Summary of Conference Call Notes Industry or Company Involved - The discussion primarily revolves around the electricity generation industry and its relationship with industrial value-added growth in the context of the broader economy. Core Points and Arguments - There is a significant divergence between electricity generation growth and industrial value-added growth, attributed to differences in statistical scope, as data from small-scale enterprises (such as renewable energy and distributed photovoltaic) is not fully captured in the statistics [1][3] - Industrial electricity consumption growth is approximately 3%, while the growth of industrial value-added for large-scale enterprises is around 6%, indicating a disparity in development between large and small enterprises [1][4] - The domestic economic growth target of 5% is likely achievable, but tail risks remain, particularly for low-income residents, small enterprises, and local governments with heavy debt burdens [1][5] - The divergence in growth rates is particularly pronounced in the electrical machinery, chemical, non-metallic minerals, and general equipment sectors, where capacity utilization rates are at historical lows [1][6] - In 2025, risk warnings in various industries, especially electrical machinery, chemicals, non-metallic minerals, and communication equipment, are higher than in 2024, indicating significant changes on the supply side with little improvement on the demand side [1][7] - The phenomenon of divergence is expected to continue, with a proposed solution being to strengthen supply-side clearing efforts and improve capacity utilization rates [1][8] Other Important but Possibly Overlooked Content - The rapid growth of small-scale enterprises in electricity generation is not reflected in overall statistics, leading to a misleading picture of the industry [3][4] - The performance of large enterprises is significantly better than that of small and medium-sized enterprises, contributing to the observed divergence in data [4][6] - The need for policy support to mitigate risks faced by low-income residents and small enterprises is emphasized, highlighting the importance of addressing these tail risks for overall economic stability [5]

今年以来，发电量增速持续低于工业增加值增速，基本可以排除短期波动的可能。那么，背后的原因是什么？ 趋势还会持续吗？ 指标的口径非常关键。 第一个口径差异 来自于，我们所使用的发电量是指规模以上工业发电企业的发电量， 不是全口径的发电量，那么，规模以下工业发电企业的发电量大幅增加可能会导致发电量增速下降。但 实际 上规模以下小工业发电企业的发电量在全部用电量中的占比仍不到 8% ，因此影响有限 。 第二个口径差异 来 自于，发电量数据虽然不是全口径的，但是发电企业生产的电力资源在使用上是不作区分的，而与之相对比的 增加值增速却是规模以上的工业增加值增速。 一方面， 规上工业企业数量增速明显放缓，但是规上工业增加 值增速上行，或说明 大企业的景气尚佳 ，而当前已不满足营收标准的企业对去年的工增增速带来拖累，年初 大小型企业制造业 PMI 表现分化也为景气分化提供了一定支撑。 另一方面， 部 分用电量增速下降的行业 ， 例如公共服务、批发零售和住宿餐饮等非工业行业， 并不包含在工业增加值的范畴之内 。 哪些工业行业的背离表现得更明显呢？ 电气机械、化工、非金属矿和通用设备等 行业中用电量和工增增速 的背离非常显著。 ...

Core Viewpoint - The article discusses the weak performance of CPI and PPI in May 2025, highlighting a deflationary trend and the factors contributing to this situation, including energy and food prices, as well as the broader economic implications for GDP growth and investment opportunities [1][4][11]. CPI Analysis - In May 2025, the CPI year-on-year was -0.1%, unchanged from the previous value, while the PPI year-on-year was -3.3%, lower than the previous -2.7% [1][4]. - The simulated deflation index, based on CPI and PPI weights of 60% and 40%, was -1.38%, the lowest in the past 16 months [1][4]. - The decline in CPI is attributed to a 1.7% month-on-month decrease in energy prices, which negatively impacted CPI by approximately 0.13 percentage points, primarily due to the transmission of commodity price declines influenced by tariffs [6][7]. - Food prices also saw a month-on-month decrease of 0.2%, contributing to a 0.04 percentage point drag on CPI, with weak demand in the restaurant sector being a significant factor [6][7]. PPI Analysis - The PPI decline was exacerbated by two main factors: a decrease in global pricing raw materials and weak domestic construction product pricing [8][9]. - The oil extraction, processing, and chemical industries experienced expanded declines due to falling oil prices, with year-on-year price drops of -17.3% for oil extraction and -14.7% for oil processing [8][9]. - New industry products made a slight positive contribution to PPI, with some sectors like automotive and electronics showing a slight narrowing in their year-on-year decline [8][9]. Future Price Trends - Looking ahead, there is a potential for a slight narrowing of PPI declines in June due to recent rebounds in oil and copper prices, indicating a possible improvement in global pricing factors [10]. - However, to significantly alter the low PPI situation, prices in the construction and emerging industries need to exit the negative growth range, which requires effective local government investment strategies [10]. Economic Outlook - The macroeconomic environment since the "924" policy has shown signs of stabilization, with actual GDP growth expected to remain above 5% in the second quarter of 2025, despite pressures from exports to the U.S. [11]. - The current economic challenges are primarily related to low prices and nominal GDP, leading to high real interest rates and a heavier debt burden, which could affect investment and consumption opportunities [11].

Group 1 - The core viewpoint of the article highlights the current economic situation, focusing on the CPI and PPI data for March, indicating a slight improvement in CPI but a continued decline in PPI, suggesting ongoing deflationary pressures in the economy [1][4][5] - In March, the CPI year-on-year was -0.1%, an improvement from -0.7% in the previous month, while the PPI year-on-year was -2.5%, down from -2.2% [1][4] - The simulated deflation index, based on the weighted contributions of CPI and PPI, is approximately -1.06%, indicating a persistent low price level since October of the previous year [1][4] Group 2 - Energy and food prices are identified as the main contributors to the downward trend in inflation, with core CPI showing zero growth month-on-month in March [1][2] - Pork prices have been in a downward adjustment cycle since late January, and fuel prices for transportation have also decreased significantly [1][6] - Positive signals in CPI include a 2.8% month-on-month increase in household appliance prices, stabilization in the rental market, and seasonal increases in alcohol prices post-holiday [1][6][7] Group 3 - The PPI in March showed a month-on-month decline of 0.4%, with oil and coal prices being the primary downward forces [2][7] - The article notes that the impact of global trade tariffs is expected to continue affecting commodity prices, which will have implications for future CPI and PPI [2][8] - The government has emphasized the importance of price stability, with recent policies aimed at strengthening price governance mechanisms [3][9] Group 4 - Historical experience suggests that in response to external shocks like tariffs, policies typically focus first on stabilizing liquidity before addressing the fundamental economic conditions [10] - The central bank has indicated readiness to provide sufficient re-lending support to stabilize liquidity, which is seen as a "expectation anchor" for the market [10] - Key areas of focus for economic resilience include consumer spending, real estate investment, and maintaining supply-demand balance and profit margins in the corporate sector [10]

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]