[Xiaomi Auto Unveils Patent Related to Solid-State Batteries] According to Tianyancha APP, Xiaomi Auto Technology Co., Ltd. recently had its patent titled "Solid-State Battery Composite Electrode, Preparation Method, and Solid-State Battery Including the Composite Electrode" published. The patent abstract on Tianyancha indicates that the disclosed solid-state battery composite electrode effectively shortens the transmission path of metal ions within thick electrodes, accelerates the transmission rate of metal ions between electrodes, and exhibits high electrode loading and C-rate performance. (Kechuangban Daily) [CICC: Domestic New Energy Vehicle Sales to Maintain Strong Growth in H2 2025] CICC pointed out that the Chinese new energy vehicle market has shown robust performance since 2025, with wholesale sales of new energy vehicles increasing by 46% YoY from January to April 2025. Looking ahead, CICC is optimistic that domestic new energy vehicle sales will maintain strong growth in H2 2025, driven by the resonance of domestic demand and exports. [Mercedes-Benz and Beijing Benz Recall Certain Imported and Domestically Produced Vehicles] Recently, Mercedes-Benz (China) Automobile Sales Co., Ltd. and Beijing Benz Automotive Co., Ltd. have filed recall plans with the State Administration for Market Regulation in accordance with the requirements of the "Regulations on the Recall of Defective Automobile Products" and the "Implementation Measures for the Regulations on the Recall of Defective Automobile Products." Recall No. S2025M0090V: Starting from June 13, 2025, certain domestically produced C-Class and GLC SUV vehicles manufactured between April 25, 2023, and August 17, 2023, will be recalled, totaling 252 units. Recall No. S2025M0094V: Starting from June 13, 2025, certain imported S-Class and EQE vehicles manufactured between February 8, 2023, and October 10, 2023, will be recalled, totaling 257 units. Some vehicles within the scope of this recall used incorrect fuse boxes during previous recall repairs, which may lead to malfunctions in associated systems, resulting in potential loss of power, affecting restraint systems, instrument displays, etc. Additionally, the risk of fire cannot be ruled out, posing safety hazards. Mercedes-Benz (China) Automobile Sales Co., Ltd. and Beijing Benz Automotive Co., Ltd. will, through authorized Mercedes-Benz dealers, conduct free inspections of the affected fuse boxes for vehicles within the recall scope and replace them if the part numbers are incorrect to eliminate safety hazards. (Finance News) [Eight Departments Seek Public Comments on the "Guidelines for the Outbound Transfer of Automobile Data Security (2025 Edition)"] Eight departments, including the Ministry of Industry and Information Technology, are seeking public comments on the "Guidelines for the Outbound Transfer of Automobile Data Security (2025 Edition)." Automobile data processors providing automobile data overseas shall declare a data outbound security assessment if any of the following circumstances apply: (1) providing important data overseas; (2) cumulatively providing personal information (excluding sensitive personal information) of over 1 million individuals overseas since January 1 of the current year; (3) cumulatively providing sensitive personal information of over 10,000 individuals overseas since January 1 of the current year; (4) operators of critical information infrastructure providing personal information overseas; (5) other circumstances specified by relevant state regulations that require a declaration of data outbound security assessment. (Cailian Press) [GAC Group Promises: Rebate Payments to Dealers Will Be Completed Within Two Months Starting Today] GAC Group issued a commitment announcement: As a crucial part of the automotive industry chain, the stable development of dealers is a key factor in ensuring user service and experience. GAC Group actively responded to the initiative of the China Automobile Dealers Association to promote the healthy development of the automotive industry. Alongside its five major vehicle brands—Hyptec, Trumpchi, Aion, Honda, and Toyota—GAC Group promises that starting today, it will ensure the completion of rebate payments to dealers within two months to drive the high-quality development of the automotive industry. (Cailian Press) [MIIT: National Lithium Battery Production Exceeded 473GWh in January-April, Up 68% YoY] The Ministry of Industry and Information Technology (MIIT) released data indicating that from January to April 2025, China's lithium-ion battery industry continued its growth momentum. According to information from enterprises under the lithium battery industry's standard announcement and calculations by industry associations, the total national lithium battery production from January to April exceeded 473GWh, up 68% YoY. In the battery segment, the production of energy storage lithium batteries exceeded 110GWh, and the battery installations for new energy vehicles were approximately 184GWh. The total export value of lithium batteries nationwide from January to April reached 155.4 billion yuan, up 25% YoY. In the first-stage materials segment, the production of cathode materials, anode materials, separators, and electrolytes from January to April was approximately 1.15 million mt, 760,000 mt, 8 billion m², and 470,000 mt, respectively, all showing YoY increases of over 40%. In the second-stage materials segment, the production of battery-grade lithium carbonate was 270,000 mt, up 60% YoY, while the production of battery-grade lithium hydroxide was 90,000 mt, down 14% YoY. The average prices of battery-grade lithium carbonate and lithium hydroxide (micro powder grade) from January to April were 74,000 yuan/mt and 76,000 yuan/mt, respectively. 》Click for details Related Reading: [SMM Analysis] Breakthrough Achieved in Portugal's Lithium Mine Project; Development of Europe's Largest Spodumene Deposit Accelerates Weekly Summary of the LFP Market in June [SMM Lithium Battery Market Analysis] [SMM Analysis] Behind the 60-Day Payment Commitment: Suppliers' Wry Smiles and Anticipations Cobalt Product Quotes "Plummeting"; Co3O4 Falls by 7,650 Yuan in a Single Week; Will It Stop Next Week? [Weekly Observation] [SMM Analysis] Rio Tinto Partners with Codelco to Enter the Lithium Triangle; $900 Million to Develop World-Class Salt Lake Project [SMM Analysis] Separator Prices Remain Stable [SMM Analysis] Raw Material Drag Causes Price Decline; Policy Window Period May Lead to Bottoming Out and Rebound Battery and Solid-State Battery Sectors Strengthen Again; Multiple Automakers Announce Latest Progress; Lopal Shares Surge with Nearly 6 Limit-Up Moves [Hot Stock] [SMM Analysis] Cathode Material Production Increased MoM in May; Weak Growth in Downstream End-Use Demand [SMM Analysis] Anode Material Production Increased in May Due to Rising Demand [SMM Analysis] Co3O4 Production Increased MoM in May; Industry Players Remain Cautious Cobalt Product Quotes Collectively "Fall"; Cobalt Chloride Smelters' Quotes Remain Firm; Will They Stay High in the Future? [Weekly Observations] [SMM Analysis] Impact of US Tariffs on China on the Export Methods and Prices of Chinese ESS Battery Cells to the US - An Exploration of Three Methods: "Direct Export from China, Re-export via Malaysia, and US Domestic Production" (Part I) [SMM Analysis] Impact of US Tariffs on China on the Export Methods and Prices of Chinese ESS Battery Cells to the US - An Exploration of Three Methods: "Direct Export from China, Re-export via Malaysia, and US Domestic Production" (Part II) [SMM Analysis] Impact of US Tariffs on China on the Export Methods and Prices of Chinese ESS Battery Cells to the US - An Exploration of Three Methods: "Direct Export from China, Re-export via Malaysia, and US Domestic Production" (Part III) [SMM Analysis] New Breakthrough in Lithium Battery Technology: Can a Single Injection Extend Battery Life?

