Valuation Overview - A-shares overall valuation has converged, with the pharmaceutical sector experiencing a counter-cyclical expansion in valuation[1] - The current dynamic PE of the pharmaceutical industry is at the historical 18th percentile, indicating significant room for improvement[1] - The dynamic PE of the chemical pharmaceutical sector has reached the historical 65th percentile, reflecting that current stock prices partially account for economic expectations[1] Market Segment Analysis - The TTM PE of the ChiNext board has contracted less than that of the main board and the Sci-Tech Innovation board[1] - The relative PE (TTM) of computing infrastructure, excluding operators/resource categories, decreased from 4.16x to 4.01x this week[2] - The absolute and relative valuations of major sectors show that consumer discretionary and consumer staples are above historical medians, while TMT and financial services are below[2] Investment Insights - The A-share non-financial ERP has decreased from 1.58% to 1.55%, indicating a decline in the relative attractiveness of equities compared to bonds[2] - The dynamic ERP of key non-financial A-share companies fell from 4.18% to 4.12% this week[2] - Industries such as communication, non-ferrous metals, and public utilities exhibit characteristics of low valuation and high profitability potential[2] Risk Considerations - The strategy views do not represent the entire industry, and valuation levels do not guarantee stock price movements[3] - Future earnings volatility may lead to discrepancies between current valuation levels and "acceptable" states[3]

Investment Rating - The report suggests a focus on underweight stocks in the construction and building materials sector, particularly heavyweight stocks, due to ongoing public fund reforms and expectations of exceeding physical workload this year [3]. Core Insights - The National Development and Reform Commission aims to finalize the "Two Heavy" construction project list by the end of June, emphasizing strategic and forward-looking projects [1]. - Infrastructure investment in April increased by 5.80% year-on-year, while cement production for the first four months of 2025 was 495 million tons, down 2.8% [2]. - The construction index fell by 1.13% during the week of May 19-23, 2025, while the building materials index decreased by 0.91% [9]. Summary by Sections Market Review - The construction index has dropped 4.36% year-to-date, ranking 23rd out of 29 industries, while the building materials index has decreased by 0.54%, ranking 18th [9]. - The highest gain in the construction sector was seen in the landscaping engineering segment, which rose by 4.14% [9]. Special Bonds and Funding Status - New local government special bond issuance amounted to 285.21 billion yuan in May, a month-on-month increase of 78.21% [2][22]. - Cumulative new local government special bond issuance for the year reached 1,475.59 billion yuan, a 62.57% increase compared to the same period in 2024 [22]. Construction High-Frequency Data Tracking - As of May 16, 2025, the cement dispatch rate increased by 2.21 percentage points to 41.51% week-on-week [29]. - The operating rate of cement mills rose by 0.35 percentage points to 42.00% [29]. Cement Industry Weekly Data Tracking - As of May 23, 2025, the national cement price decreased by 2.1% week-on-week but increased by 1.4% year-on-year [36]. - The average cement price across the country was 370.8 yuan per ton, with significant price drops in various regions [36]. Key Company Orders and Valuation - The report highlights significant new contracts for major construction companies, with China Nuclear Engineering signing contracts worth 57.56 billion yuan, a year-on-year increase of 10.80% [2]. - The current price-to-earnings ratios for the construction and building materials sectors are 8.21 and 18.41, respectively, indicating relatively low valuations compared to historical levels [16].

Investment Rating - The report maintains a "Buy" rating for Rongbai Technology (688005.SH) [5] Core Views - Rongbai Technology's ternary material sales reached 120,000 tons in 2024, representing a 20% year-on-year growth, with a global market share exceeding 12%, an increase of 2 percentage points from 2023, maintaining its position as the global leader for four consecutive years [2] - The company has established partnerships with over 40 domestic and international battery and vehicle manufacturers in the solid-state battery sector, achieving stable growth in the shipment of solid-state ternary materials [3] - The company is expected to achieve net profits of 550 million, 786 million, and 1.069 billion yuan for the years 2025 to 2027, reflecting year-on-year growth rates of 85.9%, 42.9%, and 36.1% respectively [3] Financial Summary - Revenue is projected to decline from 22.657 billion yuan in 2023 to 15.088 billion yuan in 2024, before recovering to 17.045 billion yuan in 2025, with a growth rate of 13% [4] - The net profit attributable to the parent company is expected to decrease from 581 million yuan in 2023 to 296 million yuan in 2024, then increase to 550 million yuan in 2025 [4] - Earnings per share (EPS) are forecasted to be 0.77 yuan in 2025, with a projected P/E ratio of 24.5 [4]

