Core Viewpoint - In April, China's manufacturing Purchasing Managers' Index (PMI) decreased to 49%, reflecting a decline of 1.5 percentage points from the previous month, influenced by rapid changes in the external environment, while high-tech manufacturing sectors continued to expand [1] Group 1: Manufacturing PMI - The overall manufacturing PMI for April is reported at 49%, indicating a contraction in the manufacturing sector [1] - The decline in the manufacturing PMI is attributed to external environmental changes [1] Group 2: High-Tech Manufacturing - The high-tech manufacturing PMI stands at 51.5%, significantly above the overall manufacturing level, indicating a sustained positive development trend [1] - The demand in the new momentum market remains stable with an overall increase [1] Group 3: Consumer Goods Manufacturing - The new orders index for consumer goods manufacturing is at the critical point of 50%, suggesting a good release of domestic market demand [1] Group 4: Business Expectations - The production and business activity expectation index for April is at 52.1%, remaining in the expansion zone [1]

Group 1: Report Title and Macro Event - Report title: "Industrial Enterprises' Profit Recovery - China's Profit Series Ten" [1] - Macro event: On April 27, 2025, the National Bureau of Statistics announced that from January to March, the total profit of industrial enterprises above designated size in China reached 1,509.36 billion yuan, a year - on - year increase of 0.8% [2] Group 2: Core Views Revenue Pressure Still Exists Overall Situation - Profit growth rebounds, but demand - side pressure remains. From January to March 2025, the total profit of industrial enterprises above designated size increased by 0.8% year - on - year, reversing the continuous decline since Q3 2024. In March, the single - month profit growth rate rebounded to 2.6%, a significant improvement from - 0.3% in January - February. This is due to the policy drive and the recovery of overseas orders. However, inventory pressure restricts profit space, and weak infrastructure and real estate demand drag down some upstream industries [3] - Policy drive: The "Two New" policies (large - scale equipment renewal and consumer goods trade - in) drove the profit of the equipment manufacturing industry to increase by 7.6% year - on - year, contributing over 40% to industrial profit growth [3] - Overseas orders: Overseas orders boosted the profit of export - dependent industries. From January to March, the profit of the electronics industry increased by 3.2%, and that of railway and ship transportation equipment increased by 14.2%. The profit of the consumer goods manufacturing industry increased by 7.1%, and industries such as chemical fiber and paper - making saw profit growth of 181% and 155% respectively due to a surge in export orders [3] - Inventory pressure: At the end of March, the year - on - year growth of finished product inventory was 4.2%, the actual inventory growth rate was 6.4%, and the turnover days of finished products increased to 22.3 days, indicating a slow de - stocking process [3] - Weak upstream industries: The profit of the coal mining industry decreased by 47.7% year - on - year, and the ferrous metal smelting industry was still on the verge of profit and loss due to weak infrastructure and real estate demand [3] Structural Situation - New and old kinetic energy differentiation intensifies, and policy dividends tilt towards the middle and lower reaches. The equipment manufacturing industry became the core growth engine, with a 7.6% year - on - year profit increase in Q1. The raw material industry showed obvious internal differentiation, and the consumer goods manufacturing industry showed resilience [4] - Equipment manufacturing industry: The profit of specialized equipment manufacturing (+14.2%) and general equipment manufacturing (+9.5%) was significantly higher than the industrial average. The electronics industry had bright spots in some sub - sectors [4] - Raw material industry: The profit of the non - ferrous metal smelting and rolling processing industry increased by 33.6% year - on - year, while the ferrous metal smelting industry was on the verge of profit and loss, and the coal mining industry's profit decreased by 47.7% [4] - Consumer goods manufacturing industry: Industries such as chemical fiber (+181%) and paper - making (+155%) had explosive growth. However, the automobile manufacturing industry (- 6.2%) was still restricted by the industrial chain adjustment [4] Group 3: Appendix - Interpretation of Industrial Enterprise Profit Data - Profit turns from decline to growth: In Q1 2025, the profit of industrial enterprises above designated size turned from a 3.3% year - on - year decline in the previous year to an 0.8% increase, and in March, it turned from a 0.3% decline in January - February to a 2.6% increase [29] - Revenue growth accelerates: In Q1, the revenue of industrial enterprises above designated size increased by 3.4% year - on - year, 0.6 percentage points faster than in January - February. In March, it grew by 4.2%, 1.4 percentage points faster than in January - February [29] - Nearly 60% of industries see profit growth: Among 41 industrial sectors in Q1, 24 had year - on - year profit growth, and 24 had accelerated profit growth or narrowed declines. The manufacturing industry improved significantly, with a 7.6% profit growth in Q1, 2.8 percentage points faster [30] - Equipment manufacturing supports profit growth: In Q1, the profit of the equipment manufacturing industry increased by 6.4% year - on - year, 1.0 percentage point faster than in January - February, accounting for 32.0% of the total profit of industrial enterprises above designated size, and pulling the total profit growth by 2.0 percentage points [30] - High - tech manufacturing leads high - quality development: In Q1, the profit of high - tech manufacturing turned from a 5.8% decline in January - February to a 3.5% increase. In March, it had double - digit growth, pulling the total profit growth by 2.8 percentage points [31] - "Two New" policies are effective: The "Two New" policies drove the profit growth of relevant industries. The profit of specialized and general equipment industries increased by 14.2% and 9.5% respectively, and consumer goods trade - in policies boosted related industries [32]

