Investment Rating - The industry investment rating is "Outperform the Market" [83] Core Insights - The supply of silver is gradually becoming rigid, with a cost center trend on the rise. The global silver supply from 2016 to 2024 is expected to have a CAGR of -0.5% [2][8] - Industrial demand for silver continues to grow, with a projected 3.6% year-on-year increase in 2024, driven primarily by the photovoltaic sector [2][33] - The silver price is expected to rise due to its industrial properties, with the gold-silver ratio likely to gradually converge [2][71] Supply Summary - The global silver supply is expected to be approximately 31,574 tons in 2024, a 1.7% increase year-on-year [8] - The structure of silver supply shows that mined silver accounts for 80.8% of total supply, with by-product silver making up about 19.1% [8][14] - The average cash cost of silver production is projected to be $7.64 per ounce in 2024, with a CAGR of 14.6% from 2018 to 2024 [20][24] Demand Summary - Industrial demand for silver is projected to account for about 58.5% of total demand in 2024, with significant contributions from the photovoltaic sector [32][33] - The demand for silver in the photovoltaic sector is expected to grow, with a projected increase of 2.6% in 2024, reaching 6,147 tons [33][37] - Jewelry demand is expected to remain relatively stable, with a projected increase of 2.8% in 2024, reaching 6,491 tons [46] Price Summary - The silver price is anticipated to gradually rise, supported by the industrial demand and a favorable monetary environment [71][78] - The current high gold-silver ratio is expected to trend towards convergence, driven by the industrial attributes of silver [71][73] Investment Recommendations - The report suggests focusing on companies such as Xingye Silver and Shengda Resources, which are expected to benefit from the rising silver price and demand dynamics [80]

Group 1: Capital Expenditure Cycle and Industry Comparison - The capital expenditure cycle is a key driver of industry cycles in China, with capital expenditure and PB, ROE changes being interrelated. The cycle is divided into three stages: oversupply leading to performance decline, capital expenditure downtrend improving free cash flow, and supply-side clearing leading to performance recovery [7][8]. - The PB-ROE model indicates significant investment value in the second stage, where PB is low and ROE is expected to improve, and in the third stage, where PB is reasonable and ROE can steadily rise [7][8]. - Recent trends show a contraction in capital expenditure across secondary industries excluding finance and real estate, with an increase in the proportion of industries with positive free cash flow [8][9]. Group 2: Industry Opportunities and Recommendations - The report identifies 26 industries with potential investment opportunities based on supply-side improvements, focusing on consumption, cyclical, advanced manufacturing, technology, and healthcare sectors [8][9]. - A quantitative industry rotation strategy based on free cash flow has been constructed, yielding annualized returns of 11.1% and 13% for the consumption and advanced manufacturing sectors, respectively, outperforming benchmarks by 5.1 and 3.1 percentage points [9]. - Recommended companies include DeYee Co., which has a strong position in emerging markets, and AiRuo Energy, which is expected to benefit from overseas industrial storage [10][13]. Group 3: Energy Equipment and New Energy Sector - The first quarter saw a recovery in the performance of household storage inverter companies, particularly in emerging markets like India and Southeast Asia, where demand is growing [10][12]. - The report highlights the potential for rapid growth in the commercial storage market in Europe, despite a weaker overall demand in the region [10][12]. - Key players such as DeYee Co. and JinLang Technology are recommended for their strong market positions and growth potential in emerging markets [10][13]. Group 4: Automotive Industry Insights - The automotive industry's high-end strategy is categorized into two types: companies focusing on their strengths and expanding their lead, and those adopting benchmarking strategies [14][15]. - Recommended companies include Li Auto, Great Wall Motors, and Xiaomi for their distinctive brand advantages and ongoing development [15][16]. - The report notes that stricter regulations on intelligent driving are leading to increased focus on safety and compliance among automotive companies [15][16].

