Core Insights - The report predicts that Brent crude oil prices will fluctuate around $65-70 per barrel in the second half of 2025, driven by tight supply and slow demand growth, with potential short-term spikes due to geopolitical factors [4][9] - The petrochemical industry is expected to gradually recover from its bottoming out phase, returning to a normal capacity cycle constrained by credit boundaries, leading to a slow recovery in profitability in 2025 and beyond [4][10] - Investment opportunities are highlighted in high-quality growth stocks, coal chemical equipment investments, and high-dividend sectors, emphasizing a bottom-up investment approach [4][10] Oil Price Trends - Oil prices experienced a two-phase trend in 2025: a decline from $74.64 to $60.23 per barrel (down 19.31%) until May 3, followed by a recovery to $77.01 per barrel (up 27.86%) after May 3 due to seasonal demand and geopolitical tensions [7][25] - The report indicates that global oil supply remains tight, with non-OECD countries contributing to demand growth, which will limit the extent of price declines [9][27] Industry Performance - Global refining capacity is projected to grow by 440,000 barrels per day from 2022 to 2028, with China contributing significantly to this increase [27][33] - The report notes that domestic refined oil demand is nearing its peak, with a decline in consumption due to economic weakness and competition from electric vehicles [39][45] - The petrochemical sector is experiencing a weak recovery, with some chemical products showing improved profitability despite high raw material costs [8][45] Investment Themes - The report emphasizes four main investment themes: 1. Quality growth and leading companies in the industry experiencing volume and price increases [10] 2. Opportunities in high-end materials and technology import substitution [10] 3. Investments related to the upcoming coal chemical investment cycle [10] 4. High dividend yielding state-owned enterprises benefiting from economic recovery [10][11] Recommendations - Key investment targets include leading companies in ethylene production, coal chemical leaders, and high dividend stocks such as China National Offshore Oil Corporation and China Petroleum [11][10] - The report suggests focusing on companies that are positioned to benefit from the recovery in domestic demand and the transition to high-end materials [11][10]

Investment Rating - The industry is rated as "Buy" [6] Core Viewpoints - The pig farming sector is expected to see a recovery in prices due to seasonal demand and a slight increase in the number of breeding sows, indicating a potential long-term profit cycle [5][70] - The recent increase in pig prices is attributed to supply constraints caused by seasonal weather conditions and reduced slaughtering activities [24] - The overall agricultural sector has shown resilience, outperforming the market indices in recent weeks [15] Summary by Sections 1. Industry Performance - The agricultural sector index rose by 2.55% in the week ending July 4, outperforming the Shanghai Composite Index by 1.15% [15] - The pig farming sub-sector saw a price increase of 4.28% for live pigs, while the average weight of pigs at slaughter reached 128.64 kg, up 0.50 kg week-on-week [24] 2. Key Data Tracking - As of the end of May, the number of breeding sows was 40.42 million, a slight increase of 0.1% month-on-month and 1.2% year-on-year [1] - The average price for live pigs decreased to 14.92 yuan/kg in May, down 0.9% month-on-month and 5.4% year-on-year [1] - The average profit per pig for large-scale farms dropped to 49 yuan per head in May, down from 86 yuan in April [1] 3. Investment Recommendations - The report recommends focusing on the pig farming sector, highlighting companies such as Muyuan Foods, Wens Foodstuff Group, and Juxing Agriculture as key investment opportunities [5][70] - The feed and veterinary sectors are also expected to benefit from the recovery in pig stocks, with companies like Haida Group and Ruipu Biological Products suggested for consideration [5][70] - In the planting chain, the upward trend in grain prices presents investment opportunities in companies like Suqian Agricultural Development and Beidahuang Group [5][70]

Report Industry Investment Rating - The investment view on the rubber industry is "oscillation" [1] Core Viewpoints of the Report - The long - term logic of rubber has been falsified, and new driving factors need to be awaited. The overall price range is adjusted from the initial forecast of 15,000 - 19,000 yuan/ton to 12,500 - 16,500 yuan/ton. The upward trend may be driven by supply - side factors such as weather and policies, while the downward trend may be dragged by macro factors like tariff policies and global economic recession expectations [8][86] Summary by Directory 1. Market Review 1.1 Review of the performance of Shanghai rubber and No. 20 rubber - In the first half of 2025, the natural rubber market fluctuated sharply. In Q1, it remained in a high - level sideways pattern, and in Q2, prices dropped from the high level due to factors such as increased exports from overseas rubber - producing countries, a significant increase in domestic imports, and US reciprocal tariffs. In Q1, the RU index oscillated between 16,600 - 18,000 yuan/ton. In January, prices fluctuated, with raw material prices dropping significantly compared to Q4, and increasing domestic imports and seasonal inventory accumulation suppressing prices. In February, prices