► Xiaomi Auto Unveils Solid-State Battery-Related Patent ► CICC: Domestic New Energy Vehicle Sales to Maintain Strong Growth in H2 2025 ► Mercedes-Benz and Beijing Benz Recall Certain Imported and Locally Produced Vehicles ► Eight Departments Solicit Public Opinions on the "Guidelines for the Security of Automotive Data Cross-Border Transfer (2025 Edition)" ► GAC Group Commits to Ensuring Dealer Rebate Settlement Within Two Months Starting Today ► MIIT: Total National Lithium Battery Production Exceeds 473 GWh from January to April, Up 68% YoY

According to CCTV News, on June 12, Foreign Ministry spokesperson Lin Jian hosted a regular press conference. A reporter asked about the meeting of the China-U.S. Economic and Trade Consultation Mechanism. Lin Jian stated that he would like to emphasize that this meeting was held under the strategic guidance of the heads of state of the two countries. The two sides reached a consensus in principle on the framework of measures to implement the important consensus reached during the phone call between the heads of state of the two countries on June 5 and to consolidate the outcomes of the Geneva economic and trade talks, and made new progress in addressing each other's economic and trade concerns. The Chinese side has always delivered on its promises. Now that a consensus has been reached, both sides should abide by it. It is hoped that the U.S. side will work with the Chinese side to implement the important consensus reached during the phone call between the heads of state of the two countries, give full play to the role of the China-U.S. Economic and Trade Consultation Mechanism, and enhance consensus, reduce misunderstandings, and strengthen cooperation through communication and dialogue.

SMM June 12 News: Metal Market: As of the midday close, domestic market base metals generally rose, with SHFE copper down 0.45%, SHFE aluminum up 1.14%, SHFE zinc up 0.34%, SHFE lead up 0.62%, SHFE tin slightly down, and SHFE nickel down 0.84%. In addition, the main continuous futures contract for foundry aluminum rose 0.62%, while alumina fell 0.45%. Lithium carbonate fell 1.3%, silicon metal fell 0.2%, and polysilicon fell 0.5%. The ferrous metals series mostly fell, with iron ore slightly down, rebar down 0.8%, and HRC down 0.74%. Stainless steel rose 0.76%. In the coking coal and coke sector: coking coal fell 1.9%, and coke fell 1.33%. In the overseas metal market, as of 11:45, LME metals all rose, with LME zinc up 0.45%, LME copper up 0.53%, LME aluminum up 0.32%, LME lead up 0.33%, LME tin up 0.2%, and LME nickel up 0.35%. In the precious metals sector, as of 11:45, COMEX gold rose 1.52%, and COMEX silver rose 0.65%; domestically, SHFE gold rose 1.01%, and SHFE silver fell 0.66%. As of the midday close, the most-traded contract for the European Containerized Freight Index fell 0.02%, closing at 2019.4. As of 11:45 on June 12, some midday futures market movements: 》June 12 SMM Metal Spot Prices Spot and Fundamentals Copper: Today, spot #1 copper cathode in Guangdong was quoted at a premium of 20 yuan/mt to a discount of 100 yuan/mt against the front-month contract, with an average premium of 60 yuan/mt, down 30 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 50 yuan/mt to a discount of 30 yuan/mt, with an average discount of 40 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 79,010 yuan/mt, down 295 yuan/mt from the previous trading day, and the average price of SX-EW copper was 78,910 yuan/mt, down 275 yuan/mt from the previous trading day. Spot Market: Today, Guangdong's inventory continued to decline, marking the sixth consecutive day of decline, primarily due to tight supply... 》Click for details Macro Front Domestic: [Li Chunlin, Deputy Director of the National Development and Reform Commission: Fully Supporting Shenzhen in Advancing Comprehensive Reform Pilot] Li Chunlin, Deputy Director of the National Development and Reform Commission, stated at a State Council Information Office press conference on June 12 that the Implementation Plan for the Comprehensive Reform Pilot in Shenzhen to Build a Pioneer Demonstration Area of Socialism with Chinese Characteristics (2020-2025) has been implemented for nearly five years. To further consolidate and expand the pilot results, and support Shenzhen in intensifying efforts to eliminate institutional and mechanism shortcomings in various aspects and accelerate the construction of a high-level socialist market economy system, the General Office of the CPC Central Committee and the General Office of the State Council recently issued the Opinions on Advancing Shenzhen's Comprehensive Reform Pilot to Deepen Reform and Innovation and Expand Opening Up. This is a significant measure to support Shenzhen in building a pioneer demonstration area of socialism with Chinese characteristics, an upgraded version of the Plan, and an important interpretation of China's unwavering commitment to deepening reform and opening up. Next, we will earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council, and work with relevant departments and Guangdong Province to fully support Shenzhen in advancing its comprehensive reform pilot program, ensuring the implementation of the "Opinions". [Ministry of Industry and Information Technology: Supports Automakers' "60-Day Payment Term" Commitment to Promote Healthy Industry Development] Recently, 17 key automotive enterprises, including FAW, Dongfeng, GAC, and Seres, have successively issued statements committing to "payment terms not exceeding 60 days". Today (the 12th), relevant officials from the Ministry of Industry and Information Technology stated that the automakers' commitment is of great significance in promoting the healthy and sustainable development of the automotive industry. Relevant officials from the Ministry of Industry and Information Technology also stated that the automotive enterprises' proactive commitment to "payment terms not exceeding 60 days" reflects their positive response to national calls, fulfillment of social responsibilities, and corporate commitments, and is of great significance in building a collaborative and win-win development ecosystem for "complete vehicles - parts". Relevant officials from the Ministry of Industry and Information Technology simultaneously stated that currently, China's NEV industry is at a critical juncture for high-quality development. It is hoped that enterprises will lead by example and strengthen industry self-discipline. It is also hoped that all sectors of society will care about and support the high-quality development of the NEV industry, jointly resist online chaos such as "internet trolls" and "black PR", and create a positive, civilized, and orderly development environment. (Cailian Press) The People's Bank of China conducted 119.3 billion yuan of 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. As 126.5 billion yuan of 7-day reverse repos matured today, a net withdrawal of 7.2 billion yuan was realized. ► The central parity rate of the RMB against the US dollar in the inter-bank foreign exchange market on June 12 was 7.1803 RMB per US dollar. US dollar: As of 11:45, the US dollar index fell by 0.28%, reporting 98.35. US inflation data lower than expected has increased market expectations for a possible interest rate cut by the US Fed. US data has also prompted Trump to once again call for a significant interest rate cut by the US Fed. US