Investment Rating - The report maintains a "Buy" rating for the copper industry, with specific recommendations for companies such as Jincheng Mining, Zijin Mining, Luoyang Molybdenum, and Western Mining, while also suggesting to pay attention to Minmetals Resources [4][6]. Core Viewpoints - The report is optimistic about the improvement in macroeconomic expectations leading to an upward trend in copper prices. As of June 6, 2025, the closing price for SHFE copper was 78,930 RMB/ton, up 1.0% from May 30, and LME copper closed at 9,671 USD/ton, up 1.83% from May 30. The report notes that while trade conflicts have eased, their negative impact on the economy has yet to manifest, which may suppress copper price increases. Supply disruptions in copper mining are increasing, and demand risks are present as export stocking effects weaken and the domestic market enters a low season. However, copper prices are expected to gradually rise following domestic stimulus policies and potential interest rate cuts in the U.S. [1][4]. Summary by Sections Inventory - Domestic copper social inventory increased by 7% week-on-week, while LME copper inventory decreased by 11%. As of June 6, 2025, domestic mainstream port copper concentrate inventory was 747,000 tons, down 6.1% from the previous week. Global electrolytic copper inventory totaled 435,000 tons, down 0.4% week-on-week. LME copper global inventory was 132,000 tons, down 10.7% week-on-week, and SMM copper social inventory was 149,000 tons, up 7.3% week-on-week [2][25]. Supply - The report indicates that the TC spot price was -42.9 USD/ton, reflecting a slight increase of 0.6 USD/ton from the previous week. In May 2025, China's electrolytic copper production was 1.1383 million tons, up 1.1% month-on-month and 12.9% year-on-year. The report also highlights that the domestic copper concentrate production in March 2025 was 157,000 tons, up 25.4% month-on-month and 6.9% year-on-year [3][49][70]. Demand - The cable industry's operating rate decreased by 2.6 percentage points week-on-week, with the operating rate for cable enterprises at 76.08% as of June 5, 2025. The report notes that the cable sector accounts for approximately 31% of domestic copper demand. Additionally, the report mentions that the air conditioning sector, which accounts for about 13% of domestic copper demand, saw a year-on-year increase of 2% in household air conditioning production in April, while refrigerator production decreased by 5% [3][79][98]. Futures - As of June 6, 2025, the SHFE copper active contract position increased by 18% week-on-week, and COMEX non-commercial net long positions rose by 7%. The SHFE copper active contract position was 204,000 lots, reflecting a 18% increase from the previous week, while COMEX non-commercial net long positions reached 24,000 lots, up 6.7% week-on-week [4][33]. Macroeconomic Factors - The report notes that as of June 6, 2025, the probability of the Federal Reserve not cutting interest rates was 98.2%. The U.S. dollar index was at 99.2031, down 0.24% from the previous week. The report also provides insights into U.S. inflation rates and employment statistics, indicating a stable economic environment that could influence copper demand [4][38].

Investment Rating - The report maintains a "Buy" rating for the agricultural, forestry, animal husbandry, and fishery sector, indicating an expected investment return exceeding 15% over the next 6-12 months compared to the market benchmark index [5][76]. Core Insights - The report highlights a short-term pressure on pig prices due to weak demand and increased supply, driven by policy measures aimed at reducing inventory and weight in the industry [1][4][23]. - The report suggests that the industry capacity cycle has bottomed out, and after the inventory reduction phase, a long-term profit uptrend is expected [4][73]. - The agricultural sector is experiencing mixed price movements, with corn prices rising while soybean meal and wheat prices are declining [2][48]. Summary by Sections 1. Market Overview - The agricultural, forestry, and fishery sector underperformed the market, with the sector index rising by 0.91% compared to the Shanghai Composite Index's 1.13% increase [14]. - The report notes a decline in pig prices, with the average price at 14.05 yuan/kg, down 2.90% week-on-week [22][23]. 2. Key Data Tracking - The average weight of pigs at slaughter is reported at 129.17 kg, with a slight decrease of 0.01% week-on-week [22][23]. - The average price of white feather broiler chickens is 7.32 yuan/kg, down 0.68% week-on-week, while chick prices are at 2.84 yuan/bird, down 1.05% [33][48]. 3. Investment Recommendations - For the pig farming sector, companies such as Juxing Agriculture, Shennong Group, Muyuan Foods, and Wens Foodstuff are recommended for investment [4][73]. - The report also suggests focusing on companies in the feed and animal health sectors, such as Haida Group and Ruipu Biological, as their performance is expected to improve [4][73]. - In the planting chain, companies like Suqian Agricultural Development and Beidahuang are highlighted as having significant investment opportunities due to the upward trend in grain prices [4][73]. 4. Commodity Prices - Corn prices have increased to 2387.84 yuan/ton, a rise of 0.34% week-on-week, while soybean meal and wheat prices have decreased by 1.50% and 0.86%, respectively [2][48]. - The report notes a decline in natural rubber prices, with futures at 13695 yuan/ton, down 1.05% week-on-week, influenced by supply and demand dynamics [3][63].