Investment Rating - The report assigns a "Buy" rating to the company, indicating an expected investment return that exceeds the market benchmark by over 20% in the next 6-12 months [6]. Core Views - The company achieved a revenue of 1.082 billion yuan in 2024, representing a year-on-year growth of 4%, but reported a net loss attributable to shareholders of 68 million yuan, with losses expanding by 250% compared to the previous year [6][2]. - In Q1 2025, the company generated a revenue of 223 million yuan, a decrease of 12% year-on-year, with a net loss of 15 million yuan, marking a 150% increase in losses compared to the same period last year [6][2]. - The company focuses on the Ethernet switch chip sector, with high-end flagship chips being delivered in small batches in 2024, targeting large-scale data centers and cloud service demands [2][1]. - The company has a comprehensive product lineup in Ethernet switch chips, with capabilities reaching up to 800G and switching capacities of 12.8Tbps and 25.6Tbps [1]. Financial Projections - Revenue projections for 2025, 2026, and 2027 are 1.353 billion yuan, 1.776 billion yuan, and 2.195 billion yuan, respectively, with expected growth rates of 25.1%, 31.3%, and 23.6% [2][4]. - The company plans to increase its R&D investment to 428 million yuan in 2024, a 36% increase year-on-year, accounting for 39.61% of its revenue [2][4]. - The number of R&D personnel reached 409 by the end of 2024, an increase of 38 from the previous year, representing 76.31% of the total workforce [2][4].

Market Overview - On May 22, the North Exchange A-shares recorded a trading volume of 37.19 billion yuan, a decrease of 3.92 billion yuan from the previous trading day, with the index closing down by 6.1% [1][5] - Among the 266 companies listed on the North Exchange, only 21 saw an increase in stock prices, while 245 experienced declines, indicating a significant market adjustment [5][23] Key News - The People's Bank of China and other regulatory bodies have indicated support for top-tier private equity firms in issuing bonds, which may enhance financing opportunities for small and micro enterprises [4][26] - The Ministry of Science and Technology plans to refine the technology finance system to implement policy measures effectively [26] Investment Strategy - The report suggests focusing on high-quality stocks that are experiencing a rebound after significant declines in the short term, while also monitoring policy-driven mergers and acquisitions, as well as themes related to nuclear fusion and elder care robotics [5] - For medium to long-term investments, the emphasis is on technology growth sectors such as humanoid robots, semiconductors, and specialized enterprises with stable cash flows, while also identifying undervalued high-growth stocks [5] Company Announcements - Naconoer plans to use up to 200 million yuan of idle fundraising for cash management, targeting an annualized return of 1.75%-1.80% [27] - Yingtai Bio announced the lifting of restrictions on 6,002,500 shares, representing 0.49% of its total share capital, effective May 27, 2025 [28]

Investment Rating - The report suggests a positive outlook for the storage industry, indicating a historical opportunity for domestic storage manufacturers due to supply contraction and technological upgrades [10]. Core Insights - Consumer storage products are expected to see price increases, potentially leading the storage market into a new prosperity cycle [5]. - The server market is poised to benefit first from the AI industry, with demand from supply chain manufacturers likely to rise as edge AI applications materialize [6]. - The report emphasizes the importance of monitoring channel inventory and price changes, given the cyclical nature of the storage industry [7]. Summary by Sections Supply and Demand Dynamics - Overseas manufacturers announced a 10%-15% reduction in low-end production capacity by the end of 2024, with channel inventory gradually normalizing since 2025 [8]. - High-end application areas remain in short supply, while internet companies continue to expand production, sustaining demand [8]. - The price of storage chips has seen a narrowing decline since Q1 2025, with some low-end categories already showing signs of price increases [8]. AI and Market Growth - AI server shipments are expected to account for over 14% of global server shipments in 2024, driving a nearly 70% increase in overall server market value [8]. - The penetration rate of DDR5 is projected to reach over 70% in 2024, significantly benefiting the demand for memory interface chips and related components [8]. Investment Recommendations - For storage modules, the report recommends focusing on companies like Demingli and Jiangbolong in enterprise storage, and Tianshan Electronics for module business progress [11]. - In the storage chip sector, it suggests monitoring domestic leaders like Zhaoyi Innovation and Beijing Junzheng, as well as Puran's trend towards high-end terminal products [12]. - For memory interface and supporting chips, attention is drawn to opportunities in companies like Lanke Technology and Jucheng Shares amid the storage industry’s technological transformation [12]. Market Trends and Projections - The global storage market is projected to reach approximately $172 billion in 2024, with a CAGR of about 9.5% expected to grow to $354.9 billion by 2032 [19]. - The Chinese storage market is anticipated to approach $77 billion in 2024, accounting for about 45% of the global market [19]. - The report highlights that the domestic storage manufacturers are likely to accelerate their growth due to the ongoing domestic demand for high-end products as overseas competitors withdraw from the low-end market [14].

