[Morning Post] Ministry of Commerce Speaks Out! Discusses Rare Earth Exports, China-EU Economic and Trade Relations

Macro News

1. On the afternoon of June 19, Chinese President Xi Jinping had a phone conversation with Russian President Vladimir Putin, focusing on exchanging views on the situation in the Middle East. President Xi elaborated on China's principled position and stated that the current situation in the Middle East is very