Investment Rating - The industry rating is "Outperform the Market" [7] Core Viewpoints - The report indicates that the real estate development investment in China from January to May 2025 was 3.6 trillion yuan, a year-on-year decrease of 10.7%. The new construction area was 230 million square meters, down 22.8% year-on-year, and the completed area was 180 million square meters, down 17.3% year-on-year. The sales area of new commercial housing was 350 million square meters, a decrease of 2.9% year-on-year, with residential sales down 2.6% year-on-year. The sales amount of new commercial housing was 3.4 trillion yuan, down 3.8% year-on-year, with residential sales down 2.8% year-on-year [2][12] - The report highlights that various cities are implementing policies to support the real estate market, including loan issuance for urban renewal projects and adjustments to housing policies to ease purchasing conditions. These measures are expected to enhance market expectations and stabilize the real estate sector [2][12] - In the short term, the report emphasizes the pressure for stable growth and the need for stronger policy support for the real estate market. In the medium to long term, it suggests that the opening of the interest rate reduction channel in Europe and the U.S. may provide more room for China's monetary and fiscal policies, which could further stabilize the real estate market [2][12] Summary by Sections High-Frequency Data - As of June 20, 2025, the average price of bulk P.O 42.5 cement in China was 367.1 yuan/ton, a decrease of 1.3% week-on-week, and down 3.5% year-on-year. The average price of glass (5.00mm) was 1180.0 yuan/ton, down 0.7% week-on-week, and down 28.6% year-on-year [3][21] Sector Review - The report notes that the Shanghai Composite Index fell by 0.51%, and the Shenzhen Composite Index dropped by 1.6%. The building materials sector index decreased by 1.42%. Among sub-sectors, fiberglass manufacturing increased by 2.23%, while cement manufacturing fell by 2.2% [4][56] Investment Recommendations - The report suggests focusing on three main investment lines: 1. High-quality companies benefiting from stock renovation, such as Weixing New Materials, Beixin Building Materials, and Tubao [5] 2. Undervalued stocks with long-term alpha attributes, such as Sankeshu, Dongfang Yuhong, and Jianlang Hardware [5] 3. Leading cyclical building materials companies with bottoming fundamentals, such as Huaxin Cement, Conch Cement, China Jushi, and Qibin Group [5]

Group 1 - The article discusses the escalating geopolitical risks in the Middle East, particularly the potential for U.S. military intervention in the Israel-Iran conflict, which has led to significant declines in U.S. stock index futures [4][8] - U.S. stock index futures saw a sharp drop, with the Dow futures down by 400 points and the Nasdaq futures falling over 1%, reflecting market concerns over rising oil prices and inflation due to geopolitical tensions [4][6] - Oil prices increased by nearly 3% during the trading session, indicating market reactions to the potential for military action and its implications for oil supply [6][8] Group 2 - Former President Trump criticized Federal Reserve Chairman Jerome Powell, calling him "destructive" and suggesting that interest rates should be lowered by 250 basis points to alleviate financial burdens on the Biden administration [11][12] - Trump expressed frustration over Powell's decision to maintain the federal funds rate between 4.25% and 4.5%, which has remained unchanged since December of the previous year [11][12] - The article highlights that Trump's ongoing criticism of Powell is not surprising, as he has consistently called for lower interest rates, contrasting the Fed's actions with those of European central banks that have implemented multiple rate cuts [12]

Core Viewpoint - The recent surge in gold prices is driven by a combination of geopolitical risks and expectations of monetary policy easing, leading to a breakthrough of key resistance levels in the gold market [1][3][4]. Geopolitical Risks - The situation in the Middle East has worsened due to Israel's airstrikes on Iranian nuclear facilities, prompting Iran to threaten retaliation [3]. - The escalation of the Russia-Ukraine conflict, including drone attacks and military deployments in Eastern Europe, has increased geopolitical uncertainty, boosting demand for safe-haven assets like gold [3]. Monetary Policy Expectations - Weak economic data from the U.S. has strengthened expectations for interest rate cuts, with a projected cumulative cut of 50 basis points this year [4][5]. - The Producer Price Index (PPI) data indicates a cooling inflationary pressure, contributing to the market's anticipation of a rate cut by the Federal Reserve [4][5]. Technical Analysis - Gold has established a support level above $3,380, with a bullish "engulfing" pattern observed in recent trading sessions [6]. - The price has successfully broken through the $3,400 mark, indicating strong upward momentum, supported by technical indicators such as the RSI [8]. Trading Strategy - The combination of geopolitical tensions and monetary easing expectations is expected to drive gold prices higher, with a focus on the upcoming FOMC meeting for further policy guidance [11]. - A pullback to around $3,390 is seen as an ideal entry point for investors, with long-term structural support for gold prices anticipated from central bank purchases and de-dollarization trends [11].

