Consumption - Automotive consumption remains high, with wholesale and retail sales showing a slight decline due to seasonal factors, but the four-week average year-on-year growth rate remains stable[4] - Service consumption is relatively flat, with urban congestion indices decreasing and subway passenger flow rebounding, although overall numbers are slightly down year-on-year[4] Investment - Infrastructure investment is accelerating, with special bond issuance reaching CNY 1.48 trillion as of May 18, 2025, and CNY 285.2 billion issued in the first 18 days of May[11] - Real estate transactions in 30 cities show a seasonal rebound but year-on-year growth has dropped from 6.3% to -15.0%[14] Trade and Port Operations - Import and export activities have rebounded due to tariff adjustments, with port operations improving and the number of ships docking at ports increasing significantly[17] - Export freight rates have seen a notable increase, with Shanghai and Ningbo export rates rising by 10.0% and 6.5% respectively[17] Production - Power generation coal consumption has rebounded, indicating marginal recovery in production, with some industries showing improved operating rates[19] - The steel and petrochemical sectors have seen slight improvements in operating rates, although some areas still face year-on-year declines[20] Inventory and Prices - Most inventories have decreased, except for coal and cement, which have seen increases, with coal inventories reaching historical highs[32] - Consumer Price Index (CPI) has decreased while Producer Price Index (PPI) has increased, indicating a stabilization in industrial product prices overall[34] Currency and Liquidity - The Chinese Yuan has appreciated to 7.20 against the US dollar, with the dollar index rising by 56 basis points due to favorable US economic data[39] - Funding rates have slightly increased, with R007 and DR007 rising by 5 and 10 basis points respectively[36]

Economic Growth Forecast - The GDP growth rate for Q2 is expected to be around 5.2%, with the first half of the year projected at approximately 5.3%[2] - Monthly GDP growth rates for April and May are estimated at 5.4% and 5.3%, respectively, aligning with demand-side predictions[2] Export and Trade Dynamics - Exports are anticipated to achieve a growth rate of 3%-5% in Q2, driven by "grabbing exports" and "grabbing trans-exports" despite high base effects[2][23] - The easing of trade frictions is expected to enhance export performance, making the real economic fundamentals more noteworthy in Q2[4] Consumer Spending Insights - Retail sales growth for the first four months of the year is at 4.7%, with "trade-in" consumption categories showing a 7.2% increase, contributing approximately 1.1 percentage points to overall retail growth[5] - The impact of "trade-in" policies is projected to support retail sales growth at around 4.5%-5% in Q2, with final consumption growth estimated at about 4.3%[20] Real Estate Market Trends - Real estate sales are facing downward pressure as the effects of the 924 policy diminish, with a 1-4 month cumulative decline in new housing sales area of -2.8% compared to -17.1% in the previous year[14] - The second-hand housing market showed a significant increase of 21.1% in transaction area from October 2024 to March 2025, but recent data indicates a cooling trend[14] Investment and Policy Implications - Fixed asset investment growth is expected to stabilize around 4%, supported by equipment updates and infrastructure projects, with manufacturing and infrastructure investment showing year-on-year increases of 8.8% and 10.9% respectively[23] - The overall economic stability in the first half of the year provides ample room for policy responses to external uncertainties, with sufficient flexibility for incremental policy adjustments in Q3[2][20]

Economic Overview - The macroeconomic environment in April 2025 shows a steady improvement, with industrial production growing robustly and manufacturing investment increasing by 8.8% in the first four months, effectively offsetting a decline in real estate investment, which fell by 10.3%[5] - Social retail sales for January to April increased by 4.7% year-on-year, supported by the effects of trade and tourism[5] - Industrial added value rose by 6.4% year-on-year in the first four months, with strong performance in equipment manufacturing[5] Investment Insights - Fixed asset investment (excluding rural households) grew by 4.0% year-on-year in April, with manufacturing investment at 8.8% and infrastructure investment at 5.8%[22] - The decline in real estate investment is significant, with a cumulative decrease of 10.3% in the first four months, indicating ongoing challenges in the sector[22] Policy and Structural Adjustments - The current low inflation environment necessitates a focus on price recovery, with policies aimed at boosting domestic demand and supporting real estate and consumption sectors[5] - The structural shift towards "manufacturing as a nation" continues to strengthen economic resilience, countering the negative impacts of real estate and consumption on growth[5] Future Outlook - The economy is entering a phase of gradual recovery, with potential turning points in negative narratives observed, suggesting a more optimistic outlook for RMB assets[5] - Risks include potential policy effectiveness falling short of expectations, further declines in real estate, and slower-than-expected implementation of new policies[6]

