1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Viewpoints of the Report - The equity market is expected to continue the pattern of index fluctuations and internal theme rotation, waiting for the progress of the technology industry to drive a new round of upward technology market. The adjustment of credit ratings in the convertible bond market does not cause panic for now, but if large - balance convertible bonds are downgraded, it may trigger market valuation compression and present a good opportunity to increase convertible bond positions. It is recommended to select bonds from three aspects: performance - driven, event - catalyzed, and dividend and defensive [2][3][16]. 3. Summary by Related Catalogs Market Trends (2025/6/3 - 2025/6/6) Stock Market - The equity market oscillated and rose last week. Driven by events such as NVIDIA's record - high FY1Q26 revenue and Broadcom's announcement of the start of Tomahawk 6 switch chip deliveries, the TMT sector performed well. The non - ferrous metals sector also had a high increase due to the rise in gold prices, while the previously strong new consumption and dividend sectors declined relatively. The Shenwan primary industries with the highest increases were communication (+5.27%), non - ferrous metals (+3.74%), electronics (+3.60%), comprehensive (+2.89%), and computer (+2.79%), while those with the lowest performance were household appliances (-1.79%), food and beverage (-1.06%), transportation (-0.54%), and coal (-0.50%) [7][8]. Bond Market - After crossing the end of the month, the capital market was balanced and loose. The news that the central bank would conduct large - scale outright reverse repurchase operations and that treasury bond trading operations were expected to restart in a timely manner was positive for the bond market. However, the global stock market rally and a slight increase in market risk appetite suppressed the bond market. Overall, the bond market oscillated slightly upward. The 10 - year treasury bond yield closed at 1.65% on Friday, down 1.65bp from the previous week [8]. Convertible Bond Market - Most convertible bond issues rose last week. The CSI Convertible Bond Index increased by 1.08% for the whole week, the median price increased by 1.00%, and the arithmetic average parity calculated increased by 2.35%. The overall market conversion premium rate decreased by 1.19% compared with the previous week. In terms of individual bonds, Jinling (football concept), Yitian (computing power concept), Jingyuan (computing power concept), Huati (virtual power plant concept), and Tianyang (financial IT) convertible bonds led the gains, while Zhongqi (lithography machine concept), Jingda (controllable nuclear fusion concept), and Dongshi (driving training) convertible bonds led the losses. The total trading volume of the convertible bond market last week was 256.298 billion yuan, with an average daily trading volume of 64.075 billion yuan, significantly higher than the previous week [8][11][13]. Outlook and Strategies (2025/6/9 - 2025/6/13) - With the suspension of reciprocal tariffs and positive macro - policies supporting economic resilience, the PMI data in May generally improved, and export orders significantly recovered compared to April. However, the changing attitude of Trump means that there is still significant uncertainty in Sino - US trade relations. After excluding the impact of share conversion, the market still has a high demand for convertible bonds due to the low bond market interest rates. The theme rotation in the convertible bond market is obvious. Currently, the adjustment of credit ratings has a limited impact, but if large - balance convertible bonds are downgraded, it may be a good opportunity to increase positions. It is recommended to use the inconsistency of driving factors between the dividend and technology sectors to reduce portfolio volatility and select bonds from three aspects: performance - driven, event - catalyzed, and dividend and defensive [2][3][16]. Valuation Overview - As of June 6, 2025, in the equity - biased convertible bonds, the average conversion premium rates of convertible bonds with parities in the ranges of 80 - 90 yuan, 90 - 100 yuan, 100 - 110 yuan, 110 - 120 yuan, 120 - 130 yuan, and above 130 yuan were 39.71%, 27.63%, 19.2%, 13.2%, 9.11%, and 4.79% respectively, at the 81%/62%, 73%/46%, 68%/42%, 66%/41%, 63%/41%, and 67%/32% percentile values since 2010/2021. The average YTM of debt - biased convertible bonds with parities below 70 yuan was 0.32%, at the 10%/2% percentile values since 2010/2021. The average implied volatility of all convertible bonds was 30.64%, at the 52%/29% percentile values since 2010/2021. The difference between the implied volatility of convertible bonds and the long - term actual volatility of the underlying stocks was - 17.23%, at the 13%/18% percentile values since 2010/2021 [17]. Primary Market Tracking - No convertible bonds were issued or listed last week (2025/6/3 - 2025/6/6). As of the announcements on June 6, there were no announcements of convertible bond issuances or listings in the coming week (2025/6/9 - 2025/6/13). Last week, Shenglan Co., Ltd. passed the listing committee review, and there were no new companies approved for registration by the exchange, accepted by the exchange, passed by the general meeting of shareholders, or with board of directors' proposals. Currently, there are 85 convertible bonds to be issued, with a total scale of 131.39 billion yuan, including 10 that have been approved for registration, with a total scale of 15.89 billion yuan, and 5 that have passed the listing committee review, with a total scale of 3.68 billion yuan [26].

