1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week (May 26 - May 30), the money market rates showed divergence, with the net lending of large banks increasing and the leverage of funds rising. The net financing of certificates of deposit (CDs) increased, and the yields of CDs with different maturities showed divergence. In terms of spot bond trading, the main buyers were wealth management products, which mainly increased their holdings of CDs. Rural commercial banks significantly reduced their holdings of CDs, while insurance companies increased their holdings of ultra - long - term interest - rate bonds with maturities of 15 - 30 years [3]. 3. Summary by Relevant Catalogs 3.1 Money and Capital Market - **Open Market Operations**: A total of 946 billion yuan of reverse repurchases matured this week. The central bank injected 1602.6 billion yuan of reverse repurchases from Monday to Friday, with a net liquidity injection of 656.6 billion yuan [5][11]. - **Funding Rates**: As of May 30, R001, R007, DR001, and DR007 were 1.57%, 1.7%, 1.48%, and 1.66% respectively, changing by - 4.52BP, 7.06BP, - 8.3BP, and 7.85BP compared to May 23, and were at the 23%, 12%, 20%, and 8% historical quantiles respectively [5]. - **Net Lending of Main Lenders**: The net borrowing scale of main lending institutions (large commercial/policy banks and joint - stock banks) decreased. The net borrowing was - 625.6 billion yuan this week, a decrease of 93.78 billion yuan compared to the previous week [5][19]. - **Repo Trading Volume**: The trading volume of pledged repos decreased, with an average daily trading volume of 6.5 trillion yuan, and the highest single - day trading volume reached 7.16 trillion yuan, a 3.31% decrease from the previous week's average daily trading volume. The proportion of overnight repo transactions decreased, with an average daily proportion of 83.9%, and the highest single - day proportion reached 90.2%, a 3.49 - percentage - point decrease from the previous week's average daily proportion [5]. - **Leverage Ratio**: As of May 30, the leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 102.9%, 188.3%, 127.7%, and 105.3% respectively, changing by - 0.24BP, - 4.47BP, 1.69BP, and - 0.06BP compared to May 23, and were at the 5%, 1%, 66%, and 35% historical quantiles respectively [5][32]. 3.2 Certificates of Deposit and Bills - **CD Issuance and Financing**: This week, the issuance scale of CDs decreased, but the net financing increased. The total issuance was 668.5 billion yuan, a decrease of 44.19 billion yuan from the previous week; the total maturity was 652.73 billion yuan, a decrease of 64.51 billion yuan from the previous week. The net financing was 15.77 billion yuan, an increase of 40.32 billion yuan from the previous week [5][34]. - **CD Maturity**: The maturity volume of CDs decreased this week, with a total of 652.73 billion yuan, a decrease of 84.51 billion yuan from the previous week. Next week (June 2 - June 6), the maturity of CDs will be 666.55 billion yuan [5][34]. - **Bill Rates**: Most bill rates increased. As of May 30, the 3M direct - discount rate of state - owned shares, the 3M transfer - discount rate of state - owned shares, the 6M direct - discount rate of state - owned shares, and the 6M transfer - discount rate of state - owned shares were 1.2%, 1.16%, 1.14%, and 1.06% respectively, changing by 3BP, 7BP, 1BP, and - 3BP compared to May 23 [5][51]. 3.3 Institutional Behavior Tracking - **Spot Bond Trading**: This week, the main buyers of spot bonds were wealth management products, with a net purchase of 117.4 billion yuan, an increase from the previous week; the main sellers were joint - stock banks, with a net sale of 248.4 billion yuan, an increase from the previous week [5][53]. - **Fund Behavior**: Funds had a net purchase of 37.3 billion yuan in spot bonds, with a reduction of 11.2 billion yuan in interest - rate bonds, an increase of 14.2 billion yuan in credit bonds, an increase of 4.4 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 29.8 billion yuan in CDs [5][53]. - **Wealth Management Behavior**: Wealth management products had a net purchase of 117.4 billion yuan in spot bonds, with an increase of 16.9 billion yuan in interest - rate bonds, an increase of 9.1 billion yuan in credit bonds, an increase of 10.6 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 81 billion yuan in CDs [5][53]. - **Rural Financial Institutions Behavior**: Rural financial institutions had a net sale of 104.5 billion yuan in spot bonds, with a reduction of 20.1 billion yuan in interest - rate bonds, an increase of 400 million yuan in credit bonds, an increase of 6.8 billion yuan in other bonds (including Tier 2 and perpetual bonds), and a reduction of 91.6 billion yuan in CDs [5][54]. - **Insurance Behavior**: Insurance companies had a net purchase of 100.5 billion yuan in spot bonds, with an increase of 66.4 billion yuan in interest - rate bonds, an increase of 6.2 billion yuan in credit bonds, a reduction of 5.6 billion yuan in other bonds (including Tier 2 and perpetual bonds), and an increase of 33.5 billion yuan in CDs [5][56].

