Investment Rating - The report initiates coverage with a "Buy" rating for the company [1] Core Insights - The company is a global leader in polyurethane and is transitioning into a new materials platform enterprise, having expanded its business scope significantly since its inception in 1978 [8] - In 2024, the company achieved a revenue of 182.07 billion yuan, a year-on-year increase of 3.8%, while the net profit attributable to shareholders decreased by 22.5% to 13.03 billion yuan due to impairment losses and increased costs [4][10] - The company is expected to improve its asset quality and profitability in the future as it completes its impairment provisions [4] Summary by Sections Main Business Performance - The company reported a revenue of 182.07 billion yuan in 2024, with a year-on-year growth of 3.8%, while the net profit attributable to shareholders was 13.03 billion yuan, down 22.5% [4][10] - In Q1 2025, the company generated a revenue of 43.07 billion yuan, a decrease of 6.7% year-on-year but an increase of 25.0% quarter-on-quarter [4] - The company’s main business segments, including polyurethane, petrochemicals, fine chemicals, and new materials, showed varying growth rates, with sales volumes increasing by 15.3%, 15.9%, and 27.7% respectively in 2024 [4][10] Future Growth Prospects - The company is advancing several construction projects, including a 700,000-ton/year expansion in Fujian expected to be operational by Q2 2026, and a new 330,000-ton/year TDI facility expected to start production in May 2025 [4][10] - The company is also forming a joint venture to invest in a 1.6 million-ton/year specialty polyolefin project, which is anticipated to enhance its international presence [4][10] Financial Forecast - The company is projected to achieve net profits of 13.88 billion yuan, 17.15 billion yuan, and 19.98 billion yuan for the years 2025, 2026, and 2027 respectively, reflecting growth rates of 6.5%, 23.6%, and 16.5% [4][10] - The earnings per share (EPS) are expected to be 4.42 yuan, 5.46 yuan, and 6.36 yuan for the same years [4][10]

Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals industry [2] Core Viewpoints - Precious metals are expected to see a long-term bullish trend despite a slight decline in domestic gold prices by 0.42% during the week of May 26 to June 1, 2025. The increase in U.S. tariffs on steel and aluminum from 25% to 50% is anticipated to create uncertainty in global trade, which may support gold prices in the long run [7][44] - Industrial metal prices have generally declined, influenced by the tariff increase, with copper, aluminum, lead, zinc, tin, and nickel prices dropping by 0.6%, 0.6%, 1.7%, 1.6%, 6.5%, and 1.8% respectively [7][30] - Small metals like praseodymium-neodymium oxide have seen price increases, while tungsten prices have also risen, indicating a potential steady growth in demand for tungsten in manufacturing [7][31][34] - Energy metals, particularly lithium, have experienced price declines, with lithium carbonate prices down by 3.4% and 42.3% year-on-year [7][36] Summary by Sections 1. Industry Data Review 1.1 Precious Metals - Domestic gold prices have slightly decreased, but the long-term outlook remains positive due to ongoing trade uncertainties [7][10] 1.2 Industrial Metals - Prices for industrial metals have mostly decreased, with significant drops in tin and nickel prices [7][30] 1.3 Small Metals - Prices for praseodymium-neodymium oxide and tungsten have increased, reflecting a recovery in manufacturing demand [7][31][34] 1.4 Energy Metals - Lithium prices have decreased significantly, indicating a potential oversupply or reduced demand in the short term [7][36] 2. Market Data - The non-ferrous metals sector has seen a decline of 2.40%, with various sub-sectors also experiencing losses [38] 3. Key Events Review - The announcement of increased tariffs on steel and aluminum by President Trump is a significant event impacting the non-ferrous metals market [44]

