Investment Rating - The investment rating for the company is "Buy" [12] Core Viewpoints - The current marine power strategy is being advanced, with policies increasingly focusing on underwater defense and deep-sea technology, indicating that underwater capabilities are expected to be a key investment direction in the next phase [3][8] - The company, China Marine Defense (600764.SH), is a leading player in underwater acoustic electronic defense equipment under the China Shipbuilding Group, possessing a full industrial chain capability in underwater acoustic equipment and is expected to benefit significantly from the acceleration of marine equipment construction [3][10] - The company is positioned as a capital operation platform for the electronic information sector of the China Shipbuilding Group, with potential to develop into a flagship platform for electronic information through professional integration [7][10] Summary by Sections Company Overview - China Marine Defense is a core listed platform for the electronic information industry of the China Shipbuilding Group, directly controlled by China Shipbuilding Industry Corporation, and encompasses several specialized enterprises with strong technical capabilities [7][21] - The company operates in three main segments: electronic defense equipment, electronic information industry, and specialized technical services, with a core advantage in underwater acoustic electronic defense equipment [7][25] Market Dynamics - The underwater battlefield's importance is increasingly highlighted in the context of great power competition, necessitating a systematic and comprehensive approach to underwater defense [8][39] - The government has included deep-sea technology as a new emerging industry in the 2025 work report, emphasizing its significance for resource and energy security [50][52] Financial Performance - The company has experienced revenue fluctuations from 2022 to 2024, with revenue growth rates of -11.95%, -16.31%, and -11.65%, respectively, while net profit growth rates were -31.09%, -47.23%, and -26.11% [29][30] - In Q1 2025, the company showed signs of improvement with revenue and net profit growth rates of 42.73% and 700.30%, respectively [29][30] Product and Technology - Underwater acoustic technology is essential for underwater detection, communication, navigation, and defense, with a wide range of applications in naval vessels, UUVs, and underwater observation networks [9][10] - The company is a key supplier of underwater acoustic equipment in China, with its products covering various fields including underwater information detection and transmission systems [25][26] Future Outlook - The company is expected to benefit from multiple investment projects scheduled for completion between 2025 and 2026, which will support future demand release [36][38] - The integration of specialized electronic and underwater acoustic businesses is anticipated to enhance the company's competitive edge and operational efficiency [10][34]

Investment Rating - The investment rating for the company is "Buy" [11] Core Viewpoints - The current marine power strategy is being advanced, with policies increasingly focusing on underwater defense and deep-sea technology, indicating that underwater capabilities may become a key investment direction [3][7] - The company, China Marine Defense (600764.SH), is a leading player in underwater acoustic electronic defense equipment under the China Shipbuilding Group, possessing a full industrial chain capability in underwater acoustic equipment and is expected to benefit from the accelerated construction of marine equipment [3][9] - The company is positioned as the capital operation platform for the electronic information sector of the China Shipbuilding Group, with potential to develop into a flagship platform for electronic information through professional integration [6][9] Summary by Sections Company Overview - China Marine Defense is a core listed platform for the electronic information industry of the China Shipbuilding Group, directly controlled by China Shipbuilding Industry Corporation, and encompasses several specialized enterprises with strong technical capabilities [6][19] - The company operates in three main segments: electronic defense equipment, electronic information industry, and specialized technical services, with a core advantage in underwater acoustic electronic defense equipment [6][24] Market Trends - The emphasis on underwater defense is increasingly significant in the context of great power competition, highlighting the importance of controlling underwater battlefields [7][41] - Deep-sea technology has been recognized as an emerging industry in the 2025 government work report, indicating a shift towards resource exploration and development in deep-sea environments [52][54] Financial Performance - The company has experienced revenue fluctuations from 2022 to 2024, with revenue growth rates of -11.95%, -16.31%, and -11.65%, respectively, while net profit growth rates were -31.09%, -47.23%, and -26.11% [30] - In Q1 2025, the company showed signs of improvement with revenue and net profit growth rates of 42.73% and 700.30%, respectively [30] Product and Technology - Underwater acoustic technology is essential for underwater detection, communication, navigation, and defense, with a wide range of applications in naval vessels, UUVs, and underwater observation networks [8][9] - The company is a key supplier of underwater acoustic equipment in China, with its products covering various aspects of underwater information detection and transmission [24][25] Future Outlook - The company is expected to benefit from multiple investment projects scheduled for completion between 2025 and 2026, which will support future demand [38][40] - The integration of specialized electronic and underwater acoustic businesses is anticipated to enhance the company's competitive edge and operational efficiency [9][35]

