Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The sentiment in the bond market has shifted from "bullish but not buying" to a stage where some bulls are "wavering." The short - term trading themes are broad - based monetary policy and the fundamentals. The 10 - year Treasury bond is oscillating around 1.65% - 1.70%, and the bond market is likely to be range - bound in the short term. The impact of positive events on the bond market is rapid this year. The proportion of capital gain demand in the comprehensive return has been continuously increasing, so the duration should be maintained, and leverage can be appropriately increased if the funding rate declines [2]. - From the perspective of market sentiment, the bond market has changed from "bullish but not buying" to a stage where some bulls are "wavering." This week, some bulls have turned neutral, the number of institutions with bearish views has increased by one, and the sentiment index has declined [3]. - The fundamentals and broad - based monetary policy are the "battlefields" for the bulls and bears among the sellers. As of May 19, the number of fixed - income sellers with bullish views has decreased to 10, the number of those with bearish views has increased to 3, and the number of those with neutral views has risen to 17 [3]. - Among the buyers, those with neutral views also account for more than half, and the proportion of institutions with bullish views has decreased. The overall view of fixed - income buyers is neutral - bullish. Currently, there are 10 bullish, 16 neutral, and 3 bearish institutions [3]. - In the Treasury bond futures market, the positive arbitrage space for the TS contract has decreased, and it may still be in a premium state. One can consider participating in the game of the TS contract rising [6]. Summary According to Relevant Catalogs 1. Seller and Buyer Markets 1.1 Seller Market Sentiment Index and Interest - rate Bonds - The seller sentiment index has decreased compared to last week. The weighted index this week is 0.18 (neutral - bullish, down 0.10 from last week), and the unweighted index is 0.28 (down 0.14 from last week). Currently, institutions generally hold a neutral - bullish view, with 10 bullish, 17 neutral, and 3 bearish. 33% of institutions are bullish, with keywords such as the long - term trend of Sino - US decoupling despite tariff fluctuations, a possible LPR cut this week, and the expected continuation of monetary easing; 57% are neutral, with keywords such as high macro - environment uncertainty, waiting for a new market trigger after the double - cut and tariff easing, and the bond market may have a narrow - range oscillation; 10% are bearish, with keywords such as the exhaustion of the double - cut benefits, the lack of support for the bond market reflected by the non - rising funding rate, and the central bank may take measures to maintain the bank's net interest margin and push up the long - term bond yield after the tariff cut [13]. 1.2 Buyer Market Sentiment Index and Interest - rate Bonds - The buyer sentiment index has decreased compared to last week. This week's sentiment index is 0.18 (neutral - bullish, down 0.22 from last week). Currently, institutions generally hold a neutral - bullish view, with 10 bullish, 16 neutral, and 3 bearish. 35% of institutions are bullish, with keywords such as continuous loosening of the funding side, the economy still needing policy support, and the reduction of funding costs; 55% are neutral, with keywords such as fluctuations in Sino - US economic and trade expectations, frequent policy disturbances, unclear fundamental expectations, differentiated interest - rate trends, limited adjustment space but repeated directions; 10% are bearish, with keywords such as the marginal weakening of easing expectations, the enhanced expectation of economic fundamental repair, frequent funding disturbances, and increased long - end supply pressure [14]. 1.3 Credit Bonds - Market hot topics include policies to promote science - and - technology innovation bonds and implicit debt accountability. Multiple departments have introduced policies to promote the construction of science - and - technology innovation bonds, and it is expected that future issuance increments will be for financial institutions and private enterprises, covering more science - and - technology innovation fields. The Ministry of Finance has emphasized local government implicit debt governance again, and the issuance supervision of urban investment bonds has become stricter, with risks being relatively controllable in the short term [18]. 1.4 Convertible Bonds - This week, institutions generally hold a neutral - bullish view, with 2 bullish and 6 neutral. 25% of institutions are bullish, with keywords such as the positive impact of the double - cut and the end of the earnings disclosure period, the increased risk appetite in the convertible bond market, and the strong equity market becoming an important support for convertible bonds; 75% are neutral, with keywords such as the current high valuation of convertible bonds, low cost - effectiveness, a possible range - bound oscillation pattern, and the need for incremental funds or overall underlying stock repair for a stronger market [20]. 