data shows that the US Consumer Price Index (CPI) rose by 0.1% month-on-month in May, lower than the 0.2% increase expected by economists, as falling gasoline prices partially offset the impact of rising rents. However, against the backdrop of imposed import tariffs, inflation is expected to accelerate in the coming months. The market currently expects the US Fed to cut interest rates by 50 basis points before the end of the year. Market participants are awaiting the upcoming US Producer Price Index (PPI) data to gain more signals about the US Fed's policy path ahead of the Fed's meeting on June 17-18. A research report by China International Capital Corporation Limited (CICC) pointed out that next week, the US Fed will hold its June interest rate-setting meeting. CICC believes that the FOMC in June may slightly raise its inflation forecast, but due to the resilience of non-farm payrolls and the cooling of tariff tensions, the US Fed's assessment of growth may be more optimistic than in March. As a result, Powell's stance at this meeting may lean hawkish, which could disappoint investors expecting an interest rate cut from the US Fed. Data releases: Today, the following data will be announced: US initial jobless claims for the week ending June 7, US continuing jobless claims for the week ending May 31, US PPI year-on-year rate for May, US core PPI year-on-year rate for May, Japan's BSI Large Manufacturing Confidence Index for Q2, UK GDP month-on-month rate for April, UK industrial production month-on-month rate for April, UK industrial production year-on-year rate for April, UK seasonally adjusted goods trade balance for April, and UK seasonally adjusted trade balance for April, among others. In addition, at 12:00 on June 12, US President Trump increased the tariff on imported steel from 25% to 50%. He Lifeng visited the UK from June 8 to 13 and held the first meeting of the China-US Economic and Trade Consultation Mechanism. Crude oil market: As of 11:45, crude oil futures have dropped slightly but remain hovering near a more than two-month high. Specifically, WTI crude fell by 0.32%, and Brent crude fell by 0.42%. The market is concerned that escalating geopolitical tensions could disrupt oil supplies. The US Energy Information Administration (EIA) reported that US crude oil inventories fell by 3.6 million barrels to 432.4 million barrels last week. Analysts had expected a decline of 2 million barrels. Increased refining activity pushed up gasoline and distillate inventories. The EIA stated that US gasoline inventories rose by 1.5 million barrels to 229.8 million barrels, compared to market expectations of a 900,000-barrel increase. Distillate inventories, including diesel and heating oil, rose by 1.2 million barrels to 108.9 million barrels, compared to market expectations of an 800,000-barrel increase. (Webstock Inc.) Spot market overview: ► Both inventory and copper prices fell, but the price spread between futures contracts widened; trading weakened, and premiums declined. [SMM South China Spot Copper] ► Tianjin zinc: Futures market mainly fluctuated, with premiums holding steady. [SMM Midday Review] ► [SMM Nickel Midday Review] On June 12, nickel prices continued to decline, with US CPI inflation for May falling short of expectations across the board. Midday reviews of other metal spot markets will be updated later. Please refresh to view.

The market declined rapidly in the afternoon session yesterday, with the ChiNext Index leading the losses. The combined turnover of the Shanghai and Shenzhen markets reached 142 million yuan for the day, up 129 billion yuan from the previous session. Sector-wise, port shipping, beauty and personal care, innovative drugs, and rare earth permanent magnets were among the top gainers, while Huawei Ascend, defense, semiconductors, and software development were among the biggest decliners. At yesterday's close, the Shanghai Composite Index fell 0.44%, the Shenzhen Component Index dropped 0.86%, and the ChiNext Index lost 1.17%. At today's brokerage morning meetings, Huatai Securities noted in its 2025 mid-year outlook that attention should be paid to the AI technological revolution as well as defense and self-sufficiency themes. China International Capital Corporation (CICC) believes the tungsten price center is expected to continue rising. Huaxi Securities suggested adopting a rotation strategy to play the tech rally. Huatai Securities 2025 Mid-Year Outlook: Focus on AI Tech Revolution, Defense, and Self-Sufficiency Themes Huatai Securities' 2025 mid-year outlook stated that the restructuring of global order is simultaneously altering asset pricing patterns. Multiple macro themes including tariff policies, global economic prospects, and geopolitical shifts are intertwined, leading to increased volatility across asset classes and weakened trends. In an uncertain environment, higher demands are placed on valuation, safety margins, odds, and ergodicity. The firm recommends responding through high odds and low correlation strategies. At the asset level, it advises maintaining operational flexibility, leveraging odds for left-side positioning during adjustments, and seeking structural opportunities in regional and industrial logic. With the US dollar trending weaker, non-US assets may show relative outperformance, European assets offer higher win rates, while emerging markets like Hong Kong stocks present better odds. Focus areas include the AI technological revolution, domestic demand sectors under fiscal expansion, as well as defense and self-sufficiency themes. CICC: Tungsten Price Center Expected to Continue Rising CICC noted that in the short term, the tightening supply-demand situation persists, coupled with the stimulative effect of overseas tungsten product premiums. The firm believes tungsten prices have entered a bull market channel and may continue breaking historical highs. Long-term, the supply-demand gap for tungsten is projected to expand from 18,300 mt in 2024 to 19,100 mt by 2028. The global tungsten supply-demand gap as a percentage of primary demand is estimated at -18.4%, -16.6%, -17.0%, -16.8%, and -17.4% from 2024 to 2028 respectively, with the tungsten price center expected to keep rising. Huaxi Securities: Play Tech Rally With Rotation Strategy Huaxi Securities pointed out that overall, expectations of easing China-US trade relations have boosted market risk appetite, with the tech sector continuing its rebound since late May. Notably, despite improving trade relations, international clues remain chaotic, indicating the "chaotic era" persists. Preparations should be made for potential reversals, avoiding excessive trading in single directions. Meanwhile, the main theme of the market remains unclear. Before the narrative of the technology sector is further strengthened, it is necessary to adopt a rotation strategy to participate in the technology market, "take profits when they are good" after achieving certain gains, and then look for sectors at low levels for appropriate positioning. If the technology market experiences a significant correction, it means that the STAR 50 Index will once again approach its position before the technology market rally in February. The expectation of market stabilization funds and substantive progress in the technology sector may provide solid support, offering a better opportunity to participate in the recovery of the technology market.