rose after the Spring Festival due to seasonal production cuts overseas. In March, the rumored state reserve purchase had limited impact on the market. After the Tomb - Sweeping Festival in Q2, the "reciprocal tariff" in the US affected the market, and the increase in import data in March (18% month - on - month and 20.6% year - on - year) also influenced prices. The significant increase in exports from rubber - producing countries and domestic imports in the first half of the year falsified the previous long - term logic, and prices fell back to the level of the same period in 2024 [14][15] 1.2 Review of spreads and price differences - In the first half of the year, state reserve purchases and capital actions strongly disturbed the spreads of Shanghai rubber and No. 20 rubber. In mid - April, after the rumor of the state reserve purchasing 2024 full - latex warehouse receipts, the 9 - 5 and 1 - 9 spreads of Shanghai rubber narrowed rapidly. The 9 - 5 spread even reached a negative level, and the 1 - 9 spread dropped from over 1,000 yuan/ton to below 700 yuan/ton. Later, the 9 - 5 spread gradually recovered, but the 1 - 9 spread remained at a relatively low level at the end of June. For No. 20 rubber, in Q1, the spot was tight, and the spreads showed a backwardation structure. In Q2, although imports increased, capital actions led to the cancellation of warehouse receipts, and the spreads strengthened again. By the end of June, the spreads weakened but still showed a slight premium. In the third quarter, as production increased, the spreads may return to the previous premium pattern [19][23] 2. Macro - fundamentals 2.1 The Fed lowers economic expectations, raises inflation and unemployment expectations, and internal differences widen - The Fed has paused rate cuts for the fourth consecutive time, maintaining the federal funds rate target range at 4.25% - 4.50% and the monthly balance - sheet reduction limit at $40 billion. Due to the uncertainty caused by tariffs, the Fed remains cautious. The June economic forecast solidifies the "stagflation" expectation, with economic growth being lowered and unemployment and inflation being raised. The Fed believes that tariffs will have a "one - time" impact on inflation. The internal differences in the Fed are mainly due to the uncertainty of US tariff negotiations and the geopolitical risks in the Middle East [24][27] 2.2 Geopolitical situation and tariff policies disrupt the global economy, increasing uncertainty - US tariff policies disrupt global trade, causing a 0.2% year - on - year decline in global merchandise trade volume in 2025, a 2.9 - percentage - point drop compared to before the tariff war. Multiple international institutions have lowered their global economic growth forecasts for 2025. The recent escalation of the Israel - Iran conflict in the Middle East has raised concerns about oil supply disruptions, pushing up oil prices. This has put central banks in a dilemma between fighting inflation and stabilizing growth [28][34] 3. Upstream and downstream of the industrial chain 3.1 Upstream supply and raw materials - The total planting area of ANRPC is at a high level with a slight downward trend. The new planting area has increased in some countries but cannot offset the reduction in the original planting area. The supply - side output price elasticity still exists. In 2024, global natural rubber production increased by 2.8% year - on - year. Emerging rubber - producing countries such as Côte d'Ivoire have seen rapid growth, partially offsetting concerns about the decline in traditional rubber - producing countries. The second half of the year is the peak production season for natural rubber, and the supply is expected to increase [35][47] 3.2 Imports and inventories - In the first half of 2025, domestic imports of natural and synthetic rubber increased significantly. In May, the total imports of natural and synthetic rubber (including latex) were 607,000 tons, a 25.2% increase compared to the same period in 2024, and the cumulative imports from January to May were 3.476 million tons, a 23.5% increase. As of June 15, 2025, the total inventory of natural rubber in Qingdao increased slightly. The absolute value of domestic inventory is still at a moderately high level. With the increase in new rubber supply in the second half of the year, imports are expected to rise, and the inventory reduction in the middle - stream may slow down before the third quarter [50][52] 3.3 Downstream demand - Tire production growth is slowing down. In May 2025, the output of Chinese tire casings decreased both month - on - month and year - on - year. The production of both all - steel and semi - steel tires declined. The all - steel tire market was supported by policies and exports, but the replacement market was weak. The semi - steel tire market faced increasing production and sales pressure due to rising inventory and new production capacity coming online. In the automotive market, production and sales increased in the first five months of 2025, with the passenger car and new - energy vehicle markets performing well. The heavy - truck market showed a slight increase in sales, mainly due to the implementation of the old - for - new policy [57][68] 4. Cost - profit and spread analysis 4.1 Cost - profit analysis - The losses of Thai latex and No. 20 rubber production have been partially repaired. Since May, continuous rain in the Thai production area has affected tapping, leading to an increase