitalization process of uranium mining companies is attracting increased attention.

Recently, China Nuclear Technology Corporation (hereinafter referred to as "China Uranium") updated its Shenzhen Stock Exchange main board IPO application materials.

In 2024, China Uranium's revenue and net profit attributable to shareholders reached 17.279 billion yuan and 1.458 billion yuan respectively, representing year-over-year growth of 16.74% and 15.58%.

Behind this substantial performance growth lies the global market's accelerated focus on uranium mining deployment.

Driven by surging electricity demand, multiple countries including China and the United States are constructing new nuclear power plants, further intensifying demand for natural uranium, the core raw material.

However, the challenge lies in China's limited natural uranium production capacity, with nearly 70% of global uranium mining capacity concentrated in three countries: Canada, Kazakhstan, and Namibia.

Through this IPO, China Uranium plans to raise 4.1 billion yuan, with more than half allocated to uranium mining operations in Xinjiang and other regions to further secure production capacity supply.

**Unique Market Position**

China Uranium focuses on natural uranium mining, smelting, sales, and trading.

The scarcity of this business is primarily reflected in China Uranium's exclusive operation of domestic natural uranium mining and smelting, maintaining a dominant position within China.

Currently, China Uranium holds 19 mining rights both domestically and internationally, with 17 domestic mining rights primarily distributed across Xinjiang, Guangxi, and Inner Mongolia.

These assets have created stable revenue streams for China Uranium, with self-produced natural uranium generating revenues of 3.824 billion yuan, 3.446 billion yuan, and 4.054 billion yuan from 2022 to 2024 respectively.

Under current technological pathways, natural uranium is primarily processed into nuclear fuel and used in nuclear power plant operations, which are experiencing an installation peak amid surging electricity demand.

The construction of AI data centers and electrification trends including electric vehicles are intensifying electricity demand.

According to Goldman Sachs calculations, AI computing power and data center demand are driving global electricity consumption growth to 2.5%, far exceeding the average growth rate of the past decade. Combined with factors such as electric vehicle adoption, the global baseload power gap is expected to reach 83,000 terawatt-hours by 2030.

Consequently, governments worldwide plan to increase nuclear power plant investments. At the COP28 conference, multiple countries including the US, Japan, and South Korea called for tripling global nuclear capacity by 2050.

In April this year, Dong Baotong, Director of the National Nuclear Safety Administration, noted in his remarks that China's nuclear power has entered a large-scale construction peak period, with construction licenses issued for 31 units and 13 units approved and awaiting construction.

Although China Uranium holds multiple natural uranium mining rights domestically, it still struggles to meet downstream market demand, currently relying mainly on overseas procurement of natural uranium products to supply downstream customers.

In 2024, 7.223 billion yuan of China Uranium's revenue came from non-self-produced, externally purchased natural uranium.

China Uranium acknowledges this is due to limitations in its own mine reserves and capacity utilization rates. When self-produced supply cannot meet customer demand, external uranium purchases serve as supplements to ensure customer supply.

A key objective of this IPO is capacity expansion for China Uranium.

On one hand, China Uranium plans to deepen development in major global uranium-rich regions including Africa and Central Asia, achieving strategic positioning in international natural uranium resources.

"The company actively implements the national 'Belt and Road' initiative, deepening development and deployment in major global uranium-rich regions including Africa and Central Asia. While consolidating and expanding natural uranium production capacity in Africa, primarily in Namibia, the company strives to achieve new breakthroughs in international natural uranium resource positioning," China Uranium stated.

On the other hand, China Uranium is further intensifying domestic mining operations.

Through this IPO, China Uranium plans to allocate 2.2 billion yuan of IPO proceeds to projects including Naling Gou uranium deposit in-situ leaching, Gubayanuola uranium deposit in-situ leaching phase II, Xinjiang China National Nuclear Tianshan Uranium Co., Ltd. 737 and 739 in-situ leaching expansion, and Mianhuakeng mine phase III construction.

**Global Uranium Shortage Battle**

From a resource endowment perspective, China's natural uranium production indeed faces supply shortage challenges.

In 2022, the top three global natural uranium producers were Kazakhstan, Canada, and Namibia, with production reaching 21,200 tU, 7,400 tU, and 5,600 tU respectively, accounting for nearly 70% of global production.

Therefore, companies holding natural uranium assets in these three countries play crucial roles in determining global natural uranium market price trends.

Currently, NAC Kazatomprom JSC ("Kazatomprom"), Cameco Corporation ("Cameco") holding Canadian natural uranium mines, and Orano SA rank among the top three global producers.

These three giants are also China Uranium's primary natural uranium suppliers.

In 2024, China Uranium procured 6.023 billion yuan, 1.321 billion yuan, and 855 million yuan worth of natural uranium from Kazatomprom, Cameco, and Orano respectively, accounting for 46% of total procurement.

Production limitations by major players and resource depletion from decades of mining at large global uranium mines are further intensifying global uranium shortage tensions.

Kazatomprom has already begun production cuts.

In August 2024, Kazatomprom announced lowering its 2025 production target from 30,500-31,500 tU to 25,000-26,500 tU.

Many of the world's top ten uranium mines have operated for decades, with declining ore grades pushing up extraction costs.

For example, the fifth-largest Olympic Dam mine, sixth-largest Rossing uranium mine, and eighth-largest SOMAIR have operated for 37, 49, and 54 years respectively.

The Rossing uranium mine was acquired by China Uranium seven years ago.

In 2018, China Uranium spent 739 million yuan to purchase a 68.62% stake in Namibia's Rossing uranium mine from global mining giant Rio Tinto, gaining control of the mine.

However, having been mined for many years, China Uranium expects Rossing to be depleted by 2036.

New projects struggle to match demand growth pace. For instance, NexGen Energy's Rook I mine requires 6-8 years for production, potentially exacerbating natural uranium shortages.

Sprott Physical Uranium Trust (SPUT) is conducting global "buying sprees," raising $200 million in June for physical uranium purchases.

Under the contradiction between strong demand and insufficient supply, Goldman Sachs calculates the global uranium market gap will reach 130 million pounds by 2040.

Uranium prices are showing an upward trend amid volatility. Uranium spot prices rose from $30/pound in 2020 to $85/pound in May 2025.

Some companies have already raised uranium sales prices.

In June this year, trading company CGN Mining (1164.HK) signed new sales agreements with CGN Pu Industry and CGN Finance, showing new natural uranium contract benchmark prices substantially increased from the previous $61.78 per pound to $94.22, an increase exceeding 50%.

However, rising uranium spot prices have limited short-term positive effects on China Uranium.

China Uranium's primary revenue comes from related CNNC system companies, with long-term trade agreements stipulating annual sales prices influenced by both fixed prices and previous year's market average prices, creating certain lag compared to natural uranium market price fluctuations.

Moreover, China Uranium's procurement agreements with suppliers reference recent (1-9 months) natural uranium market prices.

This means that during rapid natural uranium price increases, China Uranium cannot promptly pass rising procurement cost pressures to downstream customers.

Whether this pricing mechanism will squeeze China Uranium's profit margins remains to be observed.

Long-term, with rising natural uranium prices, China Uranium is positioned to achieve stable performance growth leveraging its domestic monopoly status.