Investment Rating - The report maintains a "Positive" investment rating for the real estate industry in China [4] Core Insights - The real estate market showed resilience in May, with new home sales improving month-on-month, while year-on-year declines narrowed [6][29] - The report anticipates a continued downward pressure on sales in the second half of the year due to potential uncertainties from U.S.-China trade negotiations [6][29] - The report highlights the importance of high-quality land reserves and product strength for real estate companies to achieve alpha attributes [6][29] Summary by Sections Market Performance - In the 23rd week, the real estate sector index underperformed compared to the CSI 300 index, with a relative return of -0.1%. The CSI 300 index closed at 3874.0, with a weekly increase of 0.9%, while the real estate index closed at 2174.1, with a weekly increase of 0.8% [6][10][11] Policy Developments - Nationally, the central government supports urban renewal actions, with 20 cities including Beijing and Guangzhou selected. Locally, Jiangsu has announced measures to boost consumption, while Hunan and Zhejiang have introduced policies to support housing and property acquisition [6][13][21] Sales Data - In the 23rd week, new home sales in 44 major cities decreased to 14,000 units, down 33.1% from the previous week. Second-hand home sales in 21 major cities also fell to 15,000 units, down 23.0% [6][16] - Inventory levels decreased, with 18 major cities holding 825,000 units, down 21,000 units from the previous week, and a sales-to-inventory ratio of 16.8 months, down 4.5 months [6][23] Company Announcements - Key companies have made significant announcements, including major asset restructuring and share repurchase plans. Notable mentions include Chengjian Development and Haitai Development [6][28][29] Future Outlook - The report expects a year-on-year increase in second-hand home transaction volumes, while new home sales are projected to continue declining but at a reduced rate. The core areas with high efficiency and premium properties are expected to drive this trend [6][29]

Group 1: Economic Performance - As of May 31, 2025, the "old-for-new" program has driven sales of 1.1 trillion yuan across five major categories, with approximately 175 million subsidies issued to consumers[5] - The estimated fiscal funding of 139.2 billion yuan represents 42% of the progress towards the target, closely aligning with the scheduled progress of 5/12[5] - The retail sales growth for April was 5.1%, down from 5.9% in March, but still better than the previous year's performance[9] Group 2: Consumer Behavior and Trends - The "old-for-new" program has reached 12.4% of the population with 175 million subsidies issued, indicating significant coverage and potential for future growth[5] - The demand for building and decoration materials improved in April, with a year-on-year growth of 9.7%, the highest since December 2021[9] - The retail sales of gold and jewelry surged to a year-on-year increase of 25.3% in April, reflecting strong consumer interest driven by rising gold prices[9] Group 3: Investment and Financing - The total social financing scale increased by 11.59 billion yuan in April, with a year-on-year growth of 8.7%[12] - Government bond issuance maintained a rapid pace, with new issuance of 972.9 billion yuan in April, significantly higher than the previous year[13] - Corporate loans decreased by 250 billion yuan year-on-year in April, while corporate bonds saw an increase of 633 billion yuan, indicating a shift in financing methods[13] Group 4: Risks and Challenges - Fluctuations in Trump's tariff policies continue to impact market risk appetite, contributing to uncertainty in trade relations[5] - The restructuring of the industrial chain due to tariffs poses risks of global growth slowdown and overcapacity[5]