Investment Rating - The report recommends a positive outlook on the electric equipment and new energy sector, highlighting specific companies for investment opportunities [2][3]. Core Insights - Huawei has reached a comprehensive cooperation agreement with UBTECH to promote humanoid robots across multiple scenarios, leveraging Huawei's AI capabilities to support innovation in the robotics industry [2][3]. - The easing of tariffs between China and the US is expected to benefit solar energy exports, with a significant reduction in tariffs on Chinese goods, enhancing competitiveness in the US market [2][3]. - The 17th Shenzhen International Battery Technology Exchange and Exhibition showcased advancements in solid-state battery technology, indicating a rapid industrialization of this sector [3][54][55]. Summary by Sections Section: Industry Developments - Multiple provinces in China are implementing policies to promote the marketization of the electricity sector, including operational rules for large-scale renewable energy bases [3][4]. - The Guangdong Power Trading Center has proposed a pricing mechanism for new energy projects, establishing fixed price periods for offshore wind and other renewable projects [4]. - The AI Data Center (AIDC) construction is gaining momentum in the Middle East, with significant investments from companies like NVIDIA and AMD [4]. Section: Company Recommendations - Recommended companies in the electric equipment sector include Zhaowei Electric, Wuzhou New Spring, and Keda Li, with additional attention on Hanwei Technology and UBTECH [2][3]. - In the solar energy sector, recommended companies include Sunshine Power, Deye Shares, and High Measurement Shares, with a focus on Airo Energy and HeMai Shares [2][3]. Section: Market Trends - The report notes a decline in lithium salt prices and stable prices for nickel and cobalt, indicating a shift in material costs within the battery supply chain [30][33]. - The prices of photovoltaic materials, including polysilicon and solar cells, have decreased, reflecting changes in market demand and supply dynamics [41][45][48].

Investment Rating - The investment rating for the company is "Buy" [6][12] Core Views - The company is a leading player in the in vitro diagnostics sector, with a diversified business layout that continues to grow [6][12] - In 2024, the company is expected to achieve revenue of 4.471 billion yuan, representing a growth of 0.62%, while the net profit attributable to the parent company is projected to be 1.194 billion yuan, a decrease of 1.89% [6][12] - The company's main business operations are stable, with notable performance in molecular diagnostics and overseas markets [2][6] Financial Performance Summary - For 2024, the company's revenue is projected to be 44.71 billion yuan, with a slight increase of 0.62%, and the net profit is expected to be 11.94 billion yuan, down by 1.89% [2][4] - In Q1 2025, the company reported revenue of 9.96 billion yuan, a decrease of 8.56%, and a net profit of 2.70 billion yuan, down by 16.76% [2][4] - The revenue from the reagent segment in 2024 is expected to be 37.97 billion yuan, with immunodiagnostic products contributing 25.56 billion yuan, an increase of 2.91% [2][4] - The company achieved domestic revenue of 41.05 billion yuan in 2024, a decrease of 1.30%, while overseas revenue reached 2.84 billion yuan, an increase of 36.25% [2][4] Research and Development Summary - The company increased its R&D investment to 7.32 billion yuan in 2024, a year-on-year increase of 11.55% [2][4] - In 2024, the company registered 144 new reagent product certificates, covering advanced technology fields such as chemiluminescence and molecular diagnostics [2][4] - The launch of the AutoChem B2000/B800 series of fully automated biochemical analyzers marks a significant development in the biochemical product field [2][4] Profitability and Financial Ratios - The company's gross margin for 2024 is projected to be 65.41%, reflecting a stable performance [2][4] - The sales, management, and R&D expense ratios for 2024 are expected to be 17.17%, 4.72%, and 16.37%, respectively [2][4] - The projected EPS for 2025, 2026, and 2027 are 2.24 yuan, 2.66 yuan, and 3.08 yuan, respectively [2][4]