in raw material prices. Factories are stocking EUDR raw materials, and the price difference between EUDR raw materials and general raw materials has narrowed compared to last year [72] 4.2 Futures - spot spread analysis - In 2025, the non - standard arbitrage spread has fully returned. Since the fourth quarter of 2024, the price of dark - colored rubber has been strong, and the spread between dark - and light - colored rubber has widened. In May 2025, NR was significantly stronger than RU, and the spread between them reached a multi - year high. The spread between RU2509 and mixed rubber also fully returned, with RU2509 trading at a rare discount to the mixed - rubber spot in late May. Later, attention should be paid to the spread trading opportunities such as going long on RU2601 and short on RU2509, and going long on RU and short on NR [75][85]

Group 1 - The capacity and inventory cycles are expected to bottom out and recover, enhancing the momentum of enterprise profit recovery [1][6][53] - The current capacity cycle has been in a downward trend since the second half of 2021 and is nearing its end, while the inventory cycle is also expected to transition from a bottoming phase to a replenishment phase within the year [1][2][11] - The recovery of the capacity cycle is typically driven by strong fiscal support policies, as seen in previous cycles [8][14] Group 2 - The downstream capacity cycle is approaching a turning point, with upstream capacity utilization still declining and the mining industry requiring more time for capacity reduction [2][15] - The inventory cycle shows significant differentiation across upstream, midstream, and downstream sectors, primarily due to varying demand improvements [2][15] - Demand improvements are concentrated in sectors with strong policy support, emerging industries, and export-oriented industries, while traditional sectors like real estate remain weak [15][16] Group 3 - The manufacturing sector is currently in a dual bottom phase for both capacity and inventory cycles, with the manufacturing capital expenditure declining significantly since its peak in 2021 [14][40] - The industrial sector is experiencing a passive destocking phase, with inventory levels expected to gradually recover as revenue growth improves [14][17] - The midstream equipment manufacturing sector is showing signs of recovery, driven by policy support and increased consumer demand for electronics and vehicles [30][37] Group 4 - The downstream consumer manufacturing sector is also in a destocking phase, with revenue growth rebounding since the beginning of 2024 [40][48] - Specific industries within the downstream sector, such as agricultural and food processing, are entering active replenishment phases, indicating a positive outlook for inventory levels [48][49] - The overall economic recovery will depend on the strength of consumer and investment demand, which will gradually transmit to the production side [53]

Market Overview - The market experienced fluctuations this week, with only the ChiNext index showing an increase. The ETF market continued to see net outflows, primarily from large-cap ETFs. The market is transitioning from wide fluctuations to narrower ones, with increased trading volume during this process, indicating potential consolidation in a weak market [4]. Copper Industry - In May, domestic waste copper production was 92,000 tons, a year-on-year decrease of 20% but a month-on-month increase of 5%. The negative impact of trade conflicts on the economy has not fully materialized, which continues to suppress copper price increases. Supply-side disturbances in copper mining have increased, while demand is weakening due to reduced export stocking effects and the domestic off-season [5]. Metal Prices - The price of London gold has reached a historical high. Sunac China’s offshore debt-to-equity swap plan received support from 82% of bondholders. In May, Sunac's total sales amounted to 4.9 billion yuan, a year-on-year increase of 128%, indicating strong performance [6]. Chemical Industry - Recent safety incidents in chemical parks have led to stricter approval and production regulations for high-risk chemical reactions. Leading companies in the chemical industry, with better safety management and advanced production technologies, are expected to benefit from stable production amid limited growth in high-risk products [7]. Construction Materials - The market performance showed a decline, with the CITIC building materials index down 2.16% and the CITIC construction index down 1.27%. The average price of PO42.5 cement was 365.70 yuan/ton, a slight increase, while glass prices decreased by 20 yuan/ton [8]. Agriculture and Livestock - In the pig farming sector, the industry capacity cycle has bottomed out, but high inventory levels continue to impact market dynamics. Recent policy-driven efforts are accelerating the reduction of inventory, which may lead to a rebalancing of supply and demand. Long-term, the end of inventory reduction could signal the start of a prolonged profit upcycle for the sector [9]. Renewable Energy - The nuclear fusion sector, while far from full commercialization, is seeing increased investment and research due to global military competition. Recent data from May indicates a downward trend in overall renewable energy prices, highlighting ongoing pressures in power supply and demand. Wind power, virtual power plants, and energy storage are identified as promising investment opportunities [10].