Investment Rating - The report maintains a "Positive" investment rating for the real estate industry in China [4] Core Insights - The real estate market showed resilience in May, with new home sales improving month-on-month and a narrowing year-on-year decline [6][29] - The report anticipates a continued downward pressure on sales in the second half of the year due to potential uncertainties from U.S.-China trade negotiations [6][29] - The report highlights the importance of high-quality land reserves and product strength for real estate companies to achieve alpha attributes [6][29] Summary by Sections Market Performance - In the 23rd week, the real estate sector index underperformed compared to the CSI 300 index, with a relative return of -0.1% [6][9] - The CSI 300 index closed at 3874.0 with a weekly increase of 0.9%, while the real estate index (Shenwan) closed at 2174.1 with a weekly increase of 0.8% [10][11] Policy Developments - National policies include central government support for urban renewal actions, with 20 cities including Beijing and Guangzhou selected [13][15] - Local policies from Jiangsu and Hunan aim to boost consumption and support the acquisition of existing homes for affordable housing [13][21] Sales Data - In the 23rd week, new home sales in 44 major cities were 14,000 units, a decrease of 33.1% from the previous week, while second-hand home sales in 21 major cities were 15,000 units, down 23.0% [6][16] - Inventory levels decreased, with 18 major cities holding 825,000 units, down by 21,000 units from the previous week [6][23] Company Announcements - Key companies such as Chengjian Development and Haitai Development announced significant asset restructuring and share transfer plans [28][29] - The report notes that several companies are engaging in share buybacks and dividend distributions [28][29] Investment Recommendations - The report recommends buying Poly Developments (600048) and China Merchants Shekou (001979), while suggesting to pay attention to companies like China Resources Land (01109) and Yuexiu Property (00123) [6][29]

Investment Rating - The report maintains a "Positive" outlook on the Chinese defense and military industry [5] Core Insights - The military trade is expected to become a second growth curve for the industry, with Indonesia considering the procurement of Chinese J-10 fighter jets due to their high performance and cost-effectiveness [27] - The report highlights that the recent geopolitical tensions have increased military spending globally, creating new opportunities for China's military exports [6][27] - The domestic aviation industry is expected to accelerate the localization of aircraft engines due to U.S. export restrictions on key technologies [6] Summary by Sections Market Trends - The defense and military industry index rose by 0.41% during the week, underperforming compared to the Shanghai Composite Index, which increased by 1.13% [10][11] - The defense and military industry ranked 24th out of 31 sectors in terms of weekly performance [13] News and Announcements - Indonesia is evaluating the feasibility of purchasing Chinese J-10 fighter jets to modernize its air force while considering budget constraints [27] - The U.S. has restricted the export of commercial engines, which is expected to accelerate the domestic development of aviation engines in China [6] Investment Recommendations - The report suggests focusing on upstream components and key materials as they are crucial for weapon development and production, with potential for significant performance improvements [6] - Specific stocks recommended include Zhihua Technology, Aerospace Electric, and others in the upstream components and key materials sectors [6]

Investment Rating - The report gives a "Buy" rating for the company, with a target price of HKD 43.37 based on a 26x P/E ratio for 2025 [3][5]. Core Insights - The company is a leading player in the traditional Chinese medicine (TCM) chain service sector in China, with a strong focus on AI integration and a robust growth trajectory [9][14]. - Revenue is projected to grow significantly, with estimates of HKD 30.2 billion in 2024, representing a 30.1% year-on-year increase, and a net profit of HKD 3.1 billion, up 21.6% [9][27]. - The TCM market is expected to expand, with a projected market size of HKD 2.97 trillion by 2030, driven by increasing demand for TCM services [38][42]. Financial Projections - The company forecasts earnings per share (EPS) of HKD 1.53, 1.81, and 2.24 for 2025, 2026, and 2027 respectively [3]. - Revenue is expected to reach HKD 5.72 billion by 2027, with a compound annual growth rate (CAGR) of 25% from 2025 to 2027 [3][9]. - The gross margin is projected to stabilize around 28% in the coming years, while the net profit margin is expected to slightly decline to 9.44% by 2027 [3][36]. Business Model and Market Position - The company operates a comprehensive OMO (Online-Merge-Offline) business model, integrating online and offline services to enhance customer engagement and service delivery [17][31]. - The TCM industry is characterized by high growth potential and low market concentration, with the top five players holding only 1.5% market share, indicating significant room for expansion [56]. - The company has established a strong network of renowned TCM practitioners, enhancing its competitive edge and service quality [9][38]. AI and Innovation - The company has been investing in AI since 2019, focusing on developing AI-assisted TCM solutions to improve service delivery and expand its market reach [9][38]. - Collaborations with institutions like West China Hospital and Baidu aim to accelerate the development of clinical applications for TCM [9][38]. Market Trends - The TCM market is benefiting from favorable policies and increasing public awareness of traditional medicine, with a projected CAGR of 12.9% from 2023 to 2028 [42][56]. - The demand for TCM services is driven by factors such as an aging population, rising chronic diseases, and a growing preference for natural and holistic treatment options [42][42].

