Report Industry Investment Ratings No relevant content provided. Core Views of the Report - The external environment is favorable for Treasury bond futures, but considering the relatively low current Treasury bond yields, the stable recovery of the Chinese economy, and the possibility of repeated tariff adjustments, it is recommended to remain cautious [7][8]. - Despite the impact of tariffs on the domestic economic recovery rhythm and the increase in global recession risks, the long - term performance of Chinese equity assets is still optimistic, and it is considered to go long on stock index futures [10]. - Due to the complex global trade and financial environment, the increasing risk of global economic recession under tariff disturbances, and the possible passive easing of monetary policies of various countries, the long - term bullish trend of precious metals will continue, and it is recommended to go long on gold futures on dips [13]. - For steel products such as rebar and hot - rolled coils, considering the industrial supply - demand situation, valuation, and technical aspects, investors can focus on shorting opportunities on rebounds and pay attention to position management [15]. - For iron ore, considering the improvement of the supply - demand pattern, valuation, and technical aspects, investors can focus on buying opportunities at low levels and pay attention to position management [17][18]. - For coking coal and coke, considering the industrial supply - demand situation and technical aspects, investors can focus on shorting opportunities on rebounds and pay attention to position management [20]. - For ferroalloys, considering the supply - demand situation, inventory, and cost, for manganese silicon, attention can be paid to the opportunities of out - of - the - money call options at low levels; for silicon iron, short - sellers can consider exiting at the bottom range, and attention can also be paid to the opportunities of out - of - the - money call options at low levels [23]. - For crude oil, considering the OPEC+ production increase and the positive impact of Sino - US talks, it is considered to take a long - biased operation on the main crude oil contract [25][26]. - For fuel oil, considering the possible relaxation of US sanctions on Russia and the signing of tariff friction agreements, it is considered to take a long - biased operation on the main fuel oil contract [27][28]. - Synthetic rubber and natural rubber are expected to be in a weak and volatile state; PVC is expected to be in a bottom - oscillating state; urea requires attention to export changes; PX is expected to oscillate and adjust following the cost side; PTA is expected to have a small price repair space; ethylene glycol is expected to have a small upward price space; short - fiber and bottle - chip are expected to oscillate and adjust following the cost side; soda ash may have short - term disk adjustments; glass has no obvious driving force in the short term; caustic soda may have certain driving forces due to device maintenance; pulp is in a weak pattern; lithium carbonate is expected to be weak; copper is expected to be strong; tin is expected to be under pressure and oscillate bearishly; nickel is recommended to be observed cautiously; industrial silicon and polysilicon are expected to be bearish; soybean oil, palm oil, rapeseed meal, and rapeseed oil have different investment opportunities; cotton is recommended to be observed; sugar is expected to oscillate within a range; apples are recommended to focus on buying opportunities after corrections; pigs are expected to be weak first and then stable and strong; eggs are recommended to gradually take profit on reverse spreads; corn and starch are recommended to be observed temporarily; logs have no obvious driving force [29][30][32][36][38][40][42][43][44][45][47][49][52][54][56][58][60][61][63][65][68][69][73][76][78][81][83][86] Summaries According to Relevant Catalogs Treasury Bonds - On the previous trading day, most Treasury bond futures closed down. The central bank conducted 77 billion yuan of 7 - day reverse repurchase operations on May 9, with a net investment of 77 billion yuan on the same day [5]. - The central bank will implement a moderately loose monetary policy. China's April export growth slowed down, and the trade surplus decreased. The Sino - US economic and trade talks reached important consensus [6]. - It is expected that the fluctuation range will increase, and caution should be maintained [9]. Stock Index Futures - On the previous trading day, stock index futures showed mixed trends. China's April CPI and core CPI showed certain changes, and PPI continued to decline [10]. - Although the domestic economy is stable, tariffs disrupt the economic recovery rhythm. However, the long - term performance of Chinese equity assets is still optimistic, and it is considered to go long on stock index futures [10][11]. Precious Metals - On the previous trading day, the gold main contract closed down, and the silver main contract closed up. Due to the complex global situation, the long - term bullish trend of precious metals will continue, and it is recommended to go long on gold futures on dips [12][13][14]. Rebar and Hot - Rolled Coils - On the previous trading day, rebar and hot - rolled coil futures fell significantly. The real - estate industry's downward trend suppresses rebar prices, but short - term peak - season demand may provide support. It is recommended to focus on shorting opportunities on rebounds [15][16]. Iron Ore - On the previous trading day, iron ore futures fell slightly. The improvement of the supply - demand pattern supports the price. It is recommended to focus on buying opportunities at low levels [17][18][19]. Coking Coal and Coke - On the previous trading day, coking coal and coke futures fell sharply. The supply of coking coal is loose, and the price of coke is under pressure. It is recommended to focus on shorting opportunities on rebounds [20][21]. Ferroalloys - On the previous trading day, the manganese silicon main contract rose, and the silicon iron main contract rose. The demand for ferroalloys is weak, and the supply is still high. Different investment opportunities are recommended for manganese silicon and silicon iron [22][23]. Crude Oil - On the previous trading day, INE crude oil oscillated upward. OPEC+ will increase production from May to June, and the Sino - US talks are positive for crude oil. It is considered to take a long - biased operation [24][25][26]. Fuel Oil - On the previous trading day, fuel oil followed crude oil and oscillated upward. The possible relaxation of US sanctions on Russia is negative for high - sulfur fuel oil, while the signing of tariff agreements is positive for fuel oil. It is considered to take a long - biased operation [27][28]. Synthetic Rubber - On the previous trading day, the synthetic rubber main contract rose. The supply pressure continues, the demand improvement is limited, and it is expected to oscillate weakly [29][30]. Natural Rubber - On the previous trading day, the natural rubber main contract fell, and the 20 - rubber main contract rose. The global supply is expected to increase, and the demand is affected by tariffs. It is expected to oscillate weakly [30][31]. PVC - On the previous trading day, the PVC main contract fell. The supply pressure eases marginally, the demand recovers weakly, and it is expected to oscillate at the bottom [32][35]. Urea - On the previous trading day, the urea main contract rose. The demand increase may not offset the supply elasticity. Attention should be paid to export changes [36][37]. PX - On the previous trading day, the PX2509 main contract rose. The short - term crude oil price is under pressure, and PX is expected to oscillate and adjust following the cost side [38][39]. PTA - On the previous trading day, the PTA2509 main contract rose. The short - term supply - demand structure of PTA improves, and the cost is expected to turn better. It is expected to have a small price repair space [40]. Ethylene Glycol - On the previous trading day, the ethylene glycol main contract rose. The short - term supply increase of ethylene glycol is not obvious, and the inventory may decline slightly. It is expected to have a small upward price space [41][42]. Short - Fiber - On the previous trading day, the short - fiber 2506 main contract rose. The downstream terminal demand warms up slightly, and it is expected to oscillate and adjust following the cost side [43]. Bottle - Chip - On the previous trading day, the bottle - chip 2506 main contract rose. The raw material price oscillates and adjusts, and the bottle - chip is expected to oscillate following the cost side [44]. Soda Ash - On the previous trading day, the soda ash 2509 main contract fell. The supply is still high, and the raw material price is falling. There may be short - term disk adjustments [45][46]. Glass - On the previous trading day, the glass 2509 main contract fell. There is no obvious driving force in the actual supply - demand fundamentals, and the market sentiment may be repaired in the short term [47][48]. Caustic Soda - On the previous trading day, the caustic soda 2509 main contract fell. The demand for caustic soda is limited, and some devices will enter the maintenance period in May, which may have certain driving forces [49][50]. Pulp - On the previous trading day, the pulp 2507 main contract rose. The supply is high, the downstream consumption is weak, and the market is in a weak pattern [51][52][53]. Lithium Carbonate - On the previous trading day, the lithium carbonate main contract fell. The supply - demand surplus situation has not changed significantly, and it is expected to be weak [54][55]. Copper - On the previous trading day, Shanghai copper oscillated slightly. The Sino - US talks achieved important results, and copper is expected to be strong. It is considered to take a long - biased operation on the Shanghai copper main contract [56][57]. Tin - On the previous trading day, Shanghai tin rose. The supply is expected to be loose, and the price is expected to be under pressure and oscillate bearishly [58][59]. Nickel - On the previous trading day, Shanghai nickel rose. The supply is tightened at the mine end, but the demand may weaken in the off - season. It is recommended to observe cautiously [60]. Industrial Silicon/Polysilicon - On the previous trading day, the industrial silicon main contract fell, and the polysilicon main contract rose. The demand in the industrial chain is weak, and the price of polysilicon is expected to continue to decline. It is considered bearish [61][62]. Soybean Oil and Soybean Meal - On the previous trading day, the soybean meal main contract fell, and the soybean oil main contract rose. The supply of soybeans is expected to be loose, and different investment opportunities are recommended for soybean oil and soybean meal [63][64]. Palm Oil - Malaysian palm oil prices are under pressure due to expected production and inventory increases. It is recommended to focus on the opportunity to widen the soybean - palm oil spread [65][66][67]. Rapeseed Meal and Rapeseed Oil - Canadian rapeseed prices rose. In China, the situation of rapeseed, rapeseed meal, and rapeseed oil inventory is different. It is recommended to focus on buying opportunities for rapeseed meal after corrections [68]. Cotton - Domestic and foreign cotton prices oscillated. The market is waiting for the USDA report and Sino - US negotiation news. The demand in the industrial chain is weak, and it is recommended to observe [69][70][71]. Sugar - Domestic sugar prices oscillated at a low level, and foreign raw sugar prices rose. The international sugar market is mixed, and the domestic sugar is expected to oscillate within a range [73][74][75]. Apples - Domestic apple futures oscillated weakly. The production is expected to decrease this year, and the inventory is low. It is recommended to focus on buying opportunities after corrections [76][77]. Pigs - The national average pig price was stable. The supply may increase in the short term, and the price is expected to be weak first and then stable and strong. It is recommended to observe temporarily [78][79][80]. Eggs - The average egg price was stable. The supply is expected to increase in May, and it is recommended to gradually take profit on reverse spreads [81][82]. Corn and Starch - On the previous trading day, the corn main contract rose, and the corn starch main contract was flat. The domestic corn supply surplus eases slightly, and the short - term supply pressure still exists. It is recommended to observe temporarily [83][84][85]. Logs - On the previous trading day, the log 2507 main contract rose slightly. The import volume decreased, and the market has no obvious driving force [86][87][88]

Group 1 - The core viewpoint of the articles indicates that the gold market has been influenced by trade tensions and geopolitical conflicts, leading to a weekly increase of approximately 3.1% in gold prices, although profit-taking has limited further gains [1] - The decline in the US dollar index by 0.3% and ongoing concerns from Federal Reserve officials regarding inflation and economic growth have contributed to the upward pressure on gold prices [1] - Analysts suggest that in the short term, gold prices may enter a consolidation phase due to potential strengthening of the US dollar and a cooling expectation of interest rate cuts by the Federal Reserve [1] Group 2 - Technical analysis shows that the Bollinger Bands have narrowed after an initial price surge, indicating a lack of market momentum [3] - The MACD indicator shows a decrease in upward momentum, with the histogram turning green, suggesting a weakening bullish trend [3] - The RSI has dropped to 55.86, indicating a shift towards a more cautious market sentiment [3] Group 3 - The suggested trading strategy includes shorting gold in the 3270-3275 range, with a stop loss at 3282 and a target of 3255-3245 [4] - The overall market sentiment remains bearish in the short term, with expectations of gold prices facing resistance in the 3250-3355 range unless significant positive news emerges [3][4]