Investment Rating - The report maintains a positive outlook on the gaming sector, recommending high-odds gaming stocks, particularly highlighting the strong performance of Giant Network's "Supernatural Action Group" [4]. Core Insights - The gaming industry exhibits a clear supply-driven demand characteristic, with an extended lifecycle for evergreen games and enhanced differentiation leading to improved profit margins. The gaming sector's current PE valuation is at a low midpoint of 15x, with expectations for EPS and PE uplift due to favorable policies and a new product cycle [4]. - The report emphasizes the potential of various companies, including G-bits, Xindong Company, and Shenzhou Taiyue, which are expected to benefit from the expansion of game licenses and new product launches [4]. - The report also highlights the anticipated entry of Blukoo into the Hong Kong Stock Connect, focusing on emotional consumption sectors such as music, concerts, and collectibles [4]. Summary by Sections Gaming Sector - The gaming sector is characterized by low valuations and high potential returns, with a PE ratio of 15x. The first quarter of 2025 saw many gaming companies in both Hong Kong and A-shares outperform expectations [4][6]. - Key companies to watch include Tencent Holdings, NetEase, and Giant Network, with projected revenue growth rates of 11% to 21% for 2025 [6]. Emotional Consumption - Companies like Blukoo and NetEase Cloud Music are highlighted for their growth potential, with Blukoo focusing on expanding its user base among women and older demographics [4]. - NetEase Cloud Music is noted for its steady growth in paid users and improved bargaining power, contributing to revenue and gross margin increases [4]. Film and Entertainment - Alibaba Pictures is shifting focus to live entertainment and IP derivatives, with a projected revenue growth of 38.8% for FY25 [4]. - The report also mentions the potential for valuation recovery in companies like Maoyan Entertainment, which has several upcoming projects [4]. AI and Cloud Computing - The report indicates a low market expectation for AI applications, despite ongoing advancements in the industry. Companies like Tencent and Alibaba are recommended for their strong positions in AI cloud computing and applications [4]. Key Recommendations - The report recommends focusing on companies that cater to emotional consumption, such as Bubble Mart, Blukoo, and NetEase Cloud Music, as well as low-valuation gaming stocks like Giant Network and Perfect World [4]. - It also suggests monitoring companies with improved competitive dynamics and high dividends, such as Focus Media [4].

Core Viewpoint - The Reserve Bank of Australia (RBA) believes it is not yet time to shift to an expansionary policy stance, indicating a cautious approach to monetary easing [1] Group 1 - The RBA is inclined to take actions that are cautious and predictable regarding monetary policy [1] - The current policy is positioned favorably, allowing for decisive responses when necessary [1] - Lowering the cash rate is seen as an appropriate response to global risks [1] - The rationale for a 25 basis point rate cut is considered stronger than that for a 50 basis point cut [1]

Core Viewpoint - The real estate market is at a critical juncture in 2025, with a stable trend expected to continue, supported by ongoing accommodative policies [1] Market Data Summary - As of May 31, 2025, the overall real estate market shows signs of stabilization, with new home supply significantly decreasing, while transaction volumes remained stable compared to April, and year-on-year growth is positive [3] - In May, the average price of new homes in 100 cities was 16,815 yuan per square meter, a month-on-month increase of 0.30% and a year-on-year increase of 2.56%. Conversely, the average price of second-hand homes was 13,794 yuan per square meter, showing a month-on-month decrease of 0.71% and a year-on-year decrease of 7.24% [4] - The new home market is improving, but the second-hand market is still undergoing significant adjustments, indicating that a full recovery in the real estate market will take considerable time [4] Future Market Trends - The market faces considerable pressure in June and the second half of the year, with developers expected to leverage promotional activities to boost transaction volumes [6] - Future market trends will depend on three core dimensions: the sustainability of policies, the economic fundamentals, and corporate behavior. Recent financial policies have lowered mortgage rates, supporting housing demand, and a continued accommodative policy stance is anticipated [7] - The recovery in core cities is seen as a starting point, but sustained recovery will require ongoing policy support and strong economic fundamentals [7]

