Investment Rating - The industry is rated as "Positive" [5] - Specific companies recommended for "Increase" rating include Sany Heavy Industry, Zoomlion, Hengli Hydraulic, and CRRC [5] Core Viewpoints - In May 2025, excavator sales reached 18,202 units, a year-on-year increase of 2.12%, while loader sales were 10,535 units, up 7.24% year-on-year [13][14] - Cumulative excavator sales from January to May 2025 totaled 101,716 units, reflecting a 17.40% year-on-year growth, with domestic sales at 57,501 units, up 25.70% [4][13] - The average working hours for major construction machinery in May 2025 were 84.5 hours, a decrease of 3.86% year-on-year [14] - The construction machinery industry is currently in a renewal cycle, with urban renewal initiatives expected to steadily boost engineering demand amid a sluggish real estate sector [4][31] Industry Data - As of June 10, 2025, the Shenyin Wanguo Machinery Equipment industry P/E ratio (TTM, overall method, excluding negative values) was 26.18 times, with a valuation premium of 117.57% relative to the CSI 300 [3][23] - The average monthly operating rate for major construction machinery products in May 2025 was 59.5%, down 2.45 percentage points month-on-month [15][31] - The steel composite price index (CSPI) was at 90.31 as of June 6, 2025 [16] Company Announcements - Zhejiang Lino plans to acquire 100% equity of Xuzhou Chemical Machinery Co., Ltd. for 260 million yuan [20] - Laisai Laser has adjusted the expected operational date for its fundraising project to August 1, 2026 [21] Market Review - From June 4 to June 10, 2025, the CSI 300 index rose by 0.35%, while the Shenyin Wanguo Machinery Equipment industry increased by 0.73%, outperforming the CSI 300 by 0.38 percentage points [22] - Notable stock performances included Jiao Da Tie Fa with a 262.09% increase and Kai Le Co., Ltd. with a -40.62% decrease [28][30]

Macro and Strategy Research - In May 2025, China's exports in USD terms grew by 4.8% year-on-year, down from 8.1% in the previous month, while imports fell by 3.4%, compared to a decline of 0.2% previously. The trade surplus reached USD 103.22 billion, up from USD 96.18 billion [4][5] - The slowdown in export growth is attributed to high base effects and global economic downturn concerns, with the global manufacturing PMI remaining below 50 for three consecutive months. Exports to the US saw a significant decline of 34.5%, influenced by new tariffs and cautious sentiment among traders [4][5] - Import demand showed weakness, with agricultural imports rising by 17.9% year-on-year, while other major commodities experienced negative growth, indicating a need for policy support to boost domestic demand [5] Fixed Income Research - For the period from June 2 to June 8, 2025, the issuance of credit bonds increased, while transaction amounts decreased. The net financing amount for credit bonds rose, with corporate bonds and medium-term notes seeing increases, while company bonds and short-term financing bonds saw reductions [6][8] - The overall yield on medium and short-term notes and corporate bonds declined, while city investment bonds showed mixed results. The credit spread for medium and short-term notes widened, indicating a complex market environment [8] - The report suggests that despite short-term fluctuations, the long-term trend for yields is downward, and investors should focus on timing their investments and monitoring interest rate trends [8] Industry Research - In the steel sector, demand is expected to decline as the off-season deepens, leading to a potential accumulation of steel inventory. The short-term outlook remains weak for steel prices [10][11] - For copper, tight supply at the mine level supports prices, but the lack of demand during the off-season may lead to volatility, particularly influenced by US-China trade negotiations [10][11] - The aluminum market faces uncertainty due to macroeconomic factors, while low domestic inventory provides some price support. Overall, aluminum prices are expected to fluctuate in the short term [10][11] - Gold prices are bolstered by international trade tensions, US interest rate expectations, and geopolitical factors, with a focus on macroeconomic data and trade developments [10][11] - The lithium market is experiencing oversupply, leading to price weakness, while the rare earth sector is positioned for long-term growth due to policy support and emerging demand from robotics and renewable energy [10][11]