Investment Rating - The report assigns a "Buy" rating for the company, with a target price of HKD 43.37 based on a 26x P/E ratio for 2025 [3][5]. Core Insights - The company is a leading player in the traditional Chinese medicine (TCM) chain service sector, with a strong AI strategy and significant growth potential. The revenue is projected to grow at a CAGR of 26.8% from 2018 to 2024, with 2024 revenue expected to reach HKD 30.2 billion, representing a 30.1% year-on-year increase [9][38]. - The TCM market in China is expected to grow significantly, with the market size projected to reach CNY 2.97 trillion by 2030, driven by factors such as an aging population and increasing public awareness of TCM [38][42]. Summary by Sections Company Overview - Established in 2010, the company has expanded its offline presence in major cities and developed an online platform, becoming a comprehensive TCM healthcare service provider [14][9]. - The company has achieved a stable business model integrating online and offline services, focusing on patient acquisition, consultation, diagnosis, and follow-up care [17][31]. Financial Performance - Revenue is forecasted to grow from HKD 2.32 billion in 2023 to HKD 5.72 billion in 2027, with a projected net profit of HKD 538.88 million in 2027 [3][4]. - The company has shown a consistent increase in adjusted net profit, with a forecasted growth of 31.4% in 2024 [27][36]. Market Potential - The TCM service market is characterized by high growth and low concentration, with the top five players holding only a 1.5% market share. The company currently holds a 0.2% market share, indicating significant room for growth [56][38]. - The demand for TCM services is driven by demographic changes, lifestyle diseases, and increasing cultural acceptance of TCM practices [42][38]. AI and Innovation - The company has been investing in AI since 2019, aiming to enhance TCM services and facilitate the internationalization of TCM products [9][3]. - Collaborations with institutions like West China Hospital and Baidu are underway to develop AI-assisted TCM solutions, which could revolutionize the delivery of TCM services [9][3]. Competitive Landscape - The TCM industry is fragmented, with many small players, creating opportunities for consolidation and growth for established companies like the one in the report [56][53]. - The regulatory environment is becoming increasingly favorable for private TCM institutions, promoting high-quality development in the sector [46][47].

Investment Rating - The report maintains a "Positive" outlook on the Chinese defense and military industry [5] Core Insights - The military trade is expected to become a second growth curve for the industry, with Indonesia considering the procurement of Chinese J-10 fighter jets due to their high performance and cost-effectiveness [27] - The report highlights that the recent geopolitical tensions have increased military spending globally, creating new opportunities for China's military exports [6][27] - The domestic aviation industry is expected to accelerate the development of indigenous engines due to U.S. export restrictions on commercial engines [6] Summary by Sections Market Trends - The defense and military industry index rose by 0.41% during the week, underperforming compared to the Shanghai Composite Index, which increased by 1.13% [10][11] - The defense and military industry ranked 24th out of 31 sectors in terms of weekly performance [13] News and Announcements - Indonesia is evaluating the feasibility of purchasing Chinese J-10 fighter jets to modernize its air force while considering budget constraints [27] - The U.S. has restricted the export of key technologies, which is expected to accelerate the domestic development of aviation engines in China [6] - The report notes that military trade could drive performance in various segments of the supply chain, including core subsystems and components [6] Investment Recommendations - The report suggests focusing on upstream components and key materials, highlighting specific companies such as Zhihua Technology, Aerospace Electric, and Xibu Superconductor for potential investment [6]

