Investment Rating - The industry investment rating is "Strong Outperform" [1] Core Viewpoints - Tungsten is a significant strategic resource, widely used in various industries, and its price has risen to 161,000 yuan/ton, the highest since 2013, due to supply tightening and supportive policies [2][19] - The global tungsten resource distribution is concentrated, with China holding 55% of reserves and 83% of production, and no new mines expected to come online in the next two years [2][29] - Demand for tungsten is expected to improve significantly due to large-scale equipment updates and supportive policies, particularly in the machinery and aerospace sectors [2][54] - Export controls implemented by China in February 2025 have strengthened the strategic nature of tungsten resources, with a projected global supply-demand gap of 5,433 tons by 2027 [2][19] Supply Summary - Domestic supply is tightening, with the first batch of tungsten mining indicators for 2025 reduced by 4,000 tons compared to 2024, leading to a 6.45% decrease in total mining quotas [33] - China's tungsten production is expected to decline due to the lack of new mining projects and decreasing ore grades, with the first batch of mining indicators for 2025 set at 58,000 tons [33][29] - The industry is experiencing consolidation, with larger companies dominating production as smaller firms exit the market due to regulatory pressures [33][29] Demand Summary - The demand for tungsten is closely linked to industrial development and macroeconomic conditions, with hard alloys being the primary application, accounting for 58.51% of tungsten consumption in 2024 [50] - The demand for tungsten materials is expected to rise, particularly in the photovoltaic sector, where tungsten wire is gaining traction due to its superior performance [62][66] - A large-scale equipment update initiative is expected to boost demand for tungsten, with significant investments planned across various sectors [54][57]

Investment Rating - The report maintains a positive outlook on the micro-cap stock index, indicating a favorable investment environment following regulatory changes [3][13]. Core Insights - The recent modification of the "Major Asset Restructuring Management Measures" by the China Securities Regulatory Commission allows for cross-border mergers and acquisitions, which is seen as a significant positive for micro-cap stocks [3][13]. - The micro-cap stock index has shown strong performance, ranking first among 38 broad indices over the past month with a 12.51% increase and a 68.6% increase over the past year [4][14][24]. Summary by Sections 1. Overview of Micro-Cap Stock Index Performance - The micro-cap stock index increased by 1.58% over the past week, ranking 5th among 38 indices [4][14]. - Over the past month, the index rose by 12.51%, ranking 1st [4][19]. - In the last quarter, the index saw a 17.17% increase, also ranking 1st [4][20]. - The annual performance shows a significant increase of 68.6%, ranking 2nd [4][22][24]. 2. Factor Performance of Micro-Cap Stocks - The top-performing factors this week include standardized expected earnings (0.154), leverage (0.127), and quarterly net profit growth (0.102) [5][14][28]. - The bottom-performing factors include momentum (-0.08) and growth factors (-0.032) [5][14][28]. 3. Diffusion Index Observations - The diffusion index remains high but has shown a slight decline, indicating potential sell signals if the trend continues [6][15][33]. - The first threshold method triggered a sell signal on May 8, 2025, while the delayed threshold method provided a buy signal on April 22, 2025 [6][15][36][40]. 4. Calendar Effects - The micro-cap stock index has shown positive average returns on Tuesdays and Thursdays, while Mondays and Wednesdays have negative average returns [7][16]. - The index achieved an 84% win rate in February and a 90% win rate in March and May [7][16]. 5. Micro-Cap Stock Related Fund Performance - The highest-performing micro-cap fund this week yielded 2.79%, while the lowest yielded 0.35% [16][43].

