Core Points - The Chinese government is advancing a new round of comprehensive reform pilot programs in Shenzhen, building on the achievements of the 2020 reform pilot [1][2] - The reform initiatives focus on four key areas: education and talent reform, financial support for high-quality economic development, establishing a higher-level open economy, and improving governance models [1][2] - Shenzhen's GDP is projected to grow from 2.78 trillion yuan in 2020 to 3.68 trillion yuan in 2024, with an average annual growth rate of 5.5% [2] - The city has seen an increase in R&D investment from 151.08 billion yuan in 2020 to 223.66 billion yuan in 2023, reflecting an average annual growth of 13.9% [2] Group 1: Reform Initiatives - The reform includes integrating education, technology, and talent systems to enhance collaboration between academia and industry [1] - Financial mechanisms will be innovated to support emerging industries and improve the market-oriented allocation of data resources [1][3] - A new open economic system will be established to optimize trade and facilitate personnel movement [1][3] Group 2: Economic Performance - Shenzhen has achieved significant progress in innovation, including the establishment of a cross-border capital pool and advancements in intellectual property securitization [2] - The city has produced 48 reform measures that have been replicated in other regions, demonstrating a ripple effect of reform [2] - The industrial output value and added value have ranked first among cities in China for three consecutive years [2] Group 3: Strategic Industries - Artificial intelligence and low-altitude economy are prioritized as strategic emerging industries, with over 2,600 AI enterprises established [3] - Shenzhen has introduced the first local regulations on low-altitude economy and is advancing infrastructure development in this sector [3] Group 4: Support from Government - The National Development and Reform Commission will collaborate with local authorities to ensure the implementation of the reform initiatives [4][5] - A comprehensive management system will be established to track the progress of reforms and ensure legal support for the initiatives [5]

Core Points - The central government has issued an opinion to deepen reform and innovation in Shenzhen, focusing on comprehensive reform pilot initiatives [1][3] Group 1: Key Initiatives - The opinion outlines four major initiatives: reforming education and talent systems, enhancing financial and technological support for the real economy, establishing a higher-level open economy, and improving governance models [3][4] - Guangdong province is tasked with creating conditions for Shenzhen's comprehensive reform pilot, including supporting education and technology reforms, financial market reforms, and enhancing international trade [4][5] Group 2: Industry Development Focus - Shenzhen aims to accelerate the development of artificial intelligence and low-altitude economy sectors, establishing itself as a national innovation hub in these areas [5][6] - The government plans to support the establishment of high-level innovation platforms and promote collaborative projects among enterprises, universities, and research institutions [5][6] Group 3: Financial and Technological Support - The government will enhance mechanisms for credit and insurance support for technological innovation, aiming to create a favorable environment for tech-driven enterprises [6][7] - There is a focus on improving the financial ecosystem for technology firms, including optimizing financing mechanisms and supporting the transformation of scientific achievements into marketable products [7][8] Group 4: Service Industry Opening - The opinion emphasizes the importance of expanding the service industry, particularly in telecommunications, healthcare, and finance, to enhance Shenzhen's role in the national service sector [8] - Specific measures include promoting digital services, increasing foreign investment in healthcare, and expanding the operational scope of financial institutions [8]

Group 1 - The core viewpoint highlights the significant growth potential in AI computing power, particularly in Europe, with NVIDIA planning to invest in 20 "AI factories" to increase AI computing capacity tenfold within two years [1] - The telecom ETF fund closely tracks the China Securities Telecom Theme Index, which includes 50 listed companies involved in telecom operations, value-added services, communication equipment, technology services, and data centers [2] - As of May 30, 2025, the top ten weighted stocks in the China Securities Telecom Theme Index account for 78.18% of the index, with major players including China Telecom, China Mobile, and China Unicom [2] Group 2 - The demand for AI is driving strong performance in leading companies in sectors such as servers and connectors, with expectations for a recovery in the Ethernet switch market [2] - The domestic development of large AI models and their application is anticipated to accelerate, suggesting a positive outlook for sectors like servers, IDC, switches, and connectors [2] - The announcement by NVIDIA's CEO indicates a pivotal moment for quantum computing, which is expected to address significant global challenges in the coming years [1]

