Group 1: Major Asset Tracking - The bond market shows short-term rates stable while long-term rates are rising, with expectations of a volatile mode for government bond futures due to fluctuating market sentiment amid trade disputes [16] - The A-share market experienced a slight increase, with the Shanghai Composite Index nearing 3400 points and the ChiNext Index rising over 1%. The total trading volume reached 1.31 trillion, an increase of 0.14 trillion from the previous day, with over 4100 stocks rising. The market is expected to enter a volatile range with rotation among technology, dividend, and consumer sectors [20][23] - The U.S. stock market saw the Dow Jones rise by 1.05%, Nasdaq by 1.2%, and S&P 500 by 1.03%. The narrative of recession may become a focal point again as long-term U.S. Treasury yields rise, suggesting a potential buying opportunity when volatility increases [25] Group 2: Important Policies and News - Domestic policies include the removal of household registration restrictions for participating in social insurance at the place of employment, aimed at enhancing social security fairness and improving public services [40] - The retail market for new energy passenger vehicles in May reached 1.021 million units, a year-on-year increase of 28.2%, with a cumulative retail of 4.351 million units from January to May, reflecting a growth of 34.1% [40] - The total value of goods trade in China for the first five months of the year was 17.94 trillion yuan, a year-on-year increase of 2.5%, indicating a sustained growth trend [40] Group 3: Currency Market - The onshore RMB against the USD was reported at 7.1834, a decrease of 11 basis points from the previous day. The RMB is expected to appreciate significantly due to favorable impacts from U.S.-China trade relations, with a potential rise to around 7.1 [29][30] Group 4: Commodity Market - The Wenhua Commodity Index fell by 0.07%, with sectors like live pigs, corn, and building materials leading gains, while coal, chemicals, and steel sectors declined. The overall technical structure remains bearish, suggesting a cautious approach [34]

Group 1 - The market experienced a net inflow of funds, but trading activity decreased, with total A-share trading volume at 4.84 trillion yuan, down from the previous week, and turnover rate at 5.58%, also a decline from the prior week. The total net inflow of funds was 156.42 billion yuan, indicating stronger liquidity [7][8][19] - The domestic liquidity situation showed a net withdrawal of 671.7 billion yuan in open market operations, with DR007 and R007 rates declining, and the spread between R007 and DR007 narrowing. The yield on 10-year government bonds decreased by 2 basis points, while the yield on 1-year bonds fell by 4 basis points, leading to an expansion of the yield curve spread [10][11][18] Group 2 - The issuance scale of equity funds increased to 13.75 billion yuan, up from the previous week. The top three sectors for fund accumulation were electronics, communications, and computers, while the sectors with the largest reductions were food and beverage, household appliances, and transportation [21][24][28] - The net inflow of margin financing was 7.649 billion yuan, with margin trading accounting for 8.4% of total A-share trading volume. The total number of ETF shares decreased by 750 million, with the largest inflow seen in the broad index of the CSI 300 ETF [28][29][32] Group 3 - In the primary market, there were two IPOs raising 5.007 billion yuan, while no refinancing occurred. The total amount of restricted shares that became tradable was 28.758 billion yuan, with the electronics, biomedicine, and automotive sectors having the highest amounts of unlocked shares [37][41][42] - The report highlighted that industrial capital reduced holdings by 3.18 billion yuan, with non-bank financials, coal, and household appliances being the top sectors for increased holdings, while electronics, biomedicine, and machinery equipment saw the largest reductions [38][39]

Group 1 - The overall market showed a broad increase, with micro-cap and growth stocks leading the performance, while dividend, stable, and consumer sectors lagged behind [7][9][21] - The performance of various industries was mixed, with non-ferrous metals, communication, and electronics showing the highest gains, while household appliances, food and beverage, and transportation performed the weakest [9][30] - The relative valuation of the ChiNext Index to the CSI 300 increased, indicating a rise in the relative PE and PB ratios [13][21] Group 2 - The overall valuation of broad market indices increased, with major indices exceeding the 50% historical percentile level over the past year, while the ChiNext Index is at a low valuation compared to the past year [21][30] - The valuation of various sectors is differentiated, with non-bank financials, non-ferrous metals, communication, electronics, agriculture, and household appliances at near one-year lows [30][33] - From the perspective of PE and PB deviation, industries such as food and beverage, agriculture, public utilities, and household appliances are currently considered relatively cheap [33][39] Group 3 - The earnings expectations across industries were generally revised downwards, with the computer sector seeing the largest upward adjustment and the defense industry experiencing the most significant downward revision [42]

