Rolls-Royce share price: Group in talks to supply Chinese nuclear plant in Essex

Rolls-Royce Holdings (LON:RR) is in talks with China’s largest state-backed nuclear company about supplying equipment for a power plant the Chinese group hopes to build in Essex, the Financial Times has reported. The move comes with CGN looking to allay national security concerns about the project.

Rolls-Royce’s share price has climbed higher in London this morning, having inched 0.31 percent to 898.00p as of 11:01 GMT. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.21 percent higher at 6,983.10 points. The group’s shares have added about two percent to their value over the past year, as compared with an over nine-percent drop in the Footsie.

Rolls-Royce in talks with CGN

The FT reported yesterday that CGN was in discussions with Rolls-Royce over providing the control systems for the Hualong HPR1000 reactors the Chinese group plans to install at Bradwell on the Essex coast. The newspaper notes that CGN has confirmed that talks were taking place and that the British engineering group was part of the approvals process it was going through with the UK nuclear regulator, but has said that no final deal has been struck.

“If the control system is built by Rolls and vetted by the UK nuclear regulator, the perception of switch-off risk is clearly reduced,” a UK nuclear industry source told the FT. While the Chinese group has developed its own control systems, using Rolls-Royce as a supplier would help assuage worries about Chinese companies building crucial energy infrastructure in the UK.

Analysts on FTSE 100 group

The 15 analysts offering 12-month price targets for Rolls-Royce for the FT have a median target of 980.00p on the shares, with a high estimate of 1,250.00p and a low estimate of 765.00p. As of January 19, the consensus forecast amongst 18 polled investment analysts covering the FTSE 100 group advises investors to hold their position in the company.

As of 10:59 GMT, Monday, 21 January, Rolls-Royce Holding PLC share price is 898.60p.