Investment Ratings - The steel industry is rated as "Neutral" while the non-ferrous metals industry is rated as "Positive" [3] - Specific companies such as Luoyang Molybdenum (603993), Zhongjin Gold (600489), Shandong Gold (600547), Zijin Mining (601899), and China Aluminum (601600) are rated as "Buy" [3] Core Insights - The steel market is experiencing a seasonal downturn, with expectations of declining demand for construction materials and sheet steel, leading to a potential inventory accumulation cycle [1][18] - Copper prices are supported by tight supply at the mine level, but the overall demand remains weak during the off-season [1][41] - Aluminum prices are expected to fluctuate in the short term due to domestic low inventory supporting prices, despite some downstream sectors showing signs of weakness [1][50] - Gold prices are bolstered by international trade tensions, expectations of U.S. interest rate cuts, and geopolitical factors [2][54] - The lithium market faces oversupply pressures, with significant inventory levels expected to keep prices weak [2][57] Industry Summaries Steel Industry - Demand has weakened, with a notable decrease in terminal procurement volumes, down 14.62% week-on-week and 6.41% year-on-year as of June 6 [19] - Steel production from major varieties was 8.8038 million tons, a slight decrease of 0.05% from the previous week [21] - The total steel inventory increased by 0.26% week-on-week, but decreased by 20.97% year-on-year [27] Copper Industry - The copper market is influenced by U.S.-China trade tensions, with the first meeting of trade negotiations expected to impact copper prices significantly [41] - As of June 6, LME copper prices were $9,800 per ton, reflecting a 1.79% increase from the previous week [48] Aluminum Industry - The aluminum sector is facing pressure from rising costs due to higher alumina prices, while some downstream demand is weakening [50] - As of June 6, LME aluminum prices were $2,400 per ton, down 0.55% from the previous week [51] Gold Industry - Gold prices are supported by various macroeconomic factors, including rising U.S. debt and geopolitical tensions [2][54] - As of June 6, COMEX gold closed at $3,331 per ounce, up 0.54% from the previous week [54] Lithium Industry - The lithium market is characterized by significant inventory pressure, with prices expected to remain weak due to oversupply [57] - As of June 6, battery-grade lithium carbonate prices were 60,700 yuan per ton, down 1.30% from the previous week [58] Rare Earth and Minor Metals - Prices for light rare earths have shown an increase, with praseodymium-neodymium oxide priced at 449,000 yuan per ton as of June 6, up 2.51% [68]

Market Overview - The valuation of major indices in the domestic market has been adjusted upwards, with the historical percentile of the price-to-earnings (P/E) ratio for the Shanghai Composite Index and CSI 300 increasing by 3.1 percentage points and 2.8 percentage points respectively, reaching 62.2% and 54.2% [1][23] - Among the 31 first-level industries in the Shenwan classification, 25 industries saw an increase, with the top five performing sectors being communication, non-ferrous metals, electronics, comprehensive, and computers [1][12] Public Fund Market - The public REITs market has surpassed a market capitalization of 200 billion yuan for the first time, reaching 201.99 billion yuan, with the CSI REITs index rising over 13% this year [2][31] - Public funds have distributed nearly 100 billion yuan in dividends this year, marking a significant increase compared to previous years, with equity funds showing a fourfold increase in dividend amounts [2][32] - The average net value of equity funds increased by 1.93% last week, while mixed bond funds rose by 0.40%, with a positive return ratio of 98.30% [2][33] ETF Market - The overall net inflow into the ETF market was 7.322 billion yuan, with bond ETFs leading the inflow due to risk-averse sentiment, while stock ETFs experienced a net outflow of 3.694 billion yuan [3][43] - The average daily trading volume in the ETF market reached 211.89 billion yuan, with a turnover rate of 7.64% [3][43] - The ETF market exhibited characteristics of "broad-based outflow and industry differentiation," with technology and low-volatility dividend themes attracting significant capital, while the sci-tech and financial sectors faced adjustment pressures [3][44] Fund Issuance - A total of 36 new funds were issued last week, a decrease of 2 from the previous week, with 40 new funds established, an increase of 10 [4][52] - The total amount raised by new funds reached 31.013 billion yuan, an increase of 12.026 billion yuan from the previous week [4][52]

Industry Overview - The furniture retail sector in China saw a significant year-on-year growth of 20.20% in the first four months, with total retail sales amounting to 583.40 billion yuan [17][51] - The furniture manufacturing industry reported a revenue of 197.35 billion yuan, reflecting a decline of 3.60% year-on-year [17] - The consumption upgrade policy, particularly the "old-for-new" program, has positively impacted sales, with over 5.76 million home renovation orders recorded [51] Market Performance - From May 6 to May 30, the light industry sector outperformed the CSI 300 index by 2.97 percentage points, with a growth of 4.82% compared to the index's 1.85% [46] - The textile and apparel sector also outperformed the CSI 300 index by 4.18 percentage points, achieving a growth of 6.03% [50] Strategic Recommendations - Companies such as Oppein Home, Sophia, and Petty have been rated as "Buy" due to their strong market positions and growth potential [2][56] - The report maintains a "Neutral" rating for the light industry and textile sectors, indicating a cautious but optimistic outlook [56] Trade and Regulatory Environment - Recent developments in US-China trade relations have led to a temporary easing of tariff risks, with the US extending certain tariff exemptions until August 2025 [54] - The global market for new tobacco products, including e-cigarettes, is experiencing growth, with sales increasing by 12.7% for heated tobacco and 9.5% for e-cigarettes [55] Emerging Opportunities - The recent launch of AI glasses, such as the Thunder X3 Pro and Liweike View AI glasses, presents potential investment opportunities in the tech sector [56] - The tightening of regulations on e-cigarettes in China may benefit compliant new tobacco companies, creating a favorable environment for growth [55]