Core Viewpoint - The article highlights that the recovery of CPI in April is primarily driven by seasonal factors such as food and travel prices, while uncertainties from trade friction and weak recovery of private sector balance sheets are constraining price elasticity. Consequently, there is room for monetary policy to continue its efforts in price regulation in the second half of the year [1]. CPI Analysis - Food price recovery is supported by supply constraints from imports and seasonal factors, with beef prices rising due to drought in South America and a seasonal switch leading to higher fruit and vegetable prices [2]. - Strong travel demand during the Labor Day holiday resulted in a core CPI increase of 0.2% month-on-month, exceeding seasonal expectations, while year-on-year growth remained at 0.5% [2]. PPI Analysis - In April, the PPI showed a year-on-year decline of 2.7% and a month-on-month decrease of 0.4%, indicating a persistent mismatch between supply and demand [3]. - The delay in the peak construction season, influenced by fiscal policies prioritizing debt repayment and capital injection into small banks, has affected the PPI recovery pace [3]. - The main drag on PPI comes from upstream raw materials and durable consumer goods, exacerbated by trade friction and weak coal demand following the end of the heating season [3]. Policy Implications - The article emphasizes a heightened focus on price regulation by policymakers, with the central bank's unexpected rate cuts reflecting this priority [3]. - The article notes that the uncertainties from trade friction and the weak recovery of private sector balance sheets are significant constraints on price elasticity, suggesting that there is still potential for monetary policy to exert influence in the coming months [3].

1. Report Industry Investment Rating No information provided in the given content. 2. Core Views of the Report - The bond market has entered a volatile period without obvious drivers. The short - term impact of the current economic fundamentals on the bond market is limited, and the short - end has fully reacted to the loose funds. The stock - bond seesaw effect is not significant [1][2]. - After the interest rate cut, although the short - end benefits may gradually spread to the long - end, the 10 - year bond has no significant downward space. The bond market has entered a spread - mining market [3]. - In terms of different maturities, the rotation pattern of government bonds from short - end to medium - end to ultra - long - end is obvious. In terms of different categories, attention should be paid to the catch - up opportunities of other varieties after the high - liquidity varieties take the lead [4][5]. 3. Summaries According to the Table of Contents 3.1 Bond Market Enters a Volatile Period without Obvious Drivers - **Fundamentals**: The economic data in April is divergent. Exports are still strong, but the PMI reflects a downward expectation. The second - quarter fundamentals may face some disturbances, and the short - term impact on the bond market is limited [1]. - **Monetary Policy**: The favorable monetary policy has been implemented, and the funds are loose. The short - end has fully reacted, and the subsequent downward breakthrough of funds still needs to be observed [1]. - **Equity Market**: After the double - cut this time, the equity market has performed steadily, and the stock - bond seesaw effect is not significant [2]. 3.2 Bond Market Strategy: How to Compress Spreads in the Volatile Period? - Although the short - end benefits may spread to the long - end, the 10 - year bond has no significant downward space. The previous low may be an important resistance level [3]. - In terms of different maturities, government bonds show a rotation pattern from short - end to medium - end to ultra - long - end. In terms of different categories, attention should be paid to the catch - up opportunities of other varieties after the high - liquidity varieties take the lead [4][5]. 3.3 Interest - Rate Bond Market Review: After the Reserve Requirement Ratio and Interest Rate Cuts, the Yield Curve Steepens - **Funding**: The central bank's OMO has a large - scale net withdrawal, and the funding is balanced and loose [8]. - **Primary Issuance**: The net financing of government bonds and inter - bank certificates of deposit has increased, while that of policy - bank bonds and local government bonds has decreased [8]. - **Benchmark Changes**: The term spreads of government bonds and CDB bonds have both widened [8].