Group 1 - The core viewpoint is that Guangdong Province aims to deepen the opening of key service sectors such as telecommunications, healthcare, and finance, while encouraging the development of overseas gaming businesses [1] Group 2 - The government will support the opening and development of telecommunications services and related digital industries, exploring the expansion of value-added telecommunications pilot business scope, and promoting the establishment of cross-border service centers and technology service platforms [1] - There will be an increase in the level of openness in the healthcare and wellness sector, promoting cooperation in medical and elderly care institutions, and supporting foreign investment in research and application in areas such as human stem cells and gene diagnosis and treatment [1] - The financial sector will see a push for international cooperation, with a gradual expansion of the business scope of financial institutions and support for multinational companies registered in Shenzhen to conduct cross-border capital centralized operations in RMB [1]

Market Performance - A-shares experienced an increase due to positive stimuli, with the Shanghai Composite Index rising by 0.52% to 3402.32 points, and the Shenzhen Composite Index increasing by 0.71% [1] - The total trading volume for A-shares was 12,867 billion, a decrease from 14,514 billion the previous day [1] - Most sectors saw gains, particularly rare earths, gaming, energy metals, insurance, automotive parts, securities, trade, non-metallic materials, jewelry, and colored metals [1] Trade Negotiations - The rise in A-shares was primarily linked to progress in US-China trade negotiations, with officials concluding a two-day meeting in London [1] - Chinese and US representatives reported professional and candid discussions, reaching a framework to implement agreements from previous high-level talks [1] - Further details regarding US-China trade negotiations are expected in the coming days, with a likelihood of positive developments [1] External Market Influences - US stock markets continued their recent upward trend, with all three major indices showing slight increases [2] - The offshore RMB exchange rate was stable around 7.188, while the US dollar remained in a consolidation phase due to various offsetting factors [2] - Market expectations for US Federal Reserve interest rate cuts have diminished, now anticipating only one cut for the year [2] Future Market Focus - The A-share market's performance is expected to be influenced by ongoing US-China trade discussions, with reduced uncertainties likely leading to diminished trade-related volatility [2] - Attention may shift towards domestic economic data and potential easing policies, especially following disappointing May import/export and price data [2]

Group 1 - The core viewpoint of the news is the establishment of a strategic cooperation between Xiong'an Xuanwu Hospital and China Telecom Xiong'an New Area Branch to create the "Xiong'an Xuanwu Medical Artificial Intelligence Joint Innovation Laboratory," marking a significant step in the integration of AI and healthcare in Xiong'an New Area [1][2] - The collaboration aims to explore new medical service models centered around artificial intelligence, enhancing the application of cutting-edge technology in the healthcare sector [1] - Both parties will leverage their strengths, with China Telecom providing robust capabilities in cloud-network integration, computing power platforms, and AI models, while Xiong'an Xuanwu Hospital offers mature clinical resources and professional teams [1][2] Group 2 - The laboratory will focus on key areas such as remote diagnosis, intelligent auxiliary diagnosis, disease prediction, and health management, aiming to improve hospital service capabilities, management efficiency, and patient experience [1] - The initiative is expected to produce practical AI application demonstration projects that are effective and scalable, contributing to the hospital's advancement in intelligent, refined, and personalized healthcare [1] - The leaders of both organizations emphasized the importance of this partnership for enhancing healthcare service efficiency and patient satisfaction, as well as contributing to the construction of a high-level public healthcare system in Xiong'an New Area [2]