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - Previously, the research team suggested paying attention to the opportunities in the bond market in June due to market expectations outpacing reality. Last week, the market's concerns about the capital side faded, leading to a decline in bond market interest rates. The team recommends continuing to focus on the possibility of changes in the curve shape [7]. - Since 2024, the term spreads of treasury bonds and credit bonds have diverged. The core reason lies in the differentiation of institutional behaviors, including banks' unstable liquidity expectations and the preferences of wealth management products [7]. - The shape of the interest rate curve and credit curve in 2024 and 2025 is related to central bank operations and the scale of wealth management products. Looking forward, the central bank's operations may improve banks' expectations of future liquidity, leading to an increase in the purchase of medium - and short - term treasury bonds. Therefore, the report suggests paying attention to the bull - steepening trade of the interest rate bond curve [8]. 3. Summary According to the Directory 3.1 Fixed Income Market Observation and Thinking: Consider Bull - Steepening Trade - The research team previously proposed two reports, hinting at bond market opportunities in June. Last week, the easing of capital - side concerns pushed down bond market interest rates, and the team suggests focusing on curve shape changes [7]. - Since 2024, the term spreads of treasury bonds and credit bonds have diverged. Banks' liquidity expectations and the preferences of wealth management products are the main reasons [7]. - The shape of the interest rate and credit curves in 2024 and 2025 is related to central bank operations and wealth management product scale. The central bank's operations may improve banks' expectations, and the report recommends the bull - steepening trade of the interest rate bond curve [8]. 3.2 Fixed Income Market Outlook: Multiple Domestic Data Releases 3.2.1 This Week's Attention Points and Important Data Releases - This week, China will release May CPI, export, and financial data, while the US will release May inflation data [14]. - The specific data release schedule includes China's May CPI on Monday, and the US's May unadjusted CPI monthly rate on Wednesday [15]. 3.2.2 This Week's Estimated Supply Scale of Interest - Bearing Bonds - This week, it is expected to issue 862.8 billion yuan of interest - bearing bonds, at a high level in the same period. Among them, treasury bonds are expected to be issued with a scale of 655 billion yuan, and local bonds are planned to be issued with a scale of 107.8 billion yuan [15]. 3.3 Interest - Bearing Bond Review and Outlook: Yield Bull - Steepening 3.3.1 Central Bank's Operations and Capital - Side Situation - At the beginning of the month, the central bank's reverse repurchase volume decreased, with a net withdrawal of 671.7 billion yuan in open - market operations. However, the early announcement of the outright reverse repurchase boosted market confidence [18]. - The capital - side pressure eased significantly at the beginning of the month. The trading volume of inter - bank pledged repurchase increased, and the capital interest rate declined. The overnight and 7 - day DR and R interest rates all decreased [19]. - The secondary yields of medium - and long - term certificates of deposit (CDs) declined rapidly. The net financing of CDs was - 80.4 billion yuan this week, and the proportion of 9M and 1Y CDs decreased. The issuance and secondary yields of CDs also changed [24]. 3.3.2 Rising Expectations of Easing - Last week, the bond market sentiment recovered due to the central bank's favorable attitude. The easing of capital pressure and the large - scale banks' purchase of short - term bonds led to expectations of further central bank easing [36]. - On June 6, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year treasury bonds decreased, and the yield curve showed a bull - steepening trend [39]. 3.4 High - Frequency Data: Significant Negative Year - on - Year Growth in Commercial Housing Sales - On the production side, the operating rates of various industries were differentiated. The operating rates of blast furnaces, semi - steel tires, petroleum asphalt, and PTA changed, and the year - on - year growth rate of daily average crude steel production in late May further declined [48]. - On the demand side, the year - on - year growth rates of passenger car manufacturers' wholesale and retail sales declined from high levels. The year - on - year growth rate of commercial housing transaction area fluctuated greatly, with a - 33% growth rate in the week of June 8. The SCFI and CCFI composite indices changed by 8.1% and 3.3% respectively [49]. - On the price side, crude oil prices rose, copper and aluminum prices diverged, coal prices were also differentiated, and the prices of building materials, steel, and downstream consumer products changed to varying degrees [49].

