Market Overview - The convertible bond market experienced narrow fluctuations during the week of June 9 to June 13, 2025, with the China Convertible Bond Index showing a change of 0% (previous week +1.1%) and the China All Share Index declining by 0.4% [3] - Year-to-date, the China Convertible Bond Index has increased by 4.7%, while the China All Share Index has risen by 1.3%, indicating that the convertible bond market has outperformed the equity market [3] Performance by Rating and Size - High-rated bonds (AA+ and above) saw a change of -0.11%, medium-rated bonds (AA) changed by -0.44%, and low-rated bonds (AA- and below) changed by -0.38%, with high-rated bonds experiencing the least decline [4] - In terms of bond size, large-scale convertible bonds (balance over 5 billion) increased by +0.43%, while medium-scale (5 to 50 billion) and small-scale (under 5 billion) bonds decreased by -0.39% and -0.34%, respectively, with large-scale bonds showing the highest increase [4] Price and Premium Analysis - The average price of convertible bonds is 121.63 yuan, with an average parity of 93.35 yuan and an average conversion premium rate of 30.0% as of June 13, 2025 [5][6] - The average conversion premium rate for medium parity convertible bonds (conversion value between 90 to 110 yuan) is 24.3%, which is higher than the median conversion premium rate of 19.8% since 2018 [6] Future Outlook - The convertible bond market's future performance will be influenced by economic negotiations, fundamental factors, and macro policies [7] - Current focus areas include convertible bonds linked to companies that can boost domestic demand and those involved in domestic substitution, particularly those with strong underlying stocks [7]

Group 1 - Ping An Bank announced an increase in the daily and single transaction limit for debit card quick payments to 200,000 yuan starting June 19, marking the second increase in a year and a half [1][6][2] - Other banks, including Postal Savings Bank, China Merchants Bank, and Bank of Communications, have also raised quick payment limits for consumption scenarios, responding to the national call to boost domestic demand [7][8] - The increase in quick payment limits is part of a broader strategy by banks to enhance consumer experience and support spending during the "618" shopping festival [8][7] Group 2 - Banks are implementing various promotional activities to enhance consumer satisfaction during the "618" event, such as discounts and cashback offers for using their debit cards on platforms like Tmall and Taobao [8][9] - Digital supply chain financial products have been developed to support small and medium-sized enterprises, with Ping An Bank's collaboration with SF Technology providing over 8.5 billion yuan in financing to more than 90 distributors in various industries [9][8] - The focus on consumer electronics and home appliances is evident, with banks offering interest-free installment services for these products [8][9]

Market Overview - On May 30, the three major stock indices opened lower, with the Shanghai Composite Index at 3358.81 points, down 0.14%, the Shenzhen Component Index at 10091.19 points, down 0.36%, and the ChiNext Index at 2002.73 points, down 0.49% [1] Expert Opinions - According to Xu Chuanbao from Jinyuan Securities, regardless of external factors, the government is expected to focus on boosting domestic demand and optimizing economic structure, reducing reliance on exports. Key sectors benefiting from this trend are anticipated to perform well [2] - Huang Jun from Haishun Securities maintains an optimistic outlook for the market, expecting resistance around the 3400-point level due to significant trapped positions. The market is likely to remain in a volatile upward trend, led by specific sectors [2] - Lai Wenliang from Dongfang Securities identifies high-certainty main lines for the second half of the year, focusing on specific sectors and emerging technology products with substantial growth potential and overseas expansion opportunities [3] Industry Insights - China Galaxy Securities reports that technological advancements are driving market demand for AR glasses, transitioning them from niche products to mainstream smart devices. In Q1 2025, global AR sales are projected to reach 112,000 units, with a significant increase in AI smart glasses sales, which reached 600,000 units, up 216% year-on-year [6] - Citic Construction Investment highlights the importance of humanoid robots as a key application of AI. The commercial viability of humanoid robots is being actively explored across various dimensions, with increasing demand in logistics and healthcare sectors [7][8]