Group 1: CPI Analysis - In May, China's CPI decreased by 0.1% year-on-year, slightly better than the expected decline of 0.2%[4] - The month-on-month CPI fell by 0.2 percentage points, aligning with seasonal trends observed over the past five and ten years[6] - Energy prices significantly impacted CPI, with a month-on-month decline of 1.7%, contributing approximately 0.13 percentage points to the overall CPI decrease[6] Group 2: PPI Analysis - China's PPI decreased by 3.3% year-on-year in May, a larger decline than the previous month's 2.7%[4] - The month-on-month PPI fell by 0.4%, consistent with the previous month, indicating continued weak performance[26] - Production material prices were under pressure, with a year-on-year decline of 4.0%, affecting the overall industrial producer price level by about 2.98 percentage points[30] Group 3: Sector Performance - Service prices showed stronger recovery compared to consumer goods, with service prices rising by 0.5% year-on-year, while consumer goods continued to decline[9] - Transportation and communication prices experienced significant month-on-month declines, with transportation fuel prices dropping by 3.7%[11] - Core CPI, excluding energy, saw an increase, indicating a recovery in non-energy consumer goods and services driven by policy support and holiday effects[25]

Quantitative Model and Construction Model Name: Relative Index Trend Tracking Model for Social Services - **Model Construction Idea**: The model assumes that the price movement of the target has strong local continuity, where prices are always in a certain trend. Reversal trends are shorter in duration compared to trend continuations. In cases of narrow-range consolidation, the model assumes the continuation of the previous trend. For large-scale trends, given a short observation window, the movement will follow the local trend within the window. When a reversal occurs, the price change at the start and end of the observation window will significantly exceed the range caused by random fluctuations, thus eliminating the impact of randomness[3] - **Model Construction Process**: 1. Calculate the difference between the closing price on day T and the closing price on day T-20, denoted as `del` 2. Calculate the volatility (`Vol`) over the period from T-20 to T (excluding T) 3. If the absolute value of `del` exceeds N times `Vol`, the current price is considered to have broken out of the original oscillation range, forming a trend. The trend direction (long/short) corresponds to the sign of `del` 4. If the absolute value of `del` is less than or equal to N times `Vol`, the current movement is considered to continue the previous trend direction (same as T-1) 5. For tracking, N is set to 1, considering the higher volatility of the stock market compared to the bond market, which provides more short-term opportunities 6. The model evaluates the combined results of long and short returns for the social services sector relative to the CSI 300 index[3] - **Model Evaluation**: The model is not suitable for direct application to the relative value of the SW First-Level Social Services Index due to its poor cumulative return performance during most of the backtesting period. However, it showed strong performance during a short period of rapid net value growth[4] --- Model Backtesting Results Relative Index Trend Tracking Model for Social Services - **Annualized Return**: -2.87%[3] - **Annualized Volatility**: 21.22%[3] - **Sharpe Ratio**: -0.14[3] - **Maximum Drawdown**: 23.32%[3] - **Total Return**: -20.18%[3]

