UBS(US:UBS)2025-07-03 02:41Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - China's GDP growth is expected to remain robust at 5.0-5.2% YoY for Q2 2025, supported by front-loading of exports and earlier government stimulus measures [4][32] - The property market continues to face challenges, with 30-city property sales declining by 10% YoY in June, and top 100 developers' contract sales volume down by 35% YoY [9][19] - Manufacturing PMIs show slight improvements, with NBS manufacturing PMI at 49.7 and Caixin manufacturing PMI at 50.4 in June, indicating a less negative growth momentum [7][10] Economic Data Summary - GDP Growth: Q2 GDP growth is projected at 5.0-5.2% YoY, with a slower sequential growth compared to Q1 [4][32] - Industrial Production: Expected to soften to 5.4% YoY in June, down from 5.8% YoY in May [3][16] - Retail Sales: Anticipated to moderate to 6% YoY in June, slightly down from 6.4% YoY in May [23] - Fixed Asset Investment (FAI): Overall FAI growth likely recorded 3% YoY in June, with property investment declining by 10-12% YoY [20] - Exports and Imports: Export growth expected to edge down to 4% YoY in June, while imports may improve to 1% YoY [23] Sector-Specific Insights - Manufacturing Sector: NBS manufacturing PMI increased by 0.2ppt to 49.7 in June, with improvements in new orders and production indices [7][10] - Property Sector: The property market continues to weaken, with significant declines in sales and new starts [9][19] - Automotive Sector: Auto retail sales growth picked up to 24% YoY in June, driven by a low base and trade-in subsidies [23][38] High-Frequency Data - PMIs: NBS non-manufacturing PMI edged up to 50.5 in June, indicating slight growth in services, while construction PMI improved significantly [8] - Port Activities: Port cargo throughput growth moderated to 1% YoY in June, reflecting a slowdown in trade activities [9][17] - Credit Growth: Total social financing (TSF) credit growth likely edged up to 8.8% YoY in June, with new RMB loans at approximately RMB 1.85 trillion [30][31]