Investment Rating - The report provides a "Recommended" investment rating for the industry, indicating a positive outlook for the sector [4]. Core Insights - The Sangdong tungsten mine is expected to commence operations shortly, with final preparations underway and processing equipment installed [1]. - A binding purchase agreement has been established with U.S. defense contractors for the supply of tungsten oxide, specifically for defense applications [1][6]. - The company has received shareholder approval to relocate production from Canada to the U.S., enhancing long-term competitiveness amid geopolitical tensions [1]. - The company has engaged a strategic partnership with American Defense International to strengthen its position in the U.S. defense and technology sectors [1][7]. Financial Performance Summary - In Q1 2025, revenue increased by 1.3% year-on-year to 7.9 million CAD, driven by higher tungsten concentrate sales [2]. - Mining business revenue grew by 24.1% year-on-year to 0.75 million CAD, attributed to improved production and pricing [2]. - Operating expenses totaled 9.5 million CAD in Q1 2025, up from 4.3 million CAD in the same period last year, primarily due to increased non-cash equity incentive costs [2]. - The net loss for Q1 2025 was 34.6 million CAD, compared to a loss of 3.8 million CAD in the previous year, largely due to non-cash losses from warrant liability valuation [2]. Cash Position - As of March 31, 2025, the total cash and cash equivalents amounted to 16.9 million CAD, an increase from 7.8 million CAD as of December 31, 2024 [3]. Strategic Agreements - A binding purchase agreement was signed with Tungsten Parts Wyoming, Inc. and Metal Tech for a minimum monthly supply of 40 tons of tungsten oxide for U.S. defense applications [6]. - The strategic partnership with American Defense International aims to enhance the company's engagement in U.S. government policies and industry priorities [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In recent years, the index - type bond fund market in China has developed vigorously. In 2025, credit bond ETFs have witnessed significant expansion, and the newly issued 8 Shanghai - Shenzhen benchmark - market - making corporate bond ETFs have rapidly grown in scale. The newly listed benchmark - market - making corporate bond ETFs fill the gap in medium - long - term investment options, and credit bond ETFs are expected to continue to expand [1][11]. - Credit bond ETFs have prominent investment advantages, including policy support for expansion and innovation, "T + 0" trading in primary and secondary markets, comparable yields to medium - short - term bond funds with lower volatility, cost advantages, and transparent holdings which are friendly to bank self - operations [2]. - Shanghai - Shenzhen market - making credit bond ETFs offer considerable returns and controllable risks. They show stable long - term return capabilities and are relatively scarce products, making them reliable investment choices in the future [4][6]. 3. Summary by Relevant Catalogs 3.1 Credit Bond Index Funds are in the Initial Stage 3.1.1 Rapid Development of Index Bond Funds since 2024 - Due to factors such as the "asset shortage" in the bond market, declining interest rate centers, and the implementation of commercial bank capital regulations, index bond funds in China have entered a fast - development track since 2024. As of March 31, 2025, the management scale of index - type bond funds reached 1.2 trillion yuan, a 54.7% increase from the end of 2023, accounting for 13.5% of all bond - type funds [12][13]. - Credit bond index funds, as a new track, are in a "blue ocean" state of low stock and high growth. As of the end of March 2025, the scale of domestic credit bond index funds was 143.8 billion yuan (36 in total), accounting for 12.03% of the index - type bond fund scale. The scale has experienced multiple rounds of growth [13]. - Bond ETFs have attracted continuous capital inflows, and their proportion in index - type bond funds has been increasing. As of May 31, 2025, there were 29 bond ETFs with a total scale of about 28.92 billion yuan, nearly 2.7 times the scale at the end of 2023. In 2025, credit bond ETFs contributed significantly to the growth of bond ETFs [17][19]. 