中信证券研报称，25H1内需有所回暖，价格端边际修复。该机构认为，中国政策端持续发力提振内需 的大方向明确。同时在市场加剧波动、不确定性提升背景下，消费在过往几年的回调后，"低预期低估 值"+"消费韧性特征下的企稳趋势"预计将提升消费配置的资金偏好。有别于过去大基建时代的投资逻 辑，当前消费领域呈现出三条趋势主线：1)回归理性、品质升级与消费平替并行；2)快乐生活、为精神 满足感和情绪价值付费；3)技术进步和迭代催生的消费新方向，这将提供诸多长期结构性"新消费"机 会，建议持续配置。至于传统消费，其经营端即使不考虑政策潜在拉动，多数子行业尤其是偏必需品行 业基本面已在积极回升，25Q2有望成为多数消费行业的压力见底窗口。维持建议从攻守兼备配置渐进 至弹性配置，攻守兼备：消费互联网、低估值高回报且经营有望率先企稳的乳制品、大众餐饮等板块。 弹性配置：顺周期特征明显的餐饮供应链、酒类、人力资源服务、酒店等行业。该机构认为提振内需的 政策预期将逐渐增强，消费配置表现有望迎来高潮，再次强调增配消费。 ...

Report Investment Rating No investment rating for the industry is provided in the report. Core View The convertible bond market had a slight adjustment this week. Since the beginning of 2025, the convertible bond market has outperformed the equity market. Fundamental trends and macro - policies remain important influencing factors for the current convertible bond market. At present, investors can continue to focus on convertible bonds of high - performance underlying stocks in areas such as boosting domestic demand and domestic substitution [1][4]. Summary by Directory 1. Market Quotes - From May 19 to May 23, 2025 (5 trading days), the CSI Convertible Bond Index fell by 0.1% (0.3% in the previous trading week), and the CSI All - Share Index changed by - 0.7%. Since the beginning of 2025, the CSI Convertible Bond Index has risen by 3.3%, and the CSI All - Share Index has risen by 0.4% [1]. - By rating, high - rated bonds (AA + and above), medium - rated bonds (AA), and low - rated bonds (AA - and below) fell by 0.06%, 0.41%, and 0.52% respectively this week, with low - rated bonds having the largest decline. By convertible bond scale, large - scale convertible bonds (bond balance > 5 billion yuan), medium - scale convertible bonds (balance between 500 million and 5 billion yuan), and small - scale convertible bonds (balance < 500 million yuan) rose by 0.30%, fell by 0.35%, and fell by 0.65% respectively, with small - scale convertible bonds having the largest decline. By conversion parity, ultra - high - parity bonds (conversion value > 130 yuan), high - parity bonds (conversion value between 110 and 130 yuan), medium - parity bonds (conversion value between 90 and 110 yuan), low - parity bonds (conversion value between 70 and 90 yuan), and ultra - low - parity bonds (conversion value < 70 yuan) fell by 1.14%, 0.38%, 0.45%, 0.31%, and 0.21% respectively, with ultra - high - parity bonds having the largest decline. By industry, the top 30 convertible bonds in terms of gains mainly came from the chemical (6) and machinery and equipment (4) sectors; the top 30 convertible bonds in terms of losses mainly came from the automobile (5), machinery and equipment (4), and chemical (4) sectors [2]. 2. Convertible Bond Price, Parity, and Conversion Premium Rate - As of May 23, 2025, there were 473 outstanding convertible bonds (476 at the end of last week), with a balance of 674.315 billion yuan (677.491 billion yuan at the end of last week). The average convertible bond price was 120.75 yuan (120.48 yuan last week), and the quantile was 75.6% (74.7% last week). The average convertible bond parity was 92.02 yuan (91.99 yuan last week), and the quantile was 57.2% (57.1% last week). The average conversion premium rate was 30.2% (31.0% last week), and the quantile was 60.8% (62.0% last week). Among them, the conversion premium rate of medium - parity convertible bonds (conversion value between 90 and 110 yuan) was 24.2% (24.3% last week), higher than the median conversion premium rate of medium - parity convertible bonds since 2018 (19.7%) [3]. 3. Convertible Bond Performance and Allocation Direction - The convertible bond market had a slight adjustment this week, with the CSI Convertible Bond Index falling by 0.1% (rising by 0.3% in the previous trading week). Since the beginning of 2025, the convertible bond market has outperformed the equity market. Looking ahead, fundamental trends and macro - policies are still important influencing factors for the current convertible bond market. At present, investors can continue to focus on convertible bonds of high - performance underlying stocks in areas such as boosting domestic demand and domestic substitution [4]. 4. Convertible Bond Rise Situation - The top 15 convertible bonds in terms of gains this week include Yanggu Convertible Bond, Jingzhuang Convertible Bond, Xuerong Convertible Bond, etc. For example, Yanggu Convertible Bond rose by 20.87%, and its underlying stock, Yanggu Huatai, rose by 32.05% [21].

