Economic Performance - The UK economy unexpectedly contracted by 0.1% in May, marking the second consecutive month of decline, indicating a loss of earlier strong growth momentum [1] - This contraction follows a 0.3% decline in April, suggesting a significant slowdown in the second quarter compared to a 0.7% growth in the first quarter [1][8] - If June output falls by 0.4% or more, the UK economy will experience an overall contraction in the second quarter [1] Sector Performance - The contraction in May was primarily driven by significant declines in the production and construction sectors, which were only partially offset by growth in the services sector [8] - The downturn in production was concentrated in oil and gas extraction, automotive manufacturing, and the volatile pharmaceutical industry [8] Market Reactions - Following the data release, the British pound fell by 0.2% against the US dollar, reaching $1.35 [4] - Investors slightly increased bets on a 25 basis point rate cut by the Bank of England in August, with expectations for two rate cuts by the end of the year [9] Government Response - Chancellor Rachel Reeves acknowledged the disappointing GDP data and expressed determination to stimulate economic growth [7] - The Labour government is relying on stronger growth to fund its spending plans, but fiscal conditions are tightening due to changes in welfare payments and winter fuel subsidies [7] Economic Outlook - Economists predict that even if June GDP stabilizes, overall growth for the second quarter will slow to just 0.1% [8] - Concerns about the health of the UK economy have increased, with the Bank of England previously warning of weak potential growth [10]

Core Viewpoint - Jilin Oilfield is advancing the implementation of a pilot project for enhanced gas recovery (CCUS-EGR) at the Changling gas field, marking the beginning of a collaborative development model for CO2-driven enhanced oil recovery (CCUS-EOR) and CCUS-EGR [1][2] Group 1 - The Changling gas field is crucial for maintaining stable natural gas production in Jilin Oilfield, but it currently has a low recovery rate despite having potential for improvement [1] - Jilin Oilfield aims to integrate EOR and EGR processes by leveraging existing advantages in gas sources, facilities, and pipeline networks, while utilizing mature CCUS technologies [1] - The EOR process produces associated gas with CO2 concentration 70% lower than the injected CO2, which can affect the efficiency of miscible displacement [1] Group 2 - The feasibility study for tight gas CCUS-EGR was initiated based on earlier research, focusing on the Longshen D Ping 2 well area, which has significant remaining reserves and high initial production capacity [2] - The design includes three sets of injection and production wells, with parameters for injection volume, pressure, method, and cycle established, aiming for a 12.5% increase in recovery rate [2] - The initial phase will involve only injection, followed by simultaneous injection and production after pressure buildup [2]

Profitability Trends - In April, industrial enterprises' profit growth improved slightly to 3% year-on-year from 2.5% in March, driven by a recovery in profitability in downstream sectors[2] - The profit margin for downstream manufacturing rose from -3.5% in March to 5.4% in April, indicating a recovery in profitability[5] - The profit margin for the automotive manufacturing sector narrowed its year-on-year decline from 28.1% in March to 2.2% in April, contributing less to the overall industrial profit decline[5] Revenue and Growth Rates - Industrial enterprises' revenue growth slowed, aligning with a decrease in export growth from 12.4% in March to 8.1% in April[2] - The adjusted profit margin for industrial enterprises in April was 5.3%, slightly down from 5.4% in Q1 but improved from 5.2% in March[11] - The net financing amount of government bonds and local bonds from January to May increased by 3.7 trillion yuan compared to the same period last year, indicating a proactive fiscal policy[3] Sector-Specific Insights - The profit growth for the computer and communication sector surged from 12.7% in March to 30.8% in April, significantly contributing to the overall profit growth[5] - Upstream industries saw a profit decline of 30.8% year-on-year in April, worsening from a 26.4% decline in March, primarily due to falling oil and commodity prices[6] - The profit growth for the electrical machinery and equipment manufacturing sector rose to 30.5% in April, up from 22.8% in March, reflecting improved profitability[11] Market Outlook - The reduction in tariffs between China and the U.S. may support profit growth in export-related industries in Q2, although long-term external demand remains uncertain[3] - The fiscal policy is expected to strengthen further, aiming to support overall demand recovery amid slowing internal consumption[3] - The leverage ratio for industrial enterprises decreased to 57.71% in April, indicating a marginal improvement in financial stability[11]

Group 1: CPI and PPI Analysis - In April 2025, the Consumer Price Index (CPI) decreased by 0.1% year-on-year, remaining unchanged from the previous month[11] - The CPI increased by 0.1% month-on-month, reversing a previous decline of 0.4%[12] - Energy prices fell by 4.8% year-on-year, with gasoline prices dropping by 10.4%, contributing approximately 0.38 percentage points to the CPI decline[13] - The Producer Price Index (PPI) decreased by 2.7% year-on-year, with the decline widening by 0.2 percentage points compared to the previous month[11] Group 2: Economic Implications and Policy Outlook - The low inflation environment provides room for policy adjustments, with both monetary and fiscal policies expected to be more proactive[4] - The decline in oil prices has led to a decrease in domestic prices across related industries, impacting overall economic stability[4] - The core CPI, excluding food and energy, rose by 0.5%, indicating stable demand despite the overall CPI decline[14] - The report suggests that the current economic conditions allow for a more aggressive macroeconomic policy response to external uncertainties[30] Group 3: Risks and Market Considerations - Potential risks include worsening geopolitical events, changes in international financial conditions, and unexpected shifts in US-China policies[5] - The report emphasizes the importance of monitoring external factors that could impact domestic economic performance and inflation trends[30]