Profit Trends - In the first four months of 2025, profits of industrial enterprises reached CNY 21,170.2 billion, a year-on-year increase of 1.4%, with a growth rate rebound of 0.6 percentage points compared to January-March[3] - High-tech manufacturing profits grew by 9.0% year-on-year, surpassing the average growth rate of all industrial enterprises by 7.6 percentage points[4] Volume, Price, and Profit Margin Analysis - Industrial added value increased by 6.4% year-on-year in January-April, slightly lower than the 6.5% in January-March[3] - The Producer Price Index (PPI) fell by 2.4% year-on-year, indicating continued price pressure on the industrial sector[3] - The cumulative profit margin for January-April was 4.87%, down 0.13 percentage points year-on-year, with April's profit margin at 5.38%[3] Inventory Cycle Insights - Nominal inventory growth was 3.9% year-on-year, down from 4.2% in January-March, indicating a slight pullback in inventory accumulation[4] - Actual inventory growth adjusted for PPI was 6.8%, ending a two-month increase, suggesting a potential slowdown in replenishment depending on fiscal policy effectiveness[4] Industry Profit Structure - The profit share of the equipment manufacturing industry reached nearly 30%, with significant contributions from high-tech sectors[4] - Mining, raw materials, and intermediate goods manufacturing saw profit declines of -26.8%, -8.4%, and -3.0% respectively, while equipment manufacturing profits rose by 15.5%[4]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - On May 23, 2025, the weighted average winning bid rate of the 50 - year special treasury bond was 2.1%, the first increase since 2022. After the issuance result was announced, long - term bonds adjusted significantly but then rebounded rapidly. The large - scale fluctuations in long - term bonds stem from the game between allocation and trading forces [4]. - The bond market's liability - side problems and supply - demand mismatch may exist for a long time. From "asset shortage" to "liability shortage", the trading model of "buying on dips" has failed this year, and the winning probabilities of typical bottom - fishing institutions have decreased significantly [4]. - There are still trading opportunities. In the short term, factors such as tariff disturbances and the central bank's expectation of restarting treasury bond trading can be used to bet on short - term oversold rebounds. However, under the long - term logic of "liability shortage", interest rates may mainly fluctuate upward this year [5]. Group 3: Summary According to Related Contents Reasons for the "Flying" of 50 - year Treasury Bond Issuance - The main allocation force for 50 - year treasury bonds is insurance. Since the beginning of this year, the overall new funds of insurance have been weak. In January, the cumulative year - on - year growth rate of insurance premium income dropped to - 3.34%, and the 0.93% growth rate in March was still significantly lower than 11.15% last year [4]. - Due to the low attractiveness of interest rate points and limited new allocation funds, insurance's bond - buying behavior may shift from continuous allocation last year to a certain trading logic. Since the beginning of this year, insurance has mainly increased its holdings of ultra - long local government bonds, with a cumulative increase of over 850 billion yuan, and the increase in ultra - long treasury bonds has been relatively weak [4]. Reasons for the Rebound of Long - term Bonds - Trading behavior drove the rebound. On May 23, rural commercial banks bought long - end interest - rate bonds against the trend, and funds increased their allocation of long - end other bonds (including Tier 2 capital bonds and perpetual bonds). Rural commercial banks significantly increased their allocation of 7 - 10Y interest - rate bonds, with a scale of 116.45 billion yuan, and funds were the main buyers of long - end Tier 2 capital bonds, with a net purchase of 57.96 billion yuan of 7 - 10Y other (Tier 2 capital bonds) bonds [4]. Current Situation of the Bond Market - Traditional allocation forces in the bond market have been significantly insufficient this year due to liability - side problems. Banks have suffered serious liability - side losses, and insurance has also faced pressure on liability - side costs and asset - side returns, making it difficult to have incremental allocation forces [4]. - The supply of interest - rate bonds, especially long - term ones, has been increasing. In May, the issuance of ultra - long special treasury bonds started, and the issuance of new local special bonds accelerated, resulting in a total net supply of government bonds reaching 1.49 trillion yuan [4].