Group 1 - The core viewpoint emphasizes the importance of maintaining foreign investment confidence and stimulating domestic demand amid ongoing US-China tariff disputes and rising global trade barriers [1] - China is leveraging institutional openness to counter external uncertainties and is implementing a "dual circulation" strategy to address insufficient domestic demand, thereby injecting new momentum into high-quality economic development [1][3] Group 2 - Despite increased pressure on foreign trade enterprises due to US-China tariff frictions, China's market attractiveness remains strong, supported by low corporate valuations, a robust economic foundation, and a large pool of high-quality talent [2] - The government is expected to provide policy support for foreign trade enterprises, such as tax reductions and loan interest cuts, while companies must enhance their resilience through technological innovation and supply chain cost reduction [2] - Companies are encouraged to diversify their markets and reduce reliance on a single market by expanding globally, as trade friction is likely to become a norm [2] Group 3 - The "dual circulation" strategy is seen as forward-looking, particularly in promoting domestic circulation to address current uncertainties, although challenges such as declining investment and consumer willingness persist [3] - Recommendations include building a unified national market to facilitate the flow of resources, dynamically assessing the effectiveness of consumption promotion policies, and continuing support for the private economy [3] - The rapid passage of the "Private Economy Promotion Law" reflects the central government's commitment to boosting confidence among private entrepreneurs, which is crucial for the development of the domestic circulation system [3]

Group 1 - The core viewpoint is that China is better prepared to respond to U.S. tariffs due to past experiences and strategic preparations, including self-sufficiency in technology and boosting domestic demand [3] - China’s response to U.S. tariffs is driven by a sense of disrespect from the U.S. government, which has disregarded previous cooperation on issues like fentanyl [3] - The high level of existing tariffs imposed by the U.S. has led China to feel compelled to retaliate, while also being cautious to maintain a favorable business environment for foreign investments [3] Group 2 - The decision-making process in the White House is described as "chaotic," lacking a clear strategy and relying on impulsive tariff actions to exert global influence [4] - The U.S. tariffs are unlikely to be effective against China, as many countries have stronger trade ties with China than with the U.S., making it impractical for them to sacrifice their relationships with China for U.S. concessions [7] - The tariffs are accelerating the internationalization of Chinese companies, pushing them to transform into multinational corporations, driven by various factors beyond just tariffs [7] Group 3 - China has a longer-term strategic planning capability compared to the U.S., particularly in areas like technological self-sufficiency, which is being effectively implemented [8] - The continuity of Chinese policies is likened to steering a ship, with the government able to guide the direction and ensure progress towards established goals [8]

Investment Rating - The report maintains a "Buy" rating for key companies in the steel sector, including Baosteel, Hualing Steel, and Nanjing Steel, among others [4]. Core Insights - The steel sector experienced a slight increase in 2024, with a notable recovery in Q1 2025 driven by supply restrictions and macroeconomic policies aimed at boosting domestic demand [1][9]. - The profitability of the steel sector improved in Q1 2025, with a significant year-on-year increase in net profit for general steel and a substantial recovery in profit margins [2][17]. - The report highlights a potential new round of capacity reduction in the steel industry due to ongoing overcapacity and losses, with government policies likely to enforce stricter production controls [3][48]. Summary by Sections 1. Steel Sector Performance - In 2024, the steel sector saw a modest increase of 6.56%, ranking 25th among industries, while Q1 2025 showed a stronger performance with a 10.24% increase, ranking 5th [1][11]. - The profitability of the general steel sector turned positive in Q1 2025, with a year-on-year net profit increase of 549.88% [17][19]. 2. Demand and Supply Dynamics - Demand for construction steel stabilized at the bottom, while manufacturing steel maintained resilience, supported by increased infrastructure investment and a gradual recovery in the real estate market [2][37]. - The report notes that the supply side is facing stricter production controls, with the potential for a new round of capacity reduction due to significant overcapacity in the industry [3][45]. 3. Investment Recommendations - The report suggests focusing on leading companies in the general steel sector, such as Baosteel and Hualing Steel, as well as companies with flexible production capacity like Liugang and Shandong Steel [3][4]. - For the special steel sector, companies with strong performance in downstream industries like automotive and wind energy are recommended, including Xianglou New Materials and Guanda Special Materials [3][4]. 4. Financial Performance - The steel sector's total revenue in 2024 decreased by 9.47%, but Q1 2025 showed a recovery with a significant increase in net profit [17][19]. - The gross profit margin for the steel sector improved to 6.60% in Q1 2025, indicating a recovery in profitability [19][20]. 5. Institutional Holdings - Institutional holdings in the steel sector increased in Q1 2025, reflecting a recovery in profitability and improved market conditions [2][27]. - The report indicates a rise in the proportion of institutional investment in the steel sector, reaching 0.42% in Q1 2025 [27][28].