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - In the production industry, attention should be paid to the implementation of the "two new" policies. Shanghai has introduced a special action plan to boost consumption, including measures to promote the replacement of old consumer goods, support automobile and home appliance consumption, and offer subsidies for purchasing new digital products [1]. - In the service industry, attention should be paid to the export - related policy restrictions in the logistics industry. The EU plans to charge fees on small parcels entering the EU, most of which are from China [1]. - The prices of some upstream products are fluctuating. Egg prices are oscillating, aluminum prices are rising, while glass and rubber prices are falling in the short - term [2]. - In the mid - stream, the PTA and asphalt开工率 have increased, while the PX开工率 has decreased [3]. - In the downstream, the sales of commercial housing in first - and second - tier cities have seasonally declined to a near - three - year low, and the number of domestic flights has decreased cyclically [4]. - The credit spreads of the pharmaceutical and chemical industries have slightly declined recently [5]. 3. Summary by Related Catalogs 3.1 Upstream - **Agriculture**: Egg prices have been oscillating recently [2]. - **Non - ferrous metals**: Aluminum prices have been rising continuously [2]. - **Black metals**: Glass and rubber prices have declined in the short - term [2]. 3.2 Mid - stream - **Chemical industry**: The PTA开工率 has increased, while the PX开工率 has decreased recently [3]. - **Infrastructure**: The asphalt开工率 has been increasing continuously recently [3]. 3.3 Downstream - **Real estate**: The sales of commercial housing in first - and second - tier cities have seasonally declined and are at a near - three - year low [4]. - **Service industry**: The number of domestic flights has decreased cyclically [4]. 3.4 Market Pricing - The credit spreads of the pharmaceutical and chemical industries have slightly declined recently [5]. 3.5 Industry Credit Spreads - The credit spreads of multiple industries such as agriculture, forestry, animal husbandry and fishery, mining, and chemical industry have changed. For example, the credit spread of the agriculture, forestry, animal husbandry and fishery industry has decreased from 78.86 last week to 63.16 this week [52]. 3.6 Key Industry Price Indicators - The prices of various products in different industries have changed. For example, the spot price of PTA has increased by 1.48% to 4986.3 yuan/ton on May 21, while the spot price of WTI crude oil has decreased by 2.58% to 62.0 dollars/barrel [53].

Production - In April, the industrial added value year-on-year growth rate was 6.1%, lower than the previous value but higher than the consensus expectation of 5.2%[11] - The export delivery value year-on-year growth rate was 0.9%, a significant decrease of 6.8 percentage points from the previous month[11] - Cumulative industrial added value growth for April was 6.4%, exceeding the full-year growth rate for 2024 by 0.6 percentage points[3] Investment - Fixed asset investment growth rate in April was 4.0%, down 0.2 percentage points from the first quarter but still 0.8 percentage points higher than the full-year growth for 2024[19] - Broad infrastructure cumulative growth rate was 10.9%, slightly lower than the previous month but still strong, with a year-on-year growth of 26.0% in electric heating and water projects[4] - Real estate investment growth rate in April was -11.3%, with a decline of 1.3 percentage points from the previous month, indicating a weakening trend in the sector[21] Consumption - In April, the year-on-year growth rate of social retail sales was 5.1%, down 0.8 percentage points from the previous month, reflecting a decrease in consumer willingness due to external uncertainties[35] - Essential consumption grew at a rate of 14.8%, while optional consumption saw a slight decline, with automotive consumption growth at only 0.7%[35] - Jewelry consumption surged by 19.3%, driven by gold price fluctuations, while home improvement materials benefited from the renovation season with a growth rate of 9.7%[35] Outlook - External demand may recover as the U.S. reduces tariffs on Chinese goods from 145% to 30%, potentially boosting production confidence[7] - Domestic demand is expected to remain stable, supported by recent monetary policy easing measures such as interest rate cuts and increased issuance of special bonds[7]