Market Performance - Global stock markets experienced a mixed performance last week, with US indices showing declines: Dow Jones, Nasdaq, and S&P 500 fell by -2.5%, -2.5%, and -2.6% respectively[2] - European markets displayed divergent trends, with the UK FTSE 100 rising while Germany's DAX and France's CAC40 retreated[2] - In the Asia-Pacific region, only Vietnam's VN30 index and the Hang Seng index recorded gains[2] Economic Indicators - The US May PMI exceeded expectations, indicating expansion in manufacturing and services, but consumer confidence fell by 2.7% compared to the previous month[5] - Moody's downgraded the US sovereign credit rating to AA+, prompting concerns over the US economy and impacting global markets[5] Bond Market Dynamics - The 30-year US Treasury yield surpassed 5.15%, while the 10-year and 2-year yields approached 4.63% and 4.0% respectively, reflecting rising interest rates[5] - The bond market is viewed as the "eye of the storm," with ongoing volatility affecting equity markets and the dollar's strength[5] Inflation and Policy Outlook - Inflation risks remain a concern, with potential for unexpected rebounds in US and European inflation impacting central bank policies and market valuations[3][61] - Strategies to address inflation include cooperation from oil-producing nations to increase output and effective tariff negotiations[5] Investment Strategy Recommendations - A left-side positioning in US Treasuries is recommended to navigate equity and commodity volatility, focusing on short-term bonds while trading long-term bonds[5] - In equity markets, a strategy of buying low and selling high is crucial during this period of turbulence, particularly in response to tariff negotiations[5]

Market Performance - Global stock markets experienced mixed results, with US indices Dow, Nasdaq, and S&P 500 declining by -2.5%, -2.5%, and -2.6% respectively[2] - European markets showed divergence; the UK FTSE 100 rose while Germany's DAX and France's CAC40 fell[2] - In the Asia-Pacific region, only Vietnam's VN30 index and the Hang Seng index saw gains[2] Economic Indicators - US May PMI exceeded expectations, indicating expansion in manufacturing and services sectors[2] - However, consumer confidence in the US fell by 2.7% compared to the previous month, raising concerns about economic recession[2] US Treasury Market - Following Moody's downgrade of the US sovereign credit rating, the 30-year Treasury yield peaked at 5.15%, while the 10-year and 2-year yields reached approximately 4.63% and 4.0% respectively[2] - The surge in Treasury yields impacted the recovering US stock market, leading to significant volatility[2] Policy and Strategy - Trump proposed a 50% tariff on EU goods starting June 1, which contributed to market turbulence and temporarily halted further increases in Treasury yields[2] - The report suggests two main strategies: addressing inflation concerns through oil production increases and enhancing the purchasing power of the Treasury market via stablecoin issuance[2] Investment Recommendations - The report recommends a left-side allocation in the Treasury market, focusing on short-term bonds while trading long-term bonds[2] - In equity markets, it advises a strategy of buying low and selling high amid volatility, particularly in response to tariff negotiations[2] Risk Factors - Potential risks include unexpected rebounds in overseas inflation, weaker-than-expected global economic conditions, and escalated geopolitical tensions[2]

Investment Rating - The report maintains an "Outperform" rating for the coal industry [1] Core Viewpoints - The coal market is expected to stabilize with potential price rebounds due to inventory reductions at ports and increased demand from power plants as summer approaches [4][5] - The report highlights a U-shaped price trend for thermal coal in 2025, with limited production growth and anticipated demand recovery driving prices upward [4] - The coal sector is seen as having confirmed its bottom, with market concerns over earnings per share (EPS) expected to gradually dissipate [5] Summary by Sections 1. Industry Data Tracking - **Price Overview**: As of May 23, 2025, the Qinhuangdao Q5500 thermal coal price is 611 CNY/ton, down 0.49% from the previous week [9][10] - **Supply and Demand Analysis**: Rail input to Qinhuangdao port increased by 3.46% to 419,000 tons, while