1. Report Industry Investment Rating - No industry investment rating is provided in the report [160][161] 2. Core View of the Report - In April 2025, CPI and PPI continued to diverge, with upstream prices continuing to decline. If trade frictions ease, the divergence between upstream and downstream prices is expected to narrow. Core CPI and food - related CPI have stabilized, indicating that consumption - promotion policies have had a positive impact on terminal consumption demand. However, trade frictions still affect upstream prices such as energy prices [2] 3. Summary by Directory 3.1 High - Frequency Data Panoramic Scan - **Food and Consumer Goods**: From May 5 - 10, 2025, the average wholesale price of pork by the Ministry of Agriculture increased by 0.81% week - on - week and 2.15% year - on - year. The Shandong Vegetable Wholesale Price Index decreased by 5.11% week - on - week and 20.89% year - on - year. The price index of edible agricultural products decreased by 0.70% week - on - week, and the year - on - year decline widened to 4.76%. Movie box office revenue increased by 283.76% week - on - week [2][14] - **Commodities and Energy**: Brent and WTI crude oil futures prices decreased by 2.02% and 1.00% week - on - week respectively. The average daily price of LME copper spot increased by 1.56% week - on - week, while the average daily price of aluminum spot decreased by 0.82% week - on - week. The domestic cement price index decreased by 2.39% week - on - week, and the Nanhua Iron Ore Index decreased by 1.01% week - on - week. The operating rate of coking enterprises with a capacity of over 2 million tons decreased by 0.48% week - on - week [2][14] - **Real Estate**: The average daily transaction area of commercial housing in 30 large - and medium - sized cities in April 2025 was about 229,000 square meters per day, compared with about 260,000 square meters per day in April 2024. From May 1 - 7, 2025, the average daily transaction area was about 136,000 square meters per day, compared with about 114,000 square meters per day in the same period of 2024. The weekly transaction area of commercial housing in 30 large - and medium - sized cities decreased by 9.60% week - on - week [2] 3.2 Comparison of High - Frequency Data and Important Macroeconomic Indicators - The report presents multiple charts showing the relationship between high - frequency data and important macroeconomic indicators, such as the relationship between the year - on - year change of copper spot price and the year - on - year change of industrial added value and PPI, and the relationship between the year - on - year change of daily crude steel production and the year - on - year change of industrial added value [16][22] 3.3 Important High - Frequency Indicators in the United States - The report includes charts on important high - frequency indicators in the United States, such as the year - on - year change of electricity generation and industrial output, the Chicago Fed Financial Conditions Index, the implied prospects of interest rate hikes or cuts in US federal funds futures, and the relationship between the same - store sales growth rate and PCE year - on - year [84][86] 3.4 Seasonal Trends of High - Frequency Data - The seasonal trends of high - frequency data are presented, with indicators mainly showing month - on - month growth rates. The data sources include high - frequency data on crude steel average daily production, production material price index, etc. [97] 3.5 High - Frequency Traffic Data in Beijing, Shanghai, Guangzhou, and Shenzhen - The report provides charts on the year - on - year changes in subway passenger volume in Beijing, Shanghai, Guangzhou, and Shenzhen [147][149]

Core Viewpoint - The article discusses the challenges faced by Chinese companies, particularly泉峰控股 and 巨星科技, in the U.S. market due to high tariffs and manufacturing costs, emphasizing the shift of production to Vietnam as a strategic response to these challenges [1][4][10]. Group 1: Market Dynamics - The U.S. electric tools and outdoor power equipment market exceeded 170 billion RMB in 2020, with a significant portion of products being manufactured in China [1]. - After the U.S. imposed a 145% tariff,泉峰控股 halted exports from China and increased production in Vietnam, which has also faced a 10% tariff [4][5]. - The U.S. market is the largest for tools, with an estimated 50% of tools sold being manufactured in China, particularly for electric tools [4][10]. Group 2: Production Strategy -泉峰控股 has been preparing to increase its production capacity in Vietnam since Trump's first term, with plans for a second manufacturing base in 2024 [5]. -巨星科技 has also expanded its production in Vietnam, moving from manual to electric tools to meet U.S. demand [5][6]. - Both companies are adjusting their supply chains to mitigate the impact of tariffs, collaborating with U.S. retailers to find solutions [6][10]. Group 3: Cost Considerations - The cost of manufacturing in the U.S. is estimated to be at least 50% higher than in China, making it unfeasible for companies to produce there [9][10]. - The lack of a complete supply chain in the U.S. for tool manufacturing further complicates the feasibility of local production [10]. - The imposition of tariffs on raw materials has increased manufacturing costs in the U.S., reducing competitiveness [10]. Group 4: Globalization and Competition - Chinese companies are pursuing globalization and brand development, with泉峰控股's global sales revenue quadrupling over the past decade [14]. - The competition with established brands like Stanley Black & Decker is intensifying, with Chinese companies gradually capturing market share [14][15]. - Despite progress, Chinese companies still face challenges in brand recognition and high-end product offerings compared to their Western counterparts [14][15].