- The report constructs an industry crowding monitoring model to monitor the crowding degree of Shenwan First-Level Industry Indexes on a daily basis[4] - The Z-score model is used to build a related ETF product screening signal model, providing potential arbitrage opportunities through rolling calculations[5] Model Construction and Process Industry Crowding Monitoring Model 1. **Model Name**: Industry Crowding Monitoring Model 2. **Model Construction Idea**: Monitor the crowding degree of various industries to identify potential investment opportunities and risks[4] 3. **Model Construction Process**: - Daily monitoring of the crowding degree of Shenwan First-Level Industry Indexes - Identify industries with high and low crowding levels - Track the main fund flows in and out of these industries over recent trading days[4] 4. **Model Evaluation**: Provides insights into industry crowding levels, helping investors to make informed decisions[4] Z-score Model for ETF Product Screening 1. **Model Name**: Z-score Model 2. **Model Construction Idea**: Identify potential arbitrage opportunities in ETF products by calculating the Z-score of their premium rates[5] 3. **Model Construction Process**: - Calculate the Z-score of the premium rates of various ETF products - Identify ETFs with significant deviations from their historical average premium rates - Provide signals for potential arbitrage opportunities and caution for potential pullback risks[5] 4. **Model Evaluation**: Helps in identifying ETFs with potential arbitrage opportunities, but also warns of possible pullback risks[5] Model Backtest Results 1. **Industry Crowding Monitoring Model**: - Daily monitoring results show that industries like basic chemicals, textiles and apparel, and light manufacturing have high crowding levels, while home appliances, real estate, and electronics have low crowding levels[4] - Significant changes in crowding levels were observed in industries like construction and decoration, and non-ferrous metals[4] 2. **Z-score Model for ETF Product Screening**: - Identified ETFs with potential arbitrage opportunities, such as the National Defense ETF and the Hang Seng Medical Index ETF[14] Factor Construction and Process Industry Crowding Factor 1. **Factor Name**: Industry Crowding Factor 2. **Factor Construction Idea**: Measure the crowding degree of industries to identify potential investment opportunities and risks[4] 3. **Factor Construction Process**: - Calculate the crowding degree of each industry based on fund flows and other relevant metrics - Identify industries with high and low crowding levels[4] 4. **Factor Evaluation**: Provides valuable insights into industry crowding levels, aiding in investment decision-making[4] Factor Backtest Results 1. **Industry Crowding Factor**: - High crowding levels were observed in industries like basic chemicals, textiles and apparel, and light manufacturing[4] - Low crowding levels were observed in industries like home appliances, real estate, and electronics[4] - Significant changes in crowding levels were noted in industries like construction and decoration, and non-ferrous metals[4]

Investment Rating - The overall industry rating is neutral, with expectations of returns between -5% and 5% relative to the CSI 300 index over the next six months [24] Core Insights - The food and beverage sector experienced a decline of 1.1% this week, ranking 30th among 31 sub-industries in the Shenwan classification. The snack, health products, and meat product segments led gains, while dairy, seasoning, and other alcoholic beverages saw the largest declines [4][14] - The liquor sector is facing short-term pressure due to the implementation of new alcohol restrictions, with the SW liquor index down 0.90%. The demand for liquor during the Dragon Boat Festival has decreased significantly, although banquet sales remain relatively stable [5][18] - The beverage sector is entering a peak season, with new product launches accelerating. Companies are introducing health-oriented products, including electrolyte water and low-sugar tea, to capture market growth [6][19] Summary by Sections Sub-industry Ratings - No ratings for liquor and beverage sectors, but several companies are recommended: - Luzhou Laojiao: Buy - Shanxi Fenjiu: Add - Jianshiyuan: Add - Yingjia Gongjiu: Add - Dongpeng Beverage: Buy - Youyou Food: Buy - Guming: Add - Lihigh Food: Buy [3][23] Market Performance - The food and beverage sector's overall performance is under pressure, with the SW food and beverage index down 1.3%. The best-performing sub-sectors include other alcoholic beverages, pre-processed foods, and seasoning products, while liquor and health products faced the most significant declines [14][18] Company Updates - Yanjing Beer is focusing on improving operational efficiency and supply chain capabilities to enhance competitiveness. The U8 product line is expected to achieve significant sales growth, with a target of 30% market share [9][22] - New product launches in the snack sector are driving growth, with companies like Youyou Food and Dongpeng Beverage seeing substantial increases in sales due to innovative offerings [6][21]

Investment Rating - The industry rating is optimistic, expecting an overall return exceeding 5% above the CSI 300 index in the next six months [9]. Core Insights - As of June 9, 2025, the CSI 300 index increased by 0.29%, while the machinery sector rose by 0.90%, ranking 14th among all primary industries. The lithium battery equipment sector saw the highest increase at 5.71%, while the engineering machinery sector experienced the largest decline at 0.37% [3]. - Notable individual stock performances included Haohan Huatong (+19.99%), Zhongzhou Special Materials (+12.78%), and Xinyu Ren (+12.40%) on the gainers' list, while Jinyang Co. (-4.23%), Huadong Heavy Machinery (-4.13%), and Changling Hydraulic (-3.40%) led the decliners [3]. Sub-industry Ratings - The report references several related research reports, including discussions on the successful assistance of robots in cerebral vascular angiography and new financing for Kepler Robotics [3]. Industry News - The 2025 Zhiyuan Conference, held from June 6 to 7 in Beijing, focused on AI and embodied intelligence, featuring discussions from Turing Award winners and industry leaders. The conference included over 180 presentations covering various AI-related topics, emphasizing the importance of open-source collaboration and data sharing for AI development [5][6]. - Meituan is accelerating its overseas expansion of drone delivery services, with Dubai being the first international location. The company has operated 53 drone delivery routes in China, completing nearly 500,000 deliveries. Plans include adding 2 to 3 new routes in Dubai and 4 to 5 in Shanghai later this year [7].