Investment Rating - The report does not explicitly provide an investment rating for the industry [34]. Core Insights - Stablecoins are closely linked to fiat currencies, with regulatory uncertainty being the most significant factor affecting their development across regions. Hong Kong has passed the "Stablecoin Ordinance" and is expected to implement it within the year, positioning itself at the forefront of the industry. Given its connection to the Greater Bay Area, Hong Kong's stablecoin development is anticipated to rank among the world's leaders in the future [3][5][8]. Summary by Sections Definition and Regulation - The Hong Kong Legislative Council officially passed the "Stablecoin Ordinance" on May 21, 2025, providing a comprehensive regulatory framework for stablecoins. The ordinance is expected to come into effect within 2025. The regulatory definition of stablecoins in Hong Kong emphasizes usability, technology, and stability, requiring them to exist in encrypted form and be linked to a single or basket of assets [5][6]. Issuance and Profitability - Only licensed institutions are permitted to issue stablecoins, with specific qualifications including a minimum paid-up capital of 25 million HKD and approval from the Monetary Authority for key stakeholders. Issuers must maintain 100% reserve assets to support the stablecoins, ensuring independent custody and daily audits [6][7]. - Future profit sources for issuers are expected to include interest from reserve assets and transaction fees. The ordinance stipulates that issuers cannot pay interest, suggesting that reserve asset income may primarily benefit the issuers [7]. Market Outlook - The development of stablecoins is expected to accelerate in Hong Kong, driven by cost advantages and increasing transaction volumes. As of May 1, 2025, the total market size of stablecoins reached approximately 227.37 billion USD, with a year-on-year growth of 46.5%. The 30-day rolling transaction volume for stablecoins reached 2 trillion USD, surpassing traditional payment channels like Visa and PayPal [8][28]. - The report highlights that only about 10% of transaction volumes in Asia currently utilize stablecoins, indicating significant growth potential in the region, especially considering its population and economic status. The close relationship between stablecoins and fiat currencies, along with the recent legislative advancements in Hong Kong, positions the region for rapid development in the stablecoin sector [8].

Investment Rating - The report maintains a "Buy" rating for the company [3][43]. Core Views - The company is expected to benefit from sustained high market activity and liquidity in the Hong Kong stock market, driven by ongoing interconnectivity policies [3][43]. - The company's PE ratio is currently at 30.52x, which is at the 20th percentile of its historical range since 2016, indicating a favorable valuation for investment [5][43]. - Revenue and other income projections for the company are estimated to be HKD 291 billion, HKD 306 billion, and HKD 321 billion for the years 2025, 2026, and 2027 respectively, with corresponding net profits of HKD 173 billion, HKD 182 billion, and HKD 192 billion [5][43]. Summary by Sections Market Performance - As of April, the Hong Kong stock market has shown significant growth, with the Hang Seng Index and Hang Seng Tech Index increasing by 10% and 14% respectively since the end of 2024 [8]. - The average daily trading (ADT) for the Hong Kong stock market was HKD 2,747 billion in April, reflecting a year-on-year increase of 144.7% [5][14]. Business Segments - In the cash market, the trading activity remains high, with the ADT for northbound funds at HKD 9,732 billion, showing a year-on-year increase of 20% [5][14]. - The derivatives market saw an increase in futures trading, with an ADV of 84.1 million contracts, up 23.2% year-on-year [5][16]. - The LME daily average trading volume increased by 10.6% month-on-month, reaching 88.0 million contracts in April [20]. Financial Projections - The company is projected to achieve total revenue and other income of HKD 291 billion in 2025, with net profits expected to reach HKD 173 billion [5][43]. - The PE ratios for the projected years are estimated to be 29.2x, 27.7x, and 26.2x for 2025, 2026, and 2027 respectively [5][43]. Macro Environment - The domestic economic outlook shows a decline in overall economic activity, with the manufacturing PMI at 49.0% in April, indicating a contraction [36]. - Internationally, the Federal Reserve has maintained its interest rates, with expectations for potential rate cuts later in the year, which may influence liquidity in the Hong Kong market [38].