3.1.2 The Launch of the First Batch of Benchmark - Market - Making Credit Bond ETFs Fills the Gap - Interest rate bond ETFs have a complete product layout in various varieties and maturities, while credit bond ETFs are fewer in number and need to improve their tracking index varieties. The previously listed short - term financing ETF, corporate bond ETF, and urban investment bond ETF mainly provided medium - high - grade, medium - short - term allocation opportunities [22][23]. - The newly launched benchmark - market - making corporate bond ETFs offer medium - long - term investment options. The average remaining maturities of the constituent bonds of the Shanghai market - making corporate bond index and the Shenzhen market - making credit index are 4.63 years and 3.50 years respectively, and the issuing entities are mainly state - owned enterprises with mostly AAA ratings [23]. 3.2 Credit Bond ETFs Have Prominent Investment Advantages 3.2.1 Policy Supports the Expansion and Innovation of Credit Bond ETFs - In 2025, policies have been introduced to promote the development of credit bond ETFs. The China Securities Regulatory Commission proposed to steadily expand bond ETFs and introduce benchmark - market - making credit bond ETFs. The China Securities Depository and Clearing Corporation allowed credit bond ETFs to pilot margin - trading repurchase in the exchange and exempted the concentration constraints of credit bond ETF collateral [2][24][25]. - On May 29, 2025, 9 credit bond ETFs became the first batch of general pledge - style repurchase collateral, which enhances the product attractiveness of credit bond ETFs and is expected to promote product expansion and increased activity [25][26]. 3.2.2 Credit Bond ETFs Enable "T + 0" Redemption and Trading in the Secondary Market - Bond ETFs can achieve "T + 0" real - time trading in primary and secondary markets, which improves capital utilization efficiency and the liquidity of fund shares. Investors can redeem and trade on the same day, enabling efficient switching between bonds and fund shares [27]. 3.2.3 Credit Bond ETFs Have Comparable Yields to Medium - Short - Term Bond Funds - Although credit bond ETFs generally underperformed active credit bond funds in the past few years, their yields are now comparable to those of active credit bond funds. In most cases in the past 4 years, their returns were higher than those of short - term and medium - short - term bond funds, with significantly lower volatility [28][30]. - In the first quarter of 2025, the performance of the bond market was differentiated. Credit bond ETFs showed relatively weak performance, but overall, the return gap between credit bond ETFs and active credit bond funds is narrowing [30]. 3.2.4 Credit Bond ETFs Have Cost Advantages - The management cost of active credit bond funds is generally high, while credit bond ETFs have lower management and custody fees. As of the end of March 2025, the combined management and custody fees of credit bond ETFs were about 0.22%, 15bp lower than those of active credit bond funds [3][34]. 3.2.5 Credit Bond ETFs Have Transparent Holdings and are Friendly to Bank Self - Operations - Bond ETFs have relatively high transparency in holding information. They publish redemption shares daily, and the index compilation rules and constituent bonds are easily accessible. Compared with active credit bond funds with opaque holdings, credit bond ETFs help banks reduce unnecessary capital consumption under the capital regulations [3][35]. 3.3 Shanghai - Shenzhen Market - Making Credit Bond ETFs: Considerable Returns and Controllable Risks - In 2024, long - term interest rate bond ETFs performed well, while credit bond ETFs had relatively short - duration tracking indexes, with returns ranging from 2.23% to 4.27% and better - controlled drawdowns. In 2025, the bond market was weak, and credit bond ETFs outperformed due to the coupon advantages of underlying assets, with year - to - date returns ranging from 0.34% to 0.83% and controllable drawdowns [4][5]. - From the index perspective, the Shenzhen market - making credit index and the Shanghai market - making corporate bond index have good risk - return characteristics. Their return capabilities are between the 3 - 5 - year and 1 - 3 - year implied AA + credit wealth indexes, and their risk levels are similar to the Wind medium - long - term bond index [5][6]. - The rolling 3 - month investment performance of the Shenzhen market - making credit index and the Shanghai market - making corporate bond index shows that they have relatively high return ceilings compared to indexes with similar volatility [6].

