Chugoku Electric Power Co., Inc.

Nishi Tetsuo, the incumbent independent mayor who advocates building an interim storage facility for spent nuclear fuel, defeated independent newcomer Hara Koji to win re-election. The Kaminoseki town mayoral election in Yamaguchi Prefecture, held to fill a term that had expired, was voted and counted on the 4th. It was the first mayoral election since the facility construction plan emerged in 2023. Nishi, who took office as mayor in 2022, accepted a survey for the interim storage facility proposed by Chugoku Electric Power in 2023, while preparatory work for the company's Kaminoseki nuclear power plant remained suspended. In the campaign, Nishi argued that nuclear-related subsidies make it possible to pursue child-rearing support and resident welfare, and stressed the need to accept the facility. Hara criticized the current town administration, saying the town has been divided over nuclear policy, and called for community-building that does not depend on nuclear-related funding, but fell short.

Chugoku Electric Power has decided to raise ¥149b through a transition loan to fund carbon neutrality projects at its Shimane nuclear and Akatsuka hydroelectric facilities. The funding commitment comes as the utility's shares have returned 0.82% over one day, 6.46% over 30 days, and 18.79% over 90 days, with a one year total shareholder return of 23.46%. Chugoku Electric Power trades at a P/E of 9.9x, above its immediate peer average of 7.3x but below the Asian Electric Utilities industry average of 14.3x and the estimated fair P/E of 12.4x. On Simply Wall St's discounted cash flow model, the stock at ¥1,050.5 screens as expensive versus an estimated future cash flow value of ¥856.76. The utility faces risks if nuclear restarts are delayed or if recent share price gains unwind.

A review meeting that serves as a precondition for operating Chugoku Electric Power's Shimane No. 3 nuclear reactor was held on the 10th at the Nuclear Regulation Authority, and Chugoku Electric's explanation of the basic design was completed. The company will next file an amendment application, and the regulator is expected to present a draft installation change permit, which would signify passage of the review, based on the amended content. Shimane No. 3 is under construction and is of the same advanced boiling water reactor type, known as ABWR, as Tokyo Electric Power Company's Kashiwazaki-Kariwa No. 6 and No. 7 reactors. Its output is 1.373 million kilowatts, among the largest of any nuclear plant in the country. It would be the first reactor under construction to pass the review under the new regulatory standards.