Market Overview - The A-share market shows a moderate increase with the Shanghai Composite Index closing at 3384.10, up 0.23% [2] - The Shenzhen Component Index and the ChiNext Index also experienced gains of 0.58% and 1.17% respectively, indicating a positive market sentiment [2][4] Financial Data - The total market capitalization of the Shanghai Composite Index is 6520.65 billion, with a price-to-earnings (PE) ratio of 11.98 and a price-to-book (PB) ratio of 1.24 [3] - The ChiNext Index has a significantly higher PE ratio of 26.99, reflecting its growth potential [3] Economic Indicators - The Caixin Services PMI for May increased to 51.1, indicating an expansion in the services sector [16][17] - The People's Bank of China conducted a reverse repurchase operation of 126.5 billion, signaling liquidity support in the market [18][19] Industry Dynamics - Online sales of home cameras increased by 13.3% year-on-year from January to April 2025, driven by expanding use cases [27] - The consumption upgrade initiative has led to over 1 trillion yuan in sales across five major categories, indicating a robust recovery in consumer spending [29][30] Company Updates - Weisheng Information (688100.SH) announced winning contracts totaling 133.32 million yuan, enhancing its revenue prospects [33] - Zexin Pharmaceutical (688266.SH) signed an exclusive marketing service agreement for a new drug, potentially generating up to 250 million yuan in revenue [36] - Hubei Yihua (000422.SZ) is set to acquire 100% of a subsidiary for 3.2 billion yuan, expanding its production capacity significantly [39] - Meiya Optoelectronics (002690.SZ) plans to invest 185 million yuan to expand its production base, indicating growth in its operational capacity [42]

Macro Dynamics - The State Council has announced the fourth national agricultural census to be conducted in 2026, focusing on rural households and agricultural production conditions [1] - The People's Bank of China will conduct a 10 trillion yuan reverse repurchase operation to maintain liquidity in the banking system, with a term of 3 months [2] Automotive Industry - The retail sales of passenger cars in China reached 1.93 million units in May, a year-on-year increase of 13%, with cumulative sales of 8.80 million units in 2023, up 9% [3] - The Ministry of Commerce emphasizes the importance of the automotive industry as a pillar of the national economy and plans to enhance policies to stimulate automotive consumption [6] Sports and Tourism - The ongoing Jiangsu Province City Football League has led to a surge in tourism, with a 305% increase in scenic area bookings from June 2 to June 8 [4] Rare Earth Exports - The Ministry of Commerce stated that China will approve export license applications for rare earths that meet regulations, emphasizing the dual-use nature of these materials [5] Financial Institutions - Citigroup announced a global simplification initiative, reducing approximately 3,500 technical staff in its global technology solutions centers, but operations in China will remain unaffected [7] Market Data - The ChiNext Index rose by 1.17%, with significant gains in CPO and computing power rental concepts, while the pharmaceutical sector experienced a pullback [8] - The financing balance of the two markets increased by 22.62 billion yuan, with the Shanghai Stock Exchange reporting a balance of 907.55 billion yuan [9] Company Dynamics - Wens Foodstuff Group reported a 14.23% year-on-year increase in pig sales revenue for May, totaling 5.32 billion yuan [12] - Yara International's supervisor is under investigation for insider trading, but the company's operations remain normal [13] - Haitai Development is planning to acquire a controlling stake in Zhixueyun Technology [14] - Wentech Technology's shareholder plans to reduce its stake by up to 3% [15]