2. Treasury Bond Futures Tracking 2.1 Futures Trading - In terms of futures prices, except for the increase in the TS contract price, the prices of other futures contracts have decreased. As of May 16, the prices of the Treasury TS/TF/T/TL contracts are 102.38 yuan, 105.72 yuan, 108.48 yuan, and 118.91 yuan respectively, with changes of +0.04 yuan, - 0.38 yuan, - 0.58 yuan, and - 1.46 yuan compared to last Friday. - In terms of Treasury bond futures open interest, except for the increase in the TS contract open interest, the open interest of other futures contracts has decreased. As of May 16, the open interest of the TS/TF/T/TL futures contracts is 84,000 lots, 79,000 lots, 100,000 lots, and 50,000 lots respectively, with changes of +702 lots, - 64,061 lots, - 76,980 lots, and - 31,940 lots compared to last Friday. - The trading volume of Treasury bond futures has increased across the board. As of May 16, from a 5 - day moving average perspective, the trading volumes of the TS/TF/T/TL futures contracts are 132.9 billion yuan, 98.5 billion yuan, 131.1 billion yuan, and 155.6 billion yuan respectively, with increases of 40.2 billion yuan, 25.9 billion yuan, 44.7 billion yuan, and 39.9 billion yuan compared to last Friday. - The trading volume - to - open - interest ratio of Treasury bond futures has increased across the board. As of May 16, from a 5 - day moving average perspective, the trading volume - to - open - interest ratios of the TS/TF/T/TL futures contracts are 1.01, 0.98, 1.03, and 2.58 respectively, with increases of 0.49, 0.49, 0.56, and 1.33 compared to last Friday [24][25]. 2.2 Spot Bond Trading - The turnover rate of 30 - year Treasury bonds has decreased. On May 16, the turnover rate was 2.32%, down 0.10 percentage points from last week and 0.41 percentage points from Monday, with a weekly average turnover rate of 3.33%. The turnover rate of interest - rate bonds has decreased. On May 16, the turnover rate was 0.89%, down 0.05 percentage points from last week and 0.22 percentage points from Monday. The turnover rate of 10 - year China Development Bank bonds has increased. On May 16, the turnover rate was 5.81%, up 0.17 percentage points from last week but down 1.54 percentage points from Monday [35][36]. 2.3 Basis Trading - In terms of basis trends in the past week, the basis of the TF main contract has narrowed, while the basis of other main contracts has widened. As of May 16, the basis (CTD) of the TS/TF/T/TL main contracts is - 0.07 yuan, +0.05 yuan, +0.11 yuan, and +0.17 yuan respectively, with changes of - 0.03 yuan, +0.10 yuan, +0.17 yuan, and +0.05 yuan compared to last Friday. - In terms of net basis, the net basis of the TS main contract has widened, while the net basis of other main contracts has narrowed. As of May 16, the net basis (CTD) of the TS/TF/T/TL main contracts is - 0.05 yuan, +0.03 yuan, +0.02 yuan, and +0.03 yuan respectively, with changes of - 0.06 yuan, +0.12 yuan, +0.08 yuan, and +0.09 yuan compared to last Friday. - In terms of IRR, the IRR of the TS contract has increased, while the IRR of other main contracts has decreased. As of May 16, the IRR (CTD) of the TS/TF/T/TL main contracts is 1.79%, 1.32%, 1.46%, and 1.39% respectively, with changes of +0.35%, - 1.02%, - 0.66%, and - 0.56% compared to last Friday. The TS main contract's basis is negative this week, and the weekly average IRR is 1.65%, at a relatively high level. Since the funding side is generally in a stage of loosening this week, with the weekly average DR007 at 1.54%, one can pay attention to the positive arbitrage strategy of the TS contract [41][44][45]. 2.4 Inter - delivery Spread and Inter - product Spread - In terms of inter - delivery spread, the spread of the T contract has widened, while the spreads of other main futures contracts have narrowed. As of May 16, the near - month minus far - month spreads of the TS/TF/T/TL contracts are - 0.11 yuan, - 0.20 yuan, - 0.17 yuan, and - 0.34 yuan respectively, with changes of +0.09 yuan, +0.14 yuan, - 0.00 yuan, and +0.19 yuan compared to last Friday. - In terms of inter - product spread, the spreads of the 2*TS - TF and 4*TS - T contracts have widened, while the spreads of other main futures contracts have narrowed. As of May 16, the values of 2*TS - TF, 2*TF - T, 4*TS - T, and 3*T - TL are 99.04 yuan, 102.93 yuan, 301.01 yuan, and 206.50 yuan respectively, with changes of +0.43 yuan, - 0.25 yuan, +0.62 yuan, and - 0.29 yuan compared to last Friday. Currently, the downward space for long - term interest rates is limited. If the central bank takes measures to ease liquidity, there may be downward opportunities for the medium - and short - term. There is considerable room for gaming in short - term Treasury bond futures, and it is recommended to continue to pay attention to the strategy of going long on the short - end and short on the long - end to steepen the yield curve [51][52].