即将在瑞士举行的中美经贸高层会谈备受国际社会瞩目。在全球经济复苏乏力的背景下，这场对话被视 为化解贸易摩擦的一个契机，各方期待中美通过建设性沟通，为世界经济增长注入确定性。 一段时间以来，美方一系列违规、无理的单边关税措施，严重冲击中美经贸关系，严重冲击全球产业链 供应链稳定，严重扰乱国际经贸秩序和世界经济增长前景。国际货币基金组织、经济合作与发展组织与 世界银行等国际机构都预测，美国关税政策将严重拖累全球经济，一些国家的经济增长迅速放缓，重新 推高通货膨胀，加重发展中国家的债务负担。美国企业和消费者也切实感受到滥施关税带来的痛感，美 国各界人士要求政府取消非理性关税措施的呼声强烈。 以负责任态度推动对话化解分歧，以战略定力守护核心利益，以开放包容汇聚合作动能。中国对中美经 贸谈判的态度清晰而坚定。历史也将再一次证明：惟有秉持相互尊重、和平共处、合作共赢的原则，才 能让谈判结出共赢之果。 《 人民日报 》（ 2025年05月10日 03 版） 谈，是化解分歧的必要之举，但指望一两次谈判解决问题并不现实。中方对谈判的复杂性有清醒认知。 中国古话讲"听其言而观其行"，诚意需要用行动丈量。美方想要通过谈判解决问题， ...

Core Viewpoint - The article highlights the resilience and strategic adjustments of Jiangsu Huaten Personal Care Products Co., Ltd. in response to the trade tensions and tariff policies under the Trump administration, showcasing the company's proactive measures to diversify its market and reduce dependency on the U.S. market. Company Development - Jiangsu Huaten was established in 2009 in Yangzhou, specializing initially in the production of dental floss and has since expanded its product line to include toothbrushes, interdental brushes, and tongue scrapers, with 80% of its revenue coming from overseas markets [1][5]. - The company successfully entered Walmart's supply chain in 2015 after a rigorous selection process, which included factory inspections and compliance with U.S. FDA regulations [5][6]. Market Impact - Following the implementation of the "reciprocal tariffs," Jiangsu Huaten experienced a noticeable decline in sales in the U.S. market, with revenue from the U.S. dropping from a peak of 50% to 20% of total revenue [6][10]. - Despite the challenges, Walmart continued to place orders in early 2023, although there was a lack of subsequent orders typically expected in March, indicating a cautious approach from the retailer [6][9]. Strategic Adjustments - The company has been actively working to reduce customer concentration and has made efforts to develop new clients in Europe and South America in anticipation of potential market disruptions [5][9]. - Jiangsu Huaten has also seen a significant increase in domestic demand for oral care products, with sales of specialized products like interdental brushes growing by over 50% annually [9][11]. Future Plans - The company aims to increase its domestic market share to 50% within one to two years, having already begun to adapt its products and packaging for the local market [11].