Market Performance - In May, global stock markets collectively rose, with the Nasdaq index leading the gains among major markets[4] - The US PCE for April showed a "cooling" inflation trend, with a month-on-month increase of 0.1% and a year-on-year growth of 2.1%, below market expectations[4] - The VN30 index in Vietnam led the gains in the Asia-Pacific market[4] Economic and Trade Developments - Following the recent tariff legal disputes, negotiations are expected to return to the forefront, with a focus on US-India trade talks scheduled for June 5-6[4] - The Trump administration faces challenges in tariff negotiations, inflation, and interest rate battles, with the potential for inflation warnings to ease in June and July[4] Investment Strategy - The report recommends focusing on the recovery of US dollar assets, particularly short-term bonds, while maintaining a trading bias towards long-term bonds[4] - In light of expected acceleration in tariff negotiations, US stocks are anticipated to rise[4] Risk Factors - Risks include potential unexpected rebounds in overseas inflation, weaker-than-expected global economic conditions, and geopolitical tensions that could lead to increased market volatility[4]

Group 1: PMI Overview - The manufacturing PMI for May is at 49.5%, a month-on-month increase of 0.5 percentage points, still in the contraction zone[4] - The production index rose to 50.7%, up 0.9 percentage points, indicating a return to the expansion zone[4] - The new orders index increased to 49.8%, up 0.6 percentage points, reflecting improved demand[4] Group 2: Sector Performance - The new export orders index rose to 47.5%, up 2.8 percentage points, but remains below the levels seen in March (49.0%) and April[4] - High-tech manufacturing PMI decreased by 0.6 percentage points to 50.9%, remaining in the expansion zone for four consecutive months[4] - Large enterprises' PMI increased to 50.7%, up 1.5 percentage points, while medium enterprises' PMI fell to 47.5%, down 1.3 percentage points[5] Group 3: Price and Inventory Trends - The raw materials price index is at 46.9%, down 0.1 percentage points, indicating ongoing price pressure[4] - The finished goods price index is at 44.7%, also down 0.1 percentage points, suggesting weak downstream demand[4] - The raw materials inventory index is at 47.4%, up 0.4 percentage points, while the finished goods inventory index is at 46.5%, down 0.8 percentage points[5] Group 4: Economic Outlook - The production activity expectation index for manufacturing is at 52.5%, up 0.4 percentage points, indicating improved business sentiment[6] - The overall economic environment shows a structural characteristic where supply exceeds demand, necessitating policy support to alleviate price pressures[4]

Investment Rating - The report assigns an "Accumulate" rating to the company [7] Core Views - The company is transitioning from a financial investment strategy to an industrial investment holding group, focusing on new energy and new technology sectors, aligning with national policy directions and market trends [4][12][15] - The company has successfully restructured its capital and improved its financial health, with a significant reduction in debt-to-asset ratio from approximately 78% in 2021 to about 65% in 2023, and projected to further decrease to around 60% in 2024 [4][6][24] - The company has established a strong synergy between its green energy and data center businesses, aiming to create a digital economy ecosystem that integrates AI computing power, data assets, and application scenarios [7][15][23] Summary by Sections 1. Transition to Industrial Investment Holding Group - The company has shifted its focus from short-term financial investments to long-term industrial investments, particularly in new energy and technology sectors, which are expected to drive future growth [4][12] - The company has increased its stake in Shandong High-speed New Energy to 60.66%, enhancing its control and position in the renewable energy market [12][15] 2. New Energy Sector - The company has received significant funding, including approximately HKD 47 billion from its own group and additional support from national clean energy subsidies, which has improved the capital structure of its subsidiary, Shandong High-speed New Energy [4][12] - The company is actively involved in various renewable energy projects, including wind and solar initiatives, with a total capacity exceeding 1GW planned for the next two years [4][5] 3. New Infrastructure and Data Center Development - The company has strategically invested in Century Internet, a leading digital infrastructure provider, to enhance its capabilities in the data center sector [4][12] - A significant project in Ulanqab City aims to integrate green power with intelligent computing, with a total investment of approximately CNY 21 billion [5][12] 4. Financial Performance and Projections - The company has shown a strong revenue growth trajectory, with projected revenues of CNY 58.84 billion, CNY 67.85 billion, and CNY 74.99 billion for 2025 to 2027, respectively [7][27] - The net profit is expected to grow significantly, with projections of CNY 1.38 billion, CNY 2.24 billion, and CNY 3.47 billion for the same period, reflecting a robust growth rate [7][27]

