Macro News 1. A spokesperson for the Ministry of Foreign Affairs announced that He Lifeng, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will visit the UK from June 8 to 13 at the invitation of the UK government. During the visit, he will hold the first meeting of the China-US Economic and Trade Consultation Mechanism with the US side. 2. In response to a reporter's question about China's export control measures on medium-heavy rare earth, a spokesperson for the Ministry of Commerce stated that rare earth-related items have both military and civilian applications, and implementing export controls on them is in line with international common practices. With the development of industries such as robotics and NEVs, the demand for medium-heavy rare earth in civilian applications is growing across countries. As a responsible major country, China fully considers the reasonable demands and concerns of various countries in civilian applications and reviews export license applications for rare earth-related items in accordance with laws and regulations. It has approved a certain number of compliant applications in accordance with the law and will continue to strengthen the review of compliant applications. China is willing to further strengthen communication and dialogue on export controls with relevant countries to facilitate compliant trade. 3. According to PBOC data, China's gold reserves stood at 73.83 million ounces (approximately 2,296.37 mt) at the end of May, up 60,000 ounces (approximately 1.86 mt) MoM, marking the seventh consecutive month of gold purchases. 4. Data shows that the PBOC conducted reverse repo operations totaling 930.9 billion yuan in the open market last week, while reverse repos totaling 1,602.6 billion yuan matured in the open market last week. Consequently, the PBOC achieved a net withdrawal of 671.7 billion yuan from the open market on a full-caliber basis last week. This week, reverse repos totaling 930.9 billion yuan will mature in the PBOC's open market operations. 5. According to statistics from the State Administration of Foreign Exchange, as of the end of May 2025, China's foreign exchange reserves stood at $3,285.3 billion, up $3.6 billion from the end of April, representing an increase of 0.11%. 6. In response to a reporter's question about Minister Wang Wentao's talks with European Commission Executive Vice President Valdis Dombrovskis, responsible for Trade and Economic Security, during his visit to France, the Ministry of Commerce stated that Minister Wang Wentao and Executive Vice President Dombrovskis held professional and in-depth discussions on the EV case, making significant progress towards a proper resolution of the case. Currently, price commitment negotiations between China and the EU on the EV case have entered the final stage, but efforts from both sides are still needed. Industry News 1. On June 6, Li Lecheng, Minister of the Ministry of Industry and Information Technology, chaired a meeting of the Ministry's Leading Group for the Integration of Informatization and Industrialization. The meeting called for the implementation of the "AI + Manufacturing" initiative to accelerate the intelligent upgrading of key industries and create an "upgraded version" of smart manufacturing. By focusing on industrial intelligence, the meeting aimed to deepen the industrial application of AI and drive the innovation and iteration of industrial datasets and large industrial models. 2. The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) issued the "Administrative Measures for the Development Planning of Central State-owned Enterprises", placing greater emphasis on industrial orientation. A three-tier planning system has been established, comprising the "Overall Development Plan for Central State-owned Enterprises + Key Task Planning + Enterprise Planning". Industrial optimization and adjustment have been identified as the key focus of this three-tier planning, with the aim of channeling state capital into critical industries and key sectors vital to national security and the lifeline of the national economy, as well as into public services, emergency response capabilities, and public welfare sectors that are crucial to the national economy and people's livelihoods, and further into forward-looking and strategic emerging industries. 3. The Shanghai Stock Exchange (SSE) held a symposium on high dividends, significant returns, and enhancing the value of publicly listed firms. Relevant officials from the SSE stated that in the future, the SSE will encourage publicly listed firms to further increase dividend payouts and frequency, and effectively utilize market value management tools such as share buybacks, mergers and acquisitions, and investor communications to continuously enhance the investment value of companies. 4. Last Saturday, a Boeing 737 MAX aircraft took off from Seattle, US, and landed in Hawaii before continuing its journey to China. This aircraft, originally a new plane awaiting delivery at Boeing's Zhoushan factory, was returned to the US in April. This marks the first time since April that Boeing has resumed aircraft deliveries to China. 5. The People's Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) are actively promoting the interconnection of the two regions' fast payment systems. The project is progressing smoothly, with some services expected to be launched by mid-year. Details will be announced in due course. 6. Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), wrote that with the strengthening of national sales promotion subsidies for scrappage and renewal, the market has rebounded, significantly boosting the automotive market. Consequently, the pressure from price wars has relatively eased from January to mid-May. Due to competitive differentiation, the promotional efforts for new energy vehicles (NEVs) in May have rebounded significantly. In May 2025, the promotional discounts for NEVs dropped to a mid-to-high level of 11%, representing an increase of 1.3 percentage points compared to the same period last year and a 1.6 percentage point increase MoM. 7. Hong Kong SAR Chief Executive John Lee Ka-chiu attended and delivered a speech at the opening ceremony of the 16th Cross-Strait and Hong Kong-Macao Economic and Trade Cooperation Symposium hosted by the Chinese Manufacturers' Association of Hong Kong last Saturday. Lee stated that Hong Kong is actively developing the artificial intelligence (AI) industry and will establish a "Technology and Innovation Industry Guidance Fund" with a scale of HK$10 billion to strengthen the guidance of market funds and promote the development of strategic emerging and future industries such as AI and robotics. 8. Amidst the 618 shopping festival promotions, national subsidy policies for home appliances in multiple regions, including Jiangsu, Chongqing, Hubei, and Guangdong, have been suspended or adjusted to a limited supply model. A reporter from Cailian Press learned through on-site visits that in Jiangsu Province, consumers wishing to use national subsidies offline need to queue up at merchants to "snatch" quotas, with digital products being in high demand and quotas hard to come by. Similarly, consumers in Guangdong Province also need to compete for coupons for redemption. According to data from the Ministry of Commerce, sales from trade-in policies have exceeded 1 trillion yuan. Industry analysts believe that the main reason for the current policy adjustment is the rapid depletion of national subsidy funds, which is a temporary phenomenon, and a new round of subsidies may be reintroduced. 