Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals industry [2]. Core Viewpoints - Precious metals are expected to perform well in the long term, with gold prices rising by 1.42% recently due to increasing geopolitical tensions [5]. - Industrial metal prices have mostly increased, influenced by easing trade tensions between China and the U.S. [5]. - The report highlights a positive outlook for the non-ferrous metals sector, particularly in precious metals, driven by anticipated monetary easing from the Federal Reserve and domestic fiscal policies [5]. Summary by Sections 1. Industry Data Review 1.1 Precious Metals - Gold prices have shown a slight increase, with a focus on long-term growth potential due to geopolitical instability [5]. 1.2 Industrial Metals - Prices for copper, aluminum, lead, zinc, tin, and nickel have varied, with copper increasing by 1.4% and tin by 2.6% [27]. 1.3 Minor Metals - Prices for rare earth metals, particularly praseodymium-neodymium oxides, have risen, indicating a recovery in manufacturing demand [29]. 1.4 Energy Metals - Lithium prices have decreased, while nickel prices have shown some resilience, suggesting a need to monitor future demand growth [34]. 2. Market Data - The non-ferrous metals sector has outperformed the broader market, with a 3.74% increase compared to the Shanghai Composite Index's 1.13% rise [36]. 3. Important Events Review - Recent geopolitical events, including tensions involving the U.S. and Russia, have influenced market sentiment and commodity prices [43].

Market Performance - Global stock markets showed a mixed performance last week, with the South Korean Composite Index leading gains among major markets[3] - The US stock indices collectively rose, with the Nasdaq, S&P 500, and Dow Jones increasing by +2.2%, +1.5%, and +1.2% respectively[3] - European markets also saw collective gains, while the Asia-Pacific region had mixed results, with only Vietnam's VN30 and Japan's Nikkei 225 indices experiencing pullbacks[3] Employment Data - The US added 139,000 jobs in May, with an unemployment rate holding steady at 4.2% for three consecutive months[3] - This job growth was better than market expectations but below the 12-month average increase of 149,000 jobs per month[3] - The ADP report indicated only 37,000 new jobs were created, significantly lower than the revised 60,000 from April and the market forecast of 110,000[3] Legislative Developments - The "One Big Beautiful Bill Act" passed the House with a narrow margin, raising concerns over increasing fiscal deficits in the US[3] - Elon Musk criticized the bill, leading to a public fallout with former President Trump, which caused significant volatility in Tesla's stock price[3] US-China Trade Talks - The first meeting of the US-China economic consultation mechanism is scheduled from June 8 to June 13, potentially improving market risk appetite[3] - The previous high-level talks in Geneva have set a foundation for deeper negotiations, with expectations for positive outcomes[3] Investment Strategy - Investors are advised to focus on equities, particularly in the US and China, as they are likely to benefit from potential positive news from trade talks[3] - Caution is advised regarding increased volatility, with fixed income and commodities being less favorable in the current environment[3] Risk Factors - Potential risks include unexpected inflation rebounds in overseas markets, weaker-than-expected global economic conditions, and geopolitical tensions escalating beyond expectations[3]

Investment Rating - The report maintains an "Outperform" rating for the basic chemical industry [2] Core Views - The basic chemical sector is expected to benefit from a new round of supply-side reforms, with a focus on price increases for products like chlorantraniliprole and SAF [5][32] - The report highlights the resilience of major companies in the sector, suggesting that core assets are entering a long-term value zone [16][17] Summary by Sections 1. Core Views - The report emphasizes that policies initiated since September 2024 are likely to improve supply-demand dynamics in the chemical sector, potentially boosting demand for end-use chemical products [16] - It identifies chlorantraniliprole as a key product to watch due to supply constraints and rising prices, with a significant price increase of 123.9% noted recently [32] - SAF prices are also recovering, driven by improved procurement conditions in Europe and rising costs of raw materials [33][34] 2. Overall Performance of the Chemical Sector - The basic chemical industry index rose by 2.6% in the week of May 30 to June 6, outperforming both the Shanghai Composite Index and the ChiNext Index [19][20] - Year-to-date, the basic chemical industry index has increased by 5.8%, significantly outperforming the broader market indices [19][25] 3. Individual Stock Performance - Among 424 stocks in the basic chemical sector, 347 stocks rose, with notable gainers including Lianhua Technology (+39.1%) and Lingpai Technology (+29%) [28][29] - Conversely, stocks like Hengtian Hailong (-15.9%) and Suzhou Longjie (-12.6%) experienced significant declines [28][29] 4. Key News and Company Announcements - The report highlights the price surge of chlorantraniliprole and SAF, indicating a favorable market environment for these products [32] - It discusses the supply constraints faced by chlorantraniliprole producers, particularly due to the dominance of a few key players in the market [32] - The report also notes the potential for SAF companies in China to benefit from increased demand and improved procurement conditions in Europe [34]