Investment Rating - The report maintains a "Positive" investment rating for the mechanical equipment industry [5] Core Viewpoints - The financing situation in the robot primary market remains strong, indicating an upward trend in industry prosperity. Vertical application scenarios are still crucial, with a focus on regional concentration. Short-term advantages lie in components, while the overall machine landscape is moving towards concentration [4][8][9] - The report suggests paying attention to segmented application fields, key regional companies, short-term components, and medium to long-term complete machine manufacturers [4][28] Summary by Sections Financing Trends - In the first five months of 2025, the number of financing projects in the robot sector showed a slight decline in May but remained at a good level. The financing for specialized robots accounted for over 50%, with humanoid and quadruped robots following closely [8][9][12] - Hardware financing is predominant, with a focus on hardware manufacturing. The number of hardware component financing projects exceeds that of software [8][20][27] Regional Analysis - The financing distribution shows that Shenzhen leads, with significant increases in Shanghai's financing in April and May 2025. This indicates a concentration of the humanoid robot industry chain in regions with existing advantages [8][9][24] Component vs. Complete Machine Dynamics - The report highlights that components currently hold a relative advantage, with supply still tight. However, the financing for complete machines is beginning to concentrate, suggesting a potential shift in industry dynamics [8][27][28] Recommended Companies - The report recommends focusing on the following companies: - Complete Machines and Assemblies: UBTECH, Yujian, Estun, Topstar, Efort-U, Zhongjian Technology, Yijiahe, Yongchuang Intelligent, Jack, Liyi Intelligent Manufacturing, Top Group, Sanhua Intelligent Control, Xinzhi Group [4][28] - Components: Wuzhou Xinchun, Beite Technology, Zhenyu Technology, Jinwo Shares, Green Harmonic, Siling Shares, Jiechang Drive, Zhaowei Electromechanical, Xiangxin Technology, Buke Technology, Nanshan Zhishang, Hanwei Technology, Lingyun Light [4][29] - Scenarios and Applications: Zhongyou Technology, Dema Technology, Yinfeng Storage, Anhui Helix, Hangcha Group, Noli Shares [4][29]

Market Performance - The A-share market experienced a rebound with the Shanghai Composite Index, CSI 300, CSI 500, and ChiNext Index rising by 1.13%, 0.88%, 1.60%, and 2.32% respectively during the week of June 2-6[5] - The PE (TTM) for CSI 300 is currently at 12.56 times, with a risk premium of 6.31%, which is above one standard deviation[5] - The PE (TTM) for ChiNext is at 30.92, below one negative standard deviation[5] Economic Indicators - The OECD has downgraded the U.S. economic growth forecast for 2025 from 2.2% to 1.6% and for 2026 to 1.5% due to tariff policies and increased uncertainty[5] - The global growth forecast for 2025 has been reduced from 3.10% to 2.9%[5] - The U.S. non-farm payrolls increased by 139,000 in May, above the market expectation of 130,000, while the unemployment rate remained at 4.2% for the third consecutive month[5] Policy Developments - The People's Bank of China conducted a 100 billion yuan reverse repo operation to maintain liquidity in the banking system[5] - The Shanghai Stock Exchange plans to encourage listed companies to increase dividend payouts and enhance market value management tools[5] Investment Strategy - The report suggests focusing on value dividend sectors and domestically supported technology industries such as AI, semiconductors, and defense[5] - The market is expected to maintain a wide fluctuation and structural trend, with short-term upward momentum lacking due to weak domestic economic fundamentals[5]