Group 1: Consumer Price Index (CPI) Analysis - In May 2025, Guangdong's Consumer Price Index (CPI) decreased by 0.4% year-on-year, maintaining the same decline as the previous month, and a month-on-month decrease of 0.1% compared to a 0.3% increase in the previous month, resulting in a fluctuation of 0.4 percentage points [1] - The average CPI for January to May 2025 was down 0.4% compared to the same period last year [1] - Factors influencing the CPI included a 4.0% increase in fresh fruit prices due to the arrival of lychee season and increased demand from warmer weather, and a 2.3% increase in aquatic product prices due to reduced market supply during the fishing ban and increased demand during holidays, collectively contributing approximately 0.15 percentage points to the CPI increase [1] Group 2: Producer Price Index (PPI) Analysis - In May 2025, Guangdong's Producer Price Index (PPI) decreased by 1.8% year-on-year, with the decline widening by 0.4 percentage points compared to the previous month, and a month-on-month decrease of 0.2% [1] - The average PPI for January to May 2025 was down 1.3% year-on-year [1] - The Industrial Producer Purchase Price Index (IPI) also saw a year-on-year decrease of 3.1% and a month-on-month decrease of 0.4% [1] - The decline in PPI was influenced by falling international crude oil prices, overcapacity in certain industries, and insufficient downstream market demand [1][2] - In the PPI survey of 38 major industries, 6 industries saw price increases, 26 experienced price declines, and 6 remained stable, indicating an industry price increase rate of 15.8% [2] - Specific industries affected included a 3.6% decrease in oil and gas extraction prices, a 3.0% decrease in petroleum, coal, and other fuel processing prices, and a 4.1% decrease in black metal mining prices due to reduced demand in the construction and real estate sectors [2]