Group 1: Urban Renewal Initiatives - The central government plans to support 20 cities, including Beijing, with over 20 billion yuan for urban renewal projects, focusing on infrastructure improvement and sustainable mechanisms [1][2] - Since the introduction of urban renewal in 2019, over 60,000 projects have been implemented nationwide, with an investment of approximately 2.9 trillion yuan in 2024 [1] Group 2: Employment Data in the US - The ADP reported a significant drop in US employment numbers for May, with only 37,000 jobs added, far below the expected 114,000 [3][4] - Key sectors such as business services and education are experiencing layoffs, while only leisure and hospitality sectors show job growth [3] Group 3: Rural Tourism Growth - Rural residents' travel spending increased by 39.6% in Q1, outpacing urban residents, with 4.76 million rural trips taken [5][6] - Improved infrastructure and lower financial pressures contribute to higher travel willingness among rural residents [5] Group 4: Automotive Industry Restructuring - The China Ordnance Industry Group's automotive business will be separated into an independent central enterprise, affecting the structure of the automotive industry [7][8] - The anticipated merger between Dongfeng and Changan has not materialized, highlighting the complexities of restructuring within state-owned enterprises [7] Group 5: Boeing's Legal Settlements - Boeing will pay over 1.3867 billion USD in settlements related to two fatal crashes, including fines and compensation to victims' families [9][10] - The company faces ongoing challenges, including supply chain issues and increased competition from Chinese manufacturers [10] Group 6: Xiaohongshu's Valuation Surge - Xiaohongshu's valuation has soared to 26 billion USD, driven by a recent transaction, surpassing its previous peak in 2021 [11][12] - Despite high user growth, Xiaohongshu faces challenges in its e-commerce and advertising sectors amid intense competition [12] Group 7: Nintendo Switch 2 Launch - Nintendo has officially launched the Switch 2, which is expected to be in high demand due to significant hardware improvements [13][14] - The success of the Switch 2 will depend on its ability to replicate the initial success of its predecessor and attract a broader user base [13] Group 8: Stock Market Trends - The stock market experienced a rebound, with the Shanghai Composite Index rising by 0.23% and trading volume increasing significantly [15][16] - Market sentiment remains cautious, with rapid sector rotation and adjustments in consumer-related stocks [15][16]

Market Overview - A-shares experienced a rally in the afternoon, with the ChiNext Index and the STAR Market Index both rising over 1% [1] - The Shanghai Composite Index closed up 0.23% at 3384.1 points, while the Shenzhen Component Index rose 0.58% to 10203.5 points [1] - The total trading volume in the Shanghai and Shenzhen markets reached 13.172 billion yuan, an increase of nearly 1.4 billion yuan compared to the previous day [1] Sector Performance - The food and beverage sector saw a pullback, with Yanjinpuzi dropping over 8% [1] - Pharmaceutical stocks also weakened, with Jinkai Biotechnology down nearly 10% and Sinovac Biotech falling over 8% [1] - The CPO concept stocks surged, with Shengyi Electronics and Haide Control hitting the daily limit [3][4] - The computing power concept stocks were strong, with Huijin Co. and Qingyun Technology also reaching the daily limit [1][3] - The virtual power plant concept gained traction, with Hengshi Technology and Ankao Zhidian both hitting the daily limit [7][8] - The sports concept remained active, with Jinling Sports achieving a three-day limit increase and Gongchuang Lawn hitting the limit for four consecutive days [9][10] CPO Concept - The CPO concept saw significant gains, with Shengyi Electronics closing at a 20% limit increase [3][4] - Other notable performers included Shijia Photon and Haide Control, both reaching their daily limits [3][4] Virtual Power Plant Concept - The virtual power plant concept also experienced a strong performance, with Hengshi Technology closing at a 20% limit increase [7][8] - Other companies in this sector, such as Ankao Zhidian and Jinzhi Technology, also saw substantial gains [7][8] Sports Sector - The sports sector showed continued strength, with Jinling Sports achieving a 20% limit increase and a cumulative increase of approximately 94% over four days [9][10] - The Jiangsu Province City Football League attracted significant attendance, boosting local tourism and consumption [11] Policy Developments - The National Energy Administration has initiated pilot projects focusing on new power system construction, including virtual power plants and intelligent microgrids [8][9] - The National Development and Reform Commission and the Energy Administration have introduced policies to promote green electricity connections, enhancing the traceability of renewable energy consumption [9]

