Investment Rating - The industry rating is "Outperform the Market," indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [14]. Core Insights - The successful handover of the last process system of the Zhangzhou Nuclear Power Unit 2 marks a significant milestone, laying a solid foundation for subsequent fuel loading, grid connection, and commercial operation [4]. - The U.S. Department of Energy has approved the preliminary safety design report for Westinghouse's eVinci micro-reactor, making Westinghouse the first developer to receive such approval, which is crucial for the demonstration of the eVinci design [5]. - Nuclear power is recognized as a key player in promoting green energy transition due to its clean, safe, and efficient characteristics, with annual utilization hours exceeding 7000 hours, the highest among all power sources [6]. Company Summaries - **Jia Dian Co., Ltd.**: The main helium fan is the only power device in the primary loop of the fourth-generation high-temperature gas-cooled reactor, and its subsidiary has leading products in the nuclear power business [6]. - **Guoguang Electric**: The company's filter and cladding systems are critical components of the ITER project [6]. - **Lanshi Heavy Industry**: Covers upstream nuclear fuel systems, midstream nuclear power plant equipment, and downstream spent fuel processing [6]. - **Kexin Electromechanical**: Has manufactured high-temperature gas-cooled reactor products and achieved import substitution for new fuel transport containers [6]. - **Hailu Heavy Industry**: Services include third and fourth-generation reactors as well as thermonuclear fusion reactors (ITER) [6]. - **Jiangsu Shentong**: Secured over 90% of orders for nuclear-grade butterfly valves and nuclear-grade ball valves for new nuclear power projects in China [6]. - **Xianheng International**: The company's products are applied in the operation and maintenance of nuclear energy and nuclear power [6].

Trade Performance - In May, exports increased by 4.8% year-on-year, a decrease of 3.3 percentage points from April's growth rate[2] - The trade surplus for May expanded to $103.22 billion due to a deeper decline in imports[2] - Imports fell by 3.4% year-on-year, with a significant drop in crude oil imports by 22.1%[4] U.S.-China Trade Relations - Despite a temporary suspension of tariff increases, China's exports to the U.S. fell sharply by 34.5%, a decline of 13.5 percentage points from April[3] - The primary method for China's continued export activity is through offshore collaborative supply chains, particularly with ASEAN countries[3] - Exports to the EU and the UK improved, rising by 3.8% and 13.1% respectively[3] Sector Analysis - Mid-range consumer goods continued to decline due to previous production slowdowns, contributing negatively to export growth[4] - The semiconductor and electronics sectors showed resilience, with a contribution to exports increasing by 0.6 percentage points[4] - The automotive sector experienced a resurgence in exports, with a contribution increase of 0.7 percentage points[4] Future Outlook - The second quarter is expected to maintain high export growth rates, but uncertainties loom for the second half of the year[5] - The U.S. government's new tax legislation indicates a continued intent to shift advanced supply chains back to the U.S.[5] - Risks include potential global trade policy uncertainties that could lead to lower-than-expected export growth[5]

Inflation Data - April CPI year-on-year decline remained at -0.1% for the third consecutive month, while core CPI slightly increased by 0.1 percentage points to 0.6%[2] - May food CPI decreased by 0.2% month-on-month, with a year-on-year decline deepening to -0.4%[3] - Core CPI rose 0.1 percentage points to 0.6% in May, driven by stable growth in service prices[4] PPI Trends - May PPI year-on-year decline deepened by 0.6 percentage points to -3.3%, marking the lowest level since August 2023[2] - PPI was significantly affected by falling prices in the coal and oil sectors, with oil and gas extraction prices dropping 5.6% month-on-month[4] - The coal and metallurgy industry prices also fell, influenced by seasonal demand and adverse weather conditions affecting construction projects[4] Consumer Behavior - Service CPI increased by 0.2 percentage points to 0.5% in May, supported by rising accommodation and travel prices during the May Day holiday[4] - Durable goods consumption is showing diminishing returns from fiscal subsidies, with transportation tools' prices narrowing their year-on-year decline to -3.4%[4] - The real estate market remains in a bottoming phase, with rental prices stable at -0.1% year-on-year and a slight month-on-month decline of 0.1%[4] Economic Outlook - The overall inflation data suggests a weak domestic consumption and investment demand, with limited potential for growth in the near term[5] - The necessity for larger-scale consumer subsidies has decreased, but export pressures are expected to rise post the 90-day tariff relief period[5] - A prediction of a potential 10 basis points rate cut in June remains, aimed at stabilizing the real estate market[5]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - Amidst minor fluctuations in the domestic