Investment Rating - The report suggests a positive outlook for the industry, indicating a potential for significant growth in the next 6-12 months, aligning with the "overweight" rating for the sector [42]. Core Insights - The average daily trading volume on the North Exchange reached 31.12 billion yuan, a 45% increase compared to the previous week, reflecting a recovery in market activity [8][9]. - The North Exchange 50 index rose by 3.6%, with a daily turnover rate of 3.4% [9]. - The top three performing sectors were defense and military (+23.2%), textiles and apparel (+19.6%), and machinery (+9.0%) [14][16]. - The report highlights significant individual stock movements, with the top gainers including Qifeng Precision (+79.25%) and Huiwei Intelligent (+41%) [22][23]. Market Overview - The North Exchange's average daily trading volume increased to 31.12 billion yuan, marking a 45% week-on-week rise [8]. - The North Exchange 50 index closed at 1380.9 points, reflecting a 3.6% increase [18]. - The report notes a resurgence in trading activity, with a focus on sectors with technological barriers and domestic substitution logic [26][27]. Key News and Policies - The report discusses the rapid advancement of the Private Economy Promotion Law, which is expected to bolster support for small and medium-sized technology enterprises [2]. - The central bank's recent monetary policy adjustments, including a reduction in the reserve requirement ratio and interest rates, are anticipated to inject over 1 trillion yuan in liquidity into the market [17][26]. Investment Strategy and Recommendations - The report recommends institutional investors focus on two main lines during the performance vacuum: technology growth stocks with barriers and domestic substitution logic (e.g., AI computing, satellite communication, robotics) and policy-driven domestic recovery and high-dividend assets [29]. - It emphasizes maintaining a balanced allocation, prioritizing sectors with high valuation and performance alignment, while also considering emerging themes like humanoid robots and low-altitude economy [29].

Investment Rating - The industry is rated as "Overweight," indicating an expected increase in the market index by over 10% in the next 6-12 months [36]. Core Insights - The integration of AI in the healthcare sector is accelerating, with significant advancements in applications such as imaging diagnostics, assisted treatment, drug development, health management, and genetic testing. The market for AI medical devices in China has grown from 12.5 million to 1.16 billion from 2019 to 2022, with a CAGR of 110%. It is projected to reach 75.6 billion by 2030, with a CAGR of 39.2% from 2023 to 2030 [6][7]. - The launch of the DeepSeek-R1 model has led to an increase in the number of pharmaceutical companies adopting AI technologies, enhancing precision, efficiency, and data processing in medical services [7]. Summary by Sections AI in Healthcare - AI applications in healthcare are expanding, with advantages in precision, efficiency, and personalized treatment. The integration of AI models into digital healthcare systems is expected to enhance the efficiency and accuracy of existing AI medical solutions [6]. - The AI medical device market in China has seen rapid growth, with projections indicating substantial future expansion driven by ongoing technological advancements and increasing healthcare demands [6]. Investment Recommendations - The report suggests focusing on various sectors within AI healthcare, including: 1. AI in imaging recognition: Recommended companies include Mindray Medical, United Imaging, and Airdoc [7]. 2. AI in assisted diagnosis: Recommended companies include KingMed Diagnostics, BGI, and RunDa Medical [7]. 3. AI in surgical procedures: Recommended companies include Kangji Medical and MicroPort Scientific [7]. 4. AI in healthcare services: Recommended companies include Gushengtang, Meinian Health, and Aier Eye Hospital [7]. 5. AI in consumer hardware: Recommended companies include Lixinhui Medical and Yuyue Medical [7]. 6. AI in data management: Recommended company is Jianhui Information [7]. 7. AI in digital marketing: Recommended companies include Yimaitong and Zhiyun Health [7]. 8. AI in general healthcare: Recommended companies include Yidu Tech and Ping An Good Doctor [7]. Company-Specific Developments - Aier Eye Hospital is enhancing its digital eye care strategy by integrating AI applications to improve service efficiency and patient experience [9]. - Huaxia Eye Hospital is advancing its smart healthcare services through AI and big data technologies, focusing on personalized and efficient patient care [12]. - Airdoc has upgraded its medical model to improve clinical diagnosis efficiency and accuracy, leveraging extensive clinical data [13][14]. - Gushengtang is utilizing AI to digitize traditional Chinese medicine practices, aiming to enhance healthcare accessibility [15][16]. - Meinian Health is leading the shift towards personalized health check-ups through AI-driven solutions [19][20].