Credit Scoring Overview - The report updates the credit scoring for convertible bonds as of Q1 2025, covering 448 non-financial convertible bonds[2] - Infrastructure, retail, and light asset service sectors saw an increase in credit scores compared to the previous quarter, while consumer healthcare, manufacturing, and cyclical sectors experienced a decline[2] Sector Breakdown - Infrastructure bonds: 37 bonds; retail bonds: 12 bonds; utility bonds: 21 bonds; light asset service bonds: 22 bonds; consumer healthcare bonds: 90 bonds; manufacturing bonds: 162 bonds; cyclical bonds: 104 bonds[2] - The credit scoring methodology evaluates conversion possibility and issuer credit quality across seven categories[7] Risk Factors - The credit analysis framework for convertible bonds is noted to be incomplete, and the issuer credit assessment framework lacks detail[3][28] - Potential unexpected adjustments to convertible bond regulations pose additional risks[3][28] Analyst Information - Analysts involved in the report include Tian Lemeng and Dong Yuan, with contact details provided for further inquiries[4]

Credit Ratings Overview - The report updates the credit ratings for convertible bonds as of Q1 2025, covering a total of 448 non-financial convertible bonds[2] - Infrastructure, retail, and light asset service sectors saw an increase in credit ratings compared to the previous quarter, while consumer healthcare, manufacturing, and cyclical sectors experienced a decline[2] Sector Breakdown - Infrastructure sector includes 37 bonds, retail sector has 12, public utilities 21, light asset services 22, consumer healthcare 90, manufacturing 162, and cyclical 104[2] - The credit ratings for public utilities remained relatively stable compared to the previous quarter[2] Risk Factors - The credit analysis framework for convertible bonds is noted to be incomplete, and the assessment of issuers' creditworthiness lacks detail[3] - Potential unexpected adjustments to convertible bond regulations pose a risk to the market[3] Future Updates - The company plans to continue updating the credit ratings for convertible bonds on a quarterly basis, encouraging investors to stay informed[2]

Investment Rating - The report assigns a "Buy" rating to the company [4][7]. Core Insights - The company, Bluku, is the leading player in China's building block character toy market, achieving explosive growth through product transformation and channel expansion, with a GMV of approximately 1.8 billion CNY in 2023, capturing 30.3% of the building block character toy market share [1][2][13]. - The building block character toy market in China is expected to grow at a CAGR of 41.3% from 2023 to 2028, with the market size projected to exceed 32.5 billion CNY by 2028 [2]. - The company's success is driven by a robust IP matrix, including over 50 popular licensed IPs and proprietary IPs, alongside a strong focus on cost-effective product development and deep channel penetration [3][4]. Summary by Sections Company Overview - Bluku is recognized as China's largest building block character toy manufacturer, with a revenue structure heavily reliant on building block character toys, which accounted for 98.2% of revenue in 2024 [1][17]. - The company has seen rapid revenue growth, with a CAGR of 89% from 2021 to 2024, driven by the expansion of its distribution channels and the popularity of its IPs [30]. Market Analysis - The building block character toy market is highly concentrated, with the top five companies holding a combined market share of 77% in 2023, and Bluku leading with a 30.3% share [2]. - The global building block toy market is dominated by companies like Bandai and LEGO, indicating a competitive landscape that local companies must navigate [2]. Growth Strategy - Bluku's growth strategy includes leveraging its IP portfolio, which features successful franchises like Ultraman and Transformers, and enhancing its product offerings through technological innovation and user engagement [3][4]. - The company has established a comprehensive distribution network, with 511 distributors covering major cities and over 80% of lower-tier cities, resulting in a significant increase in offline sales [3][23]. Financial Projections - Revenue forecasts for Bluku indicate substantial growth, with expected revenues of 3.91 billion CNY in 2025, 5.61 billion CNY in 2026, and 7.40 billion CNY in 2027, reflecting year-on-year growth rates of 74%, 43%, and 32% respectively [4][9]. - The company's net profit is projected to turn positive by 2024, driven by its focus on high-margin building block character toys and effective cost management strategies [51].

