Market Overview - US stock market declined on Wednesday, with the S&P 500 ending a three-day rally, which may put pressure on A-shares at the opening [2] - The China Golden Dragon Index rose by 0.08%, indicating a positive performance for Chinese concept stocks [2] Technical Analysis - The Shanghai Composite Index closed at 3402.32 points, maintaining above the 3400 mark, but trading volume decreased to 1.26 trillion, down 160 billion from the previous day, suggesting weak buying interest [2] - If trading volume remains low, the index may test the 3380 point support level [2] - The ChiNext Index increased by 1.21%, but the new energy sector lagged, with Ningde Times affecting overall sentiment [2] - The brokerage sector saw a net inflow of 3.7 billion, indicating potential upward movement if major brokers like CITIC Securities and Oriental Fortune show strong early performance [2] Policy Directions - Three key policy directions identified: 1. US-China trade talks focusing on rare earth and semiconductor equipment exports, with China issuing temporary export licenses for rare earth materials to three major US automakers [3] 2. Hydrogen energy pilot projects, with the National Energy Administration outlining directions for green hydrogen production and zero-carbon parks, potentially benefiting equipment manufacturers like Hupu Co. and Xue Ren Co. [3] 3. Local special bonds issuance, with 180 billion issued in the first two weeks of June, likely stabilizing infrastructure stocks like China Communications Construction and China Railway Construction [3] Sector Rotation - Focus on whether technology and brokerage sectors can resonate positively in early trading [3] - The AI computing industry chain may see funding inflows due to the upcoming delivery of Nvidia's Blackwell chips [3] - Defensive sectors like Yangtze Power, with a dividend yield over 5%, and Hu Nong Commercial Bank, known for low valuation and high dividends, are suitable for risk-averse investments [3] Investment Strategy - Key focus on trading volume; if the first hour's trading volume exceeds 380 billion, the index may approach 3417 points; if it falls below 1.2 trillion, consider reducing positions to avoid potential pullbacks [4] - Long-term investors should consider semiconductor equipment, AI computing, and consumer electronics, which are at historical low valuations and have multiple policy catalysts [4] - Short-term traders should monitor hydrogen energy pilot projects and urban renewal themes, paying attention to the strength of leading stocks [4]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The launch of Broadcom's TH6 switch chip, with a capacity of 102.4 Tbps, is expected to enhance the global computing infrastructure investment logic, supporting the next generation of AI networks [4][14] - The report emphasizes the importance of the AI computing infrastructure investment wave, highlighting the need for upgrades in communication network equipment and the development of the computing network [6][14] - The report identifies seven key investment directions within the AI computing industry chain, including AIDC data center construction, IT equipment, network devices, cloud computing, AI applications, satellite internet, and 6G [7][16] Summary by Sections Section 1: Investment Insights - Broadcom's TH6 switch chip is the first in the world to achieve 102.4 Tbps, doubling the current Ethernet switch bandwidth, and is designed to support AI clusters with over 1 million XPUs [4][13] - The TH6 chip features advanced technologies such as flexible connection options, AI-optimized routing, and support for various network topologies, making it suitable for large-scale AI network operations [5][13] Section 2: Market Review - The communication index rose by 4.06% during the week of June 2 to June 6, 2025, ranking first among the TMT sector [24] Section 3: Communication Data Tracking - As of April 2025, the total number of 5G base stations in China reached 4.439 million, with a net increase of 188,000 stations compared to the end of 2024 [25] - The number of 5G mobile phone users reached 1.081 billion, a year-on-year increase of 21.6% [25] - 5G mobile phone shipments in April 2025 were 19.889 million units, accounting for 79.4% of total shipments, with a year-on-year decrease of 1.7% [25] Section 4: Operator Performance - The report highlights strong growth in innovative business development among the three major operators, with significant revenue increases in cloud computing services [39][40] - The ARPU values for the three major operators remained stable, with slight variations noted [39][44]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The launch of Broadcom's TH6 switch chip, with a capacity of 102.4 Tbps, is expected to enhance the global computing infrastructure investment logic, particularly in AI computing networks [4][14] - The report emphasizes the importance of the AI computing infrastructure investment wave, highlighting the need for upgrades in communication network equipment [6][14] - The report identifies seven key investment directions within the AI computing industry, including AIDC data center construction, IT equipment, network devices, cloud computing, AI applications, satellite internet, and 6G [16] Summary by Sections Section 1: Investment Insights - Broadcom's TH6 switch chip is the first in the world to achieve 102.4 Tbps, doubling the current Ethernet switch bandwidth and supporting next-generation AI networks [4][13] - The TH6 chip features advanced routing capabilities and supports large-scale AI clusters, enhancing system efficiency and functionality [5][13] Section 2: Industry Trends - The report notes that as the TH6 chip is shipped, the investment logic for global computing infrastructure is expected to strengthen, with a focus on the development of the overall computing industry chain [14][15] - The report highlights the potential for accelerated investment in computing networks as trade tariffs ease, boosting confidence in overseas computing investments [6][14] Section 3: Key Investment Directions - AIDC Data Center Construction: Recommended stocks include New Idea Network Group, Yingweike, and Baoxin Software [17] - IT Equipment: Recommended stocks include Unisplendour and ZTE Corporation [18] - Network Devices: Recommended stocks include Unisplendour and ZTE Corporation [19] - Cloud Computing: Beneficiary stocks include China Mobile, China Telecom, and China Unicom [21] - AI Applications: Beneficiary stocks include Guohua Tong and Yiyuan Communication [22] - Satellite Internet: Beneficiary stocks include Haige Communication and Chengchang Technology [23] - 6G: Recommended stocks include ZTE Corporation [23] Section 4: Market Review - The communication index rose by 4.06% during the week, ranking first among the TMT sector [24] Section 5: Communication Data Tracking - As of April 2025, the total number of 5G base stations in China reached 4.439 million, with a net increase of 188,000 stations compared to the end of 2024 [25] - The number of 5G mobile phone users reached 1.081 billion, a year-on-year increase of 21.6% [25]

Group 1 - The AI computing power industry chain is expected to accelerate its development by 2025, driven by evolving demand on the inference side, which will create broader growth opportunities for the telecommunications industry [1] - Capital expenditure in computing power remains in a high growth phase, with the domestic market closely following the global AI development process, indicating significant room for improvement in telecommunications sector holdings [1] - Nvidia continues to upgrade its GPU capabilities, while Broadcom's AI-related revenue and network switching chip shipments are experiencing rapid growth, contributing to strong performance for companies closely linked to the overseas AI industry chain [1] Group 2 - The domestic AI industry is undergoing significant changes, with major internet companies in China expected to increase capital expenditure on cloud and AI infrastructure, with Alibaba projecting that its spending over the next three years will exceed the total of the past decade [1] - Tencent's capital expenditure is expected to triple year-on-year in 2024, reaching $10.7 billion, indicating a strong commitment to infrastructure investment [1] - The telecommunications sector's fund holdings decreased in Q1 2025, with a market value share of 2.59%, ranking 13th among 31 primary industries [1] Group 3 - The focus of major stock holdings remains primarily on the AI industry chain, with an increase in the proportion of domestic industry chain holdings [2] - The top ten holdings account for 58% of the telecommunications sector's holdings, with a decrease of 3 percentage points; eight companies in the AI industry chain represent 82% of the top ten holdings [2] - The proportion of stocks benefiting from the development of the domestic computing power industry chain has significantly increased [2]

Group 1: Automotive Chip Industry - The Ministry of Industry and Information Technology (MIIT) of China has announced plans to accelerate the standardization of automotive chips, including the development of common specifications for environmental reliability, information security, and consistency testing [2] - By 2025, the automotive chip market in China is expected to reach approximately 95.07 billion yuan [2] - High-end automotive chips are currently dominated by foreign manufacturers, indicating a pressing need for domestic production in areas such as MCU, smart power devices, and power management chips [2] Group 2: Data Resource Development - The National Data Bureau has emphasized the importance of developing a national integrated data resource utilization system, focusing on market-oriented and value-driven approaches [3] - The push for public data development and utilization policies aims to unlock the value of public data and foster a new model for large-scale data circulation [3] - The data industry ecosystem is expected to grow, with a focus on data infrastructure, data annotation, and companies with unique high-quality datasets [3] Group 3: GPU Resource Acquisition - ByteDance has acquired GPU resources valued at approximately 2 billion yuan from Tencent, primarily consisting of NVIDIA H20 cards and servers [4] - In the first quarter of the year, ByteDance reportedly stockpiled around 100,000 GPU modules, with an estimated total value of 100 billion yuan [5] - Alibaba has announced plans to invest over 380 billion yuan in cloud and AI hardware infrastructure over the next three years, indicating a significant increase in AI infrastructure investment across the industry [5] Group 4: Explosives Industry Outlook - The explosives industry is expected to see improved conditions due to policy support and the gradual release of downstream demand, with a reported 1.5% increase in explosive production and a 23.03% increase in total profits in the first quarter of 2025 [6] - Mining investment is projected to grow by 10.5% in 2024, maintaining stable demand for explosives in the mining sector [6] - The demand for explosives in regions like Xinjiang and Tibet is on the rise, driven by increased mining activities and government support for infrastructure projects [6]