Citi(US:C)2025-07-07 15:44Investment Rating - The report maintains a growth forecast of 5.2% YoY for Q2 2025, indicating a steady outlook for the industry [1][2]. Core Insights - The industry is on track to meet the growth target of around 5%, with a run rate of 5.3% YoY in the first half of 2025. However, monthly indicators for June may show mixed results [2]. - Industrial production is expected to moderate to 5.3% YoY in June, while retail sales are projected to increase by 5.8% YoY, supported by a favorable base [2]. - Exports are forecasted to grow by 3.3% YoY in June, despite a decline in shipments to the US, with imports expected to expand by 0.5% YoY [3]. - Inflation is anticipated to remain low, with CPI expected to rise to 0.0% YoY and PPI contraction narrowing to -3.1% YoY in June [4]. - Total social financing (TSF) is projected at RMB 3.4 trillion for June, driven primarily by government bond issuance [5]. Summary by Sections Economic Growth - The growth forecast for Q2 2025 is set at 5.2% YoY, with expectations of steady growth despite mixed monthly indicators in June [1][2]. Industrial Production and Retail Sales - Industrial production is expected to moderate to 5.3% YoY in June, while retail sales are likely to increase by 5.8% YoY, reflecting resilience in consumer spending [2]. Trade and Exports - Exports are projected to grow by 3.3% YoY in June, with imports returning to growth at 0.5% YoY, contributing to a trade surplus of US$106.1 billion [3]. Inflation and Prices - CPI is expected to remain flat at 0.0% YoY, while PPI contraction is anticipated to narrow to -3.1% YoY, indicating limited inflationary pressure [4]. Credit and Financing - New TSF is forecasted at RMB 3.4 trillion for June, with significant contributions from government bond financing and new RMB loans [5].