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2] Core Viewpoints - The report highlights a significant rebound in SAF (Sustainable Aviation Fuel) prices, with European SAF FOB prices reaching $1919.81 per ton as of June 3, 2025, marking a 7.44% increase from the previous week and a 9.90% increase from the historical low on May 14, 2025 [4] - The report emphasizes the potential for domestic SAF producers, particularly 嘉澳环保 (Jiaao Environmental Protection), to benefit from improved pricing and export opportunities following the approval of export licenses [7] Summary by Relevant Sections Market Performance - The report notes a market performance decline of 26% for the basic chemical sector compared to the Shanghai and Shenzhen 300 index [3] Price Trends - The report details the price trends for raw materials used in SAF production, indicating a rise in procurement prices for waste cooking oil and grease, which supports the upward price trend for SAF [7] Supply and Demand Dynamics - The report discusses the supply risks associated with SAF production, noting that less than 30% of SAF projects have reached final investment decisions, leading to potential supply shortages [7] Regulatory Environment - The report mentions the high compliance costs associated with international SAF regulations, which could provide a competitive advantage for domestic producers like 嘉澳环保 due to their cost-effectiveness [7] Company Focus - The report suggests monitoring specific companies such as 嘉澳环保, 海新能科 (Haineng Energy), and others as they are positioned to benefit from the evolving SAF market [6]

Investment Rating - The report maintains an "Outperform" rating for the basic chemical industry [2] Core Viewpoints - The report highlights a significant rebound in SAF (Sustainable Aviation Fuel) prices, with European SAF FOB prices reaching $1919.81 per ton as of June 3, 2025, marking a 7.44% increase from the previous week and a 9.90% increase from the historical low on May 14, 2025 [4][7] - The report emphasizes the potential for domestic SAF producers, particularly 嘉澳环保 (Jiaao Environmental Protection), to benefit from improved pricing and export opportunities following the approval of export licenses [7] Summary by Relevant Sections Market Performance - The basic chemical industry has shown a market performance trend with a range from -26% to +26% over the specified periods [3] Related Research - The report references several related studies that discuss the advancements in SAF applications and the impact of policies on the biodiesel industry [4] Investment Highlights - The report notes that the procurement prices for waste oils have increased, which supports the upward trend in SAF prices. For instance, the average price of UCO (Used Cooking Oil) rose by 5.2% from Q4 2024 to Q1 2025, and the average price of waste oil increased by 6.7% in the same period [7] - The report indicates that less than 30% of SAF projects have reached final investment decisions, leading to potential supply risks as production facilities typically require 3-5 years to scale up [7] - The report mentions that 嘉澳环保 has received approval for SAF exports, allowing it to produce 372,400 tons of bio-jet fuel annually, marking a significant step for domestic SAF producers [7]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical and biotechnology sector [2]. Core Insights - The Chinese innovative drug industry is experiencing robust growth, supported by policies, funding, talent return, and engineering advantages. The number of original innovative drug pipelines has surged from 124 in 2015 to 704 in 2024, ranking first globally. The proportion of self-developed first-in-class (FIC) innovative drugs entering clinical trials has increased from 9 in 2015 to 120 in 2024, exceeding 30% globally [5][8][11]. - Business Development (BD) activities among Chinese pharmaceutical companies have significantly increased, with total transaction amounts reaching $51.9 billion in 2024, a 26% year-on-year growth. The average upfront payment also rose by 17% to $4.1 billion [5][13][16]. - The report emphasizes the ongoing development phase of Chinese innovative drugs and suggests focusing on domestic companies with FIC/BIC pipelines [5][24]. Summary by Sections 1. Innovative Drug BD Surge - The report highlights the transition of Chinese companies from imitation to original innovation, with a notable increase in the number of FIC drugs [5][8]. - The BD activities have diversified, with a significant rise in the number of transactions involving antibody-drug conjugates (ADCs) and small nucleic acid drugs [16][24]. 2. Market Performance Review - For the week of May 26 to May 30, 2025, the pharmaceutical and biotechnology sector index rose by 2.21%, outperforming the CSI 300 index by 3.30%. Year-to-date, the sector index has increased by 6.61%, also surpassing the CSI 300 index by 9.02% [28][30]. - The top-performing stocks during this period included Shuyou Pharmaceutical (60.41%), Huason Pharmaceutical (41.97%), and Changshan Pharmaceutical (35.91%) [5][28]. 3. Monthly Investment Portfolio - Recommended stocks in the small molecule sector include Yifang Bio, Haishike, and Gilead Pharmaceuticals. In the large molecule sector, suggested stocks include Shuyou Pharmaceutical, Kexing Bio, and Xintai [5][24].