port throughput rose by 44.34% to 599,000 tons [32][33] - **Inventory Analysis**: Total coal inventory at major ports decreased by 1.09% to 77.84 million tons [43][44] 2. Market Performance - The coal sector outperformed the broader market, with a 1.03% increase compared to a 0.57% decline in the Shanghai Composite Index [65] - Notable performers include Dayou Energy (+5.76%) and Jinkong Coal Industry (+5.20%) [67] 3. International Coal Market - International coal prices have declined, with Newcastle FOB thermal coal at 68 USD/ton, down 1.81% [54][56] - The price gap between domestic and international coal has widened, with thermal coal at 5.57 CNY/ton and coking coal at -306.80 CNY/ton [63]

Investment Rating - The report maintains an "Outperform" rating for the basic chemical industry [2] Core Viewpoints - The report highlights that the overall demand for civil explosives is stabilizing and improving, despite a slight decline in production value and a decrease in profits in April 2025 due to falling raw material prices [5][7] - The report emphasizes the ongoing support from policies in western regions, which is expected to sustain the demand for civil explosives [5][7] - The report notes the significant growth potential in overseas markets and military applications, with domestic companies expanding their international presence [7] Summary by Sections Market Performance - From January to April 2025, the civil explosive production enterprises achieved a total production value of 11.829 billion yuan, a year-on-year decrease of 1.72%, while total profits reached 2.219 billion yuan, an increase of 4.22% [4][8] - The production and sales of industrial explosives during the same period were 1.3163 million tons and 1.3034 million tons, reflecting year-on-year increases of 1.72% and 1.65% respectively [5][12] Monthly Data Analysis - In April 2025, the production value for civil explosive enterprises was 3.689 billion yuan, down 2.76% year-on-year, with profits of 906 million yuan, down 15.99% year-on-year [5][8] - The production of industrial explosives in April was 416,500 tons, up 1.83% year-on-year, while the price of ammonium nitrate fell by 14.58% to 2,279 yuan per ton [5][7] Regional Insights - The report indicates that the production values in Xinjiang and Tibet increased by 8.74% and 7.34% respectively from January to April 2025, indicating a positive trend in civil explosive demand in these regions [5][7] - The report discusses the impact of debt resolution policies on demand recovery in high-debt provinces, with several provinces showing positive production value growth [5][7] Investment Recommendations - The report suggests focusing on companies such as Yipuli, Jiangnan Chemical, Guangdong Hongda, and others, which are well-positioned to benefit from the ongoing trends in the civil explosive market [7]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week (May 19 - May 23), there was a divergence in fund rates, a decline in large - bank lending, and a decrease in fund leverage. - Net financing of certificates of deposit (CDs) increased, and the yields to maturity of CDs across all tenors showed an upward trend. - In terms of cash - bond trading, the main buyers were funds, which mainly increased their holdings of credit bonds within 5 years and long - term Tier 2 and perpetual bonds. The scale of rural commercial banks' increased holdings decreased, insurance companies increased their holdings of ultra - long - term interest - rate bonds with maturities of 15 - 30 years, and wealth management products continued to increase their allocation of CDs. [3] 3. Summary by Relevant Catalogs 3.1 Monetary Fundamentals - **Open - market operations**: A total of 486 billion yuan of reverse repurchases matured this week. The central bank conducted reverse - repurchase operations of 135 billion, 357 billion, 157 billion, 154.5 billion, and 142.5 billion yuan from Monday to Friday, respectively, with a cumulative reverse - repurchase injection of 946 billion yuan. On Friday, 500 billion yuan of Medium - term Lending Facility (MLF) was injected, resulting in a net liquidity injection of 960 billion yuan for the whole week [5][10]. - **Fund prices**: As of May 23, R001, R007, DR001, and DR007 were 1.61%, 1.63%, 1.57%, and 1.59% respectively, changing by - 3.94BP, 0.15BP, - 6.61BP, and - 5.14BP compared to May 16, and were at the 25%, 10%, 