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoint of the Report The report presents an overview of the mid - view events, industry trends, and market pricing in April and May 2025, covering production, service, upstream, mid - stream, downstream industries, and credit spreads [1][2][3][4][5]. 3. Summary by Related Catalogs 3.1 Mid - view Events - **Production Industry**: In April, the total social electricity consumption was 772.1 billion kWh, a year - on - year increase of 4.7%. From January to April, the cumulative total social electricity consumption was 3156.6 billion kWh, a year - on - year increase of 3.1%. The power consumption of the primary, secondary, tertiary industries and urban and rural residents' living all increased year - on - year [1]. - **Service Industry**: On May 20, 2025, the 1 - year LPR was 3.00% and the 5 - year LPR was 3.50%, both down 10 basis points from the previous period [1]. 3.2 Industry Overview - **Upstream**: Egg prices decreased year - on - year, and glass prices dropped in the short term [2]. - **Mid - stream**: The PTA operating rate rebounded, while the PX operating rate declined recently. The asphalt operating rate in infrastructure has been rising [3]. - **Downstream**: The sales of commercial housing in first - and second - tier cities decreased seasonally, reaching a near - three - year low. The number of domestic flights decreased cyclically [4]. 3.3 Market Pricing - Bank credit spreads rebounded, while credit spreads in other industries declined [5]. - The table shows the credit spreads of various industries from last year to this week, with most industries showing a downward trend in credit spreads this week compared to last week [47]. 3.4 Key Industry Price Indicators - The table presents the price indicators of multiple industries, including agriculture, non - ferrous metals, energy, chemicals, and real estate. Most prices have small year - on - year changes, with some increasing and some decreasing [48].

Group 1 - CATL, the world's largest power battery supplier, is going public in Hong Kong, marking a new chapter in its international expansion narrative [2] - The company is focusing on establishing a strong presence in Europe, which is seen as a critical market for its growth strategy [3] Group 2 - Chinese electric vehicle manufacturers are making strides in Brazil, indicating a potential comfortable zone for them in the global market [4] - The recent surge in overseas orders and production capacity expansion by A-share companies highlights a trend towards international market development, particularly in energy infrastructure and high-end manufacturing [7] Group 3 - Alibaba International Station is launching a major promotional event to capitalize on a temporary reduction in tariffs for exports to the U.S., aiming to assist small and medium-sized foreign trade enterprises [8] - The logistics company Cainiao reported an 80% month-on-month increase in package volume to Brazil, reflecting growing cross-border e-commerce activity [8] Group 4 - Xingji Meizu Group has successfully increased its overseas sales proportion to over 20% within three months of launching its global strategy, with plans to reach 50% in the future [9] - The Saudi Public Investment Fund has opened an office in Paris to enhance its global expansion efforts, having invested $84.7 billion in Europe from 2017 to 2024 [9]

Economic Overview - In April, the industrial added value for large-scale enterprises increased by 6.1% year-on-year, exceeding market expectations[2] - The service industry production index also showed positive growth, rising by 6.0% year-on-year in April[2] Consumer Spending - The total retail sales of consumer goods grew by 5.1% year-on-year in April, down from 5.9% in the previous month, indicating a slight slowdown in consumer spending[3] - Major categories like home appliances and cultural office supplies saw double-digit growth, contributing significantly to retail sales performance[3][20] Investment Trends - Fixed asset investment (excluding rural households) grew by 4.0% year-on-year from January to April, slightly below market expectations[4] - Infrastructure investment increased by 5.8%, while manufacturing investment rose by 8.8%, but real estate development investment fell by 10.3%[4] Employment Situation - The urban surveyed unemployment rate in April was 5.1%, a decrease of 0.2 percentage points from the previous month, reflecting stable employment conditions[5] Policy Implications - The monetary policy is expected to remain accommodative, with potential for a 50 basis points reserve requirement ratio cut and a 20 basis points interest rate reduction[1] - The government is focusing on implementing more proactive fiscal policies to support economic recovery, particularly in infrastructure and manufacturing sectors[47]