macro - economy and uncertainties in external trade, local governments are actively constructing a full - scale industrial chain system. Based on the construction progress of this system, different investment strategies for local government urban investment platforms and industrial investment platform bonds are proposed [1][2]. - For industrial bonds, attention can be paid to 2 - 3 - year industrial bonds with good liquidity and 1 - year - or - less industrial bonds in specific industries. For long - term bonds, appropriate duration extension can be considered for certain industries. The issuance of inter - bank science and technology innovation bonds by private enterprises has a significant demonstration effect [3][66]. - In the financial bond market, most financial product yields declined this week, and credit spreads mostly widened. For Tier 2 and perpetual bonds, different investment suggestions are given according to different maturities and credit ratings [4][71]. 3. Summary by Relevant Catalogs 3.1 From Another Perspective on Local Economy 3.1.1 Local Governments Actively Build a Full - Scale Industrial Chain System to Stimulate Innovation and Long - Term Development - Local governments are constructing a full - scale industrial chain system including national key laboratories, R & D incubators, etc., aiming to promote local economic development and move local industrial chains towards the high - end of the global value chain [10]. - In May 2025, China's economic indicators showed positive trends. The manufacturing PMI improved, and the decline in manufacturing exports slowed down. The service industry PMI also increased, but the comprehensive PMI output index was affected by the manufacturing industry [11][12]. - China's foreign trade negotiations with the US, Europe, and South Asian countries have made new progress, which is conducive to stabilizing the external trade environment and ensuring the stability of the import and export industrial chain [16][17]. 3.1.2 Investment Suggestions - **First Type**: Regions that have basically completed the full - scale industrial chain system construction. Their local governments have strong economic strength and anti - risk ability. Long - duration bonds issued by local urban investment platforms, industrial investment platforms, and state - owned enterprises can be mainly considered, such as Shanghai, Suzhou, Guangzhou, and Shenzhen [2][39]. - **Second Type**: Regions with "national/ provincial advanced manufacturing industrial clusters" and "international logistics hub centers/ commodity resource allocation hubs", which are currently building other chain links. Medium - to - long - term bonds can be appropriately considered, such as Foshan, Guangdong [2][39]. - **Third Type**: Regions that have completed the layout of one or two chain links due to special resource endowments. Their economic strength needs further observation, and short - duration bonds can be appropriately considered, such as Huaihua High - tech Zone [2][43]. 3.2 Weekly Views on Industrial and Financial Bonds 3.2.1 Industrial Bonds - Pay attention to 2 - 3 - year industrial bonds with good liquidity in industries such as industrial investment, public utilities, transportation, state - owned real estate, and cultural tourism. For 1 - year - or - less industrial bonds, focus on industries like local refineries and steel [66]. - For long - term bonds, appropriate duration extension can be considered for coal, transportation, public utilities, and industrial investment bonds. Private enterprises such as Luxshare Precision, Muyuan Foods, Geely Holding, and Shandong Hongqiao have announced the issuance of inter - bank science and technology innovation bonds, with a significant demonstration effect [3][67]. - In the steel industry, pay attention to bonds of Shandong Iron and Steel and HBIS Group within two years. Steel enterprises need to control production rhythm and implement production - limiting policies [67]. 3.2.2 Financial Bonds - This week, most financial product yields declined, and credit spreads mostly widened. The credit spreads of Tier 2 and perpetual bonds and securities firms' short - term financing narrowed, while the credit spread of non - perpetual sub - bonds of insurance companies widened the most [4][71]. - For Tier 2 and perpetual bonds, currently, the valuation of 2 - 3Y AAA - and AA+ Tier 2 and perpetual bonds is at a historical percentile of 12% - 16% in the past year, with reduced cost - effectiveness. Different investment suggestions are given according to different maturities and credit ratings [71]. 3.3 Primary Market Tracking The report provides charts on the issuance, net financing, subscription, and registration of credit bonds, financial bonds, urban investment bonds, and industrial bonds this week, but specific numerical analyses are not elaborated in the text [78][80][82]. 3.4 Secondary Market Observation 3.4.1 Volume of Secondary Transactions The report presents charts on the trading volume and number of credit bonds, urban investment bonds, and industrial bonds in the secondary market, but specific numerical analyses are not elaborated in the text [92][95]. 3.4.2 Price of Secondary Transactions No relevant content provided.