Core Viewpoint - The article suggests that the A-share market has likely reached a significant bottom, with structural opportunities emerging in growth, consumption, cyclical sectors, and dividends. The market is expected to experience high-frequency fluctuations within a narrow range, with a potential upward trend in the second half of the year, contingent on macroeconomic policies and external uncertainties [2][3][4]. Economic Recovery and Internal Dynamics - The internal momentum of China's economy is gradually recovering, supported by a package of stable growth policies. However, challenges remain, particularly in the real estate sector and weak consumer demand. The manufacturing sector's resilience is crucial for economic growth, but uncertainties regarding tariffs may dampen future export performance [3][6][7]. - The real estate market's stabilization is critical for macroeconomic health, with recent data indicating a narrowing decline in sales area but a widening decline in sales value. The sector's recovery will depend on effective policy responses [7][8]. Valuation Perspectives and Investor Dynamics - Despite a projected 3% decline in A-share earnings for 2024, dividend payouts are expected to increase by 5%, driven by improved free cash flow. The current dividend yield of the CSI 300 index is approximately 3.5%, significantly higher than the 10-year government bond yield, indicating a favorable valuation environment [4][5]. - The structure of investors in the A-share market is shifting, with individual investors gradually increasing their market presence, influencing market dynamics and styles [4]. Investment Strategy and Sector Focus - In an uncertain environment, the investment strategy should focus on certainty, prioritizing stable sectors before shifting to growth opportunities. Key investment themes include: 1. Opportunities in sectors that can clear supply and expand capacity, such as industrial metals and lithium batteries [5][23]. 2. High-growth opportunities less correlated with economic cycles, particularly in the AI industry and defense sectors [5][24]. 3. Dividend-paying sectors with strong cash flow and low volatility, including consumer staples and utilities [5][25]. Capital Market and Policy Environment - The capital market is undergoing steady institutional improvements, with new regulations supporting market stability and growth. The focus is on enhancing the development of technology-driven enterprises and promoting mergers and acquisitions [10][11]. - Fiscal policy is expected to play a crucial role in supporting economic recovery, with a projected increase in the deficit rate and government bond issuance for 2025, indicating a proactive approach to stimulate growth [9][10]. Profitability and Earnings Outlook - A-share profitability is anticipated to stabilize and improve, with projected earnings growth of approximately 3.5% for 2025. The non-financial sector is expected to see a more significant recovery, with earnings growth around 8.3% [21][22]. - The structural optimization of A-share earnings is evident, with a declining share of profits from real estate and construction, while the technology sector's contribution is increasing, highlighting a shift towards more sustainable growth drivers [25].