9. Recently, a team led by professors Peng Jun and Zhang Xiaohong from Soochow University, in collaboration with the University of New South Wales in Australia and the White Horse Lake Laboratory in Zhejiang Province, achieved a significant breakthrough in the field of single-junction perovskite solar cells. The certified steady-state efficiency of their 0.1 cm² single-junction perovskite cell reached 27.3%, while that of the 1 cm² single-junction perovskite cell reached 26.9%, both setting new world records for their respective sizes. Corporate News 1. LONGi Green Energy announced that shareholder HHLR plans to reduce its stake by no more than 0.5% of the company's shares. 2. Desay SV announced that shareholders Huichuangtou and Shenhua Investment plan to reduce their stakes by 3% and 1.45% of the company's shares, respectively. 3. Royo announced that Langzi plans to reduce its stake by no more than 3% of the company's shares. 4. LB Group announced that it plans to repurchase between 500 million and 1 billion yuan worth of the company's shares. 5. Roborock announced that it plans to issue H shares and list them on the Hong Kong Stock Exchange. 6. *ST Haiyue announced that it has been investigated by the China Securities Regulatory Commission for suspected violations of information disclosure regulations. On the same day, the company also announced that it has received a decision to delist its shares, with the expected last trading date being July 4. 7. Vanke A announced that Shenzhen Metro Group plans to provide the company with a loan of no more than 3 billion yuan. 8. Sinowealth Electronics announced that its controlling shareholder is planning changes to the company's control, and trading in its shares has been suspended. 9. BlueFocus announced that it is planning to issue H shares and list them on the main board of the Hong Kong Stock Exchange. 10. Honghui Fruits & Vegetables announced that its controlling shareholder is planning changes to the company's control, and trading in its shares has been suspended. 11. Canadian Solar announced that shareholder Yuanhe Chongyuan plans to reduce its stake by no more than 3% of the company's shares. 12. Jiechuang Intelligence announced that it plans to purchase servers worth no more than 600 million yuan for its intelligent computing cloud services. Global Markets 1. The three major U.S. stock indexes closed higher collectively last Friday, with the Dow Jones Industrial Average rising 1.05% and gaining 1.17% for the week; the Nasdaq Composite rising 1.2% and gaining 2.18% for the week; and the S&P 500 rising 1.03% and gaining 1.5% for the week. Popular tech stocks generally rose, with Google and Tesla gaining over 3%, Amazon rising over 2%, and Nvidia, Apple, and Meta each rising over 1%, while Broadcom fell 5%. Cryptocurrency and automobile manufacturing sectors led the gains. 2. Starting on the morning of the 6th, federal agencies such as the U.S. Immigration and Customs Enforcement (ICE) deployed a large number of law enforcement officers to carry out operations targeting illegal immigrants in multiple locations across Los Angeles County, California, leading to numerous street confrontations, chaos, and clashes. On the 7th local time, law enforcement officers clashed with local residents for the second consecutive day. The most intense conflict on the 7th occurred in Paramount, approximately 30 kilometers south of downtown Los Angeles, an area predominantly inhabited by Latino immigrants. Hundreds of heavily armed federal law enforcement officers confronted and clashed with several hundred protesters. 3. According to a June 7 report by The Washington Post, the US State Department notified embassies and consulates worldwide on June 6 to resume visa processing for international students planning to study at Harvard University. This decision overturned the visa rejection order issued just the day before. Currently, no relevant information has been published on the US State Department's official website. Investment Opportunities Reference 1. Intelligent driving has become a focal point of competition among major automakers, with the demand for such core hardware continuously rising. Samsung has formed partnerships with Infineon and NXP to jointly develop next-generation automotive chip solutions. This collaboration will be based on Samsung's 5-nanometer process, with a focus on optimizing the co-design of memory and processors, and aims to "enhance chip security performance and real-time processing capabilities." Samsung is reportedly developing highly integrated SoC solutions in this field to achieve better energy efficiency ratios. Everbright Securities pointed out that in the era of domain controllers, heterogeneous SoC chips with high computing power, high performance, and high integration will become the core components of intelligent driving. In addition to domain controllers, intelligent driving SoC chips are also core components of front-view integrated machines. By 2025, the penetration rate of urban NOA in car models priced below RMB 150,000 will rapidly increase, driving up the demand for medium-to-high computing power chips. Additionally, from a technological perspective of intelligent driving, by 2025, new end-to-end technologies will focus on VLA and world models, with "parking lot to parking lot" intelligent driving functions becoming a focal point of competition among major automakers, posing higher requirements for chip computing power, solution provider capabilities, and OEM self-research capabilities. Against the backdrop of automotive OEMs such as BYD and Geely implementing "intelligent driving equity" strategies, third-party SoC producers are expected to benefit first, with the trend of "chip pre-embedding" bringing high growth certainty to the industry. 2. Another low-orbit satellite successfully launched, with institutions stating that China's commercial aerospace industry has completed the "from 0 to 1" phase. Recently, China successfully launched the Internet of Satellites Low-Orbit Group 04 satellites into their predetermined orbits using a Long March 6A carrier rocket at the Taiyuan Satellite Launch Center, with the launch mission achieving complete success. Western Securities stated that the progress of the satellite Internet industry is accelerating, with potential for valuation expansion. The satellite Internet industry is a core component of new quality productive forces. From a policy perspective, policies and regulations in areas such as terminal-to-satellite direct connectivity, satellite network coordination, and access for private satellite enterprises have been successively introduced in the past two years, with a relatively complete top-level policy framework for the satellite industry now in place. From the product and user perspectives, the number of Tiantong package subscribers has exceeded 2 million, with over 16 million terminal devices in use. Moreover, Huawei's public testing of satellite internet is expected to commence in the second half of 2025 (H2), with the user base for satellite internet access in China gradually being established. Fu Chenshuo from CITIC Securities stated that with breakthroughs achieved in satellite manufacturing, rocket launches, ground equipment, and operational services, China's commercial aerospace industry has completed the "0 to 1" phase and is on the verge of entering a rapid development stage. 