Market Overview - The Shanghai Composite Index experienced a slight increase of 0.23%, closing at 3384.1 points, while the Shenzhen Component Index rose by 0.58% to 10203.5 points. The ChiNext Index and the STAR Market 50 Index both gained over 1% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 131.72 billion yuan, an increase of nearly 140 billion yuan compared to the previous day [1] Sector Performance - The food and beverage sector saw a pullback, with Salted Fish Shop dropping over 8%. The pharmaceutical sector also weakened, with Jinkai Biotechnology down nearly 10% and Sinovac Pharmaceuticals falling over 8% [1] - The CPO (Co-Packaged Optics) concept stocks surged, with companies like Shengyi Electronics and Haide Control hitting the daily limit [1][4] - The computing power concept stocks were strong, with Huijin Co., Qingyun Technology, and Kehua Data also reaching the daily limit [1] - The virtual power plant concept gained traction, with Jinzhitech and Jicheng Electronics hitting the daily limit [1][8] - The sports concept remained active, with Jinling Sports achieving a three-day consecutive limit up and Gongchuang Lawn hitting the limit for four consecutive days [1][13] CPO Concept - The CPO concept saw significant gains, with Shengyi Electronics closing at a 20% limit up, and other companies like Shijia Photon and Haide Control also reaching their daily limits [4][5] - The demand for CPO solutions is expected to grow, driven by the launch of Broadcom's Tomahawk 6 switch chip, which offers a throughput capacity equivalent to six previous generation chips [6] Virtual Power Plant Concept - The virtual power plant concept stocks experienced a strong rally, with Hengshi Technology and Ankao Zhidian both hitting the daily limit [8][10] - Recent government initiatives, including pilot projects for new power systems, are expected to support the growth of virtual power plants [11] Sports Concept - The sports sector saw a resurgence, with Jinling Sports achieving a 20% limit up and a cumulative increase of approximately 94% over four days [13][15] - The ongoing Jiangsu Province Urban Football League has attracted significant fan attendance, boosting local tourism and consumption [15]

Core Viewpoint - The market experienced a rebound with the ChiNext Index leading the gains, reflecting a mixed performance across various sectors and stocks [1] Group 1: Market Performance - The total trading volume in the Shanghai and Shenzhen markets reached 1.29 trillion, an increase of 137.4 billion compared to the previous trading day [1] - The ChiNext Index rose by 1.17%, while the Shanghai Composite Index increased by 0.23% and the Shenzhen Component Index rose by 0.58% [1] Group 2: Sector Performance - The computing power concept stocks saw a collective rebound, with CPO and other related sectors leading the gains, and Shenghong Technology reaching a historical high [1] - Stablecoin concept stocks showed strong performance, with Cuiwei Co., Ltd. hitting the daily limit [1] - Virtual power plant concept stocks were active, with Zhongdian Xinlong and others reaching the daily limit [1] - Consumer stocks experienced a collective adjustment, with Chao Hong Ji hitting the daily limit down [1] Group 3: Sector Gains and Losses - The sectors with the highest gains included CPO, football concept, power IoT, and stablecoin concepts [1] - The sectors with the largest declines included beauty care, food processing, beverage manufacturing, and CRO [1]