Valuation Effects - As of the end of May, China's foreign exchange reserves reached $3,285.255 billion, an increase of $3.59 billion month-on-month[6] - The valuation effect from rising bond yields in major economies is expected to negatively impact foreign reserves, estimated to decrease by around $20 billion[6] - The overall valuation and interest effects are estimated to reduce foreign exchange reserves by approximately $19 billion[6] Trading Factors - Excluding foreign capital flows, the net settlement and other currency demand are expected to contribute to an increase in foreign reserves of about $13 billion[7] - The trading factors are projected to lead to an increase in foreign reserves of approximately $23 billion[7] - The anticipated inflow of foreign capital into RMB assets is estimated to be around $10 billion due to improved market sentiment and easing trade tensions[7] Currency Outlook - The RMB exchange rate is expected to stabilize within the range of 7.1 to 7.2 as the impact of trade tensions dissipates[8] - The dollar index decreased by 0.2% from the end of April, contributing to a more favorable exchange rate environment for the RMB[6] Monetary Policy - The central bank's monetary policy is expected to maintain a supportive stance, with potential for further easing in the second half of the year[9] - Structural monetary policy tools are likely to focus on enhancing existing measures to support consumption and trade[9] Risk Factors - Risks include potential unexpected changes in the Federal Reserve's monetary policy and geopolitical developments affecting exchange rates[9]

Group 1 - The report emphasizes the importance of understanding the current macroeconomic environment, highlighting three core influencing factors: external changes, internal trends, and policy shifts [2][8][12] - It discusses the political new cycle between China and the US, noting the strategic initiatives from the Trump administration aimed at reshaping the global distribution system, which may lead to increased pressure on China [9][10][11] - The report suggests that China's economic growth can achieve the 5% target for 2025, supported by manufacturing investment and broad infrastructure projects countering real estate downturns [12][13] Group 2 - The report identifies the need for a dual approach in asset allocation, focusing on both offensive and defensive strategies, particularly in a low inflation environment that supports resilient returns [14] - It highlights the significance of technology as a focal point in the great power competition, with opportunities in domestic upstream substitution and AI applications [14] - The report notes the importance of domestic policy variables, including mechanisms for stabilizing the market and the impact of new public fund regulations on future investment growth [14] Group 3 - The report outlines the expected resilience of "redemption" assets in a low inflation context, suggesting that emerging consumption trends should be prioritized for investment [14] - It discusses the steady growth of wealth management products and the decline in deposit rates, which are expected to support the bond market and similar assets [14] - The report emphasizes the need to monitor supply-demand dynamics in commodities, particularly in emerging industries and raw material adjustments [14]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [1] Core Views - The company is a global leader in polyurethane and is transitioning into a new materials platform enterprise, having expanded its business from MDI production to various chemical sectors [8] - In 2024, the company achieved a revenue of 182.07 billion yuan, a year-on-year increase of 3.8%, while the net profit attributable to shareholders decreased by 22.5% to 13.03 billion yuan due to impairment losses and increased costs [4][14] - The company is expected to improve its asset quality and profitability in the future as it completes its impairment provisions [4] Summary by Sections Main Business Performance - The company reported a revenue of 182.07 billion yuan in 2024, with a year-on-year growth of 3.8%, while the net profit attributable to shareholders was 13.03 billion yuan, down 22.5% [4][14] - In Q1 2025, the company generated a revenue of 43.07 billion yuan, a decrease of 6.7% year-on-year but an increase of 25.0% quarter-on-quarter [4] - The company’s main business segments, including polyurethane, petrochemicals, fine chemicals, and new materials, showed varying growth rates, with sales volumes increasing by 15.3%, 15.9%, and 27.7% respectively in 2024 [4][14] Future Growth Prospects - The company is advancing several projects, including a 70,000-ton/year polyurethane expansion expected to be operational by Q2 2026 and a new TDI facility of 33,000 tons/year expected to start production in May 2025 [4][14] - The company is also forming a joint venture to invest in a 1.6 million tons/year specialty polyolefins project, which is anticipated to enhance its international presence [4][14] Financial Forecast - The company is projected to achieve net profits of 13.88 billion yuan, 17.15 billion yuan, and 19.98 billion yuan for the years 2025, 2026, and 2027 respectively, reflecting growth rates of 6.5%, 23.6%, and 16.5% [4][14] - The earnings per share (EPS) are expected to be 4.42 yuan, 5.46 yuan, and 6.36 yuan for the same years [4][14]

Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals industry [2] Core Views - Precious metals are expected to perform well in the long term despite a slight decline in domestic gold prices by 0.42% during the week of May 26 to June 1, 2025. The increase in U.S. tariffs on steel and aluminum from 25% to 50% is anticipated to create uncertainty in global trade, which may support gold prices [7] - Industrial metal prices have generally declined, influenced by the tariff issues, with copper, aluminum, lead, zinc, tin, and nickel prices dropping by 0.6%, 0.6%, 1.7%, 1.6%, 6.5%, and 1.8% respectively [7] - Rare earth prices, particularly praseodymium-neodymium oxide, have increased, indicating a potential growth in demand driven by manufacturing recovery [7] - Lithium prices have decreased, with carbonate lithium and lithium hydroxide prices down by 3.4% and 2.7% respectively, highlighting a need to monitor future demand for energy metals [7] Summary by Sections 1. Industry Data Review 1.1 Precious Metals - Domestic gold prices have shown a slight decline, but long-term prospects remain positive due to ongoing trade uncertainties [7] 1.2 Industrial Metals - Prices for industrial metals have mostly decreased, with significant drops in tin and nickel prices [30][7] 1.3 Minor Metals - Prices for praseodymium-neodymium oxide have increased, while tungsten prices have also shown upward trends, indicating a recovery in manufacturing demand [31][34] 1.4 Energy Metals - Lithium prices have decreased significantly, with carbonate lithium down by 3.4% and industrial-grade lithium hydroxide down by 2.7%, suggesting a need for careful observation of future demand trends [37] 2. Market Data - The non-ferrous metals sector has seen a decline of 2.40%, with various sub-sectors such as precious metals and industrial metals also experiencing downturns [38] 3. Key Events of the Week - U.S. President Trump announced an increase in tariffs on steel and aluminum imports, which is expected to impact the industrial metals market significantly [44]