Investment Rating - The industry investment rating is "Positive" and maintained [10] Core Viewpoints - The issuance of the opinion on "Improving the Market-oriented Allocation System for Resource and Environmental Elements" by the Central Committee and the State Council promotes market-based trading of carbon emission rights, water rights, and pollution rights, which benefits the realization of environmental value [2][6] - The transition from To G to To B and To C is expected to lead to valuation recovery, with beneficiaries including waste incineration, water services, and straw power generation [2][6] - The carbon reduction industry is anticipated to expand, with beneficiaries including electric sanitation vehicles, renewable resources, automotive exhaust, hydrogen energy, and CCUS [2][6] - Strengthening data supervision and monitoring capabilities will benefit sectors such as testing certification and environmental monitoring [2][6] Summary by Relevant Sections Event Description - The opinion aims to deepen the reform of market-oriented allocation of resource and environmental elements, with key goals set for 2027, including the establishment of a sound trading system for carbon emission rights, water rights, and pollution rights [6] Event Commentary - The report emphasizes the need for a systematic approach to the trading market, covering carbon markets, energy conservation, water rights, and pollution rights, and highlights the importance of coordination among different trading mechanisms [14] - It also suggests enhancing the monitoring and accounting capabilities for carbon emissions and water resource usage, which is crucial for effective environmental management [14]

Investment Rating - The report maintains a "Buy" rating for the company [2][6][45] Core Views - The company's PE ratio is 30.52x as of the end of April, positioned at the 20th percentile historically since 2016, indicating a reasonable cost-benefit ratio for investment. The report anticipates that with the continued enhancement of the mutual access policy in Hong Kong's capital market, liquidity in the Hong Kong stock market will continue to rise, leading to an increase in overall market activity and valuation. The company is expected to achieve revenues and other income of HKD 291 billion, 306 billion, and 321 billion for 2025-2027, with net profits attributable to shareholders of HKD 173 billion, 182 billion, and 192 billion, corresponding to PE valuations of 29.2x, 27.7x, and 26.2x respectively [2][7][45]. Summary by Sections Market Performance - In April, the Hong Kong stock market overall rose, with the Hang Seng Index and Hang Seng Tech increasing by 10% and 14% respectively compared to the end of 2024. The monthly average daily trading (ADT) for the Hong Kong Stock Exchange was HKD 2,747 billion, showing a month-on-month decrease of 2.0% but a year-on-year increase of 144.7% [7][10][16]. Business Segments - **Spot Market**: The trading activity in the Hong Kong stock market remained high, with the monthly ADT for northbound funds at HKD 9,732 billion, down 20% month-on-month but up 20% year-on-year. Southbound funds had an ADT of HKD 1,911 billion, down 3% month-on-month but up 145% year-on-year [7][16]. - **Derivatives Market**: Futures trading volume increased, while options trading volume decreased. The average daily volume (ADV) for futures was 84.1 million contracts, up 5.6% month-on-month and 23.2% year-on-year, while options ADV was 100.3 million contracts, down 6.0% month-on-month but up 14.0% year-on-year [20]. - **Commodity Market**: The LME daily average trading volume was 88.0 million contracts, reflecting a month-on-month increase of 10.6% and a year-on-year increase of 2.7% [24]. - **Primary Market**: The IPO scale in April saw a decrease, with only 2 new stocks listed, totaling HKD 29 billion, down 73% month-on-month and down 6% year-on-year [26]. Investment Income - Investment income-related interest rates showed a month-on-month increase but a year-on-year decline. As of the end of April, the 6-month HIBOR was 4.03%, up 0.05 percentage points month-on-month but down 0.65 percentage points year-on-year [33][45]. Macroeconomic Environment - The domestic economic sentiment has generally declined, with the manufacturing PMI for April at 49.0%, down 1.50 percentage points month-on-month. The demand side showed weakness, with new orders and new export orders indices at 49.2% and 44.7% respectively [37][39].