Core Insights - The report indicates a recovery in the credit bond market starting from May, with credit bonds showing resilience against the backdrop of weakening interest rate bonds [3][10][26] - The yield on credit bonds, particularly those with maturities of three years or less, has decreased more significantly than that of interest rate bonds, highlighting their anti-dip characteristics [3][10] - The current yield curve shows a steepening trend in the 2-4 year segment, while the ultra-long end remains relatively unchanged, indicating a shift in market dynamics [3][13] Credit Strategy Insights - The report notes that the sentiment around secondary capital bonds remains cautious, with limited participation space in the 4-5 year segment due to yields approaching lower levels compared to the previous year [4][17] - The average duration of transactions in the market is short, with low valuation transactions not showing significant movement, suggesting a cautious optimism among investors [19][22] - The willingness to sell ultra-long credit bonds is evident, with a significant portion of transactions occurring at discounts, particularly for specific issuers like AVIC Capital [22][23] Market Performance Summary - The credit bond market has shown a positive performance over the past month, with yields consistently declining, although a cautious outlook is maintained due to insufficient absolute yields and credit spread protection [5][26] - The report emphasizes a focus on 2-4 year weak-quality city investment bonds, which are expected to see improved liquidity, while participation in higher-rated bonds in the 4-5 year segment is becoming more challenging [5][26] - The report highlights that the market's buying interest in ultra-long credit bonds is weak, with a preference shifting towards real estate bonds and lower-rated city investment bonds [23][25]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - Maintain the conclusion that "funding may be looser than expected." Although short - term fluctuations occur in the current funding situation, the optimistic expectation for liquidity should not change, and there is still room for the funding price to decline [2]. - The bank's liability growth has returned to normal, and the objective environment for funding regulation has changed. The so - called "central bank's attitude" speculated by institutions is unreliable, and the central bank's attitude has also changed [3]. - After the RRR cut, the easing effect had been overdrawn before the actual implementation. The comprehensive impact of released funds and the overdrawn effect on the actual implementation day may not lead to an obvious change in the lent funds [3]. - The impact of government bond payments and the maturity of repurchase agreements exists, but the replacement of high - cost funds with cheaper RRR - cut funds still has an easing effect [3]. - There will be support from excess structural tools in the future, including a confirmed increase of 1.1 trillion in various re - loans and the possible re - activation of PSL, which has shrunk by 1.3 trillion since 2024 [4]. 3. Summary by Directory 1. How to View the Tightening of Funds after the RRR Cut - **Previous Views on the Bond Market and Funds**: Microscopically, the bond market is recovering; macroscopically, there are still opportunities in the bond market. The key to the subsequent bond market trend is whether the funding price center can break through 1.4%. There is a possibility that the funding will be looser than expected [10]. - **Current Situation of Funds after the RRR Cut**: The RRR cut was implemented on May 15th, and the funding tightened marginally. The funding price center dropped to around 1.5% after the RRR cut was announced in early May, but did not decline further after May 15th [11]. - **Reasons for Not Being Pessimistic about the Funding**: - **Change in the Bank's Liability Environment**: The bank's liability growth has returned to normal, and the so - called "central bank's attitude" speculated by institutions is unreliable. Even if the central bank continues to regulate, the funding center will be lower than before [14]. - **Overdrawn Easing Effect**: Before the actual implementation of the RRR cut, the easing effect had been overdrawn. The actual scale of the RRR cut may be affected by the change in the deposit base, and the lent funds may not change significantly on the implementation day [16]. - **Impact of Other Factors**: The large - scale government bond payments in the short term will consume excess reserves, and the maturity of repurchase agreements also needs to be considered. However, the replacement of high - cost funds with cheaper RRR - cut funds still has an easing effect [17]. - **Support from Structural Tools**: There will be support from excess structural tools in the future, including a confirmed increase of 1.1 trillion in various re - loans and the possible re - activation of PSL, which has shrunk by 1.3 trillion since 2024 [20]. - **Conclusion**: It is not advisable to be pessimistic about the funding. In most cases, the funding price will decline in the two weeks after the RRR cut. The bank's liability has returned to normal, and the central bank's attitude has also returned to stable and loose [22].