Investment Rating - The investment rating for the company is upgraded to "Accumulate" [1] Core Views - The company is expected to maintain its cost leadership position while facing significant operational pressure due to declining prices across the photovoltaic industry [4][6] - The company has achieved a high-purity silicon annual production capacity of over 900,000 tons and solar cell production capacity exceeding 150 GW in 2024 [4] - The company is focusing on cost reduction and efficiency improvement, with significant advancements in technology expected to enhance production capabilities [6] Financial Performance Summary - In 2024, the company reported a revenue of 919.94 billion yuan, a year-on-year decrease of 34%, and a net loss attributable to shareholders of 70.39 billion yuan [8][9] - The forecast for 2025 indicates a revenue of 666 billion yuan, with a projected net loss of 34.7 billion yuan, followed by a gradual recovery in subsequent years [7][9] - The gross margin for 2024 is expected to be 6.4%, with a significant drop in profitability reflected in the negative net profit margins for 2025 [9][10] Market Position and Production Capacity - The company holds a market share of approximately 30% in the silicon material segment, leading globally with a sales volume of 467,600 tons in 2024, representing a year-on-year growth of 20.76% [4][5] - In the battery segment, the company expects to sell 87.68 GW in 2024, achieving a global market share of about 14% [4] - The company’s module sales are projected to reach 45.71 GW in 2024, marking a year-on-year increase of 46.93% [5] Cost Management and Technological Advancements - The company has successfully reduced its comprehensive electricity consumption and silicon consumption to 46 kWh and 1.04 kg respectively, with cash costs for silicon production dropping to below 27,000 yuan per ton [6] - The company is advancing its TNC technology to enhance efficiency and reduce costs, with expectations for mainstream power levels to increase by over 25W by 2025 [6] - The company’s HJT pilot line is set to commence production in June 2024, with the highest module power reaching 790.8W [6]

Group 1: Report Information - Report Title: "TS Contract: Can It Still Be Used for Cash-and-Carry Arbitrage? - Interest Rate Weekly (Week 3 of May)" [1] - Report Date: May 19, 2025 [2] - Chief Analyst: Yan Ziqi, with a practice certificate number of S0010522030002 [2] - Research Assistant: Hong Ziyan, with a practice certificate number of S0010123060036 [2] Group 2: Industry Investment Rating - No industry investment rating is provided in the report. Group 3: Core Views - Since the implementation of reciprocal tariffs on April 3, the bond market's maturity yields have first decreased and then increased. Among treasury bond futures, the TL contract has been strong, while the TS/TF/T main contracts have declined [2]. - The weak performance of the TS contract is due to the previous large premium and the change in the expectation of loose monetary policy. The market's expectation of loose monetary policy changed significantly in Q1, and there are differences in the short - term expectation of loose monetary policy after the double - cut in May. The yield curve has flattened instead of steepening as expected [3]. - As of May 16, the basis of the TS main contract is - 0.07 yuan, and the IRR is 1.79%. The basis has significantly converged, and the IRR is close to the capital interest rate, so the cost - effectiveness of cash - and - carry arbitrage is insufficient [4]. - In the short term, the TS contract may still be in a premium state because of the continuous negative carry. The inversion between R001 and the 2 - year treasury bond maturity yield has decreased from about 60bp at the beginning of the year to 15bp on May 16, and the negative carry phenomenon of some varieties will continue [4]. - Considering that the tight capital situation in Q1 will not repeat, the short - term interest rate has a ceiling and the probability of a sharp decline is low. With the significant convergence of the basis, one can consider participating in the possible rise of the TS contract [4]. Group 4: Analyst and Research Assistant Introduction - Analyst Yan Ziqi is the assistant director of the Research Institute of Hua'an Securities and the chief analyst of fixed income. He has 8 years of experience in sell - side fixed income and equity research, and has won the second place in the 2024 Wind Gold Analyst and the best analyst in the 2023 Choice fixed income industry [12]. - Research Assistant Hong Ziyan is a master of financial engineering from the University of Southern California, covering macro - interest rates, institutional behavior, and treasury bond futures research [12].