Group 1: Capital Expenditure Cycle Analysis - The capital expenditure (CAPEX) cycle is a dominant driver of industry cycles in China, influencing the relationship between CAPEX, price-to-book (PB) ratio, and return on equity (ROE) [4] - The CAPEX cycle is divided into three stages: Stage 1 (oversupply leads to declining ROE and poor market performance), Stage 2 (declining CAPEX results in rising free cash flow and market rebound), and Stage 3 (supply-side clearing leads to improved ROE and better market performance) [4][14][15] - The PB-ROE model indicates significant investment value in Stage 2 (low PB and improving ROE) and Stage 3 (reasonable PB and steadily rising ROE) [16] Group 2: Market and Industry Comparisons - In Q4 2024 and Q1 2025, the overall capital expenditure of A-share companies (excluding finance and real estate) is contracting, while free cash flow is improving [20] - The median CAPEX/depreciation ratio for secondary industries decreased from 1.35 to 1.29, while the median free cash flow/equity ratio increased from 4.4% to 4.8% [21] - The proportion of secondary industries with free cash flow greater than 0 has significantly increased, indicating a positive trend in cash flow [21][24] Group 3: Sector-Specific Insights - The consumer sector shows overall CAPEX contraction and slight decline in free cash flow, with CAPEX levels below market averages and free cash flow above market averages [26] - The advanced manufacturing sector also experiences CAPEX contraction, while free cash flow shows slight improvement [4][26] - Eight industries within the consumer sector are highlighted as potential investment opportunities based on supply-side improvements [4][26]

Report Industry Investment Rating - The report does not mention the industry investment rating [1] Core Viewpoints - Overseas uncertainties have marginally eased, and the domestic bond market yield curve has steepened. The launch of policy - based financial tools may impact the bond market, and in the current situation of balanced and loose liquidity and narrow - range bond market fluctuations, attention should be paid to factors that may break the balance of long - and short - term forces and some structural opportunities [2][3][4] Summary by Directory PART1: Overseas Uncertainties Marginally Eased, Domestic Yield Curve Steepened 1.1 Overseas - Policy uncertainties have marginally eased, and market risk appetite has recovered. In May, the US made partial progress in trade negotiations, risk assets outperformed safe - haven assets, the US dollar index stopped falling but was weak, and the market focus shifted to fiscal and tax policies. The Trump tax - cut bill passed in the House, which may increase a deficit of $2.3 - 3 trillion in the next decade, and Moody's downgraded the US sovereign credit rating, causing the 30Y US Treasury yield to exceed 5%. Japanese and European long - term bond yields generally rose, with Japanese bond yields rising due to concerns about fiscal sustainability, and the eurozone pricing in fiscal leverage and risk - appetite recovery [7][10][13] 1.2 Domestic - The asset performance was stable, with the equity market rising first and then moving sideways, and the commodity market fluctuating at a low level. In May, the central bank cut interest rates and the reserve - requirement ratio, the liquidity was loose, and the yield curve steepened. Credit bonds outperformed interest - rate bonds, with credit spreads narrowing by 7 - 19BP. In terms of institutional behavior, the bond - market leverage ratio was stable at a low level. Large banks' bond - buying scale may have increased, rural commercial banks actively bet on duration, funds reduced duration and positions and shifted to credit bonds, insurance companies' bond - allocation rhythm returned to normal, and wealth management products' liabilities became abundant again and continued to overweight inter - bank certificates of deposit [15][22][28] PART2: Policy - based Financial Tools Review 2.1 Politburo Meeting Mentioned "Establishing New Policy - based Financial Tools" - In April 2025, the Politburo meeting mentioned "establishing new policy - based financial tools". Historically, there were two rounds of policy - based tools led by policy banks: the 2 - trillion special construction funds from 2015 - 2017 and the policy - based and development financial tools in 2022. Both used policy - bank - established funds as project capital with fiscal subsidies to boost infrastructure investment [44] 2.2 Policy - based Tools' Effects and Bond - Market Pricing - Both rounds of policy - based tools were accompanied by a package of policies, supporting specific areas of investment. The 2015 - 2017 tools mainly supported the shantytown renovation and real - estate investment, while the 2022 tools mainly supported transportation infrastructure and infrastructure investment. In the bond market, short - term pricing was based on policy expectations, with the 10Y Treasury yield rising by 2 - 7BP within 3 trading days after policy announcements. Medium - term pricing depended on the rhythm of policy announcements and fundamental data improvement, with the 10Y Treasury yield rising by 18 - 30BP over 2 - 5 months [3][46][48] PART3: Bond - Market Strategy 3.1 Since April, the Bond - Market Trading Mainline Entered