Daily Investment Strategy
Daily focus：JL Magnet（6680）
The negotiations between China and the United States in London have concluded. Both sides have only established a framework for the 90-day tariff reduction consensus in Geneva. China will temporarily ease restrictions on rare earth magnet exports to the U.S. for six months. JL Magnet expects overseas customers to shorten transportation times as much as possible, with customers potentially switching from sea freight to air freight to save time. Whether customers will place additional orders remains to be evaluated, according to JL Magnet. In terms of inventory, the company holds about 2–3 months of raw material stock, and it expects rare earth prices to steadily rise. Additionally, it is important to note that rare earth export applications still require exporters to prove that the materials are for commercial use only and not for military purposes.
China’s M1 Growth Accelerates in May
The People’s Bank of China (PBoC) announced that, as of end-May, the stock of aggregate social financing (TSF) reached RMB 426.16 trillion, up 8.7 % YoY; cumulative TSF additions for the first five months totalled RMB 18.63 trillion, RMB 3.83 trillion higher YoY. New TSF in May came in at RMB 2.29 trillion, of which government bonds contributed RMB 1.46 trillion, or roughly 70 %; new RMB loans accounted for only RMB 0.62 trillion. Over the same period, the M2 balance stood at RMB 325.78 trillion, up 7.9 % YoY, while M1 rose 2.3 %. The M1-M2 growth gap narrowed to –5.6 % from –6.5 % a month earlier, indicating improving market confidence and liquidity conditions.
Southbound Stock Connect on Friday booked a net inflow of HKD 189 million. Meituan (3690) recorded the largest net inflow, at HKD 1.22 billion, followed by China Construction Bank (939). Alibaba (9988) saw the largest net outflow, at HKD 3.31 billion, trailed by Tencent (0700).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to: https://apps.sfc.https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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