Demand Side - In April 2025, domestic energy storage tendering reached 10.2GW/30.2GWh, with a year-on-year increase of 90% and a month-on-month decrease of 21%[11] - By March 2025, the domestic installed capacity was 5.35GW/12.9GWh, showing a year-on-year growth of 42.36% in power and 40.60% in capacity[10] - In India, by April 2025, 0.4GWh of battery storage systems were operational, with expectations to reach 0.5GWh by Q2 2025[25] Supply Side - The average price for a 2-hour energy storage system in April 2025 was 0.589 CNY/Wh, reflecting a month-on-month decrease of 12%[4] - In Germany, the energy storage installed capacity in April 2025 was 308.8MWh, a year-on-year decrease of 39.33%[50] - The average single project capacity for domestic energy storage tenders in April 2025 was 284.9MWh, down 20.76% from the previous month[17] Market Trends - In the UK, the newly approved storage project capacity in April 2025 was 1.42GW/2.84GWh, with over 17GWh planned for grid connection throughout the year[63] - The average wholesale electricity price in the core nine European countries in April 2025 was 70.56 EUR/MWh, a year-on-year increase of 32.9%[39] - The total capacity of energy storage projects in India reached 31.64GWh by April 2025, with 19.5GWh tendered in the current year alone[25]

Investment Rating - The investment rating for the company is upgraded to "Accumulate" [1] Core Views - The company's performance in 2024 meets expectations, maintaining a cost leadership position in the industry [1] - The photovoltaic industry is facing significant operational pressure due to a decline in prices across all segments, with polysilicon, silicon wafers, batteries, and modules experiencing price drops of 39%, 50%, 40%, and 29% respectively [4][6] - The company has established a high-purity polysilicon production capacity exceeding 900,000 tons and solar cell production capacity exceeding 150 GW in 2024 [4] - The company continues to reduce costs and improve efficiency, maintaining its industry-leading cost advantage [6] Financial Performance Summary - In 2024, the company achieved a revenue of 919.94 billion yuan, a year-on-year decrease of 34%, with a net profit attributable to the parent company of -70.39 billion yuan [8][9] - The forecasted revenues for 2025, 2026, and 2027 are 666 billion yuan, 738 billion yuan, and 797 billion yuan respectively, with year-on-year changes of -27.6%, +10.2%, and +8.6% [7][9] - The net profit attributable to the parent company is projected to be -34.7 billion yuan in 2025, -3.5 billion yuan in 2026, and 21.4 billion yuan in 2027, reflecting significant recovery in profitability by 2027 [7][9] - The gross margin is expected to be 6.4% in 2024, dropping to 1.5% in 2025, and gradually recovering to 8.9% by 2027 [9] Production and Market Position - The company is expected to sell 467,600 tons of polysilicon in 2024, a year-on-year increase of 20.76%, capturing approximately 30% of the national market share [4] - The sales volume of solar cells is projected to be 87.68 GW in 2024, with a year-on-year growth of 8.70%, achieving a global market share of about 14% [4] - The sales volume of modules is expected to reach 45.71 GW in 2024, marking a year-on-year increase of 46.93% [5]

Investment Rating - The industry investment rating is "Overweight" [1] Core Views - The consumer electronics industry is expected to benefit significantly from substantial tariff reductions, particularly in the smartphone, smart glasses, and panoramic camera supply chains [5][6] - The report highlights the strong performance of the panel sector and the weak performance of digital chip design within the electronic industry [4] - Emerging products like AI smart glasses and panoramic action cameras are gaining traction, with companies like Rokid, Snap, and Insta360 leading the market [5][6] Summary by Sections Market Overview - The Shanghai Composite Index rose by 0.76%, while the Shenzhen Component Index increased by 0.52% during the week of May 12 to May 16, 2025 [4] - The best-performing sector was panels with a 0.91% increase, while digital chip design saw a decline of 2.05% [4] Consumer Electronics - In the U.S. smartphone market, Apple holds a 60% market share, followed by Samsung at 20% and Lenovo (Motorola) at 10% [5] - AI smart glasses are projected to see significant growth, with global shipments expected to reach 80 million units by 2030 [5] - Insta360 has become the global leader in panoramic cameras, with a market share of two-thirds of the total sales [6] Company Insights - Key companies in the Apple supply chain include Luxshare Precision, GoerTek, and others [6] - Xiaomi is set to release its self-developed chip, with related companies including Xiaomi Group and Kingsoft Cloud [6] - Companies involved in AI smart glasses technology include Hengxuan Technology and TaiLing Microelectronics [9] Stock Performance - The top five performing stocks for the week included Jingyan Technology and Sixuan New Materials, while the weakest performers were Dalian Technology and Changguang Huaxin [49]