Investment Rating - The report maintains an "Accumulate" rating for the oil and petrochemical industry [6] Core Viewpoints - The geopolitical tensions combined with OPEC+'s willingness to increase production create significant uncertainty in oil prices, with Brent and WTI crude oil prices reported at $66.65 and $64.77 per barrel respectively, reflecting increases of 6.5% from the previous week [1][10] - The "Three Oil Giants" (China National Petroleum Corporation, Sinopec, and CNOOC) are focusing on increasing reserves and production to address external energy security challenges, with capital expenditures planned to grow by 1.6%, 1.3%, and 5.9% respectively in 2025 [2][11] - The companies are enhancing their technological capabilities to achieve high-quality development, with significant advancements in key technologies expected by 2024 [3][27] - A strategic shift towards energy transition is evident, with investments in renewable energy and carbon capture projects being prioritized [4][32] Summary by Sections Oil Price Dynamics - Geopolitical conflicts have led to a rebound in oil prices, with a potential increase in geopolitical risk premium, although OPEC+'s production increase may exert downward pressure on prices [1][10] Upstream Strategies - The "Three Oil Giants" are committed to high capital expenditures to boost oil and gas production, with specific growth targets for 2025 [2][11] - China National Petroleum Corporation is focusing on natural gas as a strategic growth area, aiming for natural gas to constitute 54.4% of its total production by 2024 [18] Technological Innovation - The companies are investing in technology to overcome critical challenges in the oil and petrochemical sectors, with a focus on deep drilling and unconventional resources [3][27] - Significant technological breakthroughs are anticipated in 2024, including advancements in deep drilling and catalyst applications [26][27] Energy Transition Initiatives - The "Three Oil Giants" are actively pursuing green and low-carbon transitions, with substantial investments in renewable energy projects and infrastructure [4][28] - China National Petroleum Corporation plans to establish over 10 million kilowatts of wind and solar power capacity by 2024, alongside significant hydrogen production [28][34]

Investment Rating - The report maintains an "Accumulate" rating for the coal mining industry [6]. Core Viewpoints - Coal prices are expected to remain stable with reduced volatility, as current prices are nearing the bottom and are likely to stabilize further [1]. - The demand for electricity coal is anticipated to seasonally increase due to the upcoming summer peak, supporting stable coal prices [4]. Summary by Sections Coal Price Trends - The average price of Qinhuangdao port's thermal coal (5500 kcal) was 609 RMB/ton, down by 2 RMB/ton (-0.29%) week-on-week [2]. - The average price of thermal mixed coal in Yulin, Shaanxi (5800 kcal) remained unchanged at 475 RMB/ton [2]. - Newcastle port's thermal coal FOB price (5500 kcal) was 67 USD/ton, a decrease of 0.18% [2]. Supply and Demand Dynamics - The operating rate of 110 sample washing plants was 60.6%, down by 1.0 percentage points week-on-week and down by 9.0 percentage points year-on-year, indicating a low level compared to the past five years [3]. - The capacity utilization rate of 247 blast furnaces was 90.65%, with a daily average pig iron output of 2.4174 million tons, stable week-on-week and up by 2.6% year-on-year [3]. Inventory Levels - As of June 6, coal inventory at Qinhuangdao port was 6.55 million tons, down by 2.96% week-on-week but up by 34.22% year-on-year [4]. - The total coal inventory in the Bohai Rim ports was 29.319 million tons, down by 4.10% week-on-week and up by 16.34% year-on-year [4]. Investment Recommendations - The report recommends stocks with a high proportion of long-term contracts and stable profitability, specifically China Shenhua and China Coal Energy [4].