Core Insights - The policies aimed at boosting consumer demand are showing positive effects, with March's consumption market reflecting a favorable trend due to both policy and seasonal factors [2][6][12] - The Consumer Price Index (CPI) experienced a smaller decline than the seasonal average, indicating a recovery in consumer demand and market stability [3][7][12] - The Producer Price Index (PPI) continues to decline, but some industries are witnessing positive price changes due to improved supply-demand structures [4][9][12] Consumer Market - In March, the CPI decreased by 0.4% month-on-month and 0.1% year-on-year, with the decline narrowing significantly compared to previous years [6][12] - Core CPI showed a notable recovery, increasing by 0.5% year-on-year, driven by rising service prices and industrial consumer goods prices [2][6][12] - The price of household appliances and gold jewelry has risen significantly, exceeding the average increase over the past decade [2][6] Industrial Production - The PPI fell by 0.4% month-on-month and 2.5% year-on-year, influenced by international input factors and seasonal declines in energy demand [4][12] - High-tech industries are experiencing rapid development, leading to improved supply-demand structures and positive price changes in certain sectors [4][9] External Factors - The U.S. has implemented a 10% baseline tariff on global imports and specific tariffs on 60 countries, including 34% on China, which may impact international trade dynamics [4][13][25] - Countries are responding differently to the U.S. tariff policies, with China retaliating and the EU preparing for negotiations [4][13] Policy Outlook - The government is expected to continue implementing policies to stimulate consumer demand and support economic recovery, including fiscal measures and monetary policy adjustments [22][23][24] - The focus will be on enhancing domestic demand, promoting equipment upgrades, and improving the overall economic environment [24][25]

Group 1: PMI Data Insights - The manufacturing PMI for March 2025 is reported at 50.5%, an increase of 0.3 percentage points from the previous month[2] - The new orders index rose to 51.8%, up 0.7 percentage points, indicating improved demand[12] - The service sector PMI increased to 50.3%, reflecting a 0.3 percentage point rise, while the construction PMI reached 53.4%, the highest since June of the previous year[9] Group 2: Economic Trends and Challenges - Despite the positive PMI trends, the overall economic recovery remains weak, with manufacturing PMI still below seasonal averages[2] - The manufacturing sector is experiencing passive destocking, with finished goods inventory index dropping to 48.0%, indicating a supply-demand gap[4] - Price indices for both factory and raw material purchases fell by 0.6 and 1.0 percentage points, respectively, suggesting ongoing price pressures on profitability[4] Group 3: Sector Performance - High-tech manufacturing and equipment manufacturing sectors are showing significant recovery, with PMIs of 52.3% and 52.0%, respectively[4] - Small and medium-sized enterprises (SMEs) saw a notable rebound in PMI, with small enterprises reaching 49.6%, the highest level since June of the previous year[4] - The construction sector is facing challenges due to funding pressures and low new order indices, which fell to 43.5%[9]