Core Viewpoint - The recent release of the "Comprehensive Pilot Work Plan for Accelerating the Expansion of the Service Industry" aims to enhance the openness of the service sector, providing more choices for consumers and investors, and includes 155 pilot tasks across 11 provinces and cities, with 9 additional cities newly included in the pilot program [1][2][3]. Group 1: Expansion of Service Industry - The service industry has undergone significant upgrades and expansions since 2015, with a current focus on creating a more diverse and innovative institutional framework [2][3]. - The 11 pilot provinces and cities are expected to attract approximately 293.2 billion yuan in foreign investment in 2024, accounting for about half of the national total in the service sector [2]. - The plan emphasizes the need for a market-oriented, legal, and international business environment to facilitate foreign investment [2][4]. Group 2: New Pilot Cities and Tasks - The new pilot cities, including Dalian, Ningbo, and Xiamen, have been selected based on their strong service industry foundations and regional significance [3][4]. - The plan includes 155 pilot tasks that focus on innovation and adapting to local conditions, aiming to accelerate implementation and enhance the effectiveness of the pilot programs [5][6]. Group 3: Key Areas of Focus - The plan highlights the importance of aligning with high-standard international trade rules, such as the CPTPP and DEPA, to enhance China's commitment to opening up [4]. - Specific measures in the telecommunications sector include removing foreign ownership limits on certain services and promoting new business models [9]. - In the healthcare sector, initiatives include allowing foreign doctors to open clinics and optimizing the import inspection process for rare disease medications [8][9]. Group 4: Financial Sector Initiatives - The financial sector will see support for international factoring business and the development of cross-border fund operations in RMB [10]. - The plan aims to attract foreign insurance companies and funds to invest in green projects, enhancing the financial services industry's quality [10].

Group 1 - The economic transformation has entered a "new stage" since 2022, characterized by a downward trend in the contribution of traditional sectors like real estate to the economy, leading to a divergence in economic indicators and a "two extremes" situation in industries [2][8][25] - The pressure in this new stage is increasingly focused on terminal demand, resulting in a weaker CPI while PPI remains under pressure, with overcapacity shifting towards downstream sectors [2][14] - The traditional policy framework's effectiveness is declining, necessitating a comprehensive "policy innovation" to adapt to the new economic landscape, which began in late September 2024 [2][36] Group 2 - The external shocks, particularly during the tariff phases, have accelerated domestic industrial upgrades, with significant shifts observed in industries like automotive and electronics [3][66] - During the Tariff 1.0 phase, industries transitioned from "import assembly" to self-sufficiency in core components, leading to a decrease in low-value-added exports and an increase in high-value-added exports [3][66][77] - Tariff 2.0 has primarily impacted low-value-added consumer goods, while high-value-added sectors have shown resilience, indicating that the tariff impacts align with the direction of industrial transformation [3][99][107] Group 3 - The new policy framework emphasizes high-quality development, focusing on high-level openness, "dual circulation," and sustainable growth, with a shift from investment-driven to people-centered approaches [4][122] - The "anti-involution" initiative is seen as a structural reform on the supply side, gaining increasing attention from both government and industry since late 2024 [4][36] - The service sector is identified as a critical area for absorbing structural employment pressures during the transformation process, with significant support needed to address supply shortages [5][54]

Core Insights - China's information and communication industry has established a globally leading and largest-scale network, with 5G applications integrated into 86 out of 97 categories of the national economy, and the industrial internet covering all 41 industrial categories, effectively promoting the deep integration of the real economy and the digital economy [1] Group 1: Industry Growth and Infrastructure - The telecommunications business revenue reached 598.5 billion yuan in the first four months of this year, showing a slight recovery in growth [1] - As of the end of April, the total number of 5G base stations reached 4.439 million, accounting for 34.9% of mobile base stations, with 90% of administrative villages having access to 5G [2] - The number of 5G mobile phone users reached 1.081 billion, with a net increase of 66.87 million users