Economic Outlook - Economists believe there is significant policy space to boost domestic demand and consumption, focusing on developing service consumption, optimizing the consumption environment, and implementing "two new" policies to stabilize employment and increase residents' income [1][28][32] Confidence Index - The "First Financial Chief Economist Confidence Index" for May is 49.84, falling below the neutral line of 50, indicating economic pressure due to declining external demand and uncertain tariff policies [5][1] Inflation and Price Trends - The predicted average year-on-year CPI for April is -0.17%, a decrease from March's -0.1%, while the PPI is expected to be -2.65%, slightly lower than March's -2.5% [8][4] Retail Sales - The predicted year-on-year growth rate for social retail sales in April is 5.45%, down from 5.9% in March, with expectations for a recovery in consumption supported by various government policies [12][28] Industrial Production - The predicted year-on-year growth rate for industrial added value in April is 5.62%, lower than March's 7.7%, indicating a potential slowdown in industrial activity [13][14] Fixed Asset Investment - The predicted average growth rate for fixed asset investment in April is 4.11%, slightly down from 4.2% in March, reflecting mixed signals in infrastructure and real estate investments [15][16] Real Estate Investment - The predicted year-on-year growth rate for real estate development investment in April remains at -9.9%, indicating ongoing challenges in the real estate sector [16][18] Trade Balance - The predicted trade surplus for April is $91.341 billion, with expectations of a decline in imports by 5.68% and a modest increase in exports by 2.48% [18][4] Financial Data - Predictions for April include new loans at 7,764 billion yuan, a significant drop from March's 36,400 billion yuan, and a total social financing amount of 1.31 trillion yuan [19][20] Monetary Policy - The People's Bank of China plans to implement ten policies to enhance macroeconomic control, including a reduction in the reserve requirement ratio and interest rates, to support economic growth [4][22] Currency and Foreign Reserves - The predicted exchange rate for the RMB against the USD by the end of May is 7.18, with foreign reserves expected to be around $32,330.11 billion by the end of April [24][25] Policy Recommendations - Economists suggest that future policies should focus on increasing disposable income for low- and middle-income groups, enhancing service consumption, and improving the consumption environment to stimulate economic growth [31][32][30]

Economic Overview - In the first quarter of 2025, GDP growth exceeded market expectations, with 19 provinces surpassing the national growth rate of 5.4%, indicating a stable growth trajectory across most regions [1][2] - The economic performance of major provinces like Guangdong and Jiangsu, which are part of the "3 trillion club," plays a crucial role in stabilizing employment and growth nationally, accounting for nearly 30% of the national GDP [2][3] Regional Performance - The top three provinces by GDP in Q1 2025 are Guangdong (33,525.51 billion), Jiangsu (33,088.6 billion), and Shandong (23,466 billion), with several other provinces also exceeding the billion scale in GDP [2] - Fast-growing provinces such as Tibet, Hubei, Gansu, and Anhui are supported by emerging industries, including new energy vehicles and infrastructure projects [3] Industrial Growth - High-tech, digital, and green economies are driving growth, with Guangdong's advanced manufacturing and high-tech manufacturing sectors seeing increases of 5.9% and 5.3% respectively [4] - The production of high-tech products, including new energy vehicles and lithium-ion batteries, has seen significant growth, with increases of 29.9% and 83.5% respectively [4] Consumer Market Dynamics - The "trade-in" policy and the Spring Festival holiday have stimulated consumer markets, with Jiangsu reporting significant retail growth in various categories, such as a 51.4% increase in cultural and office supplies [5] - Shandong's retail sales grew by 5.6%, benefiting from the "trade-in" policy, which generated over 31 billion in consumption [5] Trade and Export - Gansu's foreign trade saw a remarkable increase of 49.4%, with exports of electric vehicles and photovoltaic products rising significantly [5] - Shandong's foreign trade reached 820.34 billion, a 5.9% increase, marking the highest level for the same period historically [5] Policy Initiatives - Various provinces are actively implementing measures to boost domestic demand, including consumer promotion plans and accelerating major industrial projects [7][8] - The focus is on enhancing consumption and upgrading traditional industries to release consumer potential and support high-quality economic development [7][8]