Group 1 - The report highlights that on June 5, both the stock and bond markets exhibited independent trends, with the stock market supported by easing US-China tariff expectations, leading to a broad-based rally across sectors [2][5] - The performance of the stock market was characterized by the Shanghai Composite Index and CSI 300 both rising by 0.23%, while the ChiNext Index saw a decline of 0.57% [2] - The technology sector emerged as a trading hotspot, with the STAR 50 and Hang Seng Tech indices increasing by 1.04% and 1.93% respectively, indicating a rotation of market interest towards technology stocks [2][7] Group 2 - In the bond market, there were positive signals as short-term bonds continued to perform strongly, with yields on government bonds of 5 years and under generally declining by 2-3 basis points [4] - The People's Bank of China (PBOC) announced a significant operation of 1 trillion yuan in reverse repos, aimed at stabilizing market expectations and alleviating concerns over cross-quarter liquidity pressures [4] - The report notes that the recent US-China leadership call has introduced new uncertainties for the bond market, potentially impacting market risk appetite in the short term [5][6] Group 3 - The technology sector has shown signs of recovery, with the STAR 50 and STAR 100 indices rising by 2.65% and 4.90% since the end of May, indicating a potential rebound in technology stocks [7][10] - The report emphasizes that the current market conditions present opportunities for investors to engage in technology sector trades, particularly focusing on stocks that are at lower price levels [10] - Historical data suggests that the technology sector tends to perform well in June, with higher win rates and average returns compared to dividend and consumer sectors [9][10]

Domestic Market Performance - The stock market continued its upward momentum with the Shanghai Composite Index, CSI 300, and CSI 500 rising by 0.42%, 0.43%, and 0.28% respectively, while the technology sector's gains were in line with the overall market [2] - The bond market saw a decline in yields for 10-year and 30-year government bonds, which fell by 0.5 basis points and 0.6 basis points to 1.67% and 1.89% respectively [2] - The commodity market showed positive performance, particularly in coal, which rebounded by 7.19% due to production cuts and expectations of supply constraints [3] Monetary Policy and Liquidity - The central bank's reverse repurchase operations slightly exceeded expectations, indicating a continued supportive stance on liquidity, with a net withdrawal of only 6 billion yuan [3] - The current market consensus suggests that the bond market risks are low, but a significant change would require the central bank to restart bond purchases [4] - The probability of the central bank restarting bond purchases in June is estimated at 50%, influenced by the need to alleviate banks' liability pressures [4] Equity Market Trends - The equity market is experiencing a rebound, with the total trading volume reaching 1.18 trillion yuan, indicating increased market activity [5] - The market is currently in a range-bound trading pattern, with the Wande All A Index fluctuating within a 2% range since May 7 [5] - The implied volatility of the CSI 300 ETF has decreased from 18.21 at the end of April to 14.92, reflecting a lower expectation of future market volatility [5][7] Sector Performance - The small-cap stocks continue to perform well, with the CSI 2000 and Wande Micro Cap indices rising by 1.06% and 1.20% respectively, indicating strong interest in these segments [6] - The technology and consumer sectors are the main focus for capital allocation, with notable performances in areas such as AI and new consumption trends [6] - In the Hong Kong market, the Hang Seng Index and Hang Seng Tech Index rose by 0.60% and 0.57%, with new consumption and biotechnology being the primary drivers [6]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - In May, the interest rate was in a volatile market, and the decline of the capital center opened up the carry trade space. Institutions chased credit products with relatively high coupon yields, and funds became the main buyers, driving the credit spreads to narrow across the board. The 3 - 5 - year medium - and low - grade bonds performed better. In June, the supply - demand pattern of credit bonds is unfavorable, and the cost - performance of credit bonds has declined, which may lead to the widening of credit spreads. It is not recommended to chase low - grade medium - and long - term bonds, but there is no need to rush to take profits on medium - and long - term credit bonds. Instead, consider taking profits in mid - to late July. In June, when the coupon and credit spreads are both at low levels, it is appropriate to explore the riding opportunities of medium - and high - grade varieties, especially the 4 - year medium - and high - grade bonds. [1][2][24] - For bank capital bonds, the cost - performance of long - term large - bank capital bonds for insurance institutions is still low, and the allocation demand is difficult to recover in the short term. It may depend more on the start of the trading market. In the process of