Investment Rating - The industry rating is "Outperform the Market" [6][67] Core Views - The report highlights that the downward trend in cement and glass prices continues, while urban renewal initiatives are actively promoted. The Ministry of Housing and Urban-Rural Development reported that 5,679 old urban residential areas were newly started for renovation from January to April, with over 50% opening rates in six regions [2][11] - Central government financial support for urban renewal is expected to exceed 20 billion yuan, with various local governments implementing measures to stimulate real estate market demand [2][11] - Short-term factors include the emphasis on stabilizing the real estate market amid growth pressures and the gradual alleviation of risks associated with major real estate companies, which is beneficial for the building materials sector [2][11] - Long-term factors suggest that the opening of the interest rate reduction channel in Europe and the US may provide more room for monetary and fiscal policies in China, with expectations for policies to stabilize real estate transactions and prices [2][11] Summary by Sections Recent High-Frequency Data - As of June 6, 2025, the average price of bulk P.O 42.5 cement in China is 372.6 yuan/ton, down 0.6% week-on-week and down 4.6% year-on-year [3][12] - The average factory price of glass (5.00mm) is 1,205.7 yuan/ton, down 2.0% week-on-week and down 27.3% year-on-year [3][20] Investment Recommendations - The report suggests focusing on three main lines for investment: 1. High-quality companies benefiting from stock renovation, such as Weixing New Materials, Beixin Building Materials, and Tubao [4] 2. Undervalued stocks with long-term alpha attributes, such as Sankeshu, Dongfang Yuhong, and Jianlang Hardware [4] 3. Leading cyclical building materials companies with bottoming fundamentals, such as Huaxin Cement, Conch Cement, China Jushi, and Qibin Group [4] Market Performance - The Shanghai Composite Index rose by 1.13%, and the Shenzhen Composite Index rose by 1.82%. The building materials index increased by 0.63% [3][55] - Sub-sectors showed varied performance, with fiberglass manufacturing up by 2.08% and cement manufacturing down by 0.97% [3][55]

Investment Rating - The industry rating is "Outperform the Market" [8][16] Core Viewpoints - The automotive sector is focusing on luxury vehicles and unmanned logistics, with a recommendation to pay attention to leading companies such as BYD, Geely, and Xiaomi for overall vehicle production, and to Seres and Li Auto for luxury vehicles [3][4] - The robotaxi segment has experienced significant adjustments, primarily influenced by trading factors rather than fundamental issues, with a focus on the upcoming operational effects of Tesla's robotaxi on June 12 [4][5] - The low-altitude economy is highlighted, particularly the unmanned aerial vehicle (UAV) sector, which is expected to shift from being part of unmanned logistics to an independent market leader if relevant policies are implemented in June [6] Summary by Sections Automotive Sector - The report emphasizes the ongoing pressure in the domestic market and the increasing competition, suggesting a focus on leading automotive companies and luxury vehicle manufacturers [4][3] - Key companies to watch include BYD, Geely, Xiaomi, Seres, and Li Auto [4] Robotaxi and Robotics - The report notes a significant adjustment in the robotaxi market, with a focus on the upcoming Tesla robotaxi operations and the potential for new market trends [4][5] - Recommendations include focusing on large-cap stocks related to Tesla and companies with strong industrial logic and future potential [5] Low-altitude Economy - The report suggests that the UAV sector is poised for growth, particularly if low-altitude policies are enacted, with a focus on companies like Zongheng and Green Energy Hui充 [6]

Group 1 - The S&P 500 index has returned above 6000 points for the first time since February, indicating a significant recovery in market risk appetite [8][9] - The overall performance of major global asset classes was mixed, with NYMEX platinum (+11.64%) showing the largest increase, while the Japanese yen against the RMB saw the largest decline (-1.05%) [30][41] - The U.S. non-farm payrolls for May increased by 139,000, slightly above the expected 130,000, while the unemployment rate remained at 4.2%, aligning with market expectations [8][9] Group 2 - The global equity markets exhibited varied performance, with the Korean Composite Stock Price Index rising by 4.24%, while the Nikkei 225 saw a decline of 0.59% [33][45] - In the U.S. equity market, the communication