Investment Rating - The report maintains a "Buy" rating for the company [10] Core Insights - The report focuses on the deepening of international trade reforms in Yiwu, which is expected to enhance the efficiency of consumer goods imports and significantly boost the growth potential of the company [3][5] - The company has successfully transformed from a traditional commercial property operator to a comprehensive foreign trade service provider, benefiting from the new round of international trade reform [5][8] - The report highlights the importance of Yiwu as a global hub for small commodities, with a strong manufacturing base and a vibrant trade ecosystem [5][17] Summary by Sections New Round of International Trade Reform in Yiwu - The Yiwu market is recognized as the largest small commodity distribution center globally, with a population growth rate surpassing major first-tier and new first-tier cities [5][17] - The State Council approved the "Overall Plan for Deepening International Trade Comprehensive Reform in Yiwu," which aims to establish a higher-level international trade window and enhance the city's global competitiveness [20][24] Import: Expanding High-Quality Opening Up - China's foreign trade policy is shifting towards actively expanding imports, with the central economic work conference emphasizing the need for high-quality opening up [6][26] - The report notes that the current import growth rate is lagging behind exports, indicating significant potential for improvement in the import structure [6][32] Export: Policy Benefits Creating Export Trade Prosperity - Yiwu has benefited from innovative market procurement trade methods, which have simplified the export process and reduced costs [7][8] - The report anticipates that the new reform plan will further enhance the market procurement trade model, driving export growth despite global trade uncertainties [7][8] Investment Recommendations: Positive Outlook on Performance Growth - The company is expected to see significant growth driven by the resonance of new and old businesses, with a projected EPS of 0.75, 0.95, and 1.14 yuan for 2025-2027 [8] - The report emphasizes the strategic positioning of the company in emerging market economic cooperation, which is expected to unlock new growth opportunities [8]

Investment Rating - The report maintains a "Buy" rating for the company [12] Core Viewpoints - The report emphasizes the significance of the new round of international trade reform pilot in Yiwu, which is expected to enhance the efficiency of consumer goods imports and boost the company's growth potential [4][7] - The company has successfully transformed from a traditional commercial property operator to a comprehensive foreign trade service provider, benefiting from the current trade reform policies [10] Summary by Sections Launch: New Round of International Trade Reform in Yiwu - Yiwu has been designated as a pilot for national international trade reform, with a focus on enhancing trade efficiency and supporting the development of a robust foreign trade ecosystem [7][21] - The city has experienced a population inflow and boasts the highest per capita disposable income in the country, indicating strong urban vitality [21] Imports: Continuous Expansion of High-Quality Opening Up - China's foreign trade policy is shifting towards actively expanding imports, with a focus on improving the efficiency of consumer goods imports [8][33] - The report highlights the need for innovation in import mechanisms to meet domestic consumer demand for quality and price [8][50] Exports: Policy Dividends Create Export Trade Prosperity - Yiwu has benefited from innovative market procurement trade methods that simplify the export process and reduce costs [9][10] - The report notes that despite uncertainties in international trade, Yiwu's exports are expected to maintain steady growth due to China's manufacturing advantages [9] Investment Recommendations: Positive Outlook on Performance Growth Certainty - The company is positioned to benefit from the dual drivers of traditional and new business growth, with expected earnings per share (EPS) of 0.75, 0.95, and 1.14 yuan for 2025-2027 [10] - The report anticipates that the new trade reform policies will accelerate the company's import business and enhance overall performance [10]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The current credit repair market is not over. Short - end spreads are fully compressed, while medium - and long - term spreads still have room for repair. Institutions are increasing their purchases of 3 - 5 - year varieties, and the cost - effectiveness of the duration strategy continues to improve [3]. - From late May to early June, the credit bond market will still feature mainly structural opportunities. The strategy of extending duration for high - grade bonds combines safety and return potential [7]. - Although the pressure of wealth management products returning to the balance sheet at the end of June may cause a phased impact on credit bonds, the adjustment space is limited [10]. 