3. Indonesia Considering Procurement of China's J-10 Fighter Jets: Institutions Say China's Military Trade Ushers in a New Cycle According to media reports, on June 5 local time, the Indonesian military announced that the Indonesian government is conducting a feasibility assessment on the procurement of China-made J-10 fighter jets. Taufanto, the Deputy Minister of Defense of Indonesia, stated that this move aims to enhance the modern combat capabilities of the Indonesian Air Force while also considering cost-effectiveness within the national defense budget. Taufanto pointed out that the performance of China's J-10 fighter jets in the India-Pakistan conflict is one of the key factors influencing Indonesia's consideration of this model. Additionally, compared to similar Western fighter jets, the J-10 is more competitively priced and its technical configuration meets Indonesia's demand for "cost-effective advanced equipment." Taufanto revealed that Indonesia is currently focusing on reviewing the compatibility of the J-10 with its existing national defense system, after-sales maintenance support, and specific procurement terms. The procurement scope may not be limited to fighter jets but could also include China-made warships, frigates, and other weaponry. Shenwan Hongyuan stated that amid geopolitical conflicts, the attention on China's military trade will continue to rise. The intense conflict between India and Pakistan has drawn significant attention to China's military-industrial foreign trade products, with their maturity expected to gain high international recognition, thereby continuously promoting the opening up of the international market for China's military trade products and ushering in a new cycle for China's military trade, thus expanding the market space and valuation of the entire industry. 4. Volcano Engine's Motive Power Conference to Be Held, ByteDance Recently Launches Multiple AI Products The 2025 Volcano Engine Motive Power Conference - Spring will be held from June 11 to 12, focusing on cutting-edge fields such as large models and AI cloud-native technologies. Topics include agent development, multimodal understanding, deep thinking, AI cloud-native, and more. Recently, there have been continuous advancements in ByteDance's AI sector. On May 20, Volcano Engine launched the Doubao Voice Podcast Model, enabling the instant conversion of text content into a two-person dialogue-style podcast without complex editing, allowing hot topics to be instantly transformed into engaging podcasts. On the same day, Volcano Engine unveiled the Large Model Ecosystem Square - MCPServers. On May 8, Volcano Engine released the DiskANNRaBitQ vector algorithm engine, which, through the deep integration of the DiskANN algorithm and the ExtendedRaBitQ vector quantization technology, achieves an 115% improvement in query performance compared to the HNSW algorithm in high-performance vector retrieval scenarios, reduces memory resource consumption by 90%, and lowers the overall cost of the user's vector database by 75%, accelerating the application of AI technology across various industries. On May 7, Volcengine launched China's first intelligent database assistant, DBCopilot, which covers three core scenarios of data storage, management, and acquisition through AI technology. Guotai Haitong Securities stated that ByteDance has become a leading force in China's AI development, with its models and applications advancing in tandem, continuously bringing fresh blood to the development of China's AI ecosystem, and also reflecting the current vibrant state of AI development in China.

The State Council Information Office will hold a press conference at 10:00 a.m. on Tuesday, June 10, 2025. Deputy Secretary General Xiao Weiming of the National Development and Reform Commission (NDRC), along with relevant officials from the Ministry of Education, the Ministry of Civil Affairs, the Ministry of Finance, the Ministry of Human Resources and Social Security, and the National Health Commission, will introduce policies on further safeguarding and improving people's livelihoods, and answer questions from journalists.

The Shenzhen Stock Exchange (SZSE) hosted the two-day 2025 Global Investors Conference in Shenzhen from May 19 to 20. Themed "New Quality Productive Forces: New Investment Opportunities in China - Shenzhen's Open and Innovative Market," the conference showcased the investment value of Chinese assets and the A-share market through keynote speeches, roundtable discussions, company roadshows, and other formats. Li Ming, Vice Chairman of the CSRC: The current valuation of A-shares remains relatively low Li Ming, Vice Chairman of the China Securities Regulatory Commission (CSRC), stated at the 2025 Global Investors Conference hosted by the SZSE that the current valuation of A-shares remains relatively low. The price-to-earnings ratio of the CSI 300 Index stands at 12.6, significantly lower than major indices in overseas markets, further highlighting its allocation value. Currently, the market value of A-shares held by various types of foreign investors remains stable at around 3 trillion yuan Li Ming noted that currently, the market value of A-shares held by various types of foreign investors remains stable at around 3 trillion yuan, making them an important participating force in the A-share market. We believe that as the achievements of China's high-quality economic development become more evident and as the vitality of reform and opening up is further unleashed, China's capital market will undoubtedly become a crucial platform for more foreign investment and business development, offering more opportunities for global investors to share in the dividends of China's development. Policy measures to deepen reforms of the STAR Market and ChiNext will be introduced in the near future Li Ming stated that in the near future, we will also introduce policy measures to deepen reforms of the STAR Market and ChiNext, providing more suitable and inclusive institutional support for the innovative growth of enterprises. We will optimize institutional arrangements for qualified foreign institutional investors and support eligible foreign institutions in applying for new businesses and launching new products Li Ming stated that next, the CSRC will, in accordance with the deployment requirements for institutional opening-up, strengthen the top-level institutional design for opening up, focus on promoting the compatibility and interoperability of rules, regulations, management, and standards, and allow institutions to better play a fundamental role in advancing two-way opening up that stabilizes the foundation and benefits the long term. We will focus on enhancing the transparency and predictability of institutions, improving communication mechanisms with international investors, further enhancing the quality and efficiency of overseas listing filing management, optimizing institutional arrangements for qualified foreign institutional investors, supporting eligible foreign institutions in applying for new businesses and launching new products, and continuously improving the cross-border financial services system. We will focus on enhancing the systematic nature of opening