Investment Rating - The report maintains an "Outperform" rating for the telecommunications industry [2] Core Insights - The launch of computing satellites is expected to enhance the capabilities of China's satellite system, with significant advancements in regenerative payloads anticipated [10][11] - The strategic value of low Earth orbit satellites has been underscored by recent geopolitical events, particularly with the introduction of the "Iron Dome" space-based missile defense system by the U.S. [11] - Improvements in launch infrastructure and ground facilities are expected to create significant growth opportunities for satellite internet [12][13] Summary by Sections Investment Strategy - **Computing Satellites Launch**: The launch of computing satellites will enhance regenerative payload capabilities, with a total computing power target of 1000POPS from the "Three-body Computing Constellation" [10] - **"Iron Dome" Missile Defense System**: The U.S. plans to integrate a satellite network for missile detection and interception, with an estimated cost of $175 billion [11] - **Launch Infrastructure Development**: Multiple reusable rockets are set for test flights, and the expansion of commercial launch sites is underway, which may lead to a significant increase in satellite internet deployment [12][13] Industry News - **Ministry of Industry and Information Technology**: By 2028, a standardized public computing power interconnection is expected to be achieved, enhancing the competitiveness of China's computing infrastructure [14] - **Ministry of Commerce**: A plan to develop a replicable smart supply chain model by 2030 has been initiated, which will integrate AI and IoT technologies [15] - **Digital Transformation in Electronics**: By 2027, the electronic information manufacturing industry is expected to undergo significant digital transformation, with a target of over 85% CNC rate in key processes [16] - **National Data Bureau**: Policies for cultivating a unified national data market are being developed, which may standardize data asset valuation and trading [18] Weekly Review and Focus - **Market Performance**: The telecommunications sector saw a 1.84% increase, outperforming major indices during the week of May 26 to June 1 [19] - **Investment Focus**: Companies related to domestic computing power and satellite internet, such as Cambricon, Haiguang Information, and ZTE, are recommended for attention [23]

Investment Strategy - The launch of computing satellites will enhance the regenerative relay capabilities within China's satellite system, with expectations for low-orbit satellite measurement capabilities to exceed forecasts in the second half of the year. The "Star Computing" plan aims to establish a network of 2,800 computing satellites, achieving a total computing power of 1,000 POPS [10][11] - The U.S. has announced the "Iron Dome" space-based missile defense system, which will further highlight the strategic value of orbital resources. This system, costing approximately $175 billion, aims to integrate with existing missile defense capabilities and will consist of thousands of small satellites for missile detection and interception [11][12] - The infrastructure for satellite internet is expected to see significant development opportunities as multiple reusable rockets are set for test flights this year, and the Hainan commercial launch base is undergoing expansion. The anticipated launch cost for the "Zhuque-3" rocket is projected to reach 20,000 RMB per kilogram, with future costs potentially dropping below 10,000 RMB per kilogram [12][13] Industry News - The Ministry of Industry and Information Technology (MIIT) has issued a plan to achieve standardized interconnectivity of public computing resources across the country by 2028, with a complete system of standards and rules expected by 2026. This initiative is anticipated to create development opportunities for China's computing infrastructure [14] - Eight government departments, including the Ministry of Commerce, have launched an action plan to establish a replicable model for smart supply chain development by 2030, which will enhance the resilience and competitiveness of supply chains through the integration of AI, IoT, and blockchain technologies [15] - The MIIT and other departments have developed a digital transformation implementation plan for the electronic information manufacturing industry, aiming for a significant increase in digitalization and intelligent upgrades by 2027, with over 85% of key processes expected to be numerically controlled [16] - The National Data Bureau is working on policies to cultivate a unified national data market, which aims to enhance the marketization and value