Jiangsu Etern "Key beneficiary of optical shortages with nuclear fusion..."

Research evidence excerpt

Jiangsu Etern "Key beneficiary of optical shortages with nuclear fusion..."

Global Research

2 July 2026ab

Initiation of Coverage

EquitiesJiangsu Etern

Key beneficiary of optical shortages with nuclear China

fusion exposure, initiate coverage at Buy Communications Technology

12-month rating Buy

Prior : No Rating

12m price target Rmb100.00

Accelerating earnings growth

Prior :

We initiate coverage of Jiangsu Etern with a Buy rating and a price target of Rmb100.00.

We forecast an 81% EPS CAGR for 2026-28, driven by: 1) an optical communication Price (30 Jun 2026) Rmb67.48

supply shortage; and 2) a nuclear fusion upcycle. Our EPS estimates are 236% above RIC: 600105.SS BBG: 600105 CH

consensus for 2026 and 258% above for 2027, while the stock trades at 26x 2027E PE,

Trading data and key metrics

in line with its five-year average. In our Q-Series report, we highlight Etern as our top

pick in the nuclear fusion supply chain, given its strong earnings visibility and technical 52-wk range Rmb72.96-8.52

moat in key fusion components. Market cap. Rmb98.7b/US$14.5b

Shares o/s 1,462m (ORDA)

Nuclear fusion: One of two China firms positioned to address supply shortages Free float 71%

While nuclear fusion is a sensitive theme with significant uncertainties, we expect the Avg. daily volume ('000) 161,358

industry CAPEX to expand at a 70% CAGR in FY25-30E, driving a superconductor Avg. daily value (m) Rmb7,705.2

supply shortfall as early as 2029E, a shortage which consensus has not fully priced in. We Common s/h equity (12/26E) Rmb4.38b

expect the superconductor segment to contribute meaningfully to earnings from 2027E, P/BV (12/26E) 22.5x

with sales rising at a 70% CAGR over 2026-28E and margins expanding from 12% in Net debt to EBITDA (12/26E) 1.4x

2025 to 30%/35/40% in 2027/28/30E.