Investment Rating - The report maintains a "Buy" rating for the agricultural, forestry, animal husbandry, and fishery sector, indicating an expected investment return exceeding 15% over the next 6-12 months compared to the market benchmark index [5][76]. Core Insights - The report highlights a short-term pressure on pig prices due to weak demand and increased supply, driven by policy measures aimed at reducing inventory and weight in the industry [1][4][23]. - The report suggests that the industry has reached a capacity cycle bottom, and after the inventory reduction phase, a long-term profit uptrend is expected [4][73]. - The agricultural sector is experiencing mixed price movements, with corn prices rising while soybean meal and wheat prices are declining [2][48]. Summary by Sections 1. Market Overview - The agricultural, forestry, and fishery sector underperformed the market, with the sector index rising by 0.91% compared to the Shanghai Composite Index's 1.13% increase [14]. - The report notes a decline in pig prices, with the average price at 14.05 yuan/kg, down 2.90% week-on-week [22][23]. 2. Key Data Tracking - The average weight of pigs at slaughter was reported at 129.17 kg, with a slight decrease of 0.01% week-on-week [22][23]. - The average price of white feather broiler chickens was 7.32 yuan/kg, down 0.68% week-on-week, while chick prices fell to 2.84 yuan/chick, down 1.05% [33][48]. 3. Investment Recommendations - For the pig farming sector, companies such as Juxing Agriculture, Shennong Group, Muyuan Foods, and Wens Foodstuff are recommended for investment [4][73]. - The report also suggests focusing on companies in the feed and animal health sectors, such as Haida Group and Ruipu Biological, as their performance is expected to improve [4][73]. - In the planting chain, companies like Suqian Agricultural Development and Beidahuang are highlighted as having significant investment opportunities due to the upward trend in grain prices [4][73]. 4. Commodity Prices - Corn prices increased to 2387.84 yuan/ton, up 0.34% week-on-week, while soybean meal and wheat prices decreased by 1.50% and 0.86%, respectively [2][48]. - The report notes a decline in natural rubber prices, with futures at 13695 yuan/ton, down 1.05% week-on-week, indicating a supply-demand imbalance [3][63].

Market Performance - The A-share market showed signs of recovery this week, with the ChiNext Index rising by 2.3%, while the Shanghai 50 Index had the smallest increase of 0.4%[1] - The overall valuation of the Wind All A Index is currently at a historical average level since 2010[1] - Among sectors, telecommunications, non-ferrous metals, and electronics performed well, with increases of 5.3%, 3.7%, and 3.6% respectively[1] Economic Factors - Domestic policies aimed at stabilizing growth, such as the launch of the 2025 "Service Consumption Season" and the promotion of new energy vehicles, are being implemented[2] - External factors include a recent phone call between Chinese President Xi Jinping and U.S. President Trump, and the SEC tightening regulations on foreign companies listed in the U.S.[2] - The overall domestic economy remains stable, with a projected resilient economic performance in Q2 due to supportive policies and reduced tariffs between China and the U.S.[2] Investment Strategies - Focus on three main investment lines: - Domestic consumption, which is expected to receive policy support and has shown resilience in earnings[4] - Domestic substitution, targeting industries with high import ratios from the U.S. and strong domestic supply capabilities[4] - Sectors currently underweighted by funds, such as banking and public utilities, which may present long-term investment opportunities[4] Risk Analysis - Potential risks include policy measures falling short of expectations, continued weak consumption data, and significant declines in market sentiment[4] - Concerns over external disturbances, particularly from U.S. policy changes, may hinder market upward movement, especially as the Shanghai Index approaches levels seen in early April[2][3]