up, strengthening the coordination of opening up in the stock, bond, and futures markets, increasing the supply of internationalized futures and options varieties, and enriching tools for asset allocation and risk management. We will focus on enhancing bilateral and multilateral cross-border regulatory cooperation, actively participating in the formulation of international standards and rules, further strengthening cooperation between the mainland and Hong Kong markets, and consolidating Hong Kong's status as an international financial center. We hope global investors will offer valuable insights and share beneficial experiences, working with us to create a market ecosystem where various types of funds are "willing to come, able to stay, and can thrive." Medium and long-term funds, including those from social security, insurance, and annuities, have cumulatively net purchased over RMB 200 billion worth of A-shares this year. Li Ming stated that since the beginning of this year, medium and long-term funds, including those from social security, insurance, and annuities, have cumulatively net purchased over RMB 200 billion worth of A-shares, reflecting the formation of a virtuous cycle where the accelerated inflow of medium and long-term funds coincides with a steady and rising stock market. Last year, the total dividends paid by A-share companies and the amount spent on share buybacks both reached record highs. In his speech, Li Ming stated that efforts will continue to guide publicly listed firms to actively enhance their investment value through cash dividends, share buybacks and increases in holdings, mergers and acquisitions, and restructuring. In 2024, A-share listed firms distributed a total of RMB 2.4 trillion in dividends and repurchased shares worth RMB 147.6 billion, both setting new historical highs. An increasing number of enterprises are distributing dividends multiple times a year. The dividend yield of the CSI 300 Index is approaching 3.6%, further enhancing the stability and predictability of returns to investors. Currently, the valuation level of A-shares remains relatively low, with the CSI 300 price-to-earnings ratio at 12.6, significantly lower than the major indices of overseas markets, further highlighting their allocation value. Last year, high-tech enterprises accounted for over 90% of newly listed companies. In his speech, Li Ming stated that since 2024, high-tech enterprises have accounted for over 90% of newly listed companies. The market capitalization of listed firms in strategic emerging industries across the entire market has exceeded 40%. A group of leading enterprises has rapidly emerged in advanced manufacturing, digital economy, green and low-carbon sectors, standing out in global competition and attracting widespread attention from global investors. Listed firms exhibit strong innovation momentum, with the total R&D expenses of physical listed firms reaching RMB 1.6 trillion in 2024, up 3.1% YoY. Over 800 listed firms have an R&D intensity exceeding 10%. We will strengthen the top-level institutional design for the opening-up of the capital market and improve the quality and efficiency of overseas listing filing management. Li Ming stated that China's capital market will remain steadfast in its opening-up efforts. In line with the deployment requirements for institutional opening-up, China will strengthen the top-level institutional design for opening-up, focusing on promoting compatibility and interoperability in rules, regulations, management, and standards, allowing institutions to better play a fundamental role in advancing two-way opening-up that anchors the foundation and benefits the long term. Efforts will be made to enhance the transparency and predictability of institutions, improve communication mechanisms with international investors, further enhance the quality and efficiency of overseas listing filing management, optimize institutional arrangements such as those for qualified foreign institutional investors, support eligible foreign institutions in applying for new businesses and launching new products, and continuously improve the cross-border financial services system.

Macro News 1. On May 15, the State Council convened a meeting to advance the work of strengthening the domestic economic cycle. Li Qiang, Member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, emphasized at the meeting that the strategic focus of development should be placed on strengthening the domestic economic cycle, leveraging its inherent stability and long-term growth potential to hedge against uncertainties in the international cycle, thereby promoting steady and sustained economic growth in China and striving to achieve high-quality development. Li Qiang pointed out that a domestic demand-driven and internally circulated economy is a unique advantage of a major economy. Efforts should be made to prioritize strengthening the domestic economic cycle in accelerating the construction of a new development paradigm. 2. The General Offices of the CPC Central Committee and the State Council issued the "Opinions on Continuously Advancing the Urban Renewal Initiative." The Opinions propose advancing the renovation and transformation of old urban residential communities, steadily promoting the transformation of hazardous housing, accelerating the demolition and reconstruction of Category D hazardous housing, strengthening the renovation of urban infrastructure, advancing the construction of new-type urban infrastructure, supporting the implementation of the urban renewal initiative with central fiscal funds, and encouraging various types of financial institutions to actively participate in urban renewal on the premise of legal compliance, risk controllability, and commercial sustainability. 3. China has decided to expand the scope of visa-free countries. From June 1, 2025, to May 31, 2026, a visa-free policy will be implemented on a trial basis for holders of ordinary passports from Brazil, Argentina, Chile, Peru, and Uruguay. Holders of ordinary passports from these five countries who come to China for business, tourism, visiting relatives and friends, exchange visits, or transit for no more than 30 days may enter the country without a visa. 4. The Ministry of Commerce held a regular press conference yesterday afternoon. Spokesperson He Yongqian stated that China will release relevant information on China-US economic and trade consultations in a timely manner. Regarding the US's Section 232 tariffs on imported automobiles, steel, and aluminum, as well as the initiation of a Section 232 investigation on imported pharmaceuticals, He Yongqian stated that China urges the US to cease the Section 232 tariff measures as soon as possible and properly address the concerns of all parties through equal dialogue. 5. The People's Bank of China, the Hong Kong Securities and Futures Commission, and the Hong Kong Monetary Authority plan to further enrich the product types under the "Swap Connect" initiative. This includes extending the maturity of contracts, extending the maturity of interest rate swap contracts to 30 years, and expanding the product spectrum by introducing interest rate swap contracts referencing the Loan Prime Rate (LPR). Industry News 1. A recent announcement by the Bureau of Industry and Security under the US Department of Commerce indicates that the use of Huawei's Ascend chips anywhere in the world violates US export controls. Spokesperson He Yongqian of the Ministry of Commerce stated that the US has abused export control measures, imposing unjustified restrictions on Chinese chip products, seriously undermining the legitimate rights and interests of Chinese enterprises. China urges the United States to immediately correct its erroneous practices and will take resolute measures to safeguard the legitimate rights and interests of Chinese enterprises. 