Group 1 - The A-share market showed a strong recovery after a low opening on June 3, with major indices such as the Shanghai Composite Index, Shenzhen Component Index, ChiNext Index, and CSI A500 Index turning positive. Key sectors that performed well included online gaming, brain-computer interfaces, gold and jewelry, and rare earths [1] - The A500 ETF (512050) recorded a trading volume exceeding 1 billion yuan, ranking first among similar products. Notable stocks within this ETF included Zhangqu Technology, which rose over 13%, and Giant Network, Huahai Pharmaceutical, and Aerospace Rainbow, which all increased by over 8% [1] - The A500 ETF tracks the CSI A500 Index and employs a dual strategy of industry-balanced allocation and leading stock selection, covering all sub-industries. It emphasizes both value and growth attributes, with a higher allocation in sectors like pharmaceuticals, electronics, and power equipment compared to the CSI 300 Index, representing core assets in the current A-share market [1] Group 2 - Huatai Securities released a mid-term outlook for 2025, predicting that ROE (Return on Equity) is expected to stabilize and recover in the second half of 2025 due to improvements in net profit margins, stabilization of turnover rates, and an increase in equity multipliers, marking the end of the downward cycle for A-share ROE [1] - The broad valuation recovery of Chinese assets is still in progress, driven by three main variables: technological innovation, the end of the rapid decline in the real estate sector, and improvements in policy cycles. The trend is expected to remain unchanged in the second half of the year, with "de-dollarization" providing upward pressure on the renminbi, enhancing the attractiveness of Chinese asset allocation [1] - Core assets represented by A50, consumption, and finance have shown remarkable fundamental resilience over the past three years and are expected to play a leading role in the upcoming ROE recovery cycle. Additionally, five investment themes are highlighted: renminbi appreciation, technology cycles, capacity cycles, inventory cycles, and capital market reforms [1]

Strategy - Current sentiment in the Hong Kong stock market has recovered to last October's high, but lacks catalysts from sentiment, interest rates, and fundamentals in the short term [3] - Although tariff negotiations have progressed better than expected, the urgency for policy intervention has decreased, leading to insufficient internal economic momentum and persistent external uncertainties [3] - Southbound capital inflows have slowed, and active foreign capital continues to flow out, despite the Hong Kong Monetary Authority injecting nearly 130 billion HKD into liquidity [3] - The increase in placements and IPOs may dilute liquidity, suggesting that the market may experience fluctuations or pullbacks before more catalysts emerge [3] - The strategy of "actively intervening during low periods and taking profits during exuberance" remains appropriate, with opportunities to enter at lower costs after adjustments in existing holdings [3] Economic Data - April economic data shows a slowdown in year-on-year growth, with industrial value-added and service production indices at 6.1% and 6.0% respectively [12] - Export growth has slowed due to tariff impacts, with the value of exports from large industrial enterprises increasing by only 0.9% year-on-year [12] - Retail sales in April grew by 5.1% year-on-year, supported by policies like the "old-for-new" program, although some categories like furniture and automobiles saw declines [12] - Fixed asset investment for January to April accumulated a year-on-year growth of 4.0%, with equipment investment showing a significant increase of 18.2% [12] Industry Capacity Cycle - The importance of capacity cycles in industry allocation has increased, with a strong correlation between industry performance and capacity cycles over the past three years [15] - A decline in capital expenditure among non-financial enterprises by 4.9% year-on-year indicates a shift towards negative growth in capital spending, impacting capacity construction and expansion [15] - Some industries are beginning to see improvements in fundamentals, with new demand catalyzing a resumption of capital expenditure growth, presenting potential investment opportunities [15]

华泰证券研报表示，大势上，结合信用周期指引与财报线索，A股仍处于库存周期弱企稳，产能周期继 续出清的阶段，向上弹性待改善。同时，政策抓落实、稳预期，支撑风险偏好，市场或处于"上有顶、 下有底"的状态。风格上，中期维持红利+内需+科技的哑铃型配置，做多波动率。红利内部，国有行、 水电等运营性资产仍是底仓。科技和内需强调左侧思维，科技内部，AI和军工电子若调整仍可中期布 局。内需内部，三个筛选条件：1)供给收缩有约束；2)政府支出受益；3)人民币升值受益，建议超配航 空、饮料乳品等。 ...