Quantitative Models and Construction Methods 1. Model Name: PB-ROE-50 Combination - **Model Construction Idea**: This model combines Price-to-Book (PB) and Return on Equity (ROE) metrics to identify stocks with strong valuation and profitability characteristics[25] - **Model Construction Process**: - The PB-ROE-50 combination is constructed by selecting stocks based on their PB and ROE metrics, emphasizing stocks with favorable valuation and profitability profiles - The portfolio is rebalanced periodically to maintain the desired exposure to these factors[25] - **Model Evaluation**: The model demonstrates significant excess returns across multiple stock pools, indicating its effectiveness in capturing valuation and profitability signals[25] 2. Model Name: Block Trade Combination - **Model Construction Idea**: This model leverages the "high transaction, low volatility" principle to identify stocks with favorable post-trade performance based on block trade characteristics[31] - **Model Construction Process**: - Stocks are selected based on two key metrics: "block trade transaction amount ratio" and "6-day transaction amount volatility" - Stocks with higher transaction ratios and lower volatility are included in the portfolio - The portfolio is rebalanced monthly to capture updated signals[31] - **Model Evaluation**: The model effectively extracts excess information from block trades, yielding consistent positive returns relative to the benchmark[31] 3. Model Name: Private Placement Combination - **Model Construction Idea**: This model focuses on the event-driven effects of private placements, considering factors such as market value and timing of announcements[37] - **Model Construction Process**: - Stocks involved in private placements are selected based on the announcement date of shareholder meetings - Adjustments are made for market value factors, rebalancing cycles, and position control to optimize the portfolio[37] - **Model Evaluation**: The model captures the investment opportunities associated with private placements, delivering notable excess returns over the benchmark[37] --- Model Backtesting Results 1. PB-ROE-50 Combination - **Excess Return**: - CSI 500: 0.45% (weekly), 2.64% (YTD)[26] - CSI 800: 1.87% (weekly), 3.86% (YTD)[26] - All Market: 3.35% (weekly), 5.86% (YTD)[26] - **Absolute Return**: - CSI 500: 2.38% (weekly), 3.30% (YTD)[26] - CSI 800: 2.20% (weekly), 2.83% (YTD)[26] - All Market: 4.72% (weekly), 7.74% (YTD)[26] 2. Block Trade Combination - **Excess Return**: 0.41% (weekly), 23.89% (YTD)[32] - **Absolute Return**: 1.89% (weekly), 26.09% (YTD)[32] 3. Private Placement Combination - **Excess Return**: 1.97% (weekly), 6.08% (YTD)[38] - **Absolute Return**: 3.48% (YTD)[38] --- Quantitative Factors and Construction Methods 1. Factor Name: Total Asset Growth Rate - **Factor Construction Idea**: Measures the growth in total assets to capture expansion potential[12] - **Factor Construction Process**: - Calculated as the percentage change in total assets over a specified period - Adjusted for industry and market capitalization effects to isolate the factor signal[12] - **Factor Evaluation**: Demonstrates strong positive returns across multiple stock pools, indicating its effectiveness in identifying growth opportunities[12][18] 2. Factor Name: Single-Quarter ROA - **Factor Construction Idea**: Reflects the profitability of assets on a quarterly basis[12] - **Factor Construction Process**: - Calculated as net income divided by total assets for a single quarter - Adjusted for industry and market capitalization effects to enhance signal clarity[12] - **Factor Evaluation**: Consistently positive performance across stock pools, highlighting its robustness in capturing profitability signals[12][18] 3. Factor Name: Single-Quarter Revenue Growth Rate - **Factor Construction Idea**: Tracks the growth in revenue on a quarterly basis to identify companies with improving top-line performance[12] - **Factor Construction Process**: - Calculated as the percentage change in revenue compared to the same quarter in the previous year - Adjusted for industry and market capitalization effects to ensure comparability[12] - **Factor Evaluation**: Strong positive returns in multiple stock pools, validating its ability to capture growth momentum[12][18] --- Factor Backtesting Results 1. Total Asset Growth Rate - **Excess Return**: - CSI 300: 2.23% (weekly)[12] - CSI 500: 1.26% (weekly)[14] - Liquidity 1500: 2.67% (weekly)[18] 2. Single-Quarter ROA - **Excess Return**: - CSI 300: 1.58% (weekly)[12] - CSI 500: -0.44% (weekly)[15] - Liquidity 1500: 0.88% (weekly)[19] 3. Single-Quarter Revenue Growth Rate - **Excess Return**: - CSI 300: 1.78% (weekly)[12] - CSI 500: 0.58% (weekly)[15] - Liquidity 1500: 2.13% (weekly)[19]