Market Overview - The report indicates that the easing of tariff risks between China and the US has not changed the market's oscillating pattern, with the primary concern being economic expectations [4][5][15]. - Economic data for April shows signs of weakening, with external demand expectations declining and internal demand needing support [4][15]. Industry Configuration - The report highlights that the configuration value of the banking and insurance sectors has further increased, with a recommendation for a balanced investment strategy leaning towards these sectors [6][38]. - The automotive sector is experiencing a strong internal demand but weak external demand, leading to a "strong but not strong, weak but not weak" market condition [21][24]. Automotive Industry Insights - The Ministry of Industry and Information Technology has proposed new regulations requiring all passenger vehicles to be equipped with automatic emergency braking systems, positively impacting the automotive parts and passenger vehicle sectors [21][22]. - The automotive index is expected to maintain a range-bound pattern, with upward resistance and downward support due to the current economic conditions [21][24]. - As of May 16, the automotive sector index has risen to 7179.8 points, nearing the upper limit of its historical range, indicating a decrease in configuration value as it approaches previous highs [24]. Public Fund Regulations - New public fund regulations are expected to impose stricter constraints on performance benchmarks, which may lead to significant shifts in market behavior, particularly affecting equity funds [25][27]. - The report notes that the current allocation in the bond market is significantly lower than its benchmark, while the equity market allocation exceeds its benchmark [25][27].

Investment Rating - The industry investment rating is "Overweight" [1] Core Views - The consumer electronics industry is expected to benefit significantly from substantial tariff reductions, particularly in the smartphone, smart glasses, and panoramic camera supply chains [5][6] - The report highlights the strong performance of the panel sector and the weak performance of digital chip design within the electronic industry [4] - Emerging products like AI smart glasses and panoramic action cameras are gaining traction, with companies like Rokid, Snap, and Insta360 leading the market [5][6] Summary by Sections Market Overview - The Shanghai Composite Index increased by 0.76%, while the Shenzhen Component Index rose by 0.52% during the week of May 12 to May 16, 2025 [4] - The best-performing sector was panels with a 0.91% increase, while digital chip design saw a decline of 2.05% [4] Consumer Electronics - In the U.S. smartphone market, Apple holds a 60% market share, followed by Samsung at 20% and Lenovo at 10% [5] - AI smart glasses are projected to see significant growth, with global shipments expected to reach 80 million units by 2030 [5] - Insta360 has become the global leader in panoramic cameras, with a market share of two-thirds in the segment [6] Company Insights - Key companies in the Apple supply chain include Luxshare Precision, GoerTek, and others [6] - Xiaomi is set to release its self-developed chips, impacting its supply chain [6] - Companies involved in AI smart glasses technology include Hengxuan Technology and TaiLing Microelectronics [9] Stock Performance - The top-performing stocks for the week included Jingyan Technology and Sixuan New Materials, while stocks like Dalian Technology and Changguang Huaxin performed poorly [49]

1. Report Industry Investment Rating There is no information provided regarding the report's industry investment rating. 2. Core Viewpoints of the Report - The bond market is expected to remain volatile in the short - term. Although there are uncertain positive factors, the duration of the bond market should be maintained. If the funding rate declines, leverage can be appropriately increased [2][7][13][14]. - The relative loosening of funds lower than expected is the current main line of interest - rate trading. However, the loosening of funds should not be a continuous reason for bulls to be optimistic about the bond market. The significant decline of the funding rate is "unrealistic" according to experience, and if the expectation of loose funds persists, a lower - than - expected situation may lead to a bond - market correction [3][4][13][14]. - To be more bullish on the bond market, the main factors should revolve around the fundamental situation and risk appetite. There are uncertainties in the fundamental situation, such as the possible recurrence of trade frictions and the lower - than - expected results of "front - loading exports" [4][14]. 