风险提示及免责条款 周五，据越南贸易部网站发布的帖子称，在周四举行的会议上，越南贸易部要求国内企业和协会致函美 国官员，投诉特朗普的关税措施。这一表态突显了越南对美国贸易政策的强烈不满。 越南贸易部还指示各团体和企业与美国合作伙伴合作，动员美国民众和政界人士支持维持越南商品对 美"正常"流通。 作为与美国开启贸易谈判的国家之一，越南正面临特朗普政府施加的严厉关税。 4月2日，特朗普对越 南商品征收了46%的关税，随后将关税下调至10%，有效期为90天，以便进行谈判。 为了避免对越南出口产品施加惩罚性高额关税，越南政府于周三表示，已指示当地企业大量购买高价值 的美国进口商品， 这是越南在应对贸易摩擦时采取的策略之一。 美越贸易谈判开启，越南谴责特朗普关税"不合理"，并采取行动应对，包括呼吁企业向美国官员表达不 满，寻求与美国合作伙伴合作，以及寻找替代出口市场。 此外，贸易部还要求当地企业寻找替代出口市场。 越南已与多个主要经济体签署了贸易协定，这为其 提供了多元化的选择。 近期美国与多个国家开始谈判，据央视新闻此前报道，日美第二轮关税谈判仍未达成共识，美国以谈判 之名行胁迫之实 。 市场有风险，投资需谨慎。本文 ...

Core Viewpoint - The stock prices of domestic wafer foundry leaders SMIC and Hua Hong Semiconductor have significantly declined due to performance impacts, with SMIC's Hong Kong stock dropping over 10% at one point [1][2]. Group 1: SMIC Performance - SMIC reported Q1 2025 revenue of 16.301 billion yuan, a year-on-year increase of 29.4%, and a net profit of 1.356 billion yuan, up 166.5% [3]. - The revenue increase was attributed to higher wafer sales and changes in product mix, with Q1 sales reaching 2.247 billion USD, a 1.8% quarter-on-quarter growth, but below the guidance range of 6%-8% [3]. - SMIC's gross margin was 22.5%, exceeding the upper limit of the guidance range (19%-21%), and capacity utilization rose to 89.6%, a 4.1 percentage point increase [3]. - For Q2, SMIC provided guidance indicating a revenue decline of 4% to 6% quarter-on-quarter, with gross margin expected between 18% and 20% [3]. Group 2: Challenges and Market Conditions - SMIC's CEO explained that the decline in average selling prices (ASP) was due to unexpected production issues and equipment performance during Q1, which are expected to continue for the next four to five months [4]. - Analysts noted that while there are specific operational challenges, SMIC is also facing competitive pressure in mature processes, particularly in the 90nm to 55nm range, which could impact revenue [4]. - Dolphin Investment Research indicated that without adjustments to capital expenditure plans, SMIC's gross margin may struggle to improve significantly [4][5]. Group 3: Hua Hong Semiconductor Performance - Hua Hong Semiconductor reported Q1 revenue of 3.913 billion yuan, a year-on-year increase of 18.66%, but net profit fell to 22.7634 million yuan, a decline of 89.73% [6]. - The profit drop was attributed to increased R&D expenses, reduced tax credits, and higher foreign exchange losses, partially offset by rising gross margins [6]. - For Q2, Hua Hong expects main business revenue between 550 million to 570 million USD, with gross margin anticipated between 7% and 9% [6]. Group 4: Market Dynamics - The market dynamics for the semiconductor industry remain uncertain due to changes in the international environment and related policies, affecting customer demand and procurement costs [7]. - Notably, the National Integrated Circuit Industry Investment Fund reduced its holdings in both SMIC and Hua Hong, indicating potential shifts in investor sentiment [7].