Report Information - Report Title: Fixed Income Report - Release Date: May 19, 2025 - Analysts: Liang Weichao, Cui Chao [2] Industry Investment Rating - Not provided in the report Core Viewpoints - After the holiday impact weakens, the overall production heat rebounds, with increased operating rates in the chemical, tire, and coke oven sectors. The asphalt operating rate reaches its highest level since December 2023, accelerating road construction. - The transaction of commercial housing stabilizes, while the land transaction area decreases. - Prices generally rebound, with rising prices of crude oil, non - ferrous metals, and rebar, and a decline in coking coal. Due to political unrest in Guinea affecting mineral supply and the easing of US tariff policies leading to demand recovery, the aluminum price may remain strong in the short term. - Short - term focus should be on the implementation of a new round of growth - stabilizing stimulus policies, the recovery of the real estate market, and the trend of commodity prices [2][33] Summary by Directory 1. Production - Steel: The coke oven capacity utilization rate increases by 0.18 pct, the blast furnace operating rate decreases by 0.47 pct, and the rebar production increases by 3000 tons. The inventory of rebar decreases by 3280 tons [11] - Petroleum Asphalt: The operating rate significantly increases by 5.6 pct, reaching a new high since December 2023 [11] - Chemical Industry: The PX operating rate increases by 1.84 pct, and the PTA operating rate increases by 1.81 pct [11] - Automobile Tires: After the holiday, the operating rate seasonally rebounds significantly. The all - steel tire operating rate increases by 20.32 pct, and the semi - steel tire operating rate increases by 19.98 pct [12] 2. Demand - Real Estate: The transaction area of commercial housing rebounds, and the inventory - to - sales ratio decreases. The land transaction area decreases, and the premium rate of residential land transactions slightly increases [15] - Movie Box Office: It decreases by 40.9 million yuan compared with the previous week [15] - Automobile: The average daily retail sales of automobile manufacturers increase by 19000 vehicles, and the average daily wholesale sales increase by 14000 vehicles [17] - Shipping Index: The SCFI increases by 9.98%, the CCFI decreases by 0.14%, and the BDI increases by 6.85% [20] 3. Prices - Energy: The Brent crude oil price increases by 2.35% to $65.41 per barrel, and the coking coal futures price decreases by 2.21% to 864 yuan per ton [22] - Metals: The LME copper, aluminum, and zinc futures prices change by +0.02%, +2.56%, and +1.43% respectively, and the domestic rebar futures price increases by 2.11% [23] - Agricultural Products: They continue the seasonal downward trend. The agricultural product wholesale price 200 index decreases by 0.76%. The prices of pork, eggs, vegetables, and fruits change by +1.55%, +0.63%, - 2.05%, and - 1.50% respectively compared with the previous week [25] 4. Logistics - Subway Passenger Volume: The passenger volumes in Beijing and Shanghai both increase. The seven - day moving average of Beijing's subway passenger volume increases by 869900 person - times, and that of Shanghai increases by 790000 person - times [28] - Flight Volume: Both domestic and international flight volumes decrease. The seven - day moving average of domestic (excluding Hong Kong, Macao, and Taiwan) flight volume decreases by 299.43 flights, that of domestic (Hong Kong, Macao, and Taiwan) decreases by 14.86 flights, and that of international flights decreases by 76.86 flights [30] - Urban Traffic: The peak congestion index in first - tier cities rebounds. The seven - day moving average of the peak congestion index in first - tier cities increases by 0.09 [30] 5. Summary - The production heat rebounds, and prices generally rise. Short - term focus should be on the implementation of a new round of growth - stabilizing stimulus policies, the recovery of the real estate market, and the trend of commodity prices [33]

Market Performance Review - A-shares experienced a week of initial gains followed by declines, with a shift towards large-cap stocks. The major indices mostly rose, with the CSI A50 up by 1.61%, while the STAR 50 continued its downward trend. The large-cap style outperformed small and mid-cap stocks significantly this week [12][13]. A-share Investor Sentiment and Trading - The investor sentiment in A-shares has continued to decline, with the personal investor sentiment index showing a 7-day moving average of -9.9% as of May 17, down from 8.8% on May 10. This indicates that investor sentiment has entered a negative zone [4][15]. - The financing trading volume has remained stagnant, with cumulative net purchases remaining unchanged. The proportion of financing transactions in the overall A-share market has slightly increased, reflecting a continued low enthusiasm among personal investors [18][20]. Future Outlook and Investment Views - The outlook for A-shares suggests that sentiment recovery requires a catalyst, particularly the introduction of domestic demand stimulus policies. The recent phase of the US-China trade talks is a positive development for the domestic macroeconomic stability and the valuation recovery of the export chain, but further sentiment recovery in A-shares hinges on more proactive domestic demand policies [5][20]. - In terms of asset allocation, the recent interest rate cuts have enhanced the cost-effectiveness of dividend stocks. It is recommended to focus on pure dividend stocks such as banks, railways, and electricity. However, the timing for investing in consumer stocks should be approached with caution until clear domestic demand stimulus policies are announced [5][21].