The latest "C50 Direction Index" survey by Cailian Press shows that the market consensus forecast for new RMB loans in May stands at 600 billion yuan, down 35 billion yuan YoY from 95 billion yuan in the same period last year. The median forecast for new aggregate financing in May is 2.32 trillion yuan, up 26 billion yuan YoY. Market participants expect M2 growth may pick up in May amid improved liquidity and low base effects. On prices, the market anticipates CPI to remain relatively stable in May while PPI deflation may widen further. The median forecasts for CPI and PPI YoY growth rates are -0.2% and -3.3% respectively. The "C50 Direction Index Survey", initiated by Cailian Press and completed with participation from various research institutions, comprehensively reflects market expectations on macroeconomic trends, monetary policy sentiment and financial data. Nearly 20 institutions participated in this round. Market consensus forecasts median new RMB loans in May at 600 billion yuan In April, new RMB loans totaled 280 billion yuan, down approximately 450 billion yuan YoY. Household loans decreased by 521.6 billion yuan while corporate loans rose by 610 billion yuan, mainly driven by bill financing. For May, the median forecast for new RMB loans is 600 billion yuan, down 35 billion yuan YoY, with projections ranging from 430 billion to 1.25 trillion yuan. Market analysts attribute weak credit expansion in May primarily to constrained corporate loan demand, with future trends heavily dependent on fiscal policy intensity. Corporate loan growth YoY was mainly supported by increased bill financing, reflecting still weak effective loan demand and subdued financing appetite among real-economy enterprises. Data shows bill rates in May first declined then rebounded, maintaining April's sideways trend. Binbin Sun, chief economist at Caitong Securities, noted: "The phased implementation of comprehensive financial support policies announced by the PBOC on May 7, coupled with slightly rising bill rates in late May, both indicate weaker bank demand for bill-based credit expansion. Credit is expected to strengthen MoM but remain weaker YoY." Additionally, weak medium and long-term corporate loans in May were significantly affected by local government debt restructuring. Wenlang Zhang, chief macro analyst at CICC, stated: "New credit in May may remain relatively weak, with our forecast showing a YoY decline. An important factor remains potential reductions in credit stock due to government bond swaps." "Affected by local governments' efforts to resolve debt, some outstanding loans in the hidden debt of urban investment platforms have been replaced or repaid early. New loans are calculated as the difference between newly issued loans and loans repaid in the current period. Therefore, the scale of new loans in the month will be affected to a certain extent," said Liao Bo, the co-chief macro analyst at Zheshang Securities. In the first five months of this year, special refinancing bonds issued by various provinces for debt replacement totaled 160 million yuan, causing technical disruptions to credit. New aggregate financing in May may increase YoY, and the YoY growth rate of M2 may continue to rebound. In April, new aggregate financing reached 1.16 trillion yuan, with the YoY increase expanding to 1.2 trillion yuan, mainly driven by government bonds. According to this survey, the median forecast for the scale of new aggregate financing in May by market institutions is 2.32 trillion yuan, an increase of 260 billion yuan compared to 2.06 trillion yuan in the same period of 2024. The forecast range of participating institutions is from 2 trillion yuan to 2.74 trillion yuan. Overall, government bonds are expected to remain the main contributor to aggregate financing in May. High-frequency data shows that the net financing scale of government bonds in May was approximately 1.46 trillion yuan, still achieving a YoY increase of nearly 268.8 billion yuan compared to the high base in the same period last year. In addition, the industry expects that with the gradual allocation and use of fiscal funds, it may positively drive M1. Lu Zhengwei, the chief economist at Industrial Bank, said that under the influence of "deposit outflow" in May 2024, the growth rate of M1 significantly pulled back. Given the low base and the continuous advancement of debt resolution policies, the growth rate of M1 in May 2025 is expected to rise significantly. Regarding M2, on May 7, the People's Bank of China announced comprehensive RRR cuts and interest rate cuts. The RRR cuts are expected to supplement liquidity by around 1 trillion yuan, significantly easing the liquidity situation in May. The DR007 benchmark rate in May fell by 14 basis points compared to April. Lu Zhengwei expects that with the improvement in market liquidity and the impact of a low base, M2 in May may rise. In Liao Bo's view, the rebound in the growth rate of M2 in May is mainly related to the rectification of manual interest rate adjustments for deposits in April 2024, hence the impact of a low base. In addition, the shift of deposits to wealth management products may continue. In Q1 2025, the People's Bank of China promoted a moderate rebound in government bond yields through measures such as suspending government bond purchases and withdrawing liquidity, which led to a decline in the net value of some wealth management products. This resulted in some funds flowing back from wealth management products to deposit accounts, also supporting the rise in M2. The YoY growth rate of CPI in May is expected to remain under pressure, while the YoY decline of PPI may continue to widen. In April, CPI decreased by 0.1% YoY, with the growth rate remaining negative for three consecutive months. The core CPI, excluding food and energy prices, maintained a YoY growth rate of 0.5%. From a YoY perspective, market institutions forecast the median CPI in May to be -0.2%, with a forecast range of -0.4% to -0.1%. Notably, nearly 60% of market institutions expect the YoY growth rate of CPI in May to remain flat compared to the previous month. Industry insiders believe that due to abundant seasonal supply, food prices have declined mildly overall, keeping the YoY growth rate of CPI at a low level in May. Data shows that the Shouguang Vegetable Price Index in China fell by 16.3% YoY in May, further widening from the 14.2% YoY decline in April. "Regarding pork, from the supply side, the secondary fattening pigs that were replenished earlier are being marketed in succession, and the replenishment of secondary fattening pigs will continue on a rolling basis, keeping supply strong. Meanwhile, holiday demand is weaker than in previous years, driving the average pork price in 22 provinces down by 0.6% MoM in May. In other aspects, we expect non-food consumer goods driven by the trade-in policy to maintain a volume discount trend, while service prices may recover mildly," said Zhang Wenlang. Looking ahead, Sun Binbin expects vegetable prices to receive some short-term support due to continuous rainfall in many parts of south China, while pork prices are expected to remain in the doldrums due to the pressure from rising marketings. He projects YoY CPI to be -0.2% and -0.4% in June and July, respectively. In terms of PPI, the YoY decline in PPI widened by 0.2 percentage points to 2.7% in April. The median forecast for YoY PPI in May among participating institutions is -3.3%, with a forecast range of -3.5% to -3.0%. Regarding the potential further widening of the YoY decline in PPI in May, Wen Bin, chief economist at China Minsheng Bank, analyzed that from an international perspective, the positive developments in Sino-US negotiations have boosted risk appetite, leading to a slight rebound in commodity prices except for gold. However, commodity prices subsequently pulled back due to renewed tariff threats. Data shows that the monthly average of the CRB Index in May rose by 0.1% MoM, while the monthly average of metal prices fell by 1.6% MoM, the monthly average of industrial raw material prices rose by 0.1% MoM, and the monthly average of Brent crude oil prices fell by 3.7% MoM. Domestically, the monthly average of the Nanhua Industrial Products Index fell by 2.1% MoM in May, marking the third consecutive month of decline. Among them, the decline in domestically priced steel prices dragged down the metal index by 0.4% MoM; the decline in oil and coal prices drove down the energy and chemical index by 3.3% MoM; the monthly average of the Ministry of Commerce's weekly-published producer goods price index fell by 1.7% MoM, the largest MoM decline since September last year. In May, among the sub-indices of the manufacturing PMI, the index for the purchase prices of major raw materials fell by 0.1 percentage points to 46.9%, and the ex-factory price index fell by 0.1 percentage points to 44.7%. In Liao Bo's view, the changes in PPI are mainly influenced by the imported impact of the downward fluctuation in international crude oil prices on China, as well as the accelerated technological progress in some domestic industries and intense market competition pressure. "We believe that there is still uncertainty in the trend of international commodity prices. However, as domestic policies such as large-scale equipment upgrades and trade-in policies for consumer goods gradually take effect, they will provide some support for prices in certain industries. High-frequency data shows that it will be difficult for the MoM growth rate to return to the positive range," said Liao Bo.

Macro News 1. On the evening of June 5, Chinese President Xi Jinping had a scheduled phone call with US President Donald Trump. Xi Jinping pointed out that to steer the course of China-US relations in the right direction, it is crucial for both sides to navigate the ship well and set the right course, particularly by eliminating various distractions and even disruptions. Both sides should enhance exchanges in various fields such as diplomacy, economy and trade, military affairs, and law enforcement, to increase consensus, reduce misunderstandings, and strengthen cooperation. Xi Jinping emphasized that the US should handle the Taiwan issue with caution to prevent a small number of "Taiwan independence" separatists from dragging China and the US into a dangerous situation of conflict and confrontation. 2. On the afternoon of June 5, the Ministry of Commerce held a regular press conference. A reporter asked about the new restrictive measures taken by the US against China. He Yongqian, the spokesperson for the Ministry of Commerce, stated that after the Geneva talks, the US had taken a series of restrictive measures against China, seriously undermining the existing consensus and severely damaging China's legitimate rights and interests. China expressed strong dissatisfaction and firm opposition to this, demanding that the US immediately cease such actions. If the US persists in its course and continues to harm China's interests, China will resolutely take strong measures to safeguard its legitimate rights and interests. 3. On June 5, Foreign Ministry spokesperson Lin Jian hosted a regular press conference. A reporter asked about the US's plan to tighten regulations on foreign companies listing in the US. Lin Jian stated that the US should adhere to the market principle of fair competition, stop politicizing economic and trade issues, and provide a fair, just, and non-discriminatory business environment for companies from all countries, including Chinese enterprises. 4. At yesterday's regular press conference, a reporter asked about reports that due to delays in parts procurement caused by China's rare earth export controls, Japanese automaker Suzuki had suspended production of its main compact car in Japan. Lin Jian stated that China's export control measures are in line with international common practices, are non-discriminatory, and are not targeted at specific countries. 5. The People's Bank of China announced that to maintain ample liquidity in the banking system, on June 6, 2025, it will conduct a 1,000 billion yuan outright reverse repo operation through fixed-quantity, interest-rate tendering, and multiple-price bidding, with a term of 3 months (91 days). Industry News 1. The State Council recently issued the "Notice on Conducting the Fourth National Agricultural Census." The Notice states that the main contents of the Fourth National Agricultural Census include agricultural production conditions, grain and food production, new quality productive forces in agriculture, basic conditions of rural development, and the living conditions of rural residents. The standard time point for the census is 24:00 on December 31, 2026, and the period data will be for the year 2026. 2. Following the adjustment of deposit interest rates by the six major state-owned banks on May 20, the "wave of interest rate cuts" has gradually spread to small and medium-sized banks. Small and medium-sized banks, including joint-stock banks, city commercial banks, rural commercial banks, village and township banks, and private banks, have successively followed suit in reducing deposit interest rates, with significant differentiation observed in interest rate adjustments among these banks. During this wave of deposit interest rate cuts, some local rural commercial banks and village and township banks with relatively small scales have experienced "interest rate inversion," where their listed interest rates are even lower than those of large state-owned banks. 3. The national standard "Residential Project Specifications" has garnered widespread attention since its release and implementation. Yao Tianwei, Director of the Standard Quota Department of the Ministry of Housing and Urban-Rural Development, stated on the 5th that building "good houses" does not equate to building "big houses" or "expensive houses." Instead, it involves addressing pain points in housing through good design, construction, materials, services, and more, to comprehensively enhance housing quality. 4. At a regular press conference held by the Ministry of Commerce on the 5th, a reporter posed questions related to the automotive industry. He Yongqian, spokesperson for the Ministry of Commerce, stated that in response to the "cut-throat competition" phenomenon currently present in the automotive industry, the Ministry of Commerce will actively cooperate with relevant departments to strengthen comprehensive rectification and compliance guidance, maintain a fair and competitive market order, and promote the healthy development of the industry. 5. It has been learned from the National Data Bureau that China will deploy and establish 10 national data element comprehensive pilot zones in Beijing, Zhejiang, Anhui, and other regions, supporting localities in conducting pilot initiatives in cultivating market entities, thriving the data market, and fully unleashing the efficiency of the integration between the real economy and the digital economy. 