Investment Rating - The report assigns an "Accumulate" rating to the company [7] Core Views - The company is transitioning from a financial investment strategy to an industrial investment holding group, focusing on new energy and new technology sectors, aligning with national policy directions and market trends [4][12][15] - The company has successfully restructured its capital and improved its financial health, with a significant reduction in debt-to-asset ratio from approximately 78% in 2021 to about 65% in 2023, and further projected to decrease to around 60% in 2024 [4][6][24] - The company has established a strong synergy between its green energy and data center businesses, enhancing operational efficiency and reducing costs [7][15] Summary by Sections 1. Transition to Industrial Investment Holding Group - The company has shifted its focus from short-term financial investments to long-term industrial investments, particularly in new energy and technology sectors, which are expected to drive future growth [4][12] - The company has increased its stake in Shandong High-speed New Energy to 60.66% by 2025, reinforcing its control and commitment to the renewable energy market [12][23] 2. New Energy Sector - The company has received significant funding, including approximately HKD 47 billion from its parent group and additional government subsidies, which have improved the capital structure of its subsidiary, Shandong High-speed New Energy [4][5] - The company is actively involved in various renewable energy projects, including wind and solar initiatives, with a total capacity exceeding 1GW planned for the next two years [4][5] 3. New Infrastructure and Data Center Development - The company has strategically invested in Century Internet, a leading digital infrastructure provider, to enhance its capabilities in the data center sector [4][7] - A significant project in collaboration with Ulanqab City aims to integrate green energy and data computing, with a total investment of approximately CNY 21 billion [5][7] 4. Financial Performance and Forecast - The company has shown a robust growth trajectory, with projected revenues of CNY 58.84 billion in 2025, and net profits expected to reach CNY 1.38 billion, reflecting a year-on-year growth rate of 155% [7][27] - The company’s net profit margin has improved significantly, with a forecasted net profit of CNY 3.47 billion by 2027, indicating strong operational efficiency [7][32]

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2][8]. Core Viewpoints - The report highlights the significant price drop of Chlorantraniliprole, the world's leading insecticide, after its patent expiration, leading to increased competition and a price decline from 2.5 million yuan/ton to approximately 210,000 yuan/ton, a reduction of 90% [4]. - Due to supply disruptions from an explosion at Shandong Youdao Chemical Co., the supply of Chlorantraniliprole may tighten, potentially leading to a price increase in the near future [4][5]. - The report suggests monitoring companies such as Lier Chemical, Hongtai Sun, and Huailong Co. for potential investment opportunities due to the expected price recovery in the industry [4][5]. Summary by Sections Market Performance - The report indicates a market performance trend with a range from -26% to +26% for the basic chemical industry compared to the CSI 300 index from May 2024 to May 2025 [3]. Supply and Demand Dynamics - The domestic production capacity of Chlorantraniliprole is approximately 27,200 tons/year, with Shandong Youdao holding a 40.4% market share [4]. - The report notes that the main application markets for Chlorantraniliprole include Brazil (36%), India (20%), and the USA (12%), indicating strong overseas demand [4]. Price Trends - The price of Chlorantraniliprole has dropped from 430,000 yuan/ton in 2023 to 225,000 yuan/ton, currently at a historical low [4]. - The report anticipates a potential price increase due to supply constraints following the incident at Shandong Youdao [4]. Regulatory Environment - There is an increased regulatory focus on nitro and diazotization enterprises, which may impact the supply of key raw materials like K-amine, essential for producing Chlorantraniliprole [5]. Investment Recommendations - The report recommends focusing on companies involved in the production of alternative insecticides such as Indoxacarb and Abamectin, as well as monitoring the agricultural chemical sector for signs of recovery [5].