services sector experienced the highest gain at +2.96%, while the consumer discretionary sector faced the largest drop at -0.85% [40] - The major commodities market showed mixed results, with NYMEX platinum leading the gains, while CBOT corn recorded the largest decline at -0.34% [47][49] Group 3 - The report highlights the importance of upcoming economic data, particularly the June CPI data, which could influence interest rate expectations and further impact technology stocks [8][9] - The Federal Reserve's internal discussions reflect a cautious dovish tone, with officials indicating the possibility of rate cuts later in the year [9][10] - The report tracks significant economic indicators, including the ISM manufacturing PMI for May at 48.5, which is below both the previous value and market expectations [8][9]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical industry [7] Core Insights - The report highlights that the Chinese innovative drug sector is poised to capitalize on the patent cliff faced by multinational corporations (MNCs), with a potential market space exceeding $240 billion due to the expiration of patents on 31 major drugs by 2037 [5][18] - It emphasizes that China has the largest number of innovative drug pipelines globally, particularly in cell therapy, ADCs, and bispecific antibodies, which positions it as a key player in the global market [5][32] - The report suggests that the ongoing trend of licensing out Chinese innovations to MNCs could lead to significant profit opportunities, estimating a net profit of approximately $8.2 billion from authorized projects between 2020 and 2025, translating to a potential market capitalization increase of $81.7 billion [5][46][47] Summary by Sections Market Review - The report notes that the CITIC Pharmaceutical Index rose by 1.2% during the week of June 3-6, 2025, outperforming the CSI 300 Index by 0.3 percentage points [4][48] - The pharmaceutical sector has shown a year-to-date increase of 8.3%, surpassing the CSI 300 Index by 9.9 percentage points [4][48] MNC Patent Cliff - The report identifies that 27 drugs with projected sales exceeding $4 billion in 2024 will face patent expiration by 2037, leading to a potential loss of approximately $244.3 billion for MNCs [18][19] - Specific drugs mentioned include Merck's Keytruda and Pfizer's Eliquis, which are expected to face significant sales declines post-patent expiration [19][20] Supply and Demand Dynamics - China leads globally in the number of innovative drug pipelines, particularly in cell therapy and ADCs, with 58% of these drugs currently in clinical phase I trials [32][33] - The report indicates that Chinese companies are involved in 716 research tracks, ranking first in development progress [32][33] Transaction Trends - The report highlights a significant increase in global pharmaceutical transactions, with the number of deals rising from 358 in 2015 to 743 in 2024, and total transaction value increasing from $56.9 billion to $187.4 billion [36][39] - Chinese companies accounted for 30% of global transaction value in 2024, with a total of $57.1 billion in deals [39][40] Investment Recommendations - The report suggests focusing on companies with strong overseas clinical progress and those with potential for significant licensing deals, including Innovent Biologics, Eddingpharm, and others [5][6] - It also recommends monitoring companies that have received approval for commercialization, such as BeiGene and Kingsoft Biopharma [5][6]

Investment Rating - The industry rating is "Outperform the Market" [4] Core Views - The report highlights that pig prices have dropped below 14 yuan per kilogram, with a current average price of 13.97 yuan per kilogram as of June 8, reflecting a week-on-week decrease of 0.51 yuan per kilogram [13][34] - The report indicates a significant increase in pig slaughtering post-Duanwu Festival, with daily average slaughtering volume dropping to 145,800 heads, a week-on-week decrease of 2.21% [16][34] - The average weight of pigs being sold has decreased to 129.17 kg, with a slight week-on-week decline of 0.01 kg [23][34] - The report anticipates increased supply pressure in the short term, with a projected rise in daily average slaughtering rates for June [34] - In the medium term, the report suggests that high-quality pig companies may achieve unexpected profits through increased sales and reduced costs, despite a downward trend in the pig cycle expected by 2025 [34] Summary by Sections Pig Farming - The report notes accelerated pig slaughtering and a drop in prices, with the average price falling to 13.91 yuan per kilogram [13][34] - Post-holiday