2. On May 15, Li Lecheng, Minister of Industry and Information Technology, presided over the 14th Manufacturing Enterprise Symposium, focusing on accelerating the high-quality development of the industrial mother machine industry and listening to the situation briefings, suggestions, and opinions from industrial mother machine enterprises. Li Lecheng emphasized the need to attach great importance to the construction of the industrial ecosystem, avoiding "cut-throat competition" and homogeneous development. It is essential to leverage the leading role of industry leaders, establish closer industry-university-research-application cooperation, strengthen the alignment between production and demand, and promote the integrated development of large, medium, and small-sized enterprises. 3. The Supreme People's Court and the China Securities Regulatory Commission (CSRC) jointly issued the "Guiding Opinions on Strict and Fair Law Enforcement and Judicial Services to Support the High-Quality Development of the Capital Market." The opinions propose the regular implementation of representative litigation for securities disputes to facilitate investors in safeguarding their legitimate rights and interests in accordance with the law. The opinions also mention that for "small essays" that harm the rights and interests of others and constitute a crime, criminal responsibility will be pursued in accordance with the law. 4. The CSRC issued the "Regulatory Rules on the Supervision of Raised Funds by Publicly Listed Firms." Among other things, it proposes overall requirements for the use of raised funds, emphasizing that they should be used exclusively for their intended purposes and for the main business. It clarifies that the final use of excess raised funds should be for ongoing and new projects, share buybacks and cancellations, and should not be used for permanent replenishment of working capital or repayment of bank loans. 5. At Alibaba's earnings analyst conference call, Wu Yongming, CEO of Alibaba Group, stated that in fiscal year 2026, the company will continue to focus on the growth of its core businesses in e-commerce and AI+cloud, and, with a medium and long-term perspective, shape a second growth curve driven by technology. 6. On May 15, the People's Bank of China (PBOC), the Ministry of Science and Technology, the National Financial Regulatory Administration, and the China Securities Regulatory Commission jointly held a meeting to promote exchanges and advances in science and technology finance. Pan Gongsheng, Governor of the PBOC, Yin Hejun, Minister of Science and Technology, Xiao Yuanqi, Deputy Governor of the National Financial Regulatory Administration, and Li Ming, Vice Chairman of the China Securities Regulatory Commission, attended the meeting and delivered speeches. The meeting emphasized comprehensive support for technological innovation, with a strong focus on early-stage, small-scale, long-term, and hard-core technology investments. 7. The IEA's monthly report indicates that global supply is expected to significantly exceed demand growth in 2025, with oil inventories increasing by approximately 720,000 barrels per day. The global supply growth forecast for 2025 has been revised up to 1.6 million barrels per day, an increase of 380,000 barrels per day from the previous month's report, due to a more optimistic outlook for Saudi Arabia's production. Corporate News 1. China National Chemical Engineering announced that its subsidiary, Saiding Ningbo, is involved in a lawsuit regarding securities misrepresentation liability disputes with Kangde Xin. 2. Alibaba's earnings report shows that in the fourth fiscal quarter (ending March 31), revenue was 236.45 billion yuan, up 7% YoY; adjusted net profit was 29.85 billion yuan, a year-on-year increase of 22%. 3. ST Huijin announced that it has applied for the removal of other risk warnings. 4. Hengrui Medicine announced that it has completed its share repurchase program, with a total expenditure of approximately 600 million yuan. 5. Daye shares announced that as of now, its production site in Mexico is still in the trial operation phase. 6. Chengdi Xiangjiang announced that its wholly-owned subsidiary has signed an EPC general contracting contract worth 1.632 billion yuan for the China Mobile machine room building project. 7. Jingyuan Environmental Protection announced that its wholly-owned subsidiary has signed a contracting contract worth 365 million yuan for a computing power cluster construction project. 8. Xinhuajin announced that the company and its related parties may face the risk of administrative penalties from the China Securities Regulatory Commission or disciplinary actions from the stock exchange. 9. AVIC Xi'an Aircraft Industry (Group) Co., Ltd. stated at an investor relations event that the delivery volume of C919 aircraft parts has significantly increased. 10. Zowee Technology announced that 12.48% of the company's shares held by its controlling shareholder and actual controller, Xia Chuanwu, will be auctioned off by the court. Global Markets 1. On Thursday, US stocks closed with mixed results. The Dow Jones Industrial Average rose 0.65%, the S&P 500 index rose 0.41%, and the Nasdaq index fell 0.18%. Popular Chinese ADRs generally declined, with the Nasdaq Golden Dragon China Index closing down 2.37%. Alibaba and WeRide fell more than 7%, while JD.com, Baidu, and NIO fell more than 3%. NetEase surged over 14% as its Q1 revenue exceeded expectations, with its share price approaching an all-time high. European stocks closed higher across the board, with the German DAX index rising 0.72%, the UK FTSE 100 index rising 0.57%, and the French CAC 40 index rising 0.21%. 2. In commodities, WTI crude oil futures for June delivery fell 2.42% to close at $61.62 per barrel, while Brent crude oil futures for July delivery fell 2.36% to close at $64.53 per barrel. 3. International precious metal futures generally closed higher. COMEX gold futures rose 1.74% to close at $3,243.90 per ounce, while COMEX silver futures rose 1.07% to close at $32.79 per ounce. Investment Opportunities Reference 1. Jieyue Xingchen Open-Sources 3D Large Model Step1X-3D According to media reports, Jieyue Xingchen officially released and open-sourced its 3D large model, Step1X-3D, with a total parameter count of 4.8B (1.3B for the geometric module and 3.5B for the texture module), capable of generating high-fidelity, controllable 3D content. The capabilities of domestic large models continue to improve at the application level, and the demand for computing power continues to strengthen. According to CIO estimates, China's AI computing power expenditure will grow from $18 billion in 2024 to $90 billion in 2029. Yongxing Securities believes that the continuous improvement of underlying computing capabilities will drive the continuous enhancement of large model capabilities, and the computing power industry chain will continue to benefit. 