23%, and 5% historical percentiles respectively [5][15]. - **Net borrowing of major lenders**: The net borrowing of major lending institutions (large commercial/policy banks and joint - stock banks) was 312.3 billion yuan for the whole week (May 19 - May 23), an increase of 329.8 billion yuan compared to the previous week [5][18]. - **Pledged - repo trading volume**: The average daily trading volume of pledged repos decreased to 6.72 trillion yuan, with a maximum single - day volume of 6.98 trillion yuan, a 5.81% decrease from the previous week's average daily volume. The average daily proportion of overnight - repo transactions increased to 87.4%, with a maximum single - day proportion of 88.6%, a 1 - percentage - point increase from the previous week's average daily proportion, and was at the 84.9% percentile as of May 23 [5][27]. - **Leverage ratio of broad - based funds**: As of May 23, the leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 103.1%, 192.8%, 126%, and 105.4% respectively, changing by 0.15BP, - 2.11BP, - 0.25BP, and - 0.06BP compared to May 16, and were at the 11%, 3%, 53%, and 37% historical percentiles respectively [5][32]. 3.2 Certificates of Deposit and Bills - **CD issuance and financing**: The issuance scale of CDs increased this week, with a total issuance of 712.69 billion yuan, an increase of 199.45 billion yuan compared to the previous week. The total maturity was 737.24 billion yuan, an increase of 161.04 billion yuan compared to the previous week. The net financing was - 24.55 billion yuan, an increase of 38.41 billion yuan compared to the previous week [5][35]. - **CD maturity volume**: The maturity volume of CDs increased this week to 737.24 billion yuan, an increase of 161.04 billion yuan compared to the previous week. The maturity volume of CDs next week (May 26 - May 30) is expected to be 652.73 billion yuan [35][41]. - **Bill rates**: Most bill rates declined this week. As of May 23, the 3 - month direct - discount rate and transfer - discount rate of state - owned commercial bills, and the 6 - month direct - discount rate and transfer - discount rate of state - owned commercial bills were 1.19%, 1.19%, 1.13%, and 1.18% respectively, changing by - 2BP, - 10BP, 0BP, and - 9BP compared to May 16 [5][50]. 3.3 Institutional Behavior Tracking - **Main buyers and sellers of cash bonds**: The main buyers of cash bonds this week were funds, with a net purchase of 95.9 billion yuan, an increase compared to the previous week. The main sellers were joint - stock banks, with a net sale of 119.6 billion yuan, a decrease compared to the previous week [5][52]. - **Fund investment**: Funds net - bought 95.9 billion yuan of cash bonds, including an increase of 2 billion yuan in interest - rate bonds, 42.3 billion yuan in credit bonds, 34 billion yuan in other bonds (including Tier 2 and perpetual bonds), and 19.3 billion yuan in CDs. In terms of tenor, they mainly reduced their holdings of 3 - 5 - year interest - rate bonds and increased their holdings of credit bonds within 1 year [52]. - **Wealth - management product investment**: Wealth - management products net - bought 84.4 billion yuan of cash bonds, including an increase of 7.7 billion yuan in interest - rate bonds, 7.9 billion yuan in credit bonds, 4.7 billion yuan in other bonds (including Tier 2 and perpetual bonds), and 64.1 billion yuan in CDs. In terms of tenor, they mainly increased their holdings of interest - rate bonds and credit bonds within 1 year [52]. - **Rural financial institution investment**: Rural financial institutions net - sold 1.4 billion yuan of cash bonds, including an increase of 9.5 billion yuan in interest - rate bonds, 0.5 billion yuan in credit bonds, 1.4 billion yuan in other bonds (including Tier 2 and perpetual bonds), and a reduction of 12.8 billion yuan in CDs. In terms of tenor, they mainly increased their holdings of 7 - 10 - year interest - rate bonds and 3 - 5 - year credit bonds [53][55]. - **Insurance company investment**: Insurance companies net - bought 88.5 billion yuan of cash bonds, including an increase of 62.3 billion yuan in interest - rate bonds, 2.6 billion yuan in credit bonds, a reduction of 1.5 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 25 billion yuan in CDs. In terms of tenor, they mainly increased their holdings of 15 - 20 - year interest - rate bonds and 7 - 10 - year credit bonds [55].

