Group 1 - The core principle in response to trade uncertainties is to focus on "trading facts rather than expectations," indicating that risk assets have returned to their original prices amid the tariff war [1] - A-shares are expected to continue showing characteristics of risk preference recovery and thematic rotation, with a focus on low institutional holdings and thematic trading opportunities [1] - Three major trends are emphasized: the unwavering trend of enhancing China's independent technological capabilities, the European Union's reconstruction of autonomous defense and energy infrastructure, and the necessity for China to accelerate the "dual circulation" strategy to stimulate domestic demand [1] Group 2 - The Chinese Ministry of Commerce is evaluating the possibility of restarting trade negotiations with the U.S., indicating a softening stance compared to previous positions [2] - The offshore RMB exchange rate has appreciated to 7.21, the highest in over five months, driven by expectations of improved Sino-U.S. relations [2] - During the May Day holiday, domestic travel numbers reached new highs, with significant growth in inbound travel, county tourism, and long-distance travel [2] Group 3 - The analysis of tariff burden sharing reveals that industries with strong competitive advantages, such as textiles and telecommunications, are likely to bear less tariff burden, while weaker industries like pharmaceuticals may face higher burdens [3][4] - The U.S. has a high import dependency on certain Chinese products, which influences the tariff negotiation dynamics [4] Group 4 - The EU's economic recovery is complicated by U.S. tariff policies, with expectations that the negative impact of tariffs will manifest before the positive effects of fiscal expansion [5] - The global manufacturing PMI for April 2025 shows a slight decline, indicating pressures from tariffs and economic uncertainties [6] Group 5 - The banking sector experienced negative revenue and profit growth in Q1 2025, but there are expectations for gradual recovery in subsequent quarters due to adjustments in interest rates and market conditions [8] - The insurance sector reported better-than-expected Q1 results, indicating a potential for a slow bull market trajectory [17] Group 6 - The electronic industry showed normal growth despite seasonal demand fluctuations, with strong performance in sectors like computing power and automotive components [10] - Fund allocation in the electronic sector has increased, particularly in semiconductors, reflecting a positive outlook amid trade policy uncertainties [10][11] Group 7 - The tourism market during the May Day holiday showed robust demand, with significant increases in travel numbers and a positive outlook for the service sector [14] - The water price reform in Guangzhou is expected to alleviate cost pressures for water supply companies, potentially leading to improved industry returns [15]

Core Viewpoint - The overall performance of the electronic industry in Q1 2025 is expected to show normal growth under seasonal demand, with strong demand in computing-related downstream sectors, a recovery in automotive demand, stable consumer electronics demand, and a favorable outlook for advanced semiconductor manufacturing [1][2]. Group 1: Q1 2025 Performance Outlook - The electronic industry is projected to experience normal growth in Q1 2025, driven by strong demand in computing-related sectors, a recovery in automotive demand, and stable consumer electronics demand [2]. - Key segments expected to perform well include computing-related PCBs, leading companies in the Apple supply chain, IoT leaders, CIS, equipment leaders, panel leaders, and advanced packaging [2][3]. Group 2: Consumer Electronics Sector - In the consumer electronics sector, the overall impact of national subsidies is limited, with Apple demand remaining stable and Android performance being relatively flat due to high base effects [3]. - For Q1 2025, Apple smartphone shipments are expected to increase by 2% year-on-year to 51 million units, while Android smartphone shipments are projected to rise by 3% to 247 million units [3]. - The IoT sector is anticipated to see steady growth, with companies like Anker and Edifier expected to perform well [3]. Group 3: Semiconductor Sector - The semiconductor sector is expected to see slight year-on-year growth in Q1 2025, supported by national subsidies, automotive demand, and localized production [4]. - The manufacturing and testing segments are projected to perform well, with full production capacity in 12-inch fabs and a supply-demand imbalance in advanced processes [4]. - Orders for advanced storage and logic chips are expected to gradually materialize, leading to better-than-expected overall performance [4]. Group 4: Electronic Components Sector - The PCB sector is expected to maintain year-on-year revenue growth due to sustained demand from AI and automotive sectors [5]. - The panel sector is projected to see strong demand driven by home appliance subsidies, with LCD panel profitability improving and OLEDs expected to turn profitable [5]. Group 5: Investment Strategy - Looking ahead to Q2 2025, the electronic sector is expected to perform well, with a focus on strong Q1 earnings and clear themes, particularly in domestic self-reliance and AI innovation [7]. - The advanced manufacturing supply chain is recommended for investment, with a focus on semiconductor equipment and AI IoT opportunities [7].

Core Viewpoint - The article presents the fourth issue of the electronic industry stock recommendation by CITIC Securities, highlighting a positive outlook for the electronic sector in March, with a focus on strong Q1 performance and themes supported by industry trends, particularly in domestic self-sufficiency and AI innovation [2]. Industry Perspective Update - The semiconductor fabrication (Fab) domestic self-sufficiency trend is expected to strengthen, with recommendations to focus on the advanced process industry chain. The strategic value of domestic advanced process capacity is highlighted due to external sanctions altering supply-demand dynamics [2]. - The certainty in semiconductor equipment is increasing, with ongoing investigations into overseas semiconductor equipment companies affecting sales to China, leading to accelerated domestic substitution [2]. - An improvement in supply-demand dynamics for storage is anticipated, with expectations of price increases for mainstream NAND Flash and DRAM products in 2025, driven by inventory reduction and AI demand [3]. Investment Recommendations - Focus on companies with advanced customer ties and low domestic substitution rates in the semiconductor equipment sector [2]. - Emphasize investment in domestic NAND product manufacturers, as they are expected to see profit inflection points in 2025 due to favorable pricing trends [3]. - Monitor opportunities in the smart driving sector and the Android supply chain, particularly with new product launches from Huawei and panel price increases [3].