waiting, coupon assets can still be pursued, and there is still cost - performance in sinking the credit of medium - and short - term bonds. [3] Group 3: Summary According to the Directory 1. June Credit: Sinking within 3 Years and Riding Medium - and High - Grade Bonds 1.1. It is not advisable to chase high for low - grade medium - and long - term bonds. Explore the riding opportunities of medium - and high - grade 4 - year bonds - In May, the bond market was defensive, and the long - end interest rate fluctuated. The decline of the capital center opened up the carry trade space, and funds became the main buyers of credit bonds, driving the credit spreads to narrow across the board. The 3 - 5 - year medium - and low - grade bonds in urban investment bonds performed better, with yields down 12 - 16bp and credit spreads narrowing 12 - 18bp. [8][9] - In June, the demand for credit bonds is facing a decline in the scale of wealth management products at the end of the quarter, while the supply side will see an increase in issuance and net financing month - on - month. The unfavorable supply - demand pattern and the decline in the cost - performance of credit bonds may lead to the widening of credit spreads. [13][16] - In May, the market for low - grade 3 - 5 - year bonds was extreme. There is no need to rush to take profits on medium - and long - term credit bonds in June, but it is not recommended to chase low - grade medium - and long - term bonds. [22][24] - In June, when the coupon and credit spreads are at low levels, it is appropriate to explore the riding opportunities of medium - and high - grade varieties. The current convex point is at the 4 - year term, and the 4 - year medium - and high - grade urban investment bonds are worth deploying. It is also possible to consider replacing 5 - year bonds with similar 4 - year bonds to improve the risk - return ratio of the portfolio. In addition, 3 - year AA(2) and AA urban investment bonds have both coupon income and liquidity and can be used as defensive investment products. [29][30][33] 1.2. Bank capital bonds are waiting for the start of the trading market - In May, institutions valued the coupon cost - performance when allocating bank capital bonds. Medium - and small - bank capital bonds and AA - perpetual bonds with coupon advantages performed better, while the performance of 1 - year large - bank capital bonds and 4 - 5 - year AAA - bank capital bonds was poor. [36] - The cost - performance of long - term large - bank capital bonds for insurance institutions is still low, and the allocation demand is difficult to recover in the short term. The performance of long - term large - bank capital bonds may depend more on the start of the interest - rate bond trading market. In the process of waiting, coupon assets can still be pursued, and there is cost - performance in sinking the credit of medium - and short - term bonds. [38][45] 2. Urban Investment Bonds: The Issuance Interest Rates Have Declined across the Board, and the Buying Interest Remains High - In May, the issuance scale of urban investment bonds continued to decline year - on - year, and the net financing was negative, but the overall issuance sentiment was good. The proportion of 3 - 5 - year issuance continued to rise slightly, and the issuance interest rates of all terms declined, with relatively large declines in the medium - and short - term. [48][49] - The secondary - market buying interest in urban investment bonds was high in May, but the trading sentiment declined in the last week. The trading volume was gradually extended in terms of duration, and the low - grade varieties had a high proportion of trading volume. [58] - The yields of public urban investment bonds in each province declined in May, with the 2 - 3 - year medium - and low - grade bonds performing better. [60] 3. Industrial Bonds: Both Issuance and Net Financing Increased Year - on - Year, and the Yields Declined across the Board - In May, the issuance and net financing of industrial bonds increased year - on - year. The industries with large net financing scales include comprehensive, building decoration, chemical, and transportation industries. The proportion of issuance within 1 year increased significantly, and the issuance interest rates within 3 years declined significantly, while the 3 - 5 - year issuance interest rates increased slightly. [62][64] - The yields of industrial bonds declined across the board in May. Low - grade bonds with coupon advantages and 7 - year medium - and high - grade bonds performed better. The yields of public bonds in each industry declined by 7 - 21bp, with 1 - year AA, 1 - 3 - year AA + and AA performing better. [65][69] 4. Bank Capital Bonds: Low - Grade Bonds Performed Better, and the Trading Sentiment Was Weak - In May 2025, the issuance scale of bank capital bonds increased year - on - year, but due to the large amount of maturity redemptions, the net financing scale decreased year - on - year. [72] - The yields of bank capital bonds generally declined in May, and most of the credit spreads narrowed. Low - grade perpetual bonds performed better, while large - bank capital bonds performed weakly. [76]