a Sideways State after Several Switches - Since April, the bond - market trading mainline has entered a state of balanced long - and short - term forces after several switches, and the 10Y Treasury yield has been fluctuating around 1.67% [53] 3.2 Mid - term Impact of Deposit - Rate Cuts - On May 20, large banks initiated a new round of deposit - rate cuts. Since 2024, deposit - rate cuts have effectively reduced deposit costs, with different impacts on large and small banks [57] 3.3 Mid - term Impact and Market Structure - Deposit - rate cuts may have two structural impacts: if the central bank does not cooperate, the flow of large - bank deposits to non - banks or small banks may tighten liquidity; in the medium term, small banks and non - banks have abundant funds, which support the bond market. However, trading funds are scattered among different assets, making it difficult to form a unified force [61][64] 3.4 Central Bank's Concerns - The probability of further decline or increase in the funding rate is low. Recently, external pressure has eased, the net - interest - margin pressure has decreased, capital - market prices have basically recovered, and the risk of capital idling is controllable [70] 3.5 Cost - effective Structural Points - The 10Y Treasury yield is still fluctuating around 1.65 - 1.70%, and positions can be established at the upper limit of the range. Factors that may drive the yield curve down include deposit - rate cuts, slow adjustment following fundamental data announcements, and the central bank's restart of Treasury trading. Possible resistances are the flat yield curve and the non - implementation of "new policy - based financial tools". Currently, cost - effective structural points include medium - and long - term credit bonds, 1 - 5Y Treasuries, 7Y Agricultural Development Bank bonds, and 15Y local bonds [75]

Investment Rating - The report maintains an "Outperform" rating for the power equipment and new energy sector [1]. Core Viewpoints - The report highlights strong performance in emerging markets, with a recovery in Q1 earnings for household storage companies. Key players in the household storage and string inverter segments have similar business compositions, including photovoltaic inverters, energy storage inverters, and energy storage batteries. The report analyzes five representative companies: DeYee, Jinlang Technology, GoodWe, Shouhang Energy, and Airo Energy, noting that DeYee and Jinlang Technology achieved revenue growth in 2024 due to increased demand in emerging markets [2][8]. Summary by Sections 1. Household Storage Companies' Fundamentals - Emerging markets show robust growth, with Q1 performance rebounding. DeYee and Jinlang Technology reported positive revenue growth in 2024, driven by demand in Asia. DeYee leads in the emerging market household storage sector, achieving a 65% increase in net profit. In contrast, companies focused on the European market experienced revenue declines due to slowing demand [2][6][12]. 2. Business Layout - The five companies have varying focuses within the energy storage sector, with DeYee and Airo Energy emphasizing energy storage, while Jinlang Technology and GoodWe focus more on photovoltaic string inverters. The report notes that energy storage products have higher and more stable gross margins compared to photovoltaic inverters, indicating less price competition in the household storage segment [2][19][25]. 3. Regional Layout - The report identifies promising demand in emerging markets and significant potential in the European commercial storage sector. The distributed photovoltaic storage market is expanding globally, with emerging markets in Asia, Africa, and Latin America showing rapid growth since early 2024. DeYee has a broad market presence, while Jinlang Technology and GoodWe are expanding their overseas operations [2][49][50]. 4. Investment Recommendations - The report suggests a positive outlook for household storage and commercial storage markets in emerging regions and Europe. It recommends focusing on DeYee for its strong market position and effective channel development, while also suggesting attention to Airo Energy and Jinlang Technology for their strong profitability and growth potential in emerging markets [2][48].

Investment Rating - The report maintains an "Outperform" rating for the industry [1] Core Insights - The high-end strategy of automotive companies is categorized into two types: those with clear advantages focusing on their strengths and those adopting benchmarking strategies [4][58] - The tightening regulations on intelligent driving are leading to a shift in marketing strategies among automotive companies, emphasizing safety and compliance [28][59] - Leading intelligent driving suppliers are expanding their product matrices and customer bases through integrated hardware and software solutions [60] Summary by Sections 1. Leveraging Strengths for Brand Advancement - Automotive companies like Li Auto, Great Wall Motors, and Xiaomi are focusing on their unique strengths to enhance brand positioning [4][58] - Li Auto's MEGA model maintains a flagship position with a price above 500,000 yuan, while Great Wall Motors continues to deepen its off-road market with the launch of the Tank 300 [8][19] - The introduction of new large SUVs