Group 1: Tactical Asset Allocation - The tactical allocation view for Hong Kong stocks has been upgraded to overweight due to the ongoing enthusiasm for Chinese technology breakthroughs and emerging industries, with international funds increasingly favoring Hong Kong stocks [2][3] - The tactical allocation view for government bonds has been downgraded to neutral, as the imbalance between financing demand and credit supply limits the upward potential of interest rates [3][4] - The tactical allocation view for gold has been upgraded to overweight, as geopolitical tensions and economic recession fears make gold an attractive hedge against risks [3][4] Group 2: Export and Trade Industry Insights - In May, export growth slowed to 4.8% year-on-year, impacted by tariff shocks and high base effects from the previous year, but the resilience of foreign trade remains evident [5][6] - The recent US-China trade talks in London are expected to yield results in terms of tariff reductions and easing of technical restrictions, which could benefit companies with high exposure to the US market [6][7] - Cross-border e-commerce companies are entering a critical period of export acceleration to the US, driven by recent tariff reductions and upcoming sales events [7] Group 3: Automotive Industry Performance - In May, wholesale sales of passenger vehicles increased by 12.8% year-on-year, with a notable rise in new energy vehicle sales, which accounted for 52.6% of total sales [16][17] - The export of passenger vehicles, including new energy vehicles, showed significant growth, with new energy vehicle exports increasing by 80.9% year-on-year [16][17] - The automotive sector is expected to benefit from policies supporting new energy vehicles and the ongoing recovery in consumer demand [16][17] Group 4: Technology and AI Developments - The report highlights Apple's strategy to enhance its AI ecosystem by allowing third-party developers to integrate its foundational models into their applications, strengthening its competitive position [17][18] - The introduction of new features in Apple's iOS, such as real-time translation and visual intelligence, is expected to enhance user experience and drive further adoption of its devices [18][19] Group 5: Industrial Software and Robotics - The company is positioned as a leader in the industrial software sector, with projected revenues of 147.38 billion to 183.68 billion yuan from 2025 to 2027, driven by AI applications in the steel industry [24][25] - The development of humanoid robots and AI solutions is expected to accelerate automation in various industrial sectors, with significant market growth anticipated [25][26] Group 6: Smart Transportation Sector - The smart transportation industry is experiencing high growth driven by policy support and market demand, with significant contracts signed for digital transformation projects [27][28] - The company is expected to see a surge in orders as it capitalizes on opportunities in the smart transportation sector, with a strong pipeline of projects [29]

Group 1 - Economic indicators continue to weaken, and the allocation style remains growth-oriented. The quantitative indicators suggest that the economy is declining, liquidity is neutral to loose, and credit indicators are improving. The micro mapping shows that economic (profit expectations) continues to be weak, while credit is improving. The revised direction indicates economic downturn, tight liquidity, and improved credit, consistent with the previous period. Due to the significant divergence between liquidity and credit, the focus is on factors that are insensitive to the economy but sensitive to credit, maintaining a growth-oriented stock pool allocation style [4][7][9] - The macro asset allocation viewpoint suggests increasing bond positions. Given the current indicators, with the economy declining, liquidity tightening, and credit remaining favorable, the outlook for equities is slightly bearish, leading to a minor reduction in A-share positions. The trend for bonds has improved, with an increase in government bond positions and a reduction in US stock positions to zero [4][31] - The economic leading indicators are entering a declining phase. The updated economic leading indicator model indicates that June 2025 is at the beginning of a decline cycle, which is expected to continue [13][15] Group 2 - Liquidity is showing signs of recovery. In May, interest rates remained stable, with short-term rates slightly exceeding the 12-month average, while long-term rates are still significantly distant from the average. The monetary supply data has rebounded, signaling a return to a neutral stance, although the excess reserve ratio remains low, indicating that overall liquidity has returned to a slightly loose state [24][28][26] - Credit indicators are weak across various dimensions. In the second half of 2024, credit indicators are expected to remain low, with the total social financing stock showing a year-on-year increase for five consecutive months, maintaining a high level of comprehensive credit indicators [29] - The market focus remains on liquidity. Since 2023, credit and inflation have garnered significant attention, but recently liquidity has become the most scrutinized variable, particularly following the market rally at the end of September, indicating that the current market is heavily driven by liquidity [33] Group 3 - In terms of industry selection from a macro perspective, the report indicates a preference for industries that are insensitive to economic fluctuations but sensitive to credit conditions. The analysis suggests that these industries possess growth attributes, leading to a higher overall growth characteristic in the selected industries [34] - The report identifies the top industries based on their sensitivity to economic and credit conditions. The industries with the highest scores for being economically insensitive and credit-sensitive include electronics, media, and personal care, among others [34]

Group 1 - The report indicates a weakening of profit expectation indicators, leading to a preference for growth-oriented asset allocation. The economic recovery is noted, but the micro mapping shows a shift towards weaker profit expectations, resulting in a focus on factors that are less sensitive to economic changes and more sensitive to credit conditions [4][7][9] - The economic outlook is positioned at the late stage of an upward trend, with expectations of reaching a peak in June 2025 and entering a downward cycle thereafter. Recent PMI data shows a decline, indicating a potential slowdown [11][14] - Liquidity is maintained at a slightly tight level, with short-term interest rates showing a slight decline while long-term rates have decreased more significantly. Overall liquidity indicators remain neutral to slightly tight [24][27] Group 2 - The report suggests reducing commodity positions in the asset allocation strategy, with a slight increase in A-share positions and a minor recovery in US stock positions. The commodity allocation has been reduced to zero [31] - Market focus has shifted towards liquidity, which has become a significant variable influencing market performance, especially following the recent upward trends in September [32] - In terms of industry selection, the report emphasizes choosing sectors that are less sensitive to economic fluctuations but more sensitive to credit conditions, highlighting industries with growth attributes [33]