2. Computing Power Takes to the Skies! "Three-Body Computing Constellation" Successfully Launched Recently, the Long March 2D carrier rocket took off from the Jiuquan Satellite Launch Center and successfully placed the space computing satellite constellation into its predetermined orbit, marking a complete success for the launch mission. This signifies that China's first whole-orbit interconnected space computing constellation has officially entered the networking phase. The launch of twelve computing satellites in a single rocket is the first launch of the "Three-Body Computing Constellation" led by the Zhejiang Lab, a new-type R&D institution in Zhejiang Province, and also the first launch under the Nationalstar Aerospace's "Star Computing" plan. According to Wang Jian, an academician of the Chinese Academy of Engineering and director of the Zhejiang Lab, the "Three-Body Computing Constellation" is a space computing infrastructure on a thousand-satellite scale jointly built by the Zhejiang Lab in collaboration with global partners, with a total computing power of up to 1000 POPS (100 quadrillion operations per second) upon completion. The Three-Body Constellation enables whole-orbit satellite interconnection and is equipped with an 8-billion-parameter space-based model, capable of on-orbit processing of L0-L4 level satellite data. According to calculations by Yu Menglun, an expert in China's aerospace flight mechanics and rocket trajectory design, to achieve cost parity between space-based solar power generation and ground-based solar power generation, the transportation cost of rockets must be reduced to at least 1,000 yuan per kilogram. Therefore, the deployment of computing power in space will further drive the development of China's domestic commercial aerospace industry. 3. WeChat Establishes E-commerce Product Department to Explore New In-App Transaction Models According to media reports, Tencent recently issued a company-wide letter announcing adjustments to its WXG business group. The main changes include: establishing an e-commerce product department responsible for exploring in-app transaction models within WeChat, accelerating the development of transaction infrastructure and ecosystem, and operating new in-app transaction models; renaming the Open Platform Infrastructure Department to the Open Platform Department, which will be responsible for the planning, R&D, and operation of WeChat official accounts and Mini Programs. AI e-commerce is reshaping the traditional e-commerce ecosystem through functions such as intelligent product selection, AI shopping guides, and personalized recommendations. Guojin Securities stated that the current e-commerce retail industry has entered a mature stage, making it difficult to achieve rapid growth in terms of scale. Therefore, the focus is on whether new technologies like AI can bring about improvements in monetization efficiency and cost optimization. It is recommended to pay attention to leading retail and internet companies. 4. The Third Biotechnology Revolution: The Demand for Industrial Implementation Continues to Grow Stronger According to media reports, the use of synthetic biology to transform microorganisms into "super factories" for the efficient synthesis and green manufacturing of new substances and materials has become an important driver for promoting the development of new quality productive forces in cutting-edge regions. Facing this new industrial frontier, Qingdao has achieved a seamless connection from source innovation to industrial application, taking the lead in development. Synthetic biology is regarded as the third biotechnology revolution following the "discovery of the DNA double helix structure" and the "Human Genome Project," and it stands at the forefront of the global biotechnology field. Hua'an Securities pointed out that as the demand for the implementation of the bio-manufacturing industry continues to grow stronger, new programmatic documents are expected to emerge, further guiding the development of the industry and achieving a healthy value cycle in the synthetic biology sector. On the other hand, through machine learning models and algorithms, AI can analyze vast amounts of data and model and simulate biological systems within a short period, thereby rapidly evaluating design plans and experimental conditions, predicting and optimizing R&D results, and reducing the blindness and repetitiveness of experiments. With the continuous development of domestic AI technology, it will provide strong support for research in synthetic biology.

At 9 a.m. on May 7, the State Council Information Office held a press conference, where Pan Gongsheng, Governor of the People's Bank of China (PBOC), Li Yunze, Director of the National Financial Regulatory Administration (NFRA), and Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), introduced the situation regarding the "package of financial policies to support market stability and stabilize expectations". The statements related to the capital market have sparked significant attention and discussion in the market. The following are the key points related to the capital market from this press conference: 1. Implement a stimulus policy package to stabilize the market through policy hedging, capital hedging, and expectation hedging; 2. The PBOC will reduce the reserve requirement ratio (RRR) by 0.5 percentage points, which is expected to provide approximately 1 trillion yuan in long-term liquidity to the market. Starting from May 8, the interest rate for the 7-day reverse repo operations in the open market will be adjusted from 1.50% to 1.40%; 3. The NFRA will further expand the scope of pilot programs for long-term investment by insurance funds, introducing more incremental capital into the market; 4. Emphasize "stability" in market operations and "progress" in stimulating market vitality and enhancing market functions; 5. Introduce policy measures to deepen the reform of the Science and Technology Innovation Board (STAR Market) and the ChiNext Market, further enhancing the inclusiveness and adaptability of the system; 6. Expedite the release of the newly revised "Measures for the Administration of Major Asset Restructuring of Publicly Listed Firms" and relevant regulatory guidelines to better leverage the capital market's role as the main channel for mergers and acquisitions (M&A); 7. Provide comprehensive and "relay-style" financial services to science and technology innovation enterprises; 8. Promote the implementation of an action plan for the high-quality development of public funds. Fund managers should share both the joys and sorrows with investors, achieve common development and mutual success, and foster a virtuous cycle of "increased returns—inflow of funds—market stability"; 9. The stability of the stock market is crucial to the overall economic and social landscape and to the vital interests of hundreds of millions of investors; 10. We are fully confident, have the conditions, and possess the capabilities to achieve the stable and healthy development of China's stock market; 11. A-share listed firms demonstrate strong resilience and adaptability; 12. Listed firms are an important component of China's economy and the cornerstone of the capital market; 13. While strengthening supervision, we will also convey warmth in regulatory efforts and do our utmost to help affected enterprises cope with the impact of