Macro Analysis - The current macro variables affecting the market are internal demand recovery, policy implementation effects, and external environment changes[5] - The easing of US-China tariff negotiations helps alleviate pressure on the fundamentals and market risk appetite, but the long-term relationship remains competitive[10] - The economy is in an L-shaped recovery, with manageable short-term pressures on foreign trade and employment, while low inflation remains a core challenge[10] Policy Insights - The policy focus is on the effectiveness of existing policies and the preparation of incremental tools to address short- and medium-term economic challenges[11] - The asset allocation strategy suggests a high probability of A-share market fluctuations, emphasizing structural opportunities and a "barbell" investment approach[11] Company Performance Highlights - Yipuli (002096.SZ) achieved a revenue of CNY 8.546 billion in 2024, a year-on-year increase of 1.40%, with a net profit of CNY 713 million, up 12.49%[12] - Huaitong (688219.SH) reported a revenue of CNY 6.088 billion in 2024, a 13.81% increase, and a net profit of CNY 194 million, up 32.04%[16] - Haige Communication (002465.SZ) is set to launch the "Jiutian" drone, which has a maximum takeoff weight of 16 tons and a range of 7000 km, enhancing its market position in low-altitude economy[20] Industry Trends - The chemical industry is seeing stable profitability with a focus on cost reduction and efficiency improvements, particularly in the modified plastics sector[17] - The IVD sector is experiencing steady growth, with a compound annual growth rate (CAGR) of 18% from 2019 to 2023, driven by advancements in technology and product offerings[26] - The demand for modified plastics is expected to rise due to the ongoing trends in the home appliance and automotive sectors, with a projected increase in production of 6.95 billion units of major appliances in 2024, up 7.4% year-on-year[17] Risk Factors - Potential risks include insufficient policy support, slower-than-expected economic recovery, and volatility in raw material prices[8] - The low-altitude economy's development may not meet expectations, and competition in the drone market is intensifying[24]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [1] Core Insights - The company is a global leader in polyurethane and is transitioning into a new materials platform enterprise, having expanded its business scope significantly since its inception in 1978 [8] - In 2024, the company achieved a revenue of 182.07 billion yuan, a year-on-year increase of 3.8%, while the net profit attributable to shareholders decreased by 22.5% to 13.03 billion yuan due to impairment losses and increased costs [4][10] - The company is expected to improve its asset quality and profitability in the future as it completes its impairment provisions [4] Summary by Sections Main Business Performance - The company reported a revenue of 182.07 billion yuan in 2024, with a year-on-year growth of 3.8%, while the net profit attributable to shareholders was 13.03 billion yuan, down 22.5% [4][10] - In Q1 2025, the company generated a revenue of 43.07 billion yuan, a decrease of 6.7% year-on-year but an increase of 25.0% quarter-on-quarter [4] - The company’s main business segments, including polyurethane, petrochemicals, fine chemicals, and new materials, showed varying growth rates, with sales volumes increasing by 15.3%, 15.9%, and 27.7% respectively in 2024 [4][10] Future Growth Prospects - The company is advancing several construction projects, including a 700,000-ton/year expansion in Fujian expected to be operational by Q2 2026, and a new 330,000-ton/year TDI facility expected to start production in May 2025 [4][10] - The company is also forming a joint venture to invest in a 1.6 million-ton/year specialty polyolefin project, which is anticipated to enhance its international presence [4][10] Financial Forecast - The company is projected to achieve net profits of 13.88 billion yuan, 17.15 billion yuan, and 19.98 billion yuan for the years 2025, 2026, and 2027 respectively, reflecting growth rates of 6.5%, 23.6%, and 16.5% [4][10] - The earnings per share (EPS) are expected to be 4.42 yuan, 5.46 yuan, and 6.36 yuan for the same years [4][10]

Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals industry [2] Core Viewpoints - Precious metals are expected to see a long-term bullish trend despite a slight decline in domestic gold prices by 0.42% during the week of May 26 to June 1, 2025. The increase in U.S. tariffs on steel and aluminum from 25% to 50% is anticipated to create uncertainty in global trade, which may support gold prices in the long run [7][44] - Industrial metal prices have generally declined, influenced by the tariff increase, with copper, aluminum, lead, zinc, tin, and nickel prices dropping by 0.6%, 0.6%, 1.7%, 1.6%, 6.5%, and 1.8% respectively [7][30] - Small metals like praseodymium-neodymium oxide have seen price increases, while tungsten prices have also risen, indicating a potential steady growth in demand for tungsten in manufacturing [7][31][34] - Energy metals, particularly lithium, have experienced price declines, with lithium carbonate prices down by 3.4% and 42.3% year-on-year [7][36] Summary by Sections 1. Industry Data Review 1.1 Precious Metals - Domestic gold prices have slightly decreased, but the long-term outlook remains positive due to ongoing trade uncertainties [7][10] 1.2 Industrial Metals - Prices for industrial metals have mostly decreased, with significant drops in tin and nickel prices [7][30] 1.3 Small Metals - Prices for praseodymium-neodymium oxide and tungsten have increased, reflecting a recovery in manufacturing demand [7][31][34] 1.4 Energy Metals - Lithium prices have decreased significantly, indicating a potential oversupply or reduced demand in the short term [7][36] 2. Market Data - The non-ferrous metals sector has seen a decline of 2.40%, with various sub-sectors also experiencing losses [38] 3. Key Events Review - The announcement of increased tariffs on steel and aluminum by President Trump is a significant event impacting the non-ferrous metals market [44]