Market Overview - The A-share market experienced a slight drop at the beginning of the session but rebounded to close slightly higher, with the Shanghai Composite Index up by 0.08%, Shenzhen Component Index up by 0.16%, and the ChiNext Index up by 0.32% [1][5] - The total trading volume for the market was 728.5 billion yuan, showing a slight decrease compared to the previous day [5] Sector Performance - The communication, electronics, media, and computer sectors showed gains, while the consumer sector experienced a pullback, particularly in innovative drugs, CRO, and medical beauty stocks [4][10] - The virtual power plant concept stocks remained active, with several stocks hitting the daily limit up, including Hengshi Technology and Xinlian Electronics [8][9] Individual Stock Highlights - Notable gainers included Hengshi Technology, which rose by 20.05%, and Xinlian Electronics, which increased by 10.06% [9][12] - Conversely, the pharmaceutical sector saw significant declines, with stocks like Jinkai Biotechnology dropping by 9.32% due to shareholder reduction announcements [13][14] Hong Kong Market - The Hong Kong market maintained a positive outlook, with the Hang Seng Index up by 0.42% and the Hang Seng Technology Index up by 0.92% [6][7] - Key stocks such as Alibaba and Meituan rose over 2%, while others like Lao Pu Gold and Pop Mart saw declines exceeding 2% [6][7] Company News - Feiyada experienced a sharp drop, hitting the daily limit down after announcing a cash acquisition of a controlling stake in Chang Kong Gear, which is expected to enhance its technological capabilities [15]

Core Viewpoint - The A-share market is experiencing mixed performance with a slight increase in major indices, while individual stocks show a predominance of declines, indicating a cautious market sentiment [1][2]. Market Overview - As of the midday break, the Shanghai Composite Index rose by 0.08% to 3378.82, the Shenzhen Component Index increased by 0.16% to 10160.75, and the ChiNext Index gained 0.32% to 2031.39 [1][2]. - Overall, more than 3000 stocks in the market declined, reflecting a bearish trend despite the index gains [2]. Sector Performance - The football concept stocks are surging, with Jinling Sports achieving a three-day limit up of 20% [4][5]. - The computing power industry chain is strengthening, with sectors like CPO and copper connections leading the gains [4]. - Other active sectors include virtual power plants, circuit boards, 6G, rare earth permanent magnets, IP economy, and digital currency, while gold, innovative drugs, and new consumption concept stocks are experiencing pullbacks [4]. News Impact - The recent popularity of the Jiangsu Province's first urban football league ("Su Chao") has sparked interest in the A-share market, driving consumer sentiment and regional cultural engagement [6]. - Analyst Wu Jincao from Dongwu Securities notes that the excitement surrounding "Su Chao" reflects emotional consumption linked to regional characteristics, suggesting potential short-term performance for sports-related companies [6]. Capital Flow - Morning net inflows were observed in sectors such as electronics, communications, media, computers, and machinery, while net outflows were noted in pharmaceuticals, banking, transportation, agriculture, and retail [7]. - Specific stocks like Hengbao Co., Shenghong Technology, and Zhongji Xuchuang saw net inflows of 928 million, 700 million, and 620 million respectively [8]. - Conversely, stocks like Debang Co., Ningde Times, and BYD faced net outflows of 644 million, 312 million, and 290 million respectively [9]. Institutional Insights - Guodu Securities suggests that the market is consolidating below the 3400-point level, indicating potential opportunities for investors to enter at lower prices, particularly in new consumption sectors [11]. - Huaxi Securities highlights the market's positive pricing of improved US-China trade relations, while cautioning against the potential volatility of Trump's tariff policies [11].

Market Overview - A-shares experienced slight adjustments with the three major indices showing minor increases, while the stablecoin sector rebounded [1] - The Hang Seng Index and Hang Seng Tech Index opened higher and maintained their upward trend [2][3] - The A-share market saw the Shanghai Composite Index down 0.04%, Shenzhen Component Index down 0.01%, and ChiNext Index down 0.08% at the time of reporting [1] Sector Performance - In the stablecoin sector, stocks like Zhongjia Bochuang and Yuxin Technology surged over 5%, with Zhongjia Bochuang rising by 10.10% [8][9] - New consumption stocks, including Pop Mart and Mixue Group, collectively declined, with Pop Mart dropping over 1% after reaching a new high [5][6] - Commodity markets saw coking coal prices increase by over 1% [1] Bond Market - The bond market showed mixed results, with the 10-year treasury futures contract rising by 0.02% and the 30-year contract falling by 0.01% [4][13] Economic Indicators - The Caixin Services PMI for May rose to 51.1 from the previous value of 50.7, indicating an acceleration in service sector expansion [4]