Investment Rating - The report maintains an "Outperform" rating for the coal industry [1] Core Viewpoints - The coal market is expected to stabilize with potential price rebounds due to inventory reductions at ports and increased demand from power plants as summer approaches [4][5] - The report highlights a U-shaped price trend for thermal coal in 2025, with limited production growth and anticipated demand recovery driving prices upward [4] - The coal sector is seen as having confirmed its bottom, with market concerns over earnings per share (EPS) likely to dissipate [5] Summary by Sections 1. Industry Data Tracking - **Price Analysis**: As of May 23, 2025, the Qinhuangdao Q5500 thermal coal price is 611 CNY/ton, down 0.49% from the previous week [9][10] - **Supply and Demand**: Rail input to Qinhuangdao port increased by 3.46% to 419,000 tons, while port throughput rose by 44.34% to 599,000 tons [32][33] - **Inventory Analysis**: Total coal inventory at major ports decreased by 1.09% to 77.84 million tons [43][44] 2. Market Performance - The coal sector outperformed the broader market, with a 1.03% increase compared to a 0.57% decline in the Shanghai Composite Index [65] - Notable performers include Dayou Energy and Jinkong Coal, with increases of 5.76% and 5.20% respectively [67] 3. International Coal Market - International thermal coal prices have declined, with Newcastle port FOB thermal coal at 68 USD/ton, down 1.81% [54][56] - The price gap between domestic and international coal has widened, with a thermal coal price difference of 5.57 CNY/ton [63]

Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals industry [2]. Core Views - Precious metals are expected to see a long-term bullish trend, with gold prices rising slightly by 1.27% during the week of May 19-23, 2025. Ongoing international trade issues, particularly threats of tariffs on EU products, contribute to a persistent uncertainty in global trade, which is likely to support gold prices [4]. - Industrial metal prices have generally declined, with significant drops in copper (-1.5%), aluminum (-0.6%), lead (-0.4%), zinc (-2.2%), tin (-0.4%), and nickel (-2.1%) due to tariff concerns affecting global demand [4]. - Small metals show mixed trends, with prices for praseodymium-neodymium oxides declining, while tungsten concentrate prices are on the rise, driven by recovering manufacturing demand [4]. - Energy metals, particularly lithium, have seen price declines, with lithium carbonate prices down by 3.0% and 40.6% year-on-year. The report emphasizes the need to monitor future demand growth for energy metals [4]. Summary by Sections 1. Industry Data Review 1.1 Precious Metals - Gold prices are forecasted to remain strong due to ongoing trade uncertainties and the weakening position of the US dollar [4]. 1.2 Industrial Metals - The report details the price changes for various industrial metals, highlighting a general downward trend influenced by tariff discussions [27]. 1.3 Small Metals - The report notes a decrease in prices for praseodymium-neodymium oxides, while tungsten prices are increasing, indicating a potential growth in demand for tungsten in manufacturing [29][31]. 1.4 Energy Metals - Lithium and cobalt prices are declining, with lithium carbonate prices down by 3.0% week-on-week and 40.6% year-on-year, indicating a significant market adjustment [34]. 2. Market Data - The non-ferrous metals sector saw a 1.26% increase, contrasting with a 0.57% drop in the Shanghai Composite Index, indicating a relative strength in the sector [35]. 3. Key Events of the Week - A significant event was President Trump's threat to impose a 50% tariff on EU products starting June 1, 2025, which could impact the non-ferrous metals market [41].

Investment Strategy - The report highlights the impact of the US chip sanctions on China's computing power supply, indicating that China's computing system is now capable of competing with the US. The Ministry of Commerce's strong response to these sanctions suggests a potential for growth in China's computing ecosystem [10][14] - The global supply chain is facing a rebound against US restrictions, with Malaysia adopting Chinese technology to build an AI platform, marking a significant step in the region's AI infrastructure development [11] - The "Jiutian" drone is set to launch, with significant capabilities including a wingspan of 25 meters, a maximum takeoff weight of 16 tons, and the ability to carry diverse weaponry, indicating a promising future for low-altitude economic applications [12][18] Industry News - China's Ministry of Commerce has stated that any organization or individual executing US measures will face legal consequences, emphasizing the competitive landscape in computing power between China and the US. Companies to watch include Cambricon, Haiguang Information, and ZTE [14] - The construction of a computing power internet trial network has been initiated in China, with 499 computing resource pools identified, aiming to enhance the accessibility of computing resources across the country [15] - The civil aviation sector reported a total of 26.67 million hours of drone flight in 2024, reflecting a 15.4% year-on-year increase, with expectations for the low-altitude economy to reach a market size of 1.5 trillion yuan by 2025 [16][17] - The "Jiutian" drone, known as China's first "swarm mother ship," is expected to enhance the country's large drone product line, with advanced capabilities for both military and civilian applications [18] Weekly Review and Focus - The communication sector saw a slight increase of 0.02% this week, outperforming major indices, with a recommendation to focus on domestic computing power and low-altitude economic investment opportunities [19] - Key stocks to monitor include Cambricon, Haiguang Information, ZTE, and others related to the low-altitude economy [21]