Core Insights - The Federal Reserve has indicated a cautious approach, preferring to wait for clearer signals from fiscal and trade policies as well as economic responses before making further interest rate decisions [1] - Market expectations have shifted, with traders withdrawing bets on a rate cut in June, anticipating a pause in policy until the July meeting [1] - Futures market positions suggest a probability of over 50% for a rate cut by the end of September, indicating a bet on either easing inflation or worsening economic conditions necessitating further stimulus [1]

Core Viewpoint - Mitsubishi UFJ suggests that the Bank of Indonesia may lower its policy interest rate by 25 basis points to 5.50% due to the strengthening of the Indonesian rupiah against the US dollar, which provides room for monetary easing [1] Economic Indicators - Indonesia's economic growth has slowed, with actual GDP growth year-on-year decreasing from 5.02% in Q4 2024 to 4.87% [1] - Core inflation in Indonesia has been well-controlled, remaining stable at 2.5% year-on-year in April [1]

Group 1 - The A-share market showed slight declines at the opening on May 16, with the CSI 300 index closing at 3907.2 and the A500 index at 4577.84, recovering the technical gap formed since the tariff storm began on April 2 [1] - Goldman Sachs raised the 12-month target for the MSCI China Index and the CSI 300 Index to 84 points and 4600 points respectively, indicating potential increases of 11% and 17%, while maintaining an "overweight" rating on Chinese stocks [1] - Nomura significantly upgraded its rating on Chinese stocks to tactical overweight, citing the temporary reduction in tariffs between China and the U.S. as a major surprise that could support market sentiment in the short term [1] Group 2 - Goldman Sachs suggested focusing on multiple themes to capture excess returns, highlighting that the internet and service sectors will benefit from consumption recovery and accelerated digital transformation [1] - In the context of a policy easing cycle, quality regional banks and leading real estate companies are expected to see valuation recovery, while the infrastructure and AI industry chains are also worth attention [1] - The A500 Index ETF (560610) focuses on core A-share assets and provides comprehensive coverage of the CSI secondary industry, with a balanced industry distribution and a higher weight in emerging sector leaders [2]

Group 1 - Goldman Sachs raised the 12-month targets for the MSCI China Index and the CSI 300 Index to 84 points and 4600 points, indicating potential upside of 11% and 17% respectively, while maintaining an overweight rating on Chinese stocks [2] - This marks the second upgrade of Chinese stock ratings by Goldman Sachs within the month, with a previous report on May 8 also maintaining an overweight rating and raising earnings per share forecasts for major indices in the Chinese market for 2025 [2] - The Chinese stock market has fully recovered losses since the U.S. "Freedom Day," with the MSCI China Index, CSI 300 Index, and Hang Seng Tech Index exceeding early April highs by approximately 2% to 4% as of May 14 [2] Group 2 - The easing of U.S.-China trade tensions has led Goldman Sachs to raise economic growth expectations for both countries and lower the likelihood of a U.S. recession, while also adjusting the timeline for potential Fed rate cuts [3] - Goldman Sachs suggests focusing on several themes to capture excess returns in the Chinese stock market, particularly in the domestic demand-driven sectors such as internet and service industries, which are expected to benefit from consumption recovery and accelerated digital transformation [3] - The infrastructure industry chain, including building materials, engineering machinery, and new energy vehicles, is anticipated to see solid development due to policy stimulus [3] Group 3 - Other foreign investment banks, including Nomura, UBS, and Invesco, have also expressed optimism about the performance of the Chinese market, with Nomura upgrading its rating on Chinese stocks to tactical overweight [4] - The reduction of tariffs between the U.S. and China is viewed as a significant surprise that could support market sentiment and sustain the recent rebound in the Chinese stock market [4] - Given the current discount of the A-share market compared to global emerging markets, there is an expectation of continued net inflows of global capital into the Chinese market [4]