Price Data Overview - In March, CPI decreased by 0.4% month-on-month (previous value: -0.2%) and by 0.1% year-on-year (previous value: -0.7%), indicating a narrowing decline[2] - PPI also fell by 0.4% month-on-month (previous value: -0.1%) and by 2.5% year-on-year (previous value: -2.2%), showing an expanded decline[2] Key Influencing Factors - The decline in CPI was primarily driven by three factors: a 3.5% decrease in domestic gasoline prices due to falling international oil prices, which contributed approximately 0.12 percentage points to the CPI decline[2] - Food prices fell by 1.4% month-on-month, impacting CPI by about 0.24 percentage points, with significant drops in fresh vegetables (5.1%), pork (4.4%), and eggs (3.1%)[2] - Weak terminal consumption and industrial demand continued to exert downward pressure, with service prices slightly below historical levels[2] Future Price Trends - Moving forward, tariff impacts are expected to become a significant factor in price evolution, with supply and demand dynamics shifting[2] - The interplay between excess supply and weakening domestic demand will influence price stability, while tariff shocks may lead to lower prices through increased domestic supply[2] Policy Implications - Incremental policies to counter tariff impacts will be crucial, particularly in promoting consumption and stabilizing the real estate market[2] - The effectiveness of these policies will be key in determining future price trends[2] Risks and Challenges - Potential risks include a weakening real estate market, declining exports, and the possibility that incremental policies may not meet expectations[4] - The go-capacity policy may face tougher decisions, as the short-term pain from capacity reduction could be challenging for the domestic economy to absorb[2]

Core Viewpoint - The manufacturing Purchasing Managers' Index (PMI) in March rose to 50.5%, indicating a slight improvement in manufacturing activity compared to February, driven by seasonal factors, policy support, and technological innovations [1][4]. Manufacturing PMI Analysis - The production index, new orders index, new export orders index, and raw materials inventory index all increased, with rises between 0.1 to 0.7 percentage points [1]. - The new orders index reached 51.8%, up 0.7 percentage points from February, indicating sustained demand [4]. - The production index was at 52.6%, reflecting a continuous upward trend for two months [4]. Sector Performance - High-tech manufacturing sectors, such as railway, aerospace, and electronics, showed strong performance with production and new orders indices above 55.0% [6]. - Conversely, industries like wood processing and coal showed indices below the critical point, indicating supply-demand imbalances [6]. - The consumer goods manufacturing PMI rose to 50.0%, driven by policies promoting consumption [6]. Price Indices and Market Dynamics - The main raw materials purchase price index fell to 49.8%, while the factory price index dropped to 47.9%, indicating a supply surplus [7][8]. - The decline in prices is attributed to weak demand and increased production, particularly in the basic raw materials sector [7][8]. Future Outlook - The manufacturing sector is expected to continue its stable recovery in the second quarter, supported by government policies aimed at expanding domestic demand and promoting new urbanization [9]. - The manufacturing production and business activity expectation index was at 53.8%, indicating optimism among enterprises [9]. - However, potential challenges include the impact of increased tariffs on exports and the need for further stabilization in the real estate market [9].

Core Viewpoint - The divergence between PMI and EPMI is primarily due to the differentiation in the economic conditions of emerging and traditional industries, with the former showing stronger performance in March [1][8]. Manufacturing Sector - In March, the manufacturing PMI increased moderately by 0.3 percentage points to 50.5%, which is below market expectations [1][8]. - The EPMI for strategic emerging industries rose significantly by 10.6 percentage points to 59.6%, indicating a strong recovery in these sectors [1][8]. - High-tech and equipment manufacturing sectors saw substantial PMI increases of 1.4 and 1.2 percentage points, reaching 52.3% and 52% respectively, while traditional sectors like consumer goods manufacturing only saw a marginal increase of 0.1 percentage points to 50% [2][13]. - The production index for EPMI surged by 21.6 percentage points, contrasting with a slight increase of 0.1 percentage points in the manufacturing PMI production index, which reached 52.6% [2][17]. Non-Manufacturing Sector - The non-manufacturing PMI rose by 0.4 percentage points to 50.8%, with the construction sector's PMI increasing by 0.7 percentage points to 53.4%, although this was weaker than seasonal expectations [3][5]. - The service sector's PMI increased by 0.3 percentage points to 50.3%, but this was also below the same period in previous years [3][5]. - The construction sector remains constrained by weak real estate investment, while the service sector is limited by the performance of life services [3][22]. Future Outlook - There are increasing risks to exports, but potential improvements in the economy may arise from accelerated import substitution and recovery in the service sector and real estate sales [3][31]. - The manufacturing sector may receive support from accelerated import substitution in industries like electrical and mechanical equipment, while the construction and service sectors show signs of recovery [3][31]. Regular Tracking - The manufacturing PMI continues to show a mild recovery, with production and new order indices slightly increasing [4][37]. - The non-manufacturing PMI reflects a general improvement, with both construction and service sectors showing slight increases [5][46].