Macro and Strategy Research - The manufacturing sector shows signs of recovery with the May PMI data indicating a manufacturing purchasing managers' index (PMI) of 49.5%, a non-manufacturing business activity index of 50.3%, and a composite PMI output index of 50.4% [2] - The production index increased by 0.9 percentage points to 50.7%, attributed to a low base from April and improved US-China trade relations leading to a "export rush effect" [3] - New orders index rose by 0.6 percentage points to 49.8%, while new export orders increased by 2.8 percentage points to 47.5% due to the temporary suspension of certain tariffs [3] - Large enterprises' manufacturing PMI rose by 1.5 percentage points to 50.7%, indicating a positive outlook for production and potential benefits for small and medium enterprises [3] - The non-manufacturing business activity index slightly decreased by 0.1 percentage points to 50.3%, with the construction sector seeing a decline while the service sector experienced a minor increase [4] - The composite PMI output index rose by 0.2 percentage points to 50.4%, reflecting a synchronized recovery in both manufacturing and non-manufacturing sectors [4] - The short-term outlook suggests that the "export rush effect" may continue due to a 90-day tariff exemption, although seasonal factors may exert downward pressure in June [4] Industry Research - The metal industry faces ongoing supply surplus pressures, with significant declines in lithium prices observed in May [6] - Steel demand is expected to remain weak in June due to weather factors, with prices likely to fluctuate [6] - Copper prices may experience short-term fluctuations due to seasonal demand and trade policy uncertainties, although domestic stimulus measures may provide some support [7] - Aluminum prices are anticipated to remain weak, influenced by traditional seasonal demand and ongoing uncertainties in international trade relations [7] - Lithium prices are under pressure due to increased supply from salt lake lithium extraction, with expectations of continued weakness in the short term [7] - The cobalt market shows no significant support for price increases, with a general expectation of price adjustments [7] - Nickel prices are expected to fluctuate, with attention on Indonesia's nickel export policies [7] - The strategy for copper and aluminum suggests resilience in demand supported by domestic economic stimulus and potential improvements in overseas demand due to changes in EU tariff policies [8] - Long-term factors such as high US debt levels, inflation risks, and global geopolitical complexities are expected to support gold prices [8] - The rare earth sector is positioned for long-term growth driven by new demand from robotics and renewable energy sectors [8]

Macro and Strategy Research - The external environment shows volatility, with the US experiencing a decline in durable goods orders, particularly in non-defense capital goods, leading to cautious investment outlooks among businesses [2][3] - Domestic policies are expected to focus on boosting internal demand, with local governments implementing measures to enhance consumption, reflecting a trend towards quality upgrades and environmental improvements [3] Fixed Income Research - Industrial enterprise profit data for January to April shows improvement, with a narrowing decline in profit margins due to the impact of tariff policies and falling international commodity prices [4][6] - The primary market saw the issuance of 66 bonds totaling 769.2 billion, with net financing of 511.1 billion, indicating a high issuance scale for government bonds [6] - The secondary market experienced mixed performance in bond yields, with the 10-year government bond yield decreasing by 3 basis points to 1.69% [6][7] Industry Research - The pharmaceutical and biotechnology sector continues to thrive, with multiple innovative drugs receiving approval, including three from Heng Rui Medicine and others from Fosun Pharma and Zai Lab [8][10] - The industry saw a 2.26% increase in the pharmaceutical sector index, outperforming other sectors, with a current price-to-earnings ratio of 27.74, indicating a 150% premium over the CSI 300 index [10] - The upcoming American Society of Clinical Oncology (ASCO) conference is expected to provide significant updates on innovative drug data, suggesting continued investment opportunities in the sector [11]