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies [37]. Core Insights - The report highlights that the market is currently favoring high volatility and high momentum stocks, while low momentum and low volatility stocks are also performing well [3][5][20]. - It notes that growth and unexpected growth financial factors are showing positive returns, indicating a preference for stocks with stable growth despite short-term performance challenges [17][22]. - The GRU factor's performance is mixed, with most models showing negative returns, except for the open1d model which has shown positive returns [18][29]. Summary by Sections Style Factor Tracking - The report indicates strong performance in volatility, valuation, and liquidity factors, while non-linear market capitalization, market capitalization, and growth factors are underperforming [15][1]. Overall Market Factor Performance - Basic financial factors show a divergence in returns, with static financial factors yielding negative returns, while growth and unexpected growth factors yield positive returns [17]. - Technical factors are performing positively overall, with high volatility and high momentum stocks leading the performance [17]. CSI 300 Component Stock Factor Performance - Basic financial factors within the CSI 300 show mostly positive returns, with valuation factors underperforming and growth factors performing strongly [20]. - Technical factors show a mixed performance, with momentum factors significantly underperforming while volatility factors are performing positively [20]. CSI 500 Component Stock Factor Performance - Basic financial factors show a divergence in returns, with unexpected growth factors performing well, while static financial factors yield mostly negative returns [22]. - Technical factors show a mixed performance, with momentum factors underperforming and volatility factors performing positively [22]. CSI 1000 Component Stock Factor Performance - Basic financial factors show a divergence in returns, with static financial factors yielding negative returns and unexpected growth factors yielding positive returns [24]. - Technical factors are performing negatively overall, with low momentum and low volatility stocks performing better [25]. Strategy Performance Tracking - The GRU long position strategy has shown strong performance, with excess returns relative to the CSI 1000 index ranging from 0.84% to 1.89% [29]. - The open1d model has shown a strong performance year-to-date, with an excess return of 6.08% relative to the CSI 1000 index [29].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% compared to the benchmark index within the next six months [6][9]. Core Insights - The company is projected to achieve a revenue growth of 27.7% year-on-year in 2024, reaching 7.36 billion yuan, with a significant increase in net profit expected to rise by 584% to 1.103 billion yuan [3][9]. - The overall product shipment volume has reached a new high of 4.362 billion units, reflecting a year-on-year growth of 39.72% [3]. - The company is focusing on customized storage solutions, particularly in AI applications across various sectors, including mobile flagship devices, automotive, and robotics [4][8]. - The company is expected to benefit from the reduction or exit of major competitors in the niche DRAM market, with a continued push for DDR4 8Gb and LPDDR4 product customer integration [5][7]. Financial Projections - Revenue forecasts for 2025, 2026, and 2027 are estimated at 9.3 billion yuan, 12 billion yuan, and 14.5 billion yuan respectively, with corresponding net profits of 1.5 billion yuan, 2 billion yuan, and 2.5 billion yuan [9][11]. - The projected price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are 54, 40, and 32 respectively, indicating a favorable valuation trend [9][11]. Market Position and Strategy - The company has established a strong market position in the Serial NOR Flash segment, maintaining the second-largest global market share [3]. - The MCU product line is a strategic focus, with over 700 models developed to meet the growing demand in various applications, including electric vehicles and smart home devices [8]. - The company is actively pursuing innovation through its subsidiary, Beijing Qingyun Technology Co., to develop customized storage solutions tailored to specific client needs [4].

Quantitative Models and Construction Methods 1. Model Name: GRU (Generalized Recurrent Unit) - **Model Construction Idea**: GRU models are used to capture temporal dependencies and patterns in financial data, leveraging recurrent neural network structures to predict stock performance or factor returns[3][4][5] - **Model Construction Process**: The GRU model is trained on historical stock data, incorporating features such as price movements, volume, and other technical indicators. Specific GRU-based models mentioned include: - **open1d**: Focuses on daily opening prices - **close1d**: Focuses on daily closing prices - **barra1d**: Integrates Barra-style risk factors for daily predictions - **barra5d**: Extends Barra-style risk factors to a 5-day horizon[5][6][25] - **Model Evaluation**: GRU models show mixed performance, with some models like open1d performing well, while others like barra1d and barra5d experience significant drawdowns in certain market conditions[5][6][25] --- Model Backtesting Results GRU Model Performance - **open1d**: - Weekly excess return: 1.22% - Monthly excess return: 2.58% - Year-to-date excess return: 6.08%[29][30] - **close1d**: - Weekly excess return: 1.89% - Monthly excess return: 2.91% - Year-to-date excess return: 