3. Summary by Relevant Catalogs 3.1 Credit Spread Compression Logic and Investment Strategy - After the synchronous reduction of deposit rates and LPR, the pressure on banks' liability costs has eased, and the allocation demand of non - bank funds continues to be released. The market is transitioning from "grabbing short - end coupons" to "exploring spread depressions" [7]. - The central shift of the capital interest rate downwards consolidates the basis for credit bond carry trades. The stable carry space makes 1 - 3 - year and 3 - 5 - year credit bonds the preferred "core positions" for institutions [7]. - Medium - term varieties have both coupon advantages and resistance to interest rate fluctuations. There is a significant differentiation in spreads between small and medium - sized bank perpetual bonds and ordinary credit bonds, with potential for spread compression [8]. - The current credit bond repair market is ongoing. Short - end spreads are close to historical lows, while 3 - 5 - year spreads have room for valuation repair. Institutions are increasingly buying 3 - 5 - year credit bonds [9]. 3.2 Yield and Spread Overview - **Yield and Spread Changes**: The yields and spreads of various types of bonds, including government bonds, local government bonds, and different types of credit bonds, have shown different degrees of changes compared to the previous week. For example, the yields of most credit bonds have decreased, and spreads have also changed to varying extents [20][22]. - **Historical Quantiles**: The historical quantiles of yields and spreads of different bonds are also presented, which helps to understand the current position of bond yields and spreads in historical data [20][22]. 3.3 Regional Yield and Spread of Urban Investment Bonds - **Yield Changes**: The yields of public non - perpetual urban investment bonds in different provinces have changed compared to the previous week. For example, the yields of some provinces' bonds have decreased, while others have increased slightly [25]. - **Spread Changes**: The credit spreads of public non - perpetual urban investment bonds in different provinces have also changed. Some provinces' spreads have narrowed, while others have widened [27]. - **Implied Rating Yield and Spread**: The yields and spreads of different implied ratings of public non - perpetual urban investment bonds in various provinces have different characteristics and changes [32][37].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Since May 2025, US Treasuries and Japanese government bonds have been trending downwards, with the yield of 30-year US Treasuries rising by more than 10bp on individual trading days. The domestic bond market may also be affected by overseas sentiment. The trading focus of US Treasuries may shift from tariff disturbances back to the fundamentals. The subsequent yield of US Treasuries may continue to fluctuate at a high level, but the domestic bond market may have an independent trend [2][5]. - The rise in US Treasury yields in May was mainly driven by real interest rates. The trading focus of US Treasuries may shift from tariff disturbances to the US fundamentals. The economic resilience does not support the Fed's decision to cut interest rates, and the market's expectation of interest rate cuts has been postponed again. The expected real interest rate implied in US Treasuries may not decline in the short term. The debt risk pressure and supply-demand pressure in the US may push up the real risk premium implied in US Treasuries. The real risk premium in May may be more about pricing fiscal risks rather than short-term liquidity shocks and policy uncertainties [6][19][23]. - Looking ahead, US Treasury yields lack downward momentum, and there is still significant