Report Investment Rating - No information about the industry investment rating is provided in the report. Core Views - The current stage represents the "beginning of the end" of the Sino-US game, with a "temporary easing of external pressure" as the macro - background, preparing for the 2.0 game in the future [3]. - The May 12th joint statement signals that the Sino - US trade game since 2018 has ended, and a new stage of competition and cooperation will begin. Market uncertainty pricing will shift from the trade field to other economic and financial fields [5]. - In an optimistic scenario, the end of the current inventory cycle decline may be seen in 2025. Attention should be paid to the real risks to the capital market due to the accelerated bottom - hitting of the cycle and the switch of macro - assets within the year, such as the peak of gold and the steepening of the yield curve [5]. - Regarding strategies, as the economic cycle shifts from the inventory cycle decline to the capacity cycle rise, attention should be paid to the annual inflection point of gold. For Chinese bonds, with the phased improvement of risk assets, attention should be paid to the space for RMB asset allocation provided by the accelerated decline of the inventory cycle, and the yield curve will switch to steep, maintaining a strategic steepening position (+2s10s) [6]. Summary by Directory Why is it now - The macro - background of China's package of financial policies on May 7th is the "temporary easing of external pressure", reaching a window for "easing" to prepare for the future 2.0 game [11]. Review 4 - month pressure events - In April, the global economy released a pessimistic outlook. The US announced the implementation of "reciprocal tariffs" on April 2nd, deteriorating the global trade environment. Direct exports to the US in April began to decline, and spot freight rates also continued to fall [12]. - The US financial market faced pressure in April. With the impact of the US "reciprocal tariffs" and China's "reciprocal counter - measures", the instability of the US financial market increased, and the US stocks, bonds, and the US dollar showed short - term downward pressure. Asian currencies appreciated rapidly during the May Day holiday due to the hedging of currency mismatch pressure by a Taiwanese insurance company [12]. - Under the influence of uncertainty, monetary policies gradually turned loose. The ECB cut three key interest rates by 25 basis points on April 17th, and the Bank of Japan postponed the interest rate hike for the second time on May 1st and lowered GDP and inflation forecasts [12]. Performance 1: Market pressure - Gold prices reflect the "damage" to the US dollar credit. Since the US launched "reciprocal tariffs" in April, the US dollar, bonds, and stocks have fluctuated significantly, increasing market concerns about the US dollar credit. Although US stocks rebounded at the end of April, the loosening of financial conditions driven by the rising volatility of US stocks is significantly converging, and attention should be paid to the evolution of internal contradictions in the US [17]. - The Fed's balance - sheet policy needs to cooperate. The large refinancing scale of US bonds in the middle of this year has shocked the market. The current benchmark interest rate of 4.50 - 4.75% still poses pressure on fiscal refinancing. Before the final implementation of policy games, US stocks still face the risk of a second adjustment [18]. Performance 2: Economic pressure - The global economy will face downward pressure due to the trade war. In April, the global manufacturing prosperity declined significantly, with the global manufacturing PMI dropping to 49.8, China's to 49.0, and the US's to 48.7. Structurally, it shows a decline in Chinese demand and a rise in US prices [21]. What are the incremental information - On May 12th, the Sino - US joint statement was released. In terms of the background, it was a "talk" rather than a "negotiation". In the tariff aspect, the current tariff policy will be adjusted to "one cancellation, one suspension, and one retention" before May 14th, canceling tariffs imposed after April 8th, suspending 24% tariffs for 90 days, and retaining 10% tariffs. The statement did not mention "fentanyl tariffs". In the non - tariff aspect, a mechanism will be established to negotiate economic and trade relations [25][26]. About tariffs - The 90 - day tariff suspension provides a time window for Sino - US negotiations, boosting market risk appetite. The US still needs to impose about 49% tariffs on China, and China's corresponding counter - measures still need to implement about 40% tariffs, which will cause inflationary pressure on US enterprises and consumers [31][34]. About non - tariffs - The Sino - US joint statement mentioned establishing a mechanism to continue negotiating economic and trade relations. The establishment of the communication mechanism may provide space for Trump's domestic policies before the mid - term elections. In different fields, such as trade, geopolitics, regulation, and tax cuts, corresponding developments are expected [35][37]. How to view the macro - market - The May 12th joint statement signals that the Sino - US trade game since 2018 has ended, and a new stage of competition and cooperation will begin. Market uncertainty pricing will shift from the trade field to other economic and financial fields [39]. Risks in the current downward stage - The cycle is in a downward phase in 2025. The Trump tariff war and the May 12th joint statement will accelerate the cycle to "bottom out", and attention should be paid to the real risks to the capital market [40]. Outlook for the future upward stage - The "beginning of the end" of the Sino - US game is expected to accelerate the global cycle's shift from the current downward stage (global central bank interest rate cuts) to the upward stage (global fiscal expansion). Optimistically, the "low point" of this cycle will be reached within the year, and attention should be paid to the switch of macro - assets [44][45].