Core Viewpoint - The article discusses the inflation trends in May, highlighting a slight decrease in CPI and a more significant drop in PPI, with implications for future economic conditions and policy responses [1][10]. Group 1: CPI Inflation - May CPI inflation was reported at -0.1% year-on-year, matching the previous value and exceeding market expectations of -0.2% [1][2]. - Energy prices have significantly dragged down CPI inflation, while core CPI showed slight upward support [2][6]. - Food prices experienced a mild decline, with a 0.2% drop month-on-month, which is less than the average decline of 1.4% over the past five years [5]. - Core CPI inflation rose slightly by 0.1 percentage points to 0.6% year-on-year, although month-on-month momentum has weakened [6][7]. - Service prices remained resilient, with travel prices increasing by 0.8% month-on-month, surpassing the five-year average of 0.2% [6]. Group 2: PPI Inflation - May PPI inflation was reported at -3.3% year-on-year, a decrease of 0.6 percentage points from the previous month, and -0.4% month-on-month, which is weaker than the historical average since 2017 [10][12]. - The decline in PPI is attributed to weak oil prices affecting the entire industrial chain and a slowdown in the construction sector due to adverse weather conditions [10][12]. - Despite the overall decline, there are signs of recovery in prices related to exports and new growth sectors, with textile prices narrowing their decline and some electronic prices turning positive [12][15]. Group 3: Forward Outlook - Looking ahead, energy prices are expected to remain weak, with Brent crude oil projected to fluctuate between $60 and $70 [9]. - The overall pace of CPI recovery is anticipated to be slow, influenced by policies aimed at boosting domestic demand and consumption [16]. - For the second quarter, CPI inflation is expected to stabilize around 0%, while PPI inflation may drop to approximately -3.0% [16].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - In May, the month - on - month decline of PPI remained the same as in April, and the year - on - year decline of CPI also stayed unchanged. However, after excluding the impact of supply factors such as oil prices and food, marginal new structural changes emerged [1][9]. - In terms of PPI, the drag effect based on trade eased after excluding the 0.2 - percentage - point drag of oil prices. The PPI of export - oriented industries improved marginally, and the price of PPI durable consumer goods manufacturing industry rebounded [1][9]. - In terms of CPI, food performed better than the seasonal level, but the upward momentum of core consumer goods prices continued to weaken. Attention should be paid to the launch of a new round of consumption - promotion policies [2][13]. 3. Summary According to the Directory 3.1 May Price Trend: Potential Changes Behind the "Unchanged" Trend - **PPI**: The month - on - month decline in May remained at - 0.4%. After excluding the 0.2 - percentage - point drag of oil prices, the drag effect based on trade eased. The PPI of export - oriented industries improved marginally after the progress of the China - US trade meeting in May. The price of PPI durable consumer goods manufacturing industry rebounded, with a month - on - month increase of 0.1% in May and the year - on - year decline narrowing from 3.7% in April to 3.3% [1][9][11]. - **CPI**: Food performed better than the seasonal level, but the upward momentum of core consumer goods prices continued to weaken. Food supply tightening supported prices, short - term consumption demands such as tourism and clothing continued to be released, while prices of rent, furniture, and cars linked to residents' long - term income were still falling. Core consumer goods have dragged down CPI for two consecutive months after excluding the impact of gold prices, and a new round of consumption - promotion policies may be launched [2][13]. 3.2 May CPI: Food and Tourism Perform Better than Seasonal Levels, but Month - on - Month Decline Continues Due to Oil Price Drag - **Overall Situation**: In May 2025, the listing of fresh vegetables supported the food item, tourism in non - food items performed better than the seasonal level. However, affected by oil prices, durable consumer goods, and rent, CPI declined month - on - month to - 0.2% and remained at - 0.1% year - on - year. The factors affecting CPI month - on - month change from high to low were: services (0)> livestock meat (- 0.01pct)> fresh produce (- 0.03pct)> core consumer goods (- 0.03pct)> energy (- 0.13pct) [2][16]. - **Food Item**: The month - on - month decline of the food item fell back to around - 0.2%, stronger than the seasonal level, affecting CPI to decline by about 0.04 percentage points. Beef prices rose due to reduced imports, while pork prices fell. Fresh vegetable prices decreased, while limited supplies of fresh fruits and aquatic products supported food prices [2][19]. - **Non - food Item**: The month - on - month decline of the non - food item exceeded the seasonal level, falling to - 0.2%, affecting CPI to decline by about 0.16 percentage points. Oil prices dropped, clothing was the main supporting item in core consumer goods, while furniture and car prices still had a drag. Travel - related prices in services were resilient, but rent was still weak [23][24][25]. 3.3 May PPI: Oil Price Drag Increases, Price Decline of Export Industries Narrows, and Month - on - Month Decline Remains at - 0.4% - **Overall Situation**: The month - on - month decline of PPI remained around - 0.4%, mainly dragged down by production materials, while the performance of living materials improved. In May, production material prices decreased by 0.6% (- 0.1pct), and the prices of living materials turned from negative to flat [30]. - **By Industry**: The number of industries with price declines among industrial producers was still around two - thirds. The drag factors were the crude oil industry chain, building - material - related prices, and energy prices such as coal and gas. The supporting factors were export - related industries such as automobiles and machinery, and the non - ferrous metal industry [4][31][36].

Group 1 - In May 2025, the Producer Price Index (PPI) for industrial producers decreased by 3.3% year-on-year and 0.4% month-on-month, while the purchasing price index fell by 3.6% year-on-year and 0.6% month-on-month [2] - The average PPI and purchasing prices from January to May 2025 both declined by 2.6% compared to the same period last year [2] - The decline in domestic prices is influenced by international factors, particularly the drop in international crude oil prices, which led to a 5.6% decrease in the oil and gas extraction industry and a 3.5% decrease in refined petroleum product manufacturing [2] Group 2 - The coal mining and washing industry saw a price drop of 3.0%, while coal processing prices fell by 1.1% due to seasonal demand and sufficient inventory [2] - The black metal smelting and rolling industry, along with the non-metallic mineral products industry, experienced a price decline of 1.0% due to ample supply of construction materials [2] - The year-on-year decline in PPI has widened by 0.6 percentage points compared to the previous month, but some industries are showing signs of price recovery due to improved supply-demand relationships [3] Group 3 - Consumer demand is recovering, leading to price increases in living materials, supported by policies aimed at boosting consumption [3] - The development of high-end equipment manufacturing is contributing to price increases in related industries, reflecting a trend towards high-tech product demand [3] - The transition towards high-end, intelligent, and green industries is progressing steadily, with some sectors experiencing year-on-year price increases [3]