Quantitative Models and Construction Methods 1. **Model Name: Volume Timing Model** - **Model Construction Idea**: The model uses volume signals to time the market, indicating cautious signals when the volume is low. - **Model Construction Process**: The model calculates the volume timing signals for major broad-based indices. The specific process involves assessing the volume levels and determining the market stance based on these levels. - **Model Evaluation**: The model currently maintains a cautious signal for all major broad-based indices.[2][23][24] 2. **Model Name: Momentum Sentiment Indicator** - **Model Construction Idea**: This model captures market sentiment by calculating the proportion of stocks with positive returns within a given period. - **Model Construction Process**: - Calculate the proportion of stocks in the CSI 300 index with positive returns over the past N days. - Use the formula: $$ \text{Proportion of stocks with positive returns} = \frac{\text{Number of stocks with positive returns in past N days}}{\text{Total number of stocks in CSI 300 index}} $$ - Apply smoothing with different window periods to capture the trend changes. - **Model Evaluation**: The indicator can quickly capture upward opportunities but may miss out on gains during sustained market exuberance. It also has limitations in predicting downturns.[24][25][28] 3. **Model Name: Moving Average Sentiment Indicator** - **Model Construction Idea**: This model uses the eight moving average system to judge the trend state of the index. - **Model Construction Process**: - Calculate the eight moving averages for the closing price of the CSI 300 index with parameters 8, 13, 21, 34, 55, 89, 144, and 233. - Assign values to the indicator based on the number of moving averages the current price exceeds. - Use the formula: $$ \text{Indicator Value} = \begin{cases} 1 & \text{if price > 5 moving averages} \\ 0 & \text{if price between 3-5 moving averages} \\ -1 & \text{if price < 3 moving averages} \end{cases} $$ - **Model Evaluation**: The model indicates that the CSI 300 index is currently in a sentiment boom area.[33][34][36] Model Backtesting Results 1. **Volume Timing Model** - **Indicator Value**: Cautious signal for all major broad-based indices[24] 2. **Momentum Sentiment Indicator** - **Indicator Value**: Proportion of stocks with positive returns in CSI 300 index around 64%[25] 3. **Moving Average Sentiment Indicator** - **Indicator Value**: CSI 300 index is in a sentiment boom area[36] Quantitative Factors and Construction Methods 1. **Factor Name: Cross-sectional Volatility** - **Factor Construction Idea**: This factor measures the dispersion of returns among index constituents to gauge the alpha environment. - **Factor Construction Process**: - Calculate the cross-sectional volatility for the constituents of the CSI 300, CSI 500, and CSI 1000 indices. - Use the formula: $$ \text{Cross-sectional Volatility} = \sqrt{\frac{1}{N-1} \sum_{i=1}^{N} (R_i - \bar{R})^2} $$ where \( R_i \) is the return of stock \( i \) and \( \bar{R} \) is the average return. - **Factor Evaluation**: The recent cross-sectional volatility has increased, indicating a better short-term alpha environment for the CSI 300 and CSI 1000 indices.[38][41] 2. **Factor Name: Time-series Volatility** - **Factor Construction Idea**: This factor measures the volatility of returns over time for index constituents to assess the alpha environment. - **Factor Construction Process**: - Calculate the time-series volatility for the constituents of the CSI 300, CSI 500, and CSI 1000 indices. - Use the formula: $$ \text{Time-series Volatility} = \sqrt{\frac{1}{T-1} \sum_{t=1}^{T} (R_t - \bar{R})^2} $$ where \( R_t \) is the return at time \( t \) and \( \bar{R} \) is the average return. - **Factor Evaluation**: The recent time-series volatility has increased for the CSI 300 and CSI 500 indices, indicating a better alpha environment.[42][44] Factor Backtesting Results 1. **Cross-sectional Volatility** - **CSI 300**: Recent quarterly average 1.66%, 66.11% of the past half-year[41] - **CSI 500**: Recent quarterly average 1.94%, 39.68% of the past half-year[41] - **CSI 1000**: Recent quarterly average 2.32%, 54.58% of the past half-year[41] 2. **Time-series Volatility** - **CSI 300**: Recent quarterly average 0.53%, 65.49% of the past half-year[44] - **CSI 500**: Recent quarterly average 0.41%, 57.14% of the past half-year[44] - **CSI 1000**: Recent quarterly average 0.25%, 54.98% of the past half-year[44]