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2] Core Viewpoints - The report highlights potential investment opportunities in the glyphosate sector due to supply-side disruptions and the ongoing legal challenges faced by Bayer, which could reshape the industry landscape [5] - The report suggests that domestic companies in China are likely to benefit from the potential reduction in global glyphosate production if Bayer withdraws from high-risk operations [5] - There is significant price increase potential for glyphosate, with current prices at 23,300 CNY per ton, which is approximately 2.5 times lower than the historical peak price of 80,300 CNY per ton [5] Summary by Sections Market Performance - The report provides a comparative performance analysis showing a decline of 26% in the basic chemical sector against the CSI 300 index [3] Supply Chain Dynamics - Bayer's glyphosate production capacity is 370,000 tons per year, accounting for 31.4% of the global capacity, while the remaining 68.6% is concentrated in China [5] - The total number of glyphosate lawsuits against Bayer has increased to approximately 181,000, with 67,000 cases still awaiting resolution [5] Price Trends and Profitability - Glyphosate's weekly inventory as of May 23, 2025, was 60,300 tons, reflecting a decrease of 6,300 tons, indicating a trend towards inventory reduction [5] - The report notes that the gross profit margin for glyphosate is currently at a historical low, suggesting a potential for price recovery [5] Investment Recommendations - The report recommends focusing on companies such as Jiangshan Chemical, Xingfa Group, and Xin'an Chemical, which are well-positioned to benefit from the anticipated changes in the glyphosate market [5]

Investment Rating - The report maintains an "Outperform" rating for the basic chemical industry [2][7]. Core Viewpoints - The report highlights potential investment opportunities in glyphosate production due to supply-side disruptions and the ongoing litigation against Bayer, which could reshape the industry landscape [5]. - It emphasizes the significant price increase potential for glyphosate, with current prices at 23,300 CNY per ton, which is 2.5 times lower than the historical peak of 80,300 CNY per ton [5]. - The report suggests that domestic companies in China, such as Jiangshan Chemical, Xingfa Group, and Xin'an Chemical, are likely to benefit from the changes in the glyphosate market [5]. Summary by Sections Market Performance - The basic chemical industry has shown a performance trend with fluctuations ranging from -26% to +26% over the specified periods [3]. Supply Chain Dynamics - Bayer's glyphosate product, Roundup, has faced numerous lawsuits, leading to a total compensation payout of 10.1 to 10.9 billion USD due to cancer-related claims [5]. - The global glyphosate production capacity is approximately 1.18 million tons per year, with Bayer accounting for 314,000 tons (31.4%), while the remaining capacity is concentrated in China [5]. Price Trends and Profitability - Glyphosate's weekly inventory as of May 23, 2025, was 60,300 tons, reflecting a decrease of 6,300 tons, indicating a trend towards inventory reduction [5]. - The report notes that glyphosate's current gross profit margin is at a historical low, suggesting a potential for price recovery and increased profitability for producers [5]. Future Demand and Alternatives - The report discusses the rising demand for glufosinate, which may partially replace glyphosate due to increasing resistance issues [5]. - The price ratio of glufosinate to glyphosate has narrowed, making glufosinate a more attractive option for farmers [5].

Profit Trends - In the first four months of 2025, the total profit 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[2] - 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[2] - The profit margin for January-April was 4.87%, down 0.13 percentage points year-on-year, while April's single-month profit margin was 5.38%[4] Inventory and Price Dynamics - Nominal inventory growth in January-April was 3.9%, slightly lower than the 4.2% in January-March, indicating a small pullback in inventory growth[10] - The Producer Price Index (PPI) for January-April decreased by 2.4% year-on-year, indicating continued price pressure on industrial products[5] - The cost per CNY 100 of revenue for industrial enterprises was CNY 85.54, an increase of CNY 0.20 year-on-year, contributing to profit margin pressure[4] Industry Performance - Equipment manufacturing accounted for nearly 30% of total industrial profits, with a profit growth of 15.5% in January-April[8] - The mining industry saw a profit decline of 26.8%, while the raw materials industry experienced an 8.4% decrease in profits[10] - The broad inventory-to-sales ratio has rebounded, suggesting that future inventory replenishment will depend on the effectiveness of growth-stabilizing policies, particularly fiscal measures[10]

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]