compared to the end of last year, representing nearly 60% of mobile phone users [3] Group 2: Technological Innovation and Applications - The industry has launched the "5G Scale Application 'Sail' Action Upgrade Plan" to expand the application of 5G networks [3] - The global share of essential patents for 5G standards exceeds 42%, indicating the industry's technological strength [3] - The construction of the computing power internet has begun, enhancing the capabilities of the existing internet infrastructure to meet the demands of computing power applications [5][6] Group 3: International Cooperation and Investment - The Ministry of Industry and Information Technology has initiated pilot projects to expand foreign investment in value-added telecommunications services, with over 2,400 foreign-invested telecommunications companies established in China, a 26.5% increase from the previous year [4] - The government emphasizes the importance of meeting comprehensive innovation needs and accelerating the development of 5G-A and 6G technologies [4] Group 4: Service Enhancement and Social Impact - The integration of artificial intelligence in agriculture has significantly improved breeding efficiency, showcasing the application of new technologies in traditional industries [8] - The industry aims to enhance service capabilities and levels, focusing on digital transformation to bridge the digital divide and improve the quality of digital life for the public [10]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - China is in a marginal de - leveraging process, with the government aiming to stabilize the macro - leverage ratio. The fiscal policy is front - loaded, and the monetary policy is generally neutral. The stock - bond ratio is trending towards bonds, and the equity style is trending towards value. The report recommends a portfolio of the dividend index (40% position), the Shanghai Composite 50 Index (40% position), and the 30 - year Treasury Bond ETF (20% position) [6][15][21] - The performance of the US economy is closely watched, especially whether and when the quarterly real GDP growth rate will fall below the trend level. The current situation in the US is similar to that during the burst of the Internet bubble in 2001 [6] - In the de - leveraging cycle, the stock - bond ratio favors equities to a limited extent, and the value style is more likely to outperform. A + H dividend - type stocks with characteristics of non - expansion, good profitability, and survival are recommended [7][15][63] 3. Summary by Relevant Catalogs 3.1 National Balance Sheet Analysis 3.1.1 Liability Side - In April 2025, the liability growth rate of the real - sector was 9.0%, up from 8.7% previously, in line with expectations. It is expected to stabilize around 9.0% in May and then decline. By the end of the year, it is projected to drop to around 8% [1][16] - Last week, the financial sector's capital situation eased marginally, but a monthly high may occur. The government's debt (including national and local bonds) increased by 219.5 billion yuan last week (higher than the planned 128.3 billion yuan). The planned increase this week is 176.2 billion yuan. The government's liability growth rate was 14.8% at the end of April 2025, up from 13.9% previously, and is expected to stabilize around 14.8% in May and then decline to around 12.5% by the end of the year [2][17] 3.1.2 Monetary Policy - Last week, the capital trading volume increased week - on - week, the capital price decreased, and the term spread widened. After excluding seasonal effects, the capital situation eased marginally. The one - year Treasury bond yield trended downwards, closing at 1.41% at the weekend. The estimated lower bound of the one - year Treasury bond yield is about 1.3%. The term spread between the ten - year and one - year Treasury bonds widened to 24 basis points. The estimated central level of the term spread is adjusted downwards to 40 basis points, corresponding to a lower bound of the ten - year Treasury bond yield of about 1.7%. The central level of the spread between the thirty - year and ten - year Treasury bonds is estimated at 20 basis points, corresponding to a lower bound of the thirty - year Treasury bond yield of about 1.9% [2][17] 3.1.3 Asset Side - In April, the physical - quantity data weakened compared to March. The 2025 government work report set the annual real economic growth target at around 5%, and the nominal economic growth target at around 4.9% when calculated backwards from the deficit and deficit ratio. It remains to be seen whether 5% will become the central target for China's nominal economic growth in the next 1 - 2 years [3][18] 3.2 Stock - Bond Ratio and Stock - Bond Style - Last week, the capital situation eased marginally, resulting in a bull market for both stocks and bonds, with the growth style outperforming