Group 1 - The A-share market showed signs of recovery this week, with the ChiNext Index rising by 2.3% and the Shanghai 50 Index increasing by 0.4%, indicating a general upward trend in major indices [1][11][12] - The valuation of the entire A-share market is currently at a medium level compared to historical data since 2010 [1][19] - The communication, non-ferrous metals, and electronics sectors performed relatively well, with respective increases of 5.3%, 3.7%, and 3.6%, while sectors like household appliances, food and beverage, and transportation saw declines of 1.8%, 1.1%, and 0.5% [1][14][19] Group 2 - Recent domestic events include the launch of the "Service Consumption Season" and the "New Energy Vehicle Going to the Countryside" initiative, which are part of the government's efforts to stabilize growth [2][20][22] - External events such as the phone call between Chinese President Xi Jinping and US President Trump, and the tightening of regulations by the SEC on foreign companies listed in the US, are significant factors influencing market sentiment [2][20][32] - The overall domestic economy remains stable, supported by growth policies, and is expected to show resilience in the second quarter, which will provide support for the market [2][21][23] Group 3 - The report emphasizes three main investment themes: 1. Domestic consumption, which is expected to receive policy support and has shown resilience in performance [4][43] 2. Domestic substitution, focusing on industries with high import ratios from the US but strong domestic supply capabilities, such as publishing and construction materials [4][44] 3. Sectors that are currently underweighted by funds, including banking, non-bank financials, public utilities, and transportation, which may present long-term investment opportunities [4][45] Group 4 - The report suggests that the market style may shift towards defensive and undervalued sectors, with coal, public utilities, banking, non-bank financials, construction decoration, and oil and petrochemicals being highlighted as sectors worth attention [51]

Employment Data - In May 2025, the U.S. added 139,000 non-farm jobs, exceeding the market expectation of 130,000 jobs and slightly down from the revised previous value of 147,000 jobs[1][13][15] - The unemployment rate remained stable at 4.2%, matching both the forecast and the previous month's rate[1][13][15] - Average hourly earnings increased by 3.9% year-on-year, surpassing the expected 3.7% and matching the previous value[1][13][15] Sector Performance - The leisure and hospitality sector saw a significant increase, adding 48,000 jobs, up from 29,000 in the previous month, contributing to the stability of the overall employment data[2][24] - Manufacturing jobs decreased by 5,000, a decline from the previous increase of 14,000, indicating pressure from tariff disruptions[3][23] - Financial activities added 13,000 jobs, up from 3,000 previously, showing a recovery in this sector[3][24] Labor Market Dynamics - The labor force participation rate fell by 0.2 percentage points to 62.4%, with notable declines in youth employment willingness[4][29] - The U3 unemployment rate remained at 4.2%, with a slight increase of 71,000 in the number of unemployed individuals[4][35] - The U6 unemployment rate, which includes those working part-time for economic reasons, held steady at 7.8%[4][35] Federal Reserve Outlook - The robust non-farm data reinforces the Federal Reserve's wait-and-see approach, with a near 100% probability that interest rates will remain unchanged in June 2025[5][19] - Market expectations indicate two rate cuts in 2025, with the first anticipated in September, having a probability of approximately 50%[5][19][22]