Market Overview - The market sentiment is relatively optimistic, with a broad increase in stock prices and a slight decline in the bond market as of June 3 [1] - The Shanghai Composite Index, CSI 300, and CSI Dividend Index rose by 0.43%, 0.31%, and 0.37% respectively, indicating a strong market performance [1] - The technology sector showed recovery, with the STAR 50 and Hang Seng Technology indices increasing by 0.48% and 1.08% respectively [1] International Trade and Tariffs - The uncertainty surrounding U.S. tariffs has been extended, with the U.S. International Trade Court and the Trump administration required to respond by June 5 and June 9 [2] - Trump's recent comments have escalated tensions, raising steel import tariffs from 25% to 50%, which has negatively impacted global risk appetite [2] - However, there is a shift in trading logic from escalating conflict to potential easing, supported by recent statements from U.S. officials regarding possible direct talks between U.S. and Chinese leaders [3] Monetary Policy and Liquidity - The central bank's routine short-term liquidity withdrawal has led to a decrease in funding rates, with a net withdrawal of 375.5 billion yuan [4] - The overnight rates opened at 1.55% and closed between 1.50% and 1.53%, indicating stable liquidity conditions [4] - Attention is drawn to the upcoming maturity of significant amounts of bank liabilities, which may influence banks' strategies in the short term [4] Equity Market Trends - The equity market is experiencing a rebound, with the total trading volume at 1.16 trillion yuan, showing a slight decrease from previous levels [5] - The "big-cap core + small-cap" strategy remains favored, with significant gains in bank stocks, particularly in joint-stock and rural commercial banks [6] - Consumer sectors, particularly beauty care and textiles, have shown strong performance, with respective increases of 3.86% and 2.53% [6] Hong Kong Market Insights - The Hang Seng Index and Hang Seng Technology Index rose by 1.53% and 1.08%, respectively, with new consumption sectors leading the gains [7] - The AH share premium index has decreased, indicating lower relative value for Hong Kong stocks compared to A-shares [7] - There was a notable net inflow of 3.905 billion yuan from southbound funds, highlighting the importance of this capital in the Hong Kong market [7] Overall Market Sentiment - The market is pricing in a potential easing of U.S.-China trade tensions, although caution is advised regarding the unpredictability of Trump's tariff policies [8] - The current low volatility and high crowding in the CSI 2000 suggest that maintaining positions and seeking opportunities in lower-priced sectors may be a prudent strategy [8]

Investment Rating - The industry rating is "Recommended" [3] Core Views - The planting industry chain is progressing well, with 1.29 million acres of summer grain wheat harvested as of May 30, 2025, which is over 30% of the total expected harvest. Regions such as Hubei, Sichuan, and South China have completed their wheat harvests, while Anhui has surpassed 80% and Henan over 60% [1][9] - The Ministry of Agriculture and Rural Affairs emphasizes the importance of tracking weather changes and preparing for emergency harvesting to ensure timely collection of mature wheat. The commercialization of genetically modified technology is expected to accelerate, enhancing self-sufficiency in key varieties [1][9] - In the pig farming sector, the average price of external three-way cross pigs is 14.39 CNY/kg, with a week-on-week increase of 0.36%. The number of breeding sows is 40.38 million, showing a slight decrease [2][10] - The report suggests that while short-term consumer demand is recovering, supply remains relatively loose. However, due to slow recovery in production capacity in 2024, pig prices are expected to exceed expectations in the second half of 2025 [2][10] Summary by Sections Planting Industry - As of May 30, 2025, 1.29 million acres of summer grain wheat have been harvested, with significant progress in various provinces. The upcoming rainfall is beneficial for soil conditions and will facilitate mechanized sowing [1][9] - The Ministry of Agriculture will focus on ensuring the timely harvesting of wheat and improving mechanization to enhance yield [1][9] - Recommended stocks in the planting sector include Beidahuang and Suqian Agricultural Development, with a focus on leading seed companies like Longping High-Tech and Dabeinong [1][9] Pig Farming - The average price of pigs is 14.39 CNY/kg, with a slight increase from the previous week. The number of breeding sows has decreased slightly, while slaughtering volume has increased significantly year-on-year [2][10] - The report highlights the need to monitor cost improvements and suggests stocks such as Dekang Animal Husbandry, Jinke Intelligent Agriculture, and Muyuan Foods for potential investment [2][10] Market Performance - The agricultural sector index increased by 1.79% during the week of May 26 to May 30, 2025, outperforming major indices like the Shanghai Composite and Shenzhen Component [11][12] - The top-performing sub-sectors include aquaculture and livestock farming, indicating a positive trend in the agricultural market [11][12]