realization of data elements, thereby supporting high-quality economic development [18] Weekly Review and Focus - The communication sector saw a 1.84% increase from May 26 to June 1, outperforming major indices such as the Shanghai Composite Index, which fell by 0.03%. Key sectors like satellite navigation and low-altitude economy showed significant gains [19][21] - The focus for the upcoming week includes investment opportunities in domestic computing and satellite internet companies such as Cambricon, Haiguang Information, ZTE, and Unisoc [23]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical and biotechnology sector [2]. Core Insights - The Chinese innovative drug industry is experiencing robust growth, supported by policies, funding, talent return, and engineering advantages. The number of original innovative drug pipelines has surged from 124 in 2015 to 704 in 2024, ranking first globally. The proportion of self-developed first-in-class (FIC) innovative drugs entering clinical trials has increased from 9 in 2015 to 120 in 2024, exceeding 30% of the global total [5][8][11]. - Business Development (BD) activities among Chinese pharmaceutical companies have significantly increased, with total transaction amounts reaching $51.9 billion in 2024, a 26% year-on-year growth. The average upfront payment also rose by 17% to $4.1 billion [5][13][16]. - The report suggests focusing on domestic companies with FIC/BIC pipelines, as the recognition and transaction prices of Chinese innovative drug assets continue to rise [5][24]. Summary by Sections 1. Innovative Drug BD Surge - The report highlights the ongoing surge in BD activities within the innovative drug sector, emphasizing the transition from imitation to original innovation among Chinese companies. The number of original innovative drug pipelines has grown significantly, indicating a shift towards more innovative drug development [5][8][11]. 2. Market Performance Review - During the week of May 26 to May 30, 2025, the Shenwan Pharmaceutical and Biotechnology Index rose by 2.21%, outperforming the CSI 300 Index by 3.30%. Year-to-date, the index has increased by 6.61%, also surpassing the CSI 300 Index by 9.02% [28][29]. 3. Investment Strategy and Recommendations - The report recommends a bullish outlook on Chinese innovative drugs, suggesting specific companies to watch in both small molecule and large molecule sectors, as well as in the Antibody-Drug Conjugate (ADC) field [5][24][25].

Investment Rating - The report maintains an "Outperform" rating for the chemical industry [2] Core Viewpoints - The report suggests that the current period may represent the best configuration window for leading chemical companies, with a potential new cycle of supply-side reform expected to commence [5][15] - The chemical industry is anticipated to enter a new long-term prosperity cycle, driven by policy initiatives aimed at improving supply-demand dynamics [15][16] Summary by Sections 1. Core Viewpoints - Policies initiated since September 2024 are expected to boost economic confidence and chemical product demand [15] - The current expansion cycle in the chemical sector may be nearing its end, with significant improvements in domestic supply anticipated [15][30] - Key investment themes include focusing on core assets, industries facing supply constraints, and sectors with upward demand certainty [15][16][17] 2. Overall Performance of the Chemical Sector - The chemical sector index outperformed the Shanghai Composite Index by 1.2 percentage points and the ChiNext Index by 2.3 percentage points during the week of May 22-29, 2025 [7][18] - Year-to-date, the chemical sector index has increased by 4.5%, significantly outperforming both the Shanghai Composite and ChiNext indices [18][24] 3. Individual Stock Performance in the Chemical Sector - Among 424 stocks in the chemical sector, 284 stocks rose while 135 fell during the week [27] - The top gainers included Guangkang Biochemical (+58.7%) and Lianhua Technology (+39%) [27][28] 4. Key News and Company Announcements - Recent incidents, including explosions at chemical facilities, have prompted government oversight and may catalyze a new cycle in the chemical industry [29][30] - Companies like Wanhu Chemical and Nuobing have announced significant cash dividends, reflecting strong financial positions [31][34]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week (May 26 - May 30), the money market rates showed divergence, with the net lending of large banks increasing and the leverage of funds rising. The net financing of certificates of deposit (CDs) increased, and the yields of CDs with different maturities showed divergence. In terms of spot bond trading, the main buyers were wealth management products, which mainly increased their holdings of CDs. Rural commercial banks significantly reduced their holdings of CDs, while insurance companies increased their holdings of ultra - long - term interest - rate bonds with maturities of 15 - 30 years [3]. 