tariff hikes imposed by the United States; 14. Provide greater support for M&A activities among listed firms, focusing on industrial logic to "strengthen and build", stimulate vitality, and improve quality; 15. Foreign securities financial institutions and foreign capital have become important participants in the A-share market; 16. Adhere to respecting laws and regulations and actively shape a stable, transparent, and predictable regulatory environment; 17.Create conditions to support the return of high-quality Chinese concept stocks to the mainland and Hong Kong stock markets; 18. Four "highlights" to promote the high-quality development of public funds. Highlight the strengthening of interest alignment with investors; highlight the enhancement of the stability of fund investment behavior; highlight the improvement of the ability to serve investors; highlight the development and expansion of equity funds. Wu Qing: Fully Consolidate the Momentum of Market Stabilization and Improvement Wu Qing stated at a press conference held by the State Council Information Office that efforts will be made to fully consolidate the momentum of market stabilization and improvement. Strengthen market monitoring and comprehensive risk assessment, dynamically improve work plans to respond to various external shocks, fully support the role of Central Huijin as a quasi-stabilization fund, and cooperate with the People's Bank of China to improve the long-term mechanism of monetary policy tools supporting the capital market, better leveraging the inherent market stabilization functions of all market participants. Wu Qing said that further measures will be introduced to deepen the reform of the Sci-Tech Innovation Board and the Growth Enterprise Market, enhancing the inclusiveness and adaptability of the system in terms of market hierarchy and investor protection. Pan Gongsheng mentioned that the People's Bank of China firmly supports Central Huijin in increasing its holdings of stock market index funds when necessary and provides sufficient re-lending support to it, resolutely maintaining the stable operation of the capital market. Wu Qing stated that the allocation value and attractiveness of Chinese assets are continuously improving. "On the road ahead, there will be winds and rains, whether gentle breezes and light rains, or storms and downpours, whether high winds and rough waves, or towering waves and billows, we have the confidence, conditions, and ability to achieve stable and healthy development," Wu Qing frankly said. A-share Listed Companies Have Strong Resilience and Adaptability Wu Qing mentioned that in response to the impact of the US tariff hike, many listed companies have disclosed through announcements and performance briefings. Overall, the US tariff policy has impacted the global economic and trade order, and the operations of listed companies have inevitably been affected, with many companies with a high proportion of exports to the US being significantly impacted. As an important and excellent representative group of Chinese enterprises, A-share listed companies have strong resilience and adaptability, with the vast domestic demand and potential demand being their confidence. Nearly 90% of the income of A-share listed companies comes from the domestic market. The first-quarter report shows that the net profit of listed companies increased by 3.6% year-on-year, and the net profit of listed companies in the real economy increased by 4.3%. Wu Qing stated that for listed companies significantly affected by the tariff policy, regulatory tolerance will be further enhanced in terms of equity pledge, refinancing, and the use of raised funds to help alleviate difficulties. Wu Qing revealed that since April 7, more than 350 listed companies have disclosed share buyback and increase plans, reflecting the confidence of listed companies in their own value and development.The China Securities Regulatory Commission (CSRC) will continue to promote the functioning of the capital market, conveying regulatory warmth while strengthening supervision, and strive to assist affected enterprises in coping with tariff impacts. Wu Qing stated that the CSRC supports publicly listed firms in transforming through mergers and acquisitions (M&A) and restructuring. Currently, the CSRC is expediting the revision of the Administrative Measures for the Major Asset Restructuring of Publicly Listed Firms to further improve the supporting measures for the six M&A guidelines, thereby providing stronger support for M&A and restructuring activities of publicly listed firms. Wu Qing expressed that the CSRC will strengthen products and services in the multi-tiered capital market, encouraging eligible domestic enterprises to list overseas in accordance with laws and regulations, and enhancing their global market expansion capabilities. The Action Plan for Promoting High-Quality Development of Publicly Offered Funds will be released as soon as possible. Wu Qing stated that the CSRC will release the Action Plan for Promoting High-Quality Development of Publicly Offered Funds on the same day. He introduced that the reform emphasizes strengthening the alignment of interests between publicly offered funds and investors. It will optimize the fee structure for actively managed equity funds, requiring lower management fees for underperforming funds. Through a floating management fee mechanism, it aims to reverse the phenomenon of fund companies enjoying stable profits regardless of market conditions. Meanwhile, indicators directly related to investors' vital interests, such as whether performance outperforms benchmarks and investors' profit and loss situations, will be incorporated into the evaluation system for fund companies and fund managers, urging fund companies to shift their focus from "emphasizing scale" to "emphasizing returns." The Action Plan for Promoting High-Quality Development of Publicly Offered Funds is relatively mature and will be released as soon as possible. The plan emphasizes enhancing the stability of fund investment behaviors. To address issues such as style drift and mismatched products, it will establish clear performance benchmarks for each fund as a measure of the product's true performance, preventing product investment behaviors from deviating from their names and positioning. Additionally, it will establish a comprehensive incentive and restraint mechanism within the company, specifying that the evaluation weight for periods exceeding three years should be no less than 80%, reducing the phenomenon of fund managers rushing to buy amid continuous price rise and panic selling, and improving long-term product returns. Meanwhile, Wu Qing mentioned that the CSRC will expedite the introduction of regulations on the management of publicly offered fund investment advisors to promote standardized development. Furthermore, Wu Qing stated that the CSRC will strengthen bilateral and multilateral cross-border regulatory cooperation, shaping a stable, transparent, and predictable regulatory environment, safeguarding the legitimate interests of enterprises in overseas markets, and supporting the return of high-quality Chinese concept stocks to the mainland and Hong Kong markets. Wu Qing said that the market value of A-shares held by foreign investors has stabilized at around 3 trillion yuan, and the CSRC will unwaveringly promote a high-level opening-up of