during the 2025 Shanghai Auto Show aims to capture market share and elevate brand value [9][21] 2. Strengthening Safety and Regulatory Compliance - The intelligent driving sector is entering a period of stringent regulation, with new guidelines affecting marketing and OTA upgrades [28][29] - Companies are adjusting their marketing strategies to highlight safety features and avoid misleading claims about autonomous capabilities [35][36] 3. Leading Intelligent Driving Suppliers: Integrated Solutions and Rich Product Matrix - Major suppliers like Huawei and Horizon Robotics are offering diverse solutions across various price segments, with Huawei's ADS 4 and Horizon's HSD series [42][60] - High-end products are undergoing further iterations, with Huawei's ADS 4 flagship version introducing commercial L3 solutions [46][60] - The rapid expansion of user bases and significant R&D investments are leading to economies of scale for these suppliers [50][60] 4. Investment Recommendations - The report recommends focusing on automotive companies with distinctive brand advantages and ongoing development, specifically highlighting Li Auto, Great Wall Motors, and Xiaomi [58][60] - It also suggests looking at companies benefiting from the scale of new energy vehicles, such as BYD and Geely, and suppliers like Horizon Robotics and Fuyao Glass that are poised to gain from the proliferation of intelligent driving technologies [60]

Investment Rating - The report maintains a "Recommended" investment rating for Hygon Information [1][13] Core Views - Hygon Information is merging with Zhongke Shuguang to achieve a closed-loop layout in the computing power industry, enhancing its competitive position and resource utilization [4][9] - The merger will allow Hygon Information to transition from high-end chip design to high-end computer systems, thereby strengthening its industry chain [8][9] - The expected net profits for Hygon Information from 2025 to 2027 are projected to be 2.956 billion, 4.314 billion, and 6.153 billion yuan respectively, with corresponding P/E ratios of 111.7X, 76.5X, and 53.6X [6][9] Financial Summary - **Revenue Projections**: Expected revenues for 2023A, 2024A, 2025E, 2026E, and 2027E are 6,012 million, 9,162 million, 13,757 million, 19,419 million, and 27,014 million yuan respectively, with year-over-year growth rates of 17.3%, 52.4%, 50.2%, 41.2%, and 39.1% [6][11] - **Net Profit Projections**: Expected net profits for the same years are 1,263 million, 1,931 million, 2,956 million, 4,314 million, and 6,153 million yuan, with year-over-year growth rates of 57.2%, 52.9%, 53.1%, 45.9%, and 42.6% [6][11] - **Profitability Ratios**: Gross margin is projected to be 59.7%, 63.7%, 64.0%, 64.3%, and 64.0% from 2023A to 2027E, while net margin is expected to be 21.0%, 21.1%, 21.5%, 22.2%, and 22.8% [6][11] - **Return on Equity (ROE)**: ROE is projected to increase from 6.8% in 2023A to 19.6% in 2027E [6][11] Balance Sheet Summary - **Total Assets**: Expected total assets for 2024A, 2025E, 2026E, and 2027E are 28,559 million, 30,297 million, 36,386 million, and 45,159 million yuan respectively [10] - **Total Liabilities**: Expected total liabilities for the same years are 5,908 million, 4,069 million, 4,939 million, and 6,268 million yuan [10] - **Equity**: The equity attributable to shareholders is projected to grow from 20,251 million in 2024A to 31,336 million in 2027E [10] Cash Flow Summary - **Operating Cash Flow**: Expected operating cash flow for 2024A, 2025E, 2026E, and 2027E is 948 million, 3,034 million, 3,226 million, and 4,412 million yuan respectively [12] - **Net Cash Increase**: The net cash increase is projected to be -2,108 million, 392 million, 2,220 million, and 3,128 million yuan for the respective years [12]

Group 1: Key Recommendations - The report highlights that Haiguang Information (688041.SH) is a core player in the domestic computing chip sector, while Zhongke Shuguang leads in server systems. Their merger will create a closed-loop layout for the computing industry chain, maximizing resource utilization and enhancing industry competitiveness. The projected net profits for Haiguang Information from 2025 to 2027 are estimated at CNY 2.956 billion, CNY 4.314 billion, and CNY 6.153 billion, with corresponding PE ratios of 111.7X, 76.5X, and 53.6X based on the closing price on June 10, 2025 [2][9][10] - Beike-W (2423.HK) is recognized as a leading integrated real estate transaction service platform, with significant advantages in real estate brokerage. The company is expected to benefit from policy support for market recovery, with projected EPS for 2025 to 2027 at CNY 1.58, CNY 1.83, and CNY 2.11, corresponding to PE ratios of 28.7X, 24.8X, and 21.5X. The report gives a "recommend" rating for the stock [2][11][12] Group 2: Company Overview - Haiguang Information is a leading high-end processor design company in China, having developed various high-end processor products widely used in data centers across telecommunications, finance, and internet sectors. Zhongke Shuguang is a leading enterprise in high-end computing, focusing on high-end computers, storage, and data centers. The merger will enable Haiguang Information to achieve a closed-loop layout from high-end chip design to high-end computer systems, enhancing its competitive