CCSC(SH:601375) Zhongyuan Securities·2025-06-18 01:17Core Insights - The report highlights a moderate recovery in the Chinese economy, with consumption and investment as core drivers, and suggests that the A-share market is suitable for medium to long-term investment due to its current valuation levels [8][9][11]. Domestic Market Performance - The Shanghai Composite Index closed at 3,387.40, with a slight decline of 0.04%, while the Shenzhen Component Index fell by 0.12% to 10,151.43 [3]. - The average price-to-earnings ratios for the Shanghai Composite and ChiNext are 13.90 and 37.06, respectively, indicating a mid-level valuation compared to the past three years [8][9]. International Market Performance - Major international indices such as the Dow Jones and S&P 500 experienced declines of 0.67% and 0.45%, respectively, while the Nikkei 225 rose by 0.62% [4]. Economic Policies and Developments - The State-owned Assets Supervision and Administration Commission (SASAC) reported that over 80% of key reform tasks for central and local state-owned enterprises have been completed as of Q1 2025 [5][8]. - The Henan provincial government has introduced guidelines to enhance high-quality investment attraction, promoting a dual approach of government and market-driven initiatives [5][8]. Industry Analysis - The software industry saw a revenue increase of 10.8% year-on-year in the first four months of 2025, with a notable rise in domestic AI chip localization from 20% to 34% [13]. - The lithium battery sector is projected to see significant growth, with a 43.97% year-on-year increase in new energy vehicle sales in China for the first five months of 2025 [17][25]. - The telecommunications sector reported a 1.0% year-on-year increase in revenue for the first four months of 2025, with a notable rise in 5G mobile phone users [26][27]. Investment Recommendations - The report suggests focusing on sectors such as consumer electronics, battery technology, and telecommunications for short-term investment opportunities, given their current performance and growth potential [8][9][11][29]. - In the lithium battery sector, attention is drawn to companies with strong research and development capabilities and those benefiting from the ongoing demand for electric vehicles [17][25]. Key Data Updates - The semiconductor industry is experiencing a recovery, with global sales expected to grow by 11.2% in 2025, driven by increasing demand for AI and consumer electronics [21][22][23]. - The chemical industry is seeing a slowdown in price declines, particularly in potassium and phosphorus fertilizers, indicating potential investment opportunities in these areas [19][20]. Sector Performance - The food and beverage sector showed resilience, with a 0.25% increase in May, despite challenges in the liquor segment, indicating a shift in consumer preferences towards other beverage categories [31][32]. - The electrical equipment sector is expected to benefit from increased domestic demand as the power grid construction accelerates, despite facing challenges from external trade policies [34][36]. Conclusion - The report emphasizes a cautiously optimistic outlook for various sectors, suggesting that investors should remain vigilant about policy changes and market dynamics while exploring opportunities in high-growth industries [8][9][11].