the capital market. Central Bank: Reduces Reserve Requirement Ratio (RRR) by 0.5 percentage points. Pan Gongsheng stated that the RRR will be reduced by 0.5 percentage points, which is expected to provide approximately 1 trillion yuan in long-term liquidity to the market.The policy interest rate was lowered by 0.1 percentage point, meaning the interest rate for 7-day reverse repo operations in the open market was reduced from the current 1.5% to 1.4%. It is expected to drive the Loan Prime Rate (LPR) to decline by approximately 0.1 percentage point in tandem. The interest rates for structural monetary policy tools were lowered by 0.25 percentage point, including: the interest rates for various special structural tools and re-lending rates for supporting agriculture and small businesses, which were all reduced from the current 1.75% to 1.5%; the interest rate for Pledged Supplementary Lending (PSL) was reduced from the current 2.25% to 2%. Pan Gongsheng stated that two monetary policy tools supporting the capital market would be optimized. The quotas for the 500 billion yuan swap facility for securities, funds, and insurance companies and the 300 billion yuan re-lending facility for share buybacks and increases in shareholdings would be combined, bringing the total quota to 800 billion yuan. Last year, the People's Bank of China, in collaboration with the China Securities Regulatory Commission, the National Financial Regulatory Administration, and other departments, established two capital market support tools: the swap facility and the re-lending facility for share buybacks and increases in shareholdings. As of now, the swap facility has been operated twice, with a total amount of 105 billion yuan. Over 500 publicly listed firms and major shareholders have announced the use of loans to repurchase and increase their shareholdings, with a total loan amount of approximately 300 billion yuan. These two tools have built-in counter-cyclical adjustment attributes, primarily playing a stabilizing role. When the capital market is significantly undervalued, securities institutions, publicly listed firms, and major shareholders will have a stronger willingness to use the low-cost funds provided by these two tools to purchase shares, thereby interrupting the negative cycle of market weakness. For example, during the impact of excessive tariff impositions by the US in November last year, around the New Year's Day this year, and in early April, the usage of the swap facility increased significantly, and share buybacks and increases in shareholdings by publicly listed firms were also more active. The inherent stabilization mechanism established in this way has played a role in correcting over-adjustments in the capital market and stabilizing market expectations through these two tools. Li Yunze: Three Major Measures to Support Stabilizing and Invigorating the Capital Market At a press conference of the State Council Information Office, Li Yunze stated that the role of insurance funds as patient and long-term capital would be fully leveraged to increase market entry and stabilization efforts. Three measures would be introduced in the next step to support stabilizing and invigorating the capital market: first, expanding the pilot scope for long-term investments by insurance funds to inject more incremental funds into the market; second, adjusting regulatory rules for solvency by further reducing the risk factor for equity investments by 10% to encourage insurance companies to increase their market entry; third, promoting a long-term assessment mechanism to facilitate long-term investments. Li Yunze stated that an additional 60 billion yuan would be approved to further expand the pilot scope for long-term investments by insurance funds. Li Yunze indicated that a total of eight incremental policies had been launched recently, including accelerating the introduction of a series of financing systems compatible with the new model of real estate development, further expanding the pilot scope for long-term investments by insurance funds to introduce more incremental funds into the market, adjusting and optimizing regulatory rules, reducing the risk factor for equity investments by insurance companies, and supporting the stabilization and invigoration of the capital market.

On May 7, at a press conference held by the State Council Information Office, leaders from the People's Bank of China (PBOC), the National Financial Regulatory Administration (NFRA), and the China Securities Regulatory Commission (CSRC) gathered to introduce the "package of financial policies to support market stability and stabilize expectations." PBOC Governor Pan Gongsheng announced at the meeting that two monetary policy tools supporting the capital market would be optimized. The quotas for the 500 billion yuan swap facility for securities, funds, and insurance companies and the 300 billion yuan re-lending facility for share buybacks and shareholding increases would be combined, bringing the total quota to 800 billion yuan. In October 2024, to support the stable development of the capital market, the PBOC, in collaboration with relevant departments, introduced two monetary policy tools to support the capital market: the swap facility for securities, funds, and insurance companies, and the re-lending facility for share buybacks and shareholding increases. The initial quotas for these two tools were 500 billion yuan and 300 billion yuan, respectively. Cailian Press reporters learned that, as of now, the swap facility has been operated twice, with a total amount of 105 billion yuan. Over 500 publicly listed firms have announced the use of loans to repurchase and increase their shareholdings, with the total loan amount approaching 300 billion yuan. Market experts told Cailian Press reporters that the two tools adhere to the principles of marketization and rule of law, effectively enhancing the financing and investment capabilities of publicly listed firms and industry institutions. This is conducive to fulfilling these institutions' responsibilities in market value management and maintaining market stability. It also reflects the central bank's expansion and exploration of its role in safeguarding financial stability. What is the significance of the PBOC's decision to combine the quotas of the two tools? The aforementioned market experts told Cailian Press reporters that by combining the quotas of the two tools, the PBOC can fully utilize existing policies while expanding the quota ceiling for individual tools. This enhances the convenience and flexibility of using the tools, better meeting the needs of different types of institutions. Cailian Press reporters learned that the two tools have been widely welcomed by the market since their introduction, with a relatively ideal business scale and response speed. During the implementation of the policies, the People's Bank of China has summarized practical experiences, incorporated suggestions from various parties, and optimized the policy elements of the tools in terms of the scope of participating institutions, loan tenors, and the proportion of own funds. The aforementioned experts predict that relevant departments will further optimize policy designs in the future based on the specific business development and market needs, better leveraging the role of the two tools in supporting the stable development of the capital market.