6. According to local time news from the Indonesian military on June 5th, the Indonesian government is conducting a feasibility assessment on the procurement of China-made J-10 fighter jets. Dofanto, 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 the cost-effectiveness of the national defense budget. Dofanto pointed out that the performance of China's J-10 fighter jets in the India-Pakistan conflict is one of the important factors considered by Indonesia for this aircraft model. Corporate News 1. Asia Potash International announced that Peng Zhiyun, a supervisor, is under investigation for suspected insider trading. 2. Beijing North Star Technology Group stated on an interactive platform that the company has deep reserves in the underlying blockchain and smart contract technologies for stablecoins. 3. Staidson Biopharma announced that STSP-0601 for injection has been included in the priority review process. 4. ChipMOS TECHNOLOGIES announced that China-Singapore Venture Capital intends to reduce its stake in the company by no more than 2%. 5. Chow Tai Fook announced that Dongguan Group intends to reduce its stake in the company by no more than 3%. 6. Lianhe Chemical Technology released an announcement on the record of investor relations activities, stating that the company's K-amine product has stable gross profit margins and has not yet received any notice of increased customer demand. 7. Wingtech Technology announced that its shareholder, Wuxi Guolian Integrated Circuit Investment Center, plans to reduce its stake in the company by no more than 3%. 8. 3S Bio announced that the New Drug Application for its recombinant anti-IL-1β humanized monoclonal antibody injection has been accepted. 9. Chengdi Xiangjiang announced that its consortium has won the bid for the 440 million yuan data center power system construction project for China Mobile's Zhejiang branch. 10. D&O Home Furnishings announced that its actual controller has signed strategic cooperation and concerted action agreements, and its shares will resume trading today. 11. Fulin Precision Machining announced that its subsidiary has signed a supplementary agreement with CATL to expand capacity cooperation. 12. Zai Lab announced that it has signed an exclusive market promotion service agreement for recombinant human thyroid-stimulating hormone for injection. 13. Paion Biotech announced that it is planning changes to its control rights, and its shares will be suspended from trading starting June 6. 14. Medprism Medical announced that it intends to acquire 100% equity in EasyJet Medical, and its shares will resume trading. 15. Haitai Development announced that it is planning to acquire controlling equity in Zhixueyun, which is expected to constitute a major asset restructuring. 16. Wanchen Group announced that its General Manager Wang Liqing, Deputy General Manager Li Bo, and Deputy General Manager Wang Song plan to reduce their stakes in the company. Global Markets 1. US President Trump expressed that he is "very disappointed" with Musk, who is unhappy with the government's decision to revoke the "mandate" for electric vehicles. Trump claimed that he could win Pennsylvania even without Musk. Musk responded that without him, Trump would lose the election, calling Trump "so ungrateful." 2. The three major US stock indices closed lower collectively, with the Dow Jones falling 0.25%, the Nasdaq dropping 0.83%, and the S&P 500 declining 0.53%. Amid the "feud" between Trump and Musk, Tesla's shares fell more than 14%. The Nasdaq Golden Dragon China Index closed up 0.54%, with popular Chinese ADRs showing mixed performance. 3. WTI crude oil futures closed up 0.83% at $63.37 per barrel. Brent crude oil futures closed up 0.74% at $65.34 per barrel. 4. COMEX gold futures closed down 0.68% at $3,376.1 per ounce. COMEX silver futures closed up 3.31% at $35.7955 per ounce. Investment Opportunities Reference 1. The global exoskeleton robot market is entering a period of rapid growth According to "CAS Voices," the Shenyang Institute of Automation of the Chinese Academy of Sciences has recently developed a "rigid-flexible coupling" multi-joint rehabilitation exoskeleton robot for the lower limbs, which is expected to provide motor function reconstruction and behavioral assistance services for patients with lower limb hemiplegia. Exoskeleton robots are wearable intelligent mechanical devices that, through the collaboration of motors, sensors, control systems, and other technologies, provide power support similar to animal exoskeletons for humans, enhancing or restoring human mobility. They are mainly applied in military, industrial, medical, and civilian fields. According to a research report by Everbright Securities, the global exoskeleton robot market is entering a period of rapid growth. Data from GrandViewResearch shows that the market size reached $1.8 billion in 2024 and is expected to exceed $12 billion by 2030, with a compound annual growth rate of 28%. 2, The National Energy Administration organized the first batch of pilot work for new-type power system construction According to media reports, the National Energy Administration organized the first batch of pilot work for new-type power system construction. Focusing on cutting-edge directions related to the new-type power system, it conducts single-direction pilots based on typical projects and multi-directional comprehensive pilots based on typical cities, exploring new technologies and models for the construction of the new-type power system, and promoting breakthroughs in its development. CICC released a research report stating that State Grid Corporation of China's Q1 power grid investment was up 27.7% YoY, setting a record high for the first quarter. UHV project construction proceeded in an orderly manner, and the tender volume for EHV equipment continued to grow significantly. It remains optimistic about the accelerated construction of the new-type power system, with domestic power grid investment momentum trending upward. 3, Safety requirements for intelligent connected vehicle integrated driving assistance systems were proposed for formulation The National Standard Information Public Service Platform announced a notice soliciting opinions on the proposed mandatory national standard project "Safety Requirements for Intelligent Connected Vehicle Integrated Driving Assistance Systems." The national standard plan "Safety Requirements for Intelligent Connected Vehicle Integrated Driving Assistance Systems" was proposed by MIIT and entrusted to the Intelligent Connected Vehicle Branch of the National Automotive Standardization Technical Committee for execution. With the rapid development of artificial intelligence technology, autonomous driving is undergoing unprecedented transformation. From intelligent perception to precise decision-making, from efficient control to data-driven approaches, AI has injected powerful momentum into autonomous driving. Haitong Securities believes that the main barriers to the development of large-scale autonomous driving models previously included computing power and data loops, with leading enterprises mostly being top tech companies; after Deepseek released a faster inference model, latecomers (including whole vehicle manufacturers and solution providers) may have new opportunities. According to the "Internet of Vehicles White Paper," it is estimated that by 2025, the market size of smart cars in China will approach 1 trillion yuan.