3. Summaries According to Relevant Catalogs 3.1 This Week's Institutional Behavior Review: What Cards Do Bond Bulls Still Have? - This week, the credit market was strong, but interest rates fluctuated upward. The 3 - year medium - and short - term notes decreased by about 5bp, while the 10 - year Treasury bonds fluctuated up by nearly 5bp, and the credit spread narrowed overall [2][13]. - The relative loosening of funds lower than expected is the current main line of interest - rate trading. The funding rate (DR007) rose from 1.50% to around 1.60% this week, which impacted short - term bonds and caused long - term bonds to fluctuate weakly. After a 10bp interest - rate cut, some lower funding rates have formed a positive carry with many credit - bond varieties, so the credit market performed relatively strongly [3][13]. 3.2 Bond Market Yield Curve and Term Spread 3.2.1 Yield Curve: Yields of Treasury Bonds and China Development Bank Bonds Generally Rose - Treasury bond yields: The 1 - year yield rose 3bp, the 3 - year yield rose 4bp, the 5 - year yield rose 8bp, the 7 - year yield rose 6bp, the 10 - year yield rose 4bp, the 15 - year yield rose 6bp, and the 30 - year yield rose 4bp. The percentile points also increased to varying degrees [17]. - China Development Bank bond yields: The 1 - year yield rose 3bp, the 3 - year yield rose 3bp, the 5 - year yield rose 6bp, the 7 - year yield rose 6bp, the 10 - year yield rose 5bp, the 15 - year yield rose 4bp, and the 30 - year yield rose 4bp. The percentile points also changed accordingly [17]. 3.2.2 Term Spread: The Inversion of Treasury Bond Yield Spreads Eased, while that of China Development Bank Bonds Deepened; Treasury Bond Spreads Widened at the Short End, and China Development Bank Bond Spreads Widened Overall - Treasury bonds: The inversion of interest - rate spreads eased, and the term spread widened at the short end and narrowed at the long end. The 1Y - DR001 interest - rate spread inversion eased by 14bp, and the 1Y - DR007 interest - rate spread inversion eased by 11bp. The 3Y - 1Y spread widened by 3bp, the 5Y - 3Y spread widened by 2bp, the 7Y - 5Y spread narrowed by 1bp, the 10Y - 7Y spread narrowed by 2bp, the 15Y - 10Y spread widened by 1bp, and the 30Y - 15Y spread narrowed by 1bp. The percentile points also changed [18]. - China Development Bank bonds: The inversion of interest - rate spreads deepened, and the term spread widened overall. The 1Y - DR001 interest - rate spread inversion deepened by 11bp, and the 1Y - DR007 interest - rate spread inversion deepened by 7bp. The 3Y - 1Y spread changed by less than 1bp, the 5Y - 3Y spread widened by 3bp, the 7Y - 5Y spread changed by less than 1bp, the 10Y - 7Y spread narrowed by 1bp, the 15Y - 10Y spread changed by less than 1bp, and the 30Y - 15Y spread widened by 1bp. The percentile points also changed [20]. 3.3 Bond Market Leverage and Funding Situation 3.3.1 Leverage Ratio: Maintained at 106.70% From May 12 to May 16, 2025, the leverage ratio first rose and then fell during the week. As of May 16, the leverage ratio was about 106.70%, the same as last Friday and 0.19pct lower than Monday [24]. 3.3.2 This Week's Average Daily Turnover of Pledged Repurchase was 7.1 Trillion Yuan, with an Average Daily Overnight Proportion of 88.36% The average daily repurchase turnover increased compared with last week. From May 12 to May 16, the average daily turnover of pledged repurchase was about 7.1 trillion yuan, an increase of 0.3 trillion yuan from last week. The average overnight repurchase turnover was 6.3 trillion yuan, a month - on - month increase of 0.47 trillion yuan, and the average overnight trading proportion was 88.36%, a month - on - month increase of 2.57pct [29][34]. 3.3.3 Funding Situation: Banks' Fund Lending First Rose and then Fell From May 12 to May 16, the net lending of bank - related funds first rose and then fell. On May 16, the net lending of large - scale and policy banks was 3.24 trillion yuan; joint - stock banks, city commercial banks, and rural commercial banks had an average daily net borrowing of 0.05 trillion yuan, and on May 16, the net borrowing was 0.2 trillion yuan. The net lending of the banking system was 3.05 trillion yuan. The main fund - borrowing party was funds, and the lending of money - market funds first decreased and then increased [35]. 