consumption has declined, leading to reduced slaughtering volumes [16][34] - The average weight of pigs sold has decreased, indicating a weakening sentiment among farmers regarding weight gain [23][34] - The report suggests monitoring the industry's weight reduction situation as inventory levels begin to decrease [34] Poultry Sector - The white chicken market has seen a price adjustment, with the average price at 7.32 yuan per kilogram, down 0.05 yuan week-on-week [36][40] - The report highlights the impact of ongoing avian influenza outbreaks on supply, with potential benefits for domestic chicken prices due to import interruptions from Brazil and the U.S. [40] - The egg-laying chicken sector is experiencing high prices for chicks, with the average price at 4.10 yuan per chick, remaining stable week-on-week [40] Seed Industry & Agricultural Products - The report discusses the strengthening of seed industry regulations, which aims to ensure the safety of agricultural production [50] - It notes that soybean meal prices are under pressure, with a current price of 2,940 yuan per ton, reflecting a week-on-week decrease of 16 yuan [51] - The report emphasizes the importance of the soybean import situation, particularly in light of U.S.-China trade relations, which could affect future pricing [51]

Investment Rating - The report maintains an "Outperform" rating for the industry [6] Core Insights - The lithium battery sector is highlighted by the recent research achievements of CATL, which published findings on lithium metal batteries in the journal Nature, indicating advancements in battery technology [10] - The photovoltaic sector is experiencing a decline in domestic module production, with expectations of production falling below 45GW in June, driven by weak terminal demand [18] - The offshore wind sector is poised for performance realization in Q2 2025, with significant project progress in China and the UK [26] - The energy storage sector has seen a historic low in the average price of 2-hour storage systems, with the National Energy Administration initiating trials for new power systems [32] - The power equipment sector is advancing with the establishment of the first flexible direct current converter station in Guangzhou, indicating accelerated construction of major energy projects [40] Summary by Sections 1. Lithium Battery and Electric Vehicle Sector - CATL's lithium metal battery research has achieved a cycle life of 483 cycles, doubling that of previous products, with energy density potential exceeding 500Wh/kg [10] - Solid-state battery equipment was showcased at the 2025 European Battery Exhibition, indicating a shift towards advanced battery technologies [11] 2. Photovoltaic Sector - Domestic module production is expected to decline, with a focus on the upcoming SNEC exhibition for new product releases [18] - The supply chain for silicon wafers, battery cells, and auxiliary materials is adjusting downward due to reduced production [19] - The price dynamics of photovoltaic components are mixed, with some prices decreasing due to weak demand [20] 3. Wind Power Sector - Significant progress in offshore wind projects in China, with major installations expected to contribute to Q2 2025 performance [26] - The UK is set to launch its seventh round of Contracts for Difference (CfD) for offshore wind, with over 8.5GW of projects qualifying [27] 4. Energy Storage Sector - The total scale of energy storage bidding reached 6.57GW/20.2GWh in May, with the average price of 2-hour storage systems dropping to 0.55 yuan/Wh [32] - The National Energy Administration's new power system trials are expected to accelerate the development of virtual power plants and collaborative energy solutions [34] 5. Power Equipment Sector - The establishment of Guangzhou's first flexible direct current converter station marks a significant step in the construction of the "藏粤直流" project [40] - The results of the first joint procurement of 10kV transformers in North China were announced, with a total bid amount of 262 million yuan [41] 6. Industrial Control and Robotics Sector - ABB's acquisition of Bel Products signifies strategic expansion in the electrical enclosure market [49] - The domestic company SimiTech secured a 36 million yuan order for RV reducers, indicating growth in high-end component manufacturing [50] 7. Hydrogen Energy Sector - China's hydrogen energy development is transitioning into a new phase, with the Sichuan province releasing a long-term development plan [55] - Jiangsu Yancheng has proposed an orderly development of green fuels, with 12 new hydrogen companies established in May 2025 [56]