maturity pressure behind US Treasuries to support yields at a high level. If Trump's "big and beautiful" tax reform bill is implemented, it may bring long-term pressure on US Treasury yields to rise easily and fall difficultly. Although the long-term interest rate of US Treasuries has fluctuated sharply recently, its transmission effect on the domestic bond market is generally controllable, and the independent trend of the domestic bond market will continue [6][41]. Summary by Relevant Catalogs Recent Trend of US and Japanese Government Bonds - Since May 2025, US Treasuries and Japanese government bonds have been trending downwards. On May 21, the yield of 30-year US Treasuries exceeded 5%, approaching the previous high in October 2023, and the yield of 10-year US Treasuries rose by 10bp to nearly 4.6%, returning to the level at the end of February. On May 23, the domestic bond market may have been affected by the weakening of overseas long-term bonds [5][10]. - After the signing of the US "reciprocal tariff" executive order, US Treasuries experienced two rounds of obvious declines, showing an "N" shape. The first stage was a rapid decline (April 4 - April 11), the second stage was a recovery period (April 12 - April 30), and the third stage was another decline (May 1 - May 21) [12][13]. Factors Driving the Rise in US Treasury Yields - In May, the rise in US Treasury yields was mainly driven by real interest rates. From May 1 to May 21, real interest rates pushed up the yield of 10-year US Treasuries by about 24bp, while inflation expectations contributed about 12bp [19]. - The trading focus of US Treasuries may shift from tariff disturbances to the US fundamentals. The economic resilience does not support the Fed's decision to cut interest rates, and the market's expectation of interest rate cuts has been postponed again. The expected real interest rate implied in US Treasuries may not decline in the short term [23]. - As the debt ceiling deadline approaches, the debt risk pressure and supply-demand pressure in the US are prominent, which may push up the real risk premium implied in US Treasuries. The real risk premium in May may be more about pricing fiscal risks rather than short-term liquidity shocks and policy uncertainties [28][30]. Review of April - In April, the main driver of the rise and fall of the long-term yield of US Treasuries was the real risk premium, which mainly reflected the compensation for policy uncertainty risks, liquidity risks, and fiscal risks [35]. - In early April, multiple factors such as the unexpected implementation of the US reciprocal tariff policy, the large-scale closing of US Treasury basis trades, and the decline in overseas bond-buying enthusiasm jointly pushed up the long-term yield of US Treasuries. The main driving factor was the real risk premium, which was mainly driven by short-term liquidity risks caused by the closing of high-leverage arbitrageurs [35]. - The Fed's statements to stabilize the market alleviated market concerns about liquidity risks, and tariff negotiation signals reduced policy uncertainty risks. From April 12 to April 30, the yield of 10-year US Treasuries declined significantly [36]. Outlook for US Treasuries and Impact on the Domestic Bond Market - Looking ahead, US Treasury yields lack downward momentum, and there is still significant maturity pressure behind US Treasuries to support yields at a high level. If Trump's "big and beautiful" tax reform bill is implemented, it may bring long-term pressure on US Treasury yields to rise easily and fall difficultly [41]. - Although the long-term interest rate of US Treasuries has fluctuated sharply recently, its transmission effect on the domestic bond market is generally controllable, and the independent trend of the domestic bond market will continue. The core logic lies in the substantial differentiation of monetary policies between China and the US and the advantages of RMB assets [45]. - It is expected that the long-term interest rate may fluctuate slightly between 1.65% - 1.7%. A dumbbell-shaped allocation structure of "increasing the allocation of certificates of deposit at the short end, and allocating at the long end when the yield is above 1.7% and at the ultra-long end when the yield is above 1.9% on dips" is recommended. Attention can also be paid to 3 - 5Y credit products, which may still have some spread compression space in the future [45].