3.4 Duration of Medium - and Long - Term Bond Funds 3.4.1 The Median Duration Decreased to 2.73 Years This week (from May 12 to May 16), the median duration of medium - and long - term bond funds was 2.73 years (de - leveraged) and 2.95 years (including leverage). On May 16, the median duration (de - leveraged) was 2.73 years, a decrease of 0.05 years from last Friday; the median duration (including leverage) was 2.95 years, a decrease of 0.01 years from last Friday [48]. 3.4.2 The Duration of Interest - Rate Bond Funds Rose to 3.90 Years In terms of different types of bond funds, the median duration of interest - rate bond funds (including leverage) rose to 3.90 years, an increase of 0.12 years from last Friday; the median duration of credit - bond funds (including leverage) decreased to 2.64 years, a decrease of 0.03 years from last Friday. The median duration of interest - rate bond funds (de - leveraged) was 3.35 years, a decrease of 0.02 years from last Friday; the median duration of credit - bond funds (de - leveraged) was 2.55 years, a decrease of 0.02 years from last Friday [52]. 3.5 Comparison of Category Strategies 3.5.1 Sino - US Interest - Rate Spread: The Overall Inversion Deepened The inversion of the Sino - US Treasury - bond spread deepened overall. The 1 - year spread inversion deepened by 5bp, the 2 - year by 5bp, the 3 - year by 6bp, the 5 - year spread inversion eased by 2bp, the 7 - year spread changed by less than 1bp, the 10 - year spread inversion deepened by 2bp, and the 30 - year spread inversion deepened by 2bp [54]. 3.5.2 Implied Tax Rate: The Short - End Narrowed, and the Long - End Widened As of May 16, the spread between China Development Bank bonds and Treasury bonds changed by less than 1bp for the 1 - year, narrowed by 1bp for the 3 - year, narrowed by 2bp for the 5 - year, changed by less than 1bp for the 7 - year, changed by less than 1bp for the 10 - year, narrowed by 1bp for the 15 - year, and widened by 1bp for the 30 - year [58]. 3.6 Changes in Bond - Lending Balances - On May 16, the concentration trend of lending for the active 10 - year China Development Bank bonds rose, while that for the active 10 - year Treasury bonds, the second - active 10 - year Treasury bonds, the second - active 10 - year China Development Bank bonds, and the active 30 - year Treasury bonds declined [60]. - In terms of institutions, the lending balance of securities companies increased, while that of large - scale and small - and medium - sized banks decreased [61].

Investment Rating - Industry investment rating: Overweight [2] Core Views - The report highlights the rapid iteration of multimodal large models in the domestic market, indicating that computing power remains a long-term theme for the computer industry [1][4] - The supply and demand sides of computing power are both favorable, with TSMC planning to open or upgrade nine advanced manufacturing plants in 2025, with an annual budget set between $38 billion and $42 billion [4][5] - The report emphasizes the strong momentum in AI development both domestically and internationally, suggesting potential investment opportunities in related companies [6][8] Weekly Market Review - From May 12 to May 16, 2025, the Shanghai Composite Index rose by 0.76%, the ChiNext Index increased by 1.38%, and the CSI 300 Index gained 1.12%. The Hang Seng Technology Index rose by 1.95%, while the Nasdaq Index surged by 7.15% [3][26] - Sector performance showed the Media Index decreased by 0.67%, while the Hang Seng Internet Technology Index increased by 2.1%. The AI Index fell by 0.95%, and the Computer Index dropped by 1.26% [3][26] AI Developments - Tencent released the Hunyuan Image 2.0 model on May 16, 2025, achieving real-time image generation capabilities, which enhances the creative process for professional designers [4][42] - Alibaba open-sourced the Wan2.1-VACE model on May 14, 2025, which supports video generation and editing, with versions that can run on consumer-grade graphics cards [4][43] Semiconductor Sector - TSMC is accelerating the production of 2nm technology in Taiwan and has completed the second phase of its Arizona plant, with plans for further expansion [5] - AMD achieved a 39.4% revenue share in the global server CPU market in Q1 2025, marking a significant increase from previous quarters [10][43] Investment Recommendations - Focus on overseas AI companies such as Meta, Adobe, Microsoft, Apple, Nvidia, AMD, and Amazon due to their advancements in model iterations [6][8] - In the domestic AI sector, companies like Baidu, Alibaba, Tencent, and Kuaishou are highlighted for their innovative developments [9][10]