On June 25th, the three major A-share indices continued to adjust, with the ChiNext Index leading the decline. By the midday close, the Shanghai Composite Index fell by 0.38%, the Shenzhen Component Index fell by 0.62%, and the ChiNext Index fell by 1.35%. The semiconductor industry chain experienced a correction, with GPU and advanced packaging directions leading the decline, while high-speed copper connections, computing power, and consumer electronics themes weakened; vitamins, PEEK materials, industrial machine tools, and Huawei automobile concept stocks were active. Over 2,800 individual stocks rose across the entire market.
Let's review the market hotspots from the morning session.
**Automobile Consumption Welcomes Another Major Policy Benefit, Automobile Parts Sector Surges During the Session**
The automobile parts sector surged during the session. By the midday close, Wantong Intelligent Control hit a 20% limit up, Jin Qilin achieved a four-day board, and Dong'an Power, Kai Zhong Shares, and Shenglong Shares all hit the daily limit up, with Zhongjie Precision and Chaojie Shares following suit.
The "Measures on Creating New Consumer Scenarios and Cultivating New Growth Points of Consumption" (hereinafter referred to as "Measures") issued by the National Development and Reform Commission and other departments propose to expand new scenarios for automobile consumption. They encourage cities with purchase restrictions to relax vehicle purchase limits and issue more car purchase quotas. Through the joint efforts of central and local governments, funds are arranged to support the scrapping and renewal of old cars that meet the conditions.
The Measures suggest encouraging places with conditions to support the replacement and renewal of cars. It proposes to expand the pilot scope of full electrification of public vehicles. Steadily promote the commercial operation of autonomous driving and create new scenarios for high-level intelligent driving.
The Measures also call for the pilot application of "vehicle-road-cloud integration" in smart cars. It initiates pilot reforms for urban automobile circulation and consumption. By integrating automobile races, self-driving camping, automobile cultural experiences, car modifications, and car rentals, it aims to enrich the products and services of the aftermarket and further promote the trustworthy and convenient trading of second-hand cars.
Cinda Securities believes that under the policy's encouragement of consumption and the new product cycles of various car companies, the industry's prosperity and terminal sales are expected to see improvement.
**Industrial Machine Tool Concept Erupts with 8 Stocks Hitting the Daily Limit, Including Jin Rong Tian Yu and Pangu Intelligence**
The industrial machine tool concept saw a strong lift during the session. By the midday close, stocks such as Heng Er Da, Jin Rong Tian Yu, and Pangu Intelligence hit the daily limit up, with Hua Chen Equipment rising by more than 11%, and Guosheng Zhike and Hongde Shares leading the gains.Hua Chuang Securities has noted that lead screws, which are components that convert rotary motion into linear motion based on helical transmission, are widely used in industrial equipment such as CNC machines, semiconductors, and precision grinders. The application space for lead screws is broad, and the core technological barriers are high. Industries such as humanoid robots and industrial mother machines are driving the rapid growth of the lead screw market. Domestic manufacturers are expected to accelerate the introduction to core customers and achieve localization through years of industry and technology accumulation and cost-effectiveness.
**2023 Annual "Economic Health Check" Report Released**
According to Xinhua News Agency, auditing, referred to as an "economic health check," is an important part of the supervision system of the Party and the state. On the morning of June 25th, at the 10th meeting of the 14th National People's Congress Standing Committee, Hou Kai, the Auditor General of the National Audit Office, reported on the "State Council's Report on the Implementation of the Central Budget for the Year 2023 and Other Financial Revenue and Expenditure" on behalf of the State Council.
This highly anticipated annual "economic health check" report shows that in 2023, the total revenue of the central general public budget was approximately 10.74 trillion yuan, with a total expenditure of about 14.9 trillion yuan, resulting in a deficit of 4.16 trillion yuan, which is in line with the adjusted budget.
In terms of the implementation of the central departmental budget, in 2023, 41 key audited departments and their 346 affiliated units received financial budget allocations of 582.404 billion yuan. A total of 22.626 billion yuan in various issues were identified. Among these, the central departmental level and its affiliated units had issue amounts of 3.629 billion yuan and 18.997 billion yuan, respectively, accounting for 16% and 84%.