Group 1 - The Consumer Price Index (CPI) in May decreased by 0.2% month-on-month and 0.1% year-on-year, while the core CPI, excluding food and energy, increased by 0.6% year-on-year, a rise of 0.1 percentage points from the previous month [1][2] - The Producer Price Index (PPI) fell by 0.4% month-on-month and 3.3% year-on-year, with the year-on-year decline widening by 0.6 percentage points compared to the previous month, although some sectors showed marginal price improvements [1][3] - The decline in CPI was primarily driven by a 1.7% decrease in energy prices, which accounted for approximately 70% of the total CPI decline, while food prices fell by 0.2%, less than the seasonal average decline of 1.1% [1][2] Group 2 - In May, the year-on-year decline in energy prices was 6.1%, which was the main factor affecting the CPI, contributing approximately 0.47 percentage points to the overall decline [2] - The core CPI's increase of 0.6% year-on-year was supported by rising prices in various categories, including gold jewelry (up 40.1%), household textiles (up 1.9%), and durable goods for entertainment (up 1.8%) [2] - The PPI's decline was influenced by international factors, particularly the decrease in international crude oil prices, which affected domestic oil-related industries, contributing approximately 0.23 percentage points to the PPI decline [3]

Group 1: CPI Analysis - In May, the Consumer Price Index (CPI) decreased by 0.2% month-on-month and 0.1% year-on-year, while the core CPI rose by 0.6% year-on-year, an increase of 0.1 percentage points from April [1][3] - The decline in CPI was primarily influenced by a 1.7% decrease in energy prices, which accounted for approximately 0.13 percentage points of the total CPI decline [2] - The hospitality and tourism sectors saw price increases of 4.6% and 0.8% respectively, indicating a recovery in consumer demand [2][3] Group 2: PPI Analysis - The Producer Price Index (PPI) fell by 0.4% month-on-month and 3.3% year-on-year, with the year-on-year decline widening by 0.6 percentage points compared to April [1][4] - The decrease in PPI was largely due to international factors, with significant price drops in the oil and gas extraction sector (5.6%) and refined petroleum products (3.5%) [4] - Domestic energy and raw material prices also saw a decline, particularly in the coal sector, which experienced a 3.0% drop due to seasonal demand [4][6] Group 3: Economic Outlook - The core CPI's mild recovery reflects improvements in supply and demand structures across various industries, supported by macroeconomic policies [3][6] - The overall economic resilience is expected to lead to a gradual recovery in CPI, with increased demand during the summer likely to boost service prices [3] - The PPI is anticipated to show marginal improvement, although it may take time to exit negative territory [6]

Inflation Data Summary - May CPI year-on-year decreased by 0.1%, better than the expected decline of 0.2% and consistent with the previous month[1] - Month-on-month CPI fell by 0.2%, compared to a rise of 0.1% in the previous month[1] - Core CPI excluding food and energy remained flat month-on-month, down from a 0.2% increase in the previous month[1] Energy and Commodity Prices - Energy prices significantly impacted CPI, with a 1.7% decrease in energy prices contributing approximately 0.13 percentage points to the CPI decline[1] - Brent crude oil prices fell by 5.2% month-on-month, with a cumulative decline of 18.9% from February to May[1] - Transportation fuel prices dropped by 3.7%, with a total decline of 9.2% from March to May[1] Service and Food Prices - Service prices were flat month-on-month, down from a previous increase of 0.3%, indicating weakened support for CPI[2] - Food prices decreased by 0.2%, a smaller decline compared to historical averages of -1.1% and -0.9% for the same period[3] - Fresh vegetable prices fell by 5.9%, while fresh fruit prices increased by 3.3% due to drought conditions in northern regions[3] Producer Price Index (PPI) Trends - PPI remained unchanged month-on-month at -0.4%, consistent with the previous two months[5] - The rolling three-month average for PPI is -0.4%, marking a seven-month low, with an annual rate of -4.7%[5] - The mining and raw materials sectors saw PPI declines of -2.5% and -0.9%, respectively, while the manufacturing sector decreased by -0.3%[5] Market Implications - The weak inflation data suggests continued pressure on industries sensitive to economic cycles, while technology sectors may perform relatively better[8] - Defensive dividend stocks are recommended for consideration, although attention should be paid to potential market disruptions from dividend-related trading in June and July[8]