The market rebounded with fluctuations throughout the day yesterday, with the three major indices rising slightly. The total trading volume in the Shanghai and Shenzhen markets reached 1.14 trillion yuan, up 2.23 billion yuan from the previous trading day. Sector-wise, beauty and personal care, soccer concepts, innovative drugs, and pet economy sectors led the gains, while automobile manufacturing, steel, baijiu, and coal sectors lagged. At the close, the Shanghai Composite Index rose 0.43%, the Shenzhen Component Index gained 0.16%, and the ChiNext Index advanced 0.48%. In today's brokerage morning meetings, China Securities noted that molybdenum and tungsten prices continue to rise, highlighting investment opportunities in strategic metals. CICC suggested the yuan may still have room to appreciate against the US dollar. Huatai Securities indicated that the imminent reduction in policy interest rates is expected to lower costs for the insurance industry. China Securities: Molybdenum and Tungsten Prices Continue to Rise, Highlighting Strategic Metal Investment Opportunities China Securities stated that since the beginning of the year, strategic metals such as antimony, bismuth, tungsten, and molybdenum have seen successive price increases. In recent years, the price center of strategic minor metals has shown a significant upward trend, primarily due to increasing resource scarcity and supply rigidity, demand-side benefits from new energy, advanced materials, manufacturing upgrades, and military development, coupled with critical mineral resources becoming a new "battleground" in global competition. China Securities remains optimistic about the value reversion and stock valuation reassessment of China's dominant strategic mineral resources, recommending attention to strategic metal investment opportunities. CICC: Yuan May Still Have Room to Appreciate Against the US Dollar CICC noted that, in the medium and long term, the US dollar still holds a pivotal position in global reserves, but geopolitical and economic changes pose challenges. In the short term, the US faces "twin deficits" in fiscal and trade balances, particularly rising pressure from treasury bond issuance, suggesting the depreciation pressure on the US dollar may not be fully released. On the other hand, China's financial cycle adjustment is slowing while technological progress accelerates, and potential US dollar depreciation could strengthen the motivation to settle accumulated foreign exchange from current account surpluses in recent years, supporting the yuan's exchange rate. Huatai Securities: Imminent Policy Interest Rate Reduction Expected to Lower Insurance Industry Costs Huatai Securities believes the recent yuan appreciation expectations and mutual fund reforms have boosted liquidity in both A and H markets, driving up insurance stocks. Fundamentally, under the dynamic adjustment mechanism for policy interest rates, life insurance product rates are expected to be lowered in Q3 this year, improving the cost-profit inversion since early this year and potentially enhancing overall sales momentum. Currently, insurance stock valuations are at historically low levels, with persistently low interest rates remaining the biggest factor suppressing life insurers' valuations. Even though concerns about interest spread losses persist, the insurance sector is still likely to achieve decent returns in H2 amid improved liquidity and fundamentals. Huatai Securities values the importance of asset-liability matching.

[CICC: The Color TV Industry Landscape is Being Reshaped, Global Competition Opens Up Growth Space for China's Leading Black TV Manufacturers] A CICC research report states that since 2000, South Korean enterprises have gradually occupied the high ground of global color TV brand competition by leveraging the advantages of the entire industry chain. Today, however, the layout of China's industry chain has surpassed that of others, and R&D innovation by brand owners has accelerated, leading to changes in the global color TV market competition landscape. Over the past decade, the Matthew effect has become evident in the black TV sector, with Chinese enterprises squeezing out the market share of local small and medium-sized brands globally with their quality-to-price ratio. In 2024, the global color TV CR4 reached 56.3% (Omdia data). In the medium and long-term, we believe that with the popularization of mid-to-high-end Mini LED technology and breakthroughs in global market share, China's black TV enterprises are reshaping their brand images globally. The continuous improvement of profitability may reshape the industry's valuation system and open up new growth spaces.