**Ministry of Commerce: Online Retail Sales Reach 5.77 Trillion Yuan from January to May, Growing by 12.4%**
The head of the E-commerce Department of the Ministry of Commerce introduced the development of e-commerce in China from January to May 2024. This year, China's e-commerce has played an active role in promoting the recovery and improvement of consumption, promoting the integration of the digital and physical economies, and expanding international economic and trade cooperation, with the digitalization level in the commercial field continuously improving. Consumer e-commerce has stimulated market potential. Online promotional activities have a strong pulling effect. The Ministry of Commerce guided the organization of the "Double Quality Shopping Festival" and the "618" event, which was held earlier, driving online retail sales to reach 5.77 trillion yuan from January to May, a 12.4% increase. Among these, the online retail sales of physical goods accounted for 24.7% of the total retail sales of consumer goods, an increase of 0.8 percentage points from January to April. The growth momentum of service consumption is strong, with key monitored online service consumption growing by 23.2%, and the sales of major online travel platforms for inbound tourism increasing by 1.9 times. There are many highlights in digital consumption, with AI-related products growing by 20.8%. E-commerce platforms play a significant role in the exchange of old for new products, with the delivery scope of related products expanded to over 96% of urban areas nationwide. In May, the main categories such as washing machines, furniture, and mobile phones accelerated, with increases of 33%, 21.3%, and 20%, respectively.
**National Intellectual Property Administration: Using Artificial Intelligence Technology to Improve Patent Examination Quality and Efficiency**
According to the official WeChat public account of the National Intellectual Property Administration, from June 18th to 20th local time, the 17th China-US-EU-Japan-Korea Intellectual Property Five-Bureau Cooperation Director's Series Meeting was held in South Korea. Shen Changyu, the Director of the China National Intellectual Property Administration, led a delegation to attend. At the International Intellectual Property Protection Conference, the directors of the five bureaus and the Deputy Director General of the World Intellectual Property Organization discussed the challenges and opportunities that artificial intelligence and digital innovation pose to intellectual property rights. Shen Changyu pointed out that the China National Intellectual Property Administration has always paid close attention to the impact of artificial intelligence and digital transformation on the intellectual property system. On the one hand, it continuously and dynamically improves the patent examination standards for new technologies and new fields such as artificial intelligence and big data. On the other hand, it actively uses artificial intelligence technology to improve the quality and efficiency of patent examination, promote the digital transformation and intelligent upgrading of examination work, and actively explores the application of large model technology in the fields of quality improvement, protection, utilization, and service of intellectual property examination.
**Ministry of Commerce: Promote the Exchange of Old Consumer Goods for New Ones to Ensure That "Real Gold and Silver" Discounts Reach Consumers Directly**On June 20th, Shen Qiuping, the Vice Minister of Commerce, chaired a special inter-ministerial meeting on the consumer goods exchange for new initiative, summarizing the progress made at the current stage and planning the next steps.
The meeting pointed out that since the issuance of the "Plan to Promote the Exchange of Consumer Goods for New," all departments have refined policy measures according to their task division, seriously organized and implemented them, and made smooth progress, achieving good results at the start and phased effectiveness. In terms of automobiles, from January to May, the national recovery of scrapped vehicles reached 2.2 million, a year-on-year increase of 19.4%; the sales of new energy vehicles were 3.895 million, a year-on-year increase of 32.5%, accounting for 33.9% of new car sales; the transaction of second-hand cars was 7.864 million, a year-on-year increase of 8.7%. In terms of home appliances, from January to May, the retail sales of home appliances and audio-visual equipment above the designated size units reached 342.1 billion yuan, a year-on-year increase of 7%, of which the retail sales of home appliances and audio-visual equipment above the designated size units in May was 74.3 billion yuan, a year-on-year increase of 12.9%. In terms of home decoration and kitchen and bathroom, in May, the retail sales of furniture products above the designated size units increased by 4.8%, accelerating by 3.6 percentage points compared to the previous month.
The meeting emphasized that all units must take their responsibilities seriously, increase policy support, continuously improve convenient services for the public, and promote the implementation of established policy measures as soon as possible. It is necessary to do a good job in policy publicity and interpretation, create a good market environment, and follow up and supervise the effectiveness in a timely manner. It is important to play a good combination of policies, focus on implementation, and strongly promote to ensure that the work of exchanging old for new achieves solid results.
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