Group 1 - The core objective of macroeconomic policy in the second half of the year is to promote a reasonable recovery of price levels, which will create space for fiscal measures to boost consumption and investment, as well as for further interest rate cuts by the central bank [1][2][5] - In May, the Consumer Price Index (CPI) decreased by 0.1% year-on-year, marking the fourth consecutive month of negative growth, primarily due to falling energy prices and lower food prices [1][3][4] - The Producer Price Index (PPI) saw a year-on-year decline of 3.3% in May, with the drop in production material prices contributing significantly to this decline [1][6][10] Group 2 - The core CPI, which excludes volatile food and energy prices, rose by 0.6% year-on-year in May, indicating a slight improvement in underlying price levels [1][4][5] - The decline in food prices, particularly fresh vegetables and eggs, has been a major factor in the overall CPI decrease, with fresh vegetable prices dropping by 8.3% year-on-year [3][4][6] - The implementation of policies aimed at boosting consumption, such as the trade-in program for vehicles and appliances, has provided some support to prices in certain sectors [4][5][8] Group 3 - The analysis indicates that while the PPI is expected to show marginal improvement, it is likely to remain in negative territory for some time due to external and internal pressures [8][9][10] - The demand for high-tech products is increasing, leading to price increases in sectors such as integrated circuits and aircraft manufacturing [8] - The overall economic environment remains challenging, with low inflation levels exerting pressure on corporate operations and employment [5][6]

Group 1 - In May, the national consumer price index (CPI) decreased by 0.1% year-on-year, while the producer price index (PPI) fell by 3.3% year-on-year [1][7] - The primary factor for the decline in CPI is the continuous drop in energy prices, which decreased by 6.1% year-on-year and 1.7% month-on-month [2][7] - Core CPI, excluding food and energy prices, rose by 0.6% year-on-year, indicating a stable upward trend for three consecutive months [4][8] Group 2 - Food prices experienced a slight decline, with a month-on-month decrease of 0.2%, influenced by seasonal factors and supply changes [3] - The hospitality and tourism sectors saw price increases of 4.6% and 0.8% respectively, driven by improved consumer demand and holiday activities [4] - The PPI's decline is attributed to both international factors, such as falling crude oil prices, and domestic factors, including seasonal drops in coal prices [7][8] Group 3 - The high-end equipment manufacturing sector is witnessing price increases, with significant rises in prices for integrated circuits and aircraft manufacturing [8] - The overall consumer demand is gradually recovering, supported by effective consumption-boosting policies [4][5] - The real estate market is still in recovery, affecting demand for household appliances and entertainment equipment, which saw a month-on-month price decline of 1.1% [5]

Group 1: CPI and PPI Overview - In May, the national CPI decreased by 0.1% year-on-year and 0.2% month-on-month, while the PPI fell by 3.3% year-on-year and 0.4% month-on-month [1][2] - The core CPI, excluding food and energy, increased by 0.6% year-on-year, indicating a slight improvement in domestic economic resilience [1][4] - The decline in CPI was influenced by seasonal factors and falling oil prices, while the core CPI's increase reflects a recovery in consumer demand [2][3] Group 2: Sector-Specific Price Changes - In May, food prices decreased by 0.4%, while non-food prices remained stable; consumer goods prices fell by 0.5%, and service prices rose by 0.5% [2][4] - The industrial producer prices showed a year-on-year decline of 3.3%, with significant contributions from the petroleum and coal industries, which saw price drops of 5.6% and 3% respectively [5][6] - The prices of durable consumer goods, such as gold jewelry and home textiles, increased by 40.1% and 1.9%, respectively, indicating a shift in consumer spending patterns [3][4] Group 3: Economic Outlook and Policy Recommendations - Future policies should focus on boosting consumption through active fiscal measures to stimulate domestic demand and support price recovery [2][4] - Analysts expect a moderate recovery in prices throughout the year, driven by macroeconomic policies and improvements in supply structure [6]