Investment Rating - The industry investment rating is not specified in the report, but it indicates a positive outlook for the real estate sector, expecting overall returns to exceed the CSI 300 index by more than 5% in the next six months [12]. Core Insights - The report highlights that Jiangsu Province is actively promoting housing vouchers and "old-for-new" housing exchanges to stimulate housing consumption and improve living conditions for residents [6]. - The report notes that the equity market saw an overall increase, with the Shanghai Composite Index and Shenzhen Composite Index rising by 0.43% and 0.93%, respectively, on June 9, 2025 [4]. - The report mentions significant individual stock performances within the real estate sector, with notable gains from companies such as Heimu Dan (6.43%) and Sunshine Shares (5.24%) [5]. Summary by Sections Market Trends - The report indicates a general upward trend in the equity market, with the real estate index showing a slight increase of 0.06% [4]. - It also mentions the establishment of Nanjing Shengxi Investment Co., Ltd. by China Merchants Shekou and China Resources Land, marking a significant collaboration aimed at boosting the real estate market in Nanjing and the East China region [9]. Policy Developments - Jiangsu's government has implemented measures to support urban village renovations and housing improvements, including the issuance of special bonds to facilitate the purchase of existing homes for affordable housing [6]. - The report details a successful bid by Baohua for a redevelopment project in Shanghai, with a floor price of approximately 16,000 yuan per square meter [6]. Company Announcements - Vanke announced an interest payment of 61.4 million yuan due on June 15 for its bond "23 Vanke MTN003," with a total bond balance of 2 billion yuan and a coupon rate of 3.07% [10]. - Greentown Real Estate Group has announced a bond issuance with a maximum amount of 1 billion yuan, with a subscription range of 3.80% to 4.20% [10].

Investment Rating - The report does not provide specific investment ratings for the industry segments [2]. Core Insights - The overall industry strategy indicates that the supply chain is continuously upgrading, with AI+ being the core driving force [3][4]. - The electric vehicle (EV) sales structure is improving, benefiting companies like Li Auto and Xiaomi, with a projected wholesale sales volume of 1.24 million new energy passenger vehicles in May 2025, representing a year-on-year increase of 38% and a month-on-month increase of 9% [4][29]. - The solid-state battery supply chain is approaching mass production, with companies like CATL planning to produce solid-state batteries by 2026-2027 [4][32]. - The demand for lithium iron phosphate (LiFePO4) is rising both domestically and internationally, with companies like Fulin Precision and Longpan Technology benefiting from this trend [5][28]. - The domestic energy storage market is at a cyclical low, with a record low average price of 0.55 yuan/Wh for two-hour systems in May 2025 [6][36]. - The photovoltaic (PV) demand is at a low point, with expected production declines in June 2025 due to weakened demand after a rush to install [6][30]. Summary by Sections Electric Vehicle Sector - The EV sales are structurally improving, with companies like Li Auto and Xiaomi expected to benefit from favorable policies and market conditions [4][29]. - Li Auto aims for a sales target of over 200,000 units in the new energy market, with a projected second-quarter sales volume of 123,000 to 128,000 vehicles [4][29]. Solid-State Battery Sector - The solid-state battery production is nearing key milestones, with major automakers like SAIC and Changan planning to validate and produce solid-state batteries by 2026 [4][32]. - CATL and other battery manufacturers are also planning to mass-produce solid-state batteries in the 2026-2027 timeframe [4][32]. Lithium Iron Phosphate Demand - The demand for lithium iron phosphate is increasing, with major suppliers like LG Energy Solution and Samsung SDI planning to produce these batteries in the U.S. [5][28]. - Fulin Precision and CATL have signed agreements to enhance cooperation in lithium iron phosphate materials, with significant investments planned [5][28]. Energy Storage Market - The energy storage market is currently at a cyclical low, with a significant drop in average prices for energy storage systems [6][36]. - Companies like Aters are focusing on overseas high-profit markets, with expected energy storage system shipments of 2.4-2.6 GWh in the second quarter of 2025 [6][36]. Photovoltaic Industry - The photovoltaic industry is experiencing a downturn, with expected production declines in June 2025 due to reduced demand following a surge in installations [6][30]. - Companies with advantages in overseas photovoltaic markets, such as Aters, are expected to benefit from these trends [6][30].