Group 1 - In April, China's overall export growth slowed to 8.1%, with industrial export delivery value showing a nominal growth of 0.9%, down from 7.7% in March [1] - Manufacturing investment growth for January to April was 8.8%, a decrease of 0.3 percentage points from the first quarter, marking the lowest level of the year [1] - The real estate market showed signs of cooling, with some residents opting to wait, leading to declines in housing prices, sales, construction, and funding sources [1] Group 2 - The service sector demonstrated resilience against external shocks, with domestic travel during the Qingming Festival increasing by 6.3% in terms of visitor numbers and 6.7% in total spending [2] - The service production index in April grew by 6.0%, marking the second-highest monthly growth rate of the year [2] - Infrastructure investment from January to April increased by 5.8%, remaining steady compared to the first quarter, supported by easing local government debt issues and proactive fiscal policies [2] Group 3 - Despite external shocks, China's economic foundation remains stable, with strong resilience and potential, supported by coordinated macro policies [3] - A recent high-level economic meeting between China and the U.S. resulted in significant tariff reductions, with the U.S. canceling 91% of additional tariffs and China reciprocating [3] - Following the announcement, global risk aversion decreased, leading to a drop in gold prices and an increase in stock markets, with major institutions raising their growth forecasts for China's economy [3] Group 4 - Recent financial policies announced by regulatory authorities include a 0.5 percentage point reduction in reserve requirements and a 0.1 percentage point cut in policy interest rates [4] - The government emphasized strengthening domestic circulation to counter uncertainties in international circulation, aiming for enhanced economic resilience [4] - As these policies are implemented, the economic resilience of China is expected to further strengthen [4]

Summary of Key Points from Conference Call Records Industry or Company Involved - **Construction Industry**: Focus on Sichuan Road and Bridge, China Chemical, Honglu Steel Structure - **Building Materials Industry**: Emphasis on consumer building materials and specific companies - **Environmental Industry**: Highlighting water and waste incineration sectors - **Pork Industry**: Analysis of pig prices and leading companies - **Agriculture Sector**: Focus on Haida Group - **Banking Sector**: Analysis of Ningbo Bank - **Media Sector**: Overview of the media industry and specific companies - **Steel Industry**: Insights on major steel companies - **Sportswear Industry**: Analysis of Anta Sports - **Liquor Industry**: Overview of the liquor market and key players Core Points and Arguments Construction Industry - **Sichuan Road and Bridge**: Expected to benefit from the Chengdu-Chongqing economic circle strategy, with a projected dividend yield of 6.2% in 2025 and a 25% upside potential in market value [1][3][4] - **China Chemical**: Strong overseas order growth, particularly benefiting from Xinjiang coal chemical construction, with a projected order volume of 400-500 billion [1][3][4] - **Honglu Steel Structure**: Anticipated 30%+ growth in performance due to improved export expectations and smart production efficiencies [1][4] Building Materials Industry - **Consumer Building Materials**: 2025 is expected to be a bottom year, with 2026 as a turning point due to resilient second-hand housing market demand [1][6][7][8] - **Key Companies**: Focus on Beixin Building Materials and Yilong Co., with projected growth rates of over 30% [1][9] Environmental Industry - **Water and Waste Incineration**: High dividend yield sectors, with water pricing reforms expected to enhance profitability [1][10][11][12] - **Specific Companies**: Hongcheng Environment and Hanlan Environment recommended for their stable growth and high dividend rates [1][12][13] Pork Industry - **Price Trends**: Pig prices are expected to remain above the breakeven point, with leading companies like Muyuan and Wens becoming attractive investment targets [1][16] Agriculture Sector - **Haida Group**: Projected significant growth in overseas markets, with a focus on expanding production capacity [1][17] Banking Sector - **Ningbo Bank**: Strong long-term investment value with a projected PB of 0.7x and a net interest income growth of over 15% [1][18][20] Media Sector - **Overall Performance**: The media sector has shown significant recovery, with recommended stocks including Mango Super Media and Kaiying Network [1][25][26][28] Steel Industry - **Current Trends**: High capacity utilization and stable smelting profits, with recommended stocks including Baosteel, Nanjing Steel, and Hualing [1][36][40][41][42][43] Sportswear Industry - **Anta Sports**: Expected to achieve double-digit revenue growth over the next three years, with a stable dividend policy [1][32][33] Liquor Industry - **Market Recovery**: Major liquor companies like Moutai and Wuliangye are expected to maintain stable growth, with a focus on dividend policies [1][34][35] Other Important but Possibly Overlooked Content - **Market Environment**: Current market conditions are characterized by unpredictable external changes, making long-term value investment strategies more favorable [2] - **Investment Opportunities**: Emphasis on identifying undervalued stocks across various sectors, particularly in the context of changing economic conditions and consumer demand [1][31]