4.14%[29][30] - **barra1d**: - Weekly excess return: 0.85% - Monthly excess return: 1.50% - Year-to-date excess return: 3.48%[29][30] - **barra5d**: - Weekly excess return: 0.84% - Monthly excess return: 2.25% - Year-to-date excess return: 5.59%[29][30] --- Quantitative Factors and Construction Methods 1. Factor Name: Barra Style Factors - **Factor Construction Idea**: Barra factors are designed to capture systematic risk exposures across various dimensions such as size, value, momentum, and volatility[13][14] - **Factor Construction Process**: - **Beta**: Historical beta of the stock - **Size**: Natural logarithm of total market capitalization - **Momentum**: Weighted average of historical excess returns, combining volatility, cumulative deviation, and residual volatility $ Momentum = 0.74 \cdot \text{Volatility} + 0.16 \cdot \text{Cumulative Deviation} + 0.1 \cdot \text{Residual Volatility} $ - **Volatility**: Weighted average of historical residual return volatilities - **Valuation**: Inverse of price-to-book ratio - **Liquidity**: Weighted average of turnover ratios (monthly, quarterly, yearly) - **Profitability**: Weighted average of analyst forecasted earnings yield, cash flow yield, and other profitability metrics - **Growth**: Weighted average of earnings and revenue growth rates - **Leverage**: Weighted average of market leverage, book leverage, and debt-to-asset ratio[14][15] - **Factor Evaluation**: Barra factors demonstrate varying performance across different market conditions, with some factors like volatility and liquidity showing strong returns, while others like size and growth exhibit weaker performance[15][16] 2. Factor Name: Technical Factors - **Factor Construction Idea**: Technical factors aim to capture price and volume-based patterns, focusing on momentum and volatility metrics[17][20][24] - **Factor Construction Process**: - **Momentum**: Calculated over different time horizons (e.g., 20-day, 60-day, 120-day) - **Volatility**: Measured as the standard deviation of returns over specific periods (e.g., 20-day, 60-day, 120-day) - **Median Deviation**: Captures the median absolute deviation of returns[27] - **Factor Evaluation**: High-momentum and high-volatility stocks generally outperform, but certain periods show negative returns for these factors, especially in the 120-day horizon[17][27] 3. Factor Name: Fundamental Factors - **Factor Construction Idea**: Fundamental factors are derived from financial statements, focusing on profitability, growth, and valuation metrics[17][20][24] - **Factor Construction Process**: - **Static Financial Metrics**: Return on equity (ROE), return on assets (ROA), and profit margins - **Growth Metrics**: Earnings growth, revenue growth, and cash flow growth - **Surprise Metrics**: Earnings and revenue surprises relative to analyst expectations[19][21][23] - **Factor Evaluation**: Growth and surprise factors perform well, while static financial metrics like ROA and ROE show weaker performance in certain periods[19][21][23] --- Factor Backtesting Results Barra Factors - **Volatility**: Weekly return: 0.75%, Monthly return: 2.73% - **Liquidity**: Weekly return: 0.68%, Monthly return: 1.37% - **Size**: Weekly return: -1.45%, Monthly return: -3.60%[15][16] Technical Factors - **20-day Momentum**: Weekly return: -1.81%, Monthly return: -6.16% - **60-day Volatility**: Weekly return: -1.79%, Monthly return: -0.74% - **120-day Momentum**: Weekly return: -1.68%, Monthly return: -0.80%[27] Fundamental Factors - **ROA Growth**: Weekly return: 0.23%, Monthly return: 1.31% - **Earnings Surprise**: Weekly return: 0.20%, Monthly return: 1.11% - **Revenue Growth**: Weekly return: 0.17%, Monthly return: 0.77%[19][21][23]

Investment Rating - The investment rating for the company is "Buy" with initial coverage [1] Core Views - The company aims to enhance its e-commerce capabilities and optimize its product structure to drive sales growth, particularly in the vitamin water segment, which is expected to follow industry trends towards healthier beverage options [4][17] - The company reported a slight increase in total revenue for 2024, with a total revenue of 1.415 billion yuan, reflecting a year-on-year growth of 0.22% [4][13] - The gross profit margin for 2024 is projected at 39.08%, an increase of 3.24 percentage points year-on-year, while the net profit margin is expected to be 15.82%, a decrease of 0.97 percentage points [4][13] Company Overview - The latest closing price of the company's stock is 13.03 yuan, with a total market capitalization of 5.1 billion yuan [3] - The company has a total share capital of 394 million shares, with a price-to-earnings ratio of 22.47 [3] Financial Performance - For Q1 2025, the company achieved total revenue of 320 million yuan, a decrease of 4.3% year-on-year, while the net profit increased by 16.17% to 66 million yuan [5][14] - The projected revenues for 2025 to 2027 are 1.519 billion yuan, 1.644 billion yuan, and 1.764 billion yuan, respectively, with expected growth rates of 7.31%, 8.25%, and 7.32% [8][10] Strategic Initiatives - The company is focusing on building a second growth curve through the introduction of vitamin water, leveraging its clean ingredient profile and higher vitamin C content compared to competitors [7][17] - A dealer empowerment plan is being implemented to support distributors with differentiated strategies based on regional and channel characteristics [6][15] Market Trends - The soft drink industry is witnessing trends towards lighter flavors, health benefits, and sugar-free options, which the company aims to capitalize on with its new product lines [17]