expectations. Bond yields declined across the board, and the stock - bond ratio shifted towards stocks. The ten - year Treasury bond yield dropped by 2 basis points to 1.65%, the one - year Treasury bond yield dropped by 5 basis points to 1.41%, and the thirty - year Treasury bond yield dropped by 2 basis points to 1.88% [5][20] - In the de - leveraging cycle, the stock - bond ratio trends towards bonds, and the equity style trends towards value. Currently, long - term bonds have a slightly better cost - performance than value - type equity assets. If value - type equity assets continue to fall, a good entry opportunity may emerge [6][21] 3.3 Industry Recommendation 3.3.1 Industry Performance Review - This week, the A - share market rose with increased volume. The Shanghai Composite Index rose 1.13%, the Shenzhen Component Index rose 1.42%, and the ChiNext Index rose 2.32%. Among the Shenwan primary industries, communications, non - ferrous metals, electronics, composites, and computers had the largest increases, while household appliances, food and beverages, transportation, coal, and steel had the largest declines [27] 3.3.2 Industry Crowding and Trading Volume - As of June 6, the top five industries in terms of crowding were electronics, computers, pharmaceutical biology, machinery and equipment, and power equipment, with crowding levels of 10.4%, 9.8%, 7.9%, 7.2%, and 7% respectively. The bottom five were composites, steel, coal, petroleum and petrochemicals, and beauty care, with levels of 0.2%, 0.5%, 0.5%, 0.6%, and 0.7% respectively [30] - This week, the top five industries with increased crowding were communications, non - ferrous metals, electronics, basic chemicals, and computers, with increases of 2.1%, 1.8%, 1.4%, 1%, and 0.4% respectively. The bottom five with decreased crowding were pharmaceutical biology, automobiles, machinery and equipment, environmental protection, and banks, with changes of - 1.9%, - 1.7%, - 0.9%, - 0.7%, and - 0.6% respectively [30] - The average daily trading volume of the entire A - share market this week was 1.2 trillion yuan, up from 1.09 trillion yuan last week. The industries with the highest year - on - year growth in trading volume were social services, non - bank finance, building materials, media, and non - ferrous metals, while composites, commercial retail, petroleum and petrochemicals, basic chemicals, and machinery and equipment had the smallest increases [31] 3.3.3 Industry Valuation and Earnings - This week, among the Shenwan primary industries, communications, electronics, non - ferrous metals, composites, and computers had the largest increases in PE(TTM), while household appliances, food and beverages, transportation, coal, and steel had the largest declines [35] - As of June 6, 2025, industries with high 2024 full - year earnings forecasts and relatively low current valuations compared to history include insurance, petroleum and petrochemicals, transportation, pharmaceutical biology, and consumer electronics [36] 3.3.4 Industry Prosperity - In terms of external demand, there were mixed trends. The global manufacturing PMI in May fell from 49.8 to 49.6, while most of the disclosed PMI of major economies in May rebounded. The CCFI index rose 3.34% week - on - week. South Korea's export growth rate rose to 3.7% in April and then dropped to - 1.3% in May. Vietnam's export growth rate slightly decreased from 21% in April to 20.7% in May [40] - In terms of domestic demand, the second - hand housing price remained flat last week, and quantity indicators showed mixed trends. The highway truck traffic volume declined. The capacity utilization rate of ten industries in March 2025 rose to a relatively high level in history, declined significantly in April, and rebounded slightly in May. Automobile trading volume was at a relatively high level compared to the same period in history, new - home trading volume remained at a historical low, and second - hand housing trading volume declined significantly compared to the historical seasonality [40] 3.3.5 Public Fund Market Review - In the first week of June (June 3 - 6), most active public equity funds outperformed the CSI 300. The 10%, 20%, 30%, and 50% weekly returns were 3.6%, 2.8%, 2.3%, and 1.5% respectively, while the CSI 300 rose 0.9% [57] - As of June 6, the net asset value of active public equity funds was estimated to be 3.46 trillion yuan, slightly down from 3.66 trillion yuan in Q4 2024 [57] 3.3.6 Industry Recommendation - In the de - leveraging cycle, the stock - bond ratio favors equities to a limited extent, and the value style is more likely to outperform. The recommended A + H dividend portfolio includes 20 A + H stocks, and the A - share portfolio includes 20 A - shares, mainly concentrated in industries such as banking, telecommunications, petroleum and petrochemicals, and transportation [7][63]