Investment Rating - The industry maintains a "Neutral" rating [7][62]. Core Views - The pharmaceutical and biotechnology industry continues to experience a favorable environment with multiple innovative drugs receiving approval for market entry, indicating sustained industry vitality [6][7]. - The recent approval of several innovative drugs, including those from 恒瑞医药 and 复星医药, highlights ongoing advancements in drug development and potential investment opportunities [6][29][30]. - The upcoming American Society of Clinical Oncology (ASCO) conference is expected to provide further updates on significant research findings, which may influence investment strategies in innovative drugs and related sectors [7][61]. Industry News - 恒瑞医药 has received conditional approval for three Class 1 innovative drugs, including 苹果酸法米替尼胶囊 and 注射用瑞康曲妥珠单抗 [4][29]. - 复星医药's subsidiary has also gained approval for drugs such as 枸橼酸伏维西利胶囊 and 芦沃美替尼片 [4][30]. - 石药集团 is in discussions for potential licensing and collaboration on several products, which could lead to significant financial opportunities [4][31]. - 泽璟制药's 盐酸吉卡昔替尼片 has been approved for market entry, expanding its product offerings [4][32]. Market Review - In the week from May 23 to May 29, 2025, the Shanghai Composite Index fell by 0.50%, while the Shenzhen Component Index decreased by 0.90%. In contrast, the pharmaceutical and biotechnology sector rose by 2.26%, with most sub-sectors showing positive performance [5][45]. - The current price-to-earnings ratio (TTM) for the pharmaceutical and biotechnology industry is 27.74 times, with a valuation premium of 150% relative to the CSI 300 index [5][51]. Weekly Strategy - The ongoing trend in innovative drug approvals is expected to continue, with significant attention on the impact of U.S. tariff policy changes on the CXO sector [6][59]. - Investors are advised to focus on innovative drugs and related supply chains, as well as sectors benefiting from domestic demand recovery, such as medical services and pharmaceutical commerce [7][61].

Market Review - The important indices showed mixed performance over the past five trading days, with the Shanghai Composite Index down by 0.50% and the ChiNext Index down by 1.61% [2] - The trading volume continued to shrink, with a total turnover of 5.36 trillion yuan, averaging 1.07 trillion yuan per day, a decrease of 524.08 billion yuan compared to the previous five trading days [2] - Among the industries, the environmental protection, pharmaceutical, and computer sectors saw the highest gains, while the power equipment, comprehensive, and automotive sectors experienced the largest declines [2] Data Insights - From January to April, the profit growth rate of large-scale industrial enterprises continued to recover. However, the industrial added value growth rate showed a decline compared to the first quarter due to the impact of tariff policies on exports [2] - The Producer Price Index (PPI) also saw a year-on-year decline, leading to a slight decrease in revenue growth. However, the profit margin decline narrowed, providing some support for enterprise profits [2] - Looking ahead, the easing of Sino-US trade relations in May and the "export rush effect" from tariff exemptions are expected to support revenue and improve profit growth for industrial enterprises [2] Policy Developments - Consumption-boosting measures are being implemented, with the Fujian provincial government announcing a special action plan to enhance consumption, focusing on service consumption and new consumption areas such as health and low-altitude economy [3] - The plan encourages flexible work arrangements to create more consumption scenarios, which is expected to stimulate consumer demand [3] - Overall, these measures are anticipated to provide incremental support for the consumption sector as part of the strategy to strengthen domestic circulation [3] Strategy Outlook - The market is expected to continue oscillating at reasonable levels, with future opportunities depending on incremental changes in the market [4] - If external risks or fundamental factors lead to unexpected downturns, stable funding support may help form a temporary market bottom [4] - A "barbell" investment strategy is recommended, focusing on high-dividend and relatively underweight sectors like banking, while also looking for thematic investment opportunities in new consumption areas [4]

Market Overview - During the week of May 21 to May 27, the A-share market saw all major indices decline, with the ChiNext Index experiencing the largest drop of 2.77%. The Shanghai Composite Index fell by 1.18%, while the Shenzhen Component Index decreased by 2.15% [2] - As of May 27, the margin trading balance in the Shanghai and Shenzhen markets was 1,804.733 billion yuan, a decrease of 2.577 billion yuan from the previous week. The financing balance was 1,792.922 billion yuan, down by 2.292 billion yuan, and the securities lending balance was 11.812 billion yuan, down by 0.285 billion yuan [2] Industry Insights - In the financing activities, the automotive, pharmaceutical, and non-ferrous metal industries saw significant net buying, while the electronics, computer, and non-bank financial sectors experienced lower net buying [3] - The financing buy-in ratio was notably high in the non-bank financial, banking, and steel industries, while it was lower in textiles, light manufacturing, and retail [3] Company Announcements - Huanghe Xuanfeng plans to establish Henan Qianyuan Chip Drilling Semiconductor Technology Co., Ltd. in partnership with Bozhi Jinduan [5] - Tianyi Shangjia intends to change its stock abbreviation to Tianyi New Materials [5] Machinery Industry Performance - From January to April 2025, excavator sales reached 83,500 units, representing a year-on-year increase of 21.40%, with domestic sales accounting for 49,100 units, up by 31.90% [6] - The construction machinery industry is experiencing an upward trend, driven by improved construction activity, particularly in road equipment, which saw significant increases in operating rates [6] Investment Recommendations - The report maintains a "positive" rating for the machinery industry, with specific "buy" ratings for companies such as Sany Heavy Industry, Zoomlion Heavy Industry, Hengli Hydraulic, and CRRC Corporation [6]