3. Summary by Relevant Catalogs 3.1 Money and Capital Market - **Open Market Operations**: A total of 946 billion yuan of reverse repurchases matured this week. The central bank injected 1602.6 billion yuan of reverse repurchases from Monday to Friday, with a net liquidity injection of 656.6 billion yuan [5][11]. - **Funding Rates**: As of May 30, R001, R007, DR001, and DR007 were 1.57%, 1.7%, 1.48%, and 1.66% respectively, changing by - 4.52BP, 7.06BP, - 8.3BP, and 7.85BP compared to May 23, and were at the 23%, 12%, 20%, and 8% historical quantiles respectively [5]. - **Net Lending of Main Lenders**: The net borrowing scale of main lending institutions (large commercial/policy banks and joint - stock banks) decreased. The net borrowing was - 625.6 billion yuan this week, a decrease of 93.78 billion yuan compared to the previous week [5][19]. - **Repo Trading Volume**: The trading volume of pledged repos decreased, with an average daily trading volume of 6.5 trillion yuan, and the highest single - day trading volume reached 7.16 trillion yuan, a 3.31% decrease from the previous week's average daily trading volume. The proportion of overnight repo transactions decreased, with an average daily proportion of 83.9%, and the highest single - day proportion reached 90.2%, a 3.49 - percentage - point decrease from the previous week's average daily proportion [5]. - **Leverage Ratio**: As of May 30, the leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 102.9%, 188.3%, 127.7%, and 105.3% respectively, changing by - 0.24BP, - 4.47BP, 1.69BP, and - 0.06BP compared to May 23, and were at the 5%, 1%, 66%, and 35% historical quantiles respectively [5][32]. 3.2 Certificates of Deposit and Bills - **CD Issuance and Financing**: This week, the issuance scale of CDs decreased, but the net financing increased. The total issuance was 668.5 billion yuan, a decrease of 44.19 billion yuan from the previous week; the total maturity was 652.73 billion yuan, a decrease of 64.51 billion yuan from the previous week. The net financing was 15.77 billion yuan, an increase of 40.32 billion yuan from the previous week [5][34]. - **CD Maturity**: The maturity volume of CDs decreased this week, with a total of 652.73 billion yuan, a decrease of 84.51 billion yuan from the previous week. Next week (June 2 - June 6), the maturity of CDs will be 666.55 billion yuan [5][34]. - **Bill Rates**: Most bill rates increased. As of May 30, the 3M direct - discount rate of state - owned shares, the 3M transfer - discount rate of state - owned shares, the 6M direct - discount rate of state - owned shares, and the 6M transfer - discount rate of state - owned shares were 1.2%, 1.16%, 1.14%, and 1.06% respectively, changing by 3BP, 7BP, 1BP, and - 3BP compared to May 23 [5][51]. 3.3 Institutional Behavior Tracking - **Spot Bond Trading**: This week, the main buyers of spot bonds were wealth management products, with a net purchase of 117.4 billion yuan, an increase from the previous week; the main sellers were joint - stock banks, with a net sale of 248.4 billion yuan, an increase from the previous week [5][53]. - **Fund Behavior**: Funds had a net purchase of 37.3 billion yuan in spot bonds, with a reduction of 11.2 billion yuan in interest - rate bonds, an increase of 14.2 billion yuan in credit bonds, an increase of 4.4 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 29.8 billion yuan in CDs [5][53]. - **Wealth Management Behavior**: Wealth management products had a net purchase of 117.4 billion yuan in spot bonds, with an increase of 16.9 billion yuan in interest - rate bonds, an increase of 9.1 billion yuan in credit bonds, an increase of 10.6 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 81 billion yuan in CDs [5][53]. - **Rural Financial Institutions Behavior**: Rural financial institutions had a net sale of 104.5 billion yuan in spot bonds, with a reduction of 20.1 billion yuan in interest - rate bonds, an increase of 400 million yuan in credit bonds, an increase of 6.8 billion yuan in other bonds (including Tier 2 and perpetual bonds), and a reduction of 91.6 billion yuan in CDs [5][54]. - **Insurance Behavior**: Insurance companies had a net purchase of 100.5 billion yuan in spot bonds, with an increase of 66.4 billion yuan in interest - rate bonds, an increase of 6.2 billion yuan in credit bonds, a reduction of 5.6 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 33.5 billion yuan in CDs [5][56].