This week, Hong Kong stocks generally maintained their strong momentum, with the weekly performances of the three major indices varying. By the close of trading, the Hang Seng Index (HSI) had risen by 1.10% week-on-week to close at 23,601.26 points; the Hang Seng Tech Index had fallen by 0.65% week-on-week to close at 5,246.87 points; and the Hang Seng China Enterprises Index (HSCEI) had risen by 1.36% week-on-week to close at 8,583.86 points. Note: Weekly performance of the HSI since the beginning of the year Notably, the HSI has achieved seven consecutive weeks of gains. Medium and long-term optimism becomes consensus among institutions Huatai Securities pointed out that despite uncertainties surrounding tariff issues and potential short-term disruptions due to high US Treasury yields, the risk premium of Hong Kong stocks has significantly pulled back, and the easing of tail risks in the economy will drive up the market's center of gravity. Morgan Stanley recently raised its target for the HSI to 24,500 points by 2026, emphasizing the valuation reshaping opportunities brought about by structural improvements in the Chinese stock market. However, CICC cautioned about short-term risks, believing that current market sentiment has recovered to a cyclical high, and the marginal effect of policy efforts may weaken. 3SBIO leads the market gains this week In the list of weekly gainers, 3SBIO (01530.HK) led the market with a weekly gain of 57.38%. The pharmaceutical company's collaboration agreement with Pfizer on a PD-1/VEGF bispecific antibody drug set a new industry record, with an upfront payment plus milestone payments totaling up to $6 billion, creating a new benchmark for out-licensing of domestically developed innovative drugs. Another pharmaceutical stock that performed well was ImmuneOnco Biopharmaceuticals (01541.HK), which rose by over 36% week-on-week. The company recently announced clinical progress, including the successful enrollment of three patients in the Phase Ib clinical trial of its first dual-target large molecule drug for autoimmune diseases, Amurevup alpha (CD47xCD20, IMM0306), targeting neuromyelitis optica spectrum disorder (NMOSD), with all patients receiving the drug smoothly. In addition, Alibaba Pictures surged by over 50% this week. The company recently announced its renaming to "Damai Entertainment Holdings Limited," focusing on the layout of the offline entertainment ecosystem and enhancing its brand recognition in the overall entertainment market. Subsequently, Huatai Securities and Citi raised their target prices to HK$0.75 and HK$0.92, respectively. Both Datang Gold and Lingbao Gold benefited from the trend of international gold prices, rising by 28.13% and 27.44%, respectively. In terms of news, COMEX gold continued to strengthen after breaking through $3,300 this week and is currently trading near $3,353. Technical pullback and signs of capital rotation emerge in the market on Friday Despite maintaining the recent upward trend overall this week, today's performance was not ideal. By the close of trading on Friday, the HSI had risen by 0.24%, the Hang Seng Tech Index had fallen by 0.09%, and the HSCEI had risen by 0.31%. The futures market showed significant divergence, with the pharmaceutical and gold sectors bucking the trend to strengthen, while the real estate sector was weighed down by development and investment data, and tea beverage stocks saw a correction as investors took profits. Pharmaceutical stocks were boosted by multiple positive factors. By the close of trading, Hengrui Medicine (01276.HK), Luye Pharma (02186.HK), and Innovent Biologics (01801.HK) had risen by 25.20%, 5.74%, and 4.18%, respectively. Note: Performance of pharmaceutical stocks In terms of news, pharmaceutical stocks have recently been receiving a series of positive developments, including the aforementioned agreement between Pfizer and 3SBio, as well as the strong debut performance of Hengrui Medicine on its first day of trading in Hong Kong. Zhongtai Securities stated that since 2024, despite monthly fluctuations in overseas CPI data, there is an expectation of a gradual shift towards interest rate cuts, with an anticipated improvement in investment and financing conditions. It is expected that integrated CRO/CDMO companies primarily reliant on overseas revenue, as well as domestic preclinical CRO companies, will see opportunities for valuation recovery. The first-day performance of Hengrui Medicine's H shares attracted significant market attention, with the stock surging over 30% during intraday trading. The company received over 450 times oversubscription during its IPO phase, highlighting the global competitiveness of Chinese innovative pharmaceutical companies as international institutions scrambled to acquire shares. The safe-haven attribute of the gold sector became prominent. By the close of trading, Lingbao Gold (03330.HK), Chifeng Jilong Gold Mining (06693.HK), and Zijin Mining (01815.HK) had risen by 9.16%, 3.28%, and 2.63%, respectively. Note: Performance of gold stocks On the news front, spot gold prices continued to rise, currently standing above $3,350 per ounce. CITIC Futures pointed out that the passage of Trump's "Tax Cuts and Jobs Act" through the House of Representatives has increased the likelihood of large-scale tax cuts being implemented, with expectations rising for a continued climb in the US deficit rate. This aligns with Moody's downgrade of the US credit rating, as the disorderly expansion of debt leads to a gradual contraction in the US dollar's creditworthiness, providing solid support for the medium and long-term bullish outlook on gold. Louise Street, Senior Market Analyst at the World Gold Council, stated that the macroeconomic situation remains difficult to predict, and this uncertainty may bring further upside potential to gold prices. As the turbulent situation persists, the demand for gold as a safe-haven asset from institutional, individual, and official sectors may further increase in the coming months. Real estate stocks were weighed down by development and investment data. By the close of trading, Yuexiu Property (00123.HK), Ronshine China (03301.HK), and China Vanke (02202.HK) had fallen by 2.68%, 1.44%, and 0.79%, respectively. Note: Performance of real estate stocks In terms of news, data from the National Bureau of Statistics (NBS) showed that from January to April, national real estate development investment reached 2,773 billion yuan, a year-on-year decrease of 10.3%. Among this, residential investment was 2,117.9 billion yuan, down 9.6%. From January to April, the sales area of newly-built commercial housing reached 282.62 million m², down 2.8% YoY, with the decline narrowing by 0.2 percentage points compared to the January-March period. Tea beverage stocks weakened slightly By the close, Cha Panda (02555.HK), Tenfu (06868.HK), and Mixue Group (02097.HK) fell by 4.19%, 4.09%, and 1.40%, respectively. Note: Performance of tea beverage stocks In terms of news, most tea beverage stocks, including Cha Panda, weakened, which was related to profit-taking by some investors. Taking Mixue Group as an example, since its listing, the company's shares have risen by over 150% in total. Stocks with abnormal movements NetEase Cloud Music rises over 5%, with Q1 gross profit up nearly 14% QoQ NetEase Cloud Music (09899.HK) rose by 5.32% to close at HKD 217.60. In terms of news, NetEase Cloud Music's net revenue for the first quarter of this year was RMB 1.858 billion, with a gross profit of RMB 683 million, corresponding to a gross profit margin of 36.7%. Bilibili rises over 4%, with Q1 results exceeding expectations Bilibili-W (09626.HK) rose by 4.35% to close at HKD 146.40. CMB International released a research report stating that Bilibili announced its financial results for the first quarter of 2025, with total revenue increasing by 24% YoY to RMB 7 billion, in line with market consensus expectations. Adjusted net profit reached RMB 362 million, turning around from a net loss of RMB 456 million in the first quarter of 2024 and exceeding market expectations of RMB 248 million. For the second quarter of this year, CMB International expects Bilibili to maintain a 20% YoY revenue growth rate. Meanwhile, benefiting from the strong momentum of its advertising and mobile gaming businesses, its profit margin will further expand.