edge in the industry [8][9][10] - Beike has established a robust position in the real estate brokerage market, with a significant market share in both existing and new home transactions. The company’s "true housing source" standard and ACN network address service quality issues, creating a unique competitive advantage. The projected total transaction volume for 2024 is CNY 3.3 trillion, with net revenue reaching CNY 934.6 billion, marking a historical high [11][12] Group 3: Industry Insights - The computing industry is undergoing a transformation with a focus on domestic chip production and intelligent computing infrastructure. The merger of Haiguang Information and Zhongke Shuguang is expected to accelerate the localization of the computing industry in China, enhancing the overall competitiveness of the sector [8][9] - The real estate market is showing signs of recovery, supported by policy measures. Beike's diversified business model, including home decoration and rental services, positions it well for future growth. The company is expected to leverage its brokerage strength to drive growth in its ancillary services [11][12]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [7] Core Views - The company is a leading integrated online and offline real estate transaction service platform, with a strong foundation in real estate brokerage and a strategic focus on three wings of growth [6][11] - The company is expected to achieve a total transaction volume of CNY 3.3 trillion in 2024, with net revenue reaching CNY 934.6 billion, marking a historical high [6][20] - The company emphasizes shareholder returns, with a significant cash reserve and a share buyback plan in place [27] Summary by Sections 1. Leading Integrated Real Estate Transaction and Service Platform - The company began operations in 2001 and has expanded its services to include second-hand and new home transactions, home decoration, and rental services [11] - The total transaction volume is projected to reach CNY 3.3 trillion in 2024, reflecting a year-on-year growth of 6.6% [20] 2. Real Estate Brokerage: Strong Leadership and Operational Advantages - The company holds a dominant position in the real estate brokerage industry, with a total transaction volume of CNY 3.3 trillion in 2024, significantly ahead of competitors [48] - The company has established a unique competitive advantage through its "True Source" standard and ACN network, addressing industry pain points [51] 3. Three Wings Business: Home Decoration and Rental Services - The home decoration segment is rapidly growing, with a projected transaction volume of CNY 169 billion in 2024, reflecting a CAGR of 329.7% from 2021 to 2024 [6] - The rental service has expanded significantly, with managed properties increasing from 70,000 in 2022 to 420,000 in 2024 [6] 4. Profit Forecast and Investment Recommendations - The company forecasts EPS of CNY 1.58, CNY 1.83, and CNY 2.11 for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 28.7, 24.8, and 21.5 [7] - The report highlights the company's commitment to shareholder returns, with a cash dividend of USD 600 million in 2023 and USD 400 million in 2024 [27]

Investment Rating - The report gives a "Buy" rating for the company, Beike-W (2423.HK), with a current stock price of HKD 49.55 [1]. Core Views - Beike is a leading integrated online and offline real estate transaction service platform, with a strong foundation in real estate brokerage and a strategic focus on three wings: home decoration, rental services, and Beihome [6][11]. - The company is expected to achieve a total transaction volume of CNY 3.3 trillion in 2024, with net revenue reaching CNY 934.6 billion, marking a historical high [6][21]. - The company emphasizes shareholder returns, with a significant cash reserve and a share buyback plan in place [28]. Summary by Sections 1. Leading Integrated Real Estate Transaction and Service Platform - Beike began operations in 2001 and has expanded its services to include second-hand and new home transactions, home decoration, and rental services [11]. - The company has established a "one body, three wings" strategy, with a projected total transaction volume of CNY 3.3 trillion in 2024 [6][11]. 2. Real Estate Brokerage: Strong Leadership and Operational Advantages - Beike holds a dominant position in the real estate brokerage industry, with a total transaction volume of CNY 3.3 trillion in 2024, significantly ahead of competitors [51]. - The company has implemented the "True Source" standard and the ACN network, enhancing service quality and operational efficiency [54]. 3. Three Wings Business: Home Decoration, Rental, and Beihome Potential - The home decoration segment is rapidly growing, with a projected transaction volume of CNY 169 billion in 2024, reflecting a CAGR of 329.7% from 2021 to 2024 [6]. - The rental business has expanded significantly, with managed properties increasing from 70,000 in 2022 to 420,000 in 2024 [6]. 4. Profit Forecast and Investment Recommendations - The report forecasts EPS of CNY 1.58, CNY 1.83, and CNY 2.11 for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 28.7, 24.8, and 21.5 [7]. - The company is expected to maintain a stable commission rate in the new home market, while the second-hand home commission rate may face pressure [6].