文 ： 华创证券研究所副所长 、首席宏观分析师 张瑜（执业证号：S0360518090001） 联系人： 陆银波（15210860866） 前言 本文聚焦今年产业层面的重大变化。将所有行业基于一定的共性分为 11 个板块 ，今年或是信息业引领资本 开支（领头羊）。这一判断基于当前的宏观环境依然存在一定的供需矛盾以及有多股力量正合力促进信息 业的发展。信息业的引领下，会有哪些宏观影响？这涉及科技进步的方向以及科技会推广于何处，较难回 答。但若与 2014-2015 年对比，或有区别，彼时借助 4G 的普及以及" C 端补贴"催生了较多消费"新业 态"。参考 2022 年以来的美国，或指向的是互联网企业增加资本开支，互联网企业及"卖铲者"业绩受益。 报告摘要 一、信息业或将再次引领资本开支 根据行业特性（如科技含量、政府参与程度、用途等）可以将全社会固定资产投资分为 11 个板块。将当年 投资增速最快的板块称之为资本开支的领头羊。 我们发现： 1 ）资本开支的领头羊发生过数次更迭 。 2008-2009 年：电气机械； 2010-2013 年：频繁轮动，先后是电子设备、电气机械、汽车、消费品制造 业； 2014- ...

Group 1: CPI Analysis - The CPI year-on-year growth rate decreased to -0.7% in February, down 1.2 percentage points from the previous month, primarily due to the impact of the Spring Festival timing [1][4] - Excluding the Spring Festival effect, the CPI year-on-year increased by 0.1% in February, indicating a moderate recovery in prices [1][4] - Food prices contributed over 80% to the total decline in CPI, with fresh vegetable prices dropping by 12.6% year-on-year [5][6] Group 2: PPI Analysis - The PPI year-on-year decline narrowed to 2.2% in February, with the average for January-February also showing a 2.2% decrease compared to the previous year [2][7] - The main reasons for the PPI decline include the off-peak industrial production season and weak demand for construction materials [2][7] - The prices of production materials fell by 2.5%, while living materials prices decreased by 1.2%, with specific industries like coal processing seeing significant price drops [7][8] Group 3: Market Sentiment and Future Outlook - The PMI data indicated an increase in raw material and finished product price indices, but the PPI only slightly narrowed, suggesting a discrepancy between perceived and actual market conditions [3] - The current policy uncertainty may lead to a cautious approach from enterprises, affecting production enthusiasm [3] - Positive signals from the upcoming Two Sessions may help restore market demand and improve production and demand dynamics [3]

Core Viewpoint - The article discusses the decline in consumer prices (CPI) and producer prices (PPI) in February 2025, highlighting the impact of seasonal factors and international commodity price fluctuations on these indices [9][10][11]. Group 1: Consumer Price Index (CPI) Analysis - In February 2025, the national CPI decreased by 0.7% year-on-year, with urban and rural areas both experiencing a decline of 0.7% [1] - The average CPI for January-February 2025 showed a slight decrease of 0.1% compared to the same period last year [1] - Food prices fell by 3.3%, significantly impacting the CPI, while non-food prices saw a minor decline of 0.1% [1][10] - The decline in fresh vegetable prices by 12.6% was a major contributor to the CPI drop, affecting it by approximately 0.31 percentage points [4][10] - Seasonal factors, such as the timing of the Spring Festival, contributed to the CPI's year-on-year decline, with a calculated impact of -1.2 percentage points from last year's price changes [10] Group 2: Producer Price Index (PPI) Analysis - The PPI for February 2025 decreased by 2.2% year-on-year and by 0.1% month-on-month, with the decline in producer prices showing a slight narrowing compared to the previous month [2][9] - The drop in industrial producer prices was primarily driven by a 2.5% decrease in production material prices, which affected the overall PPI by approximately 1.86 percentage points [6] - The construction sector faced reduced demand due to seasonal factors, leading to a 10.6% decline in black metal smelting and rolling prices [11] - International commodity price fluctuations, particularly in coal and oil, also contributed to the PPI decline, with coal processing prices down by 24.7% year-on-year [11] Group 3: Price Changes in Specific Categories - In February, the prices of food, tobacco, and alcohol categories decreased by 1.9% year-on-year, impacting the CPI by about 0.54 percentage points [4] - The prices of other categories showed mixed results, with clothing prices increasing by 1.2% while transportation and communication prices fell by 2.5% [4] - The industrial producer prices for food decreased by 1.6%, while durable consumer goods prices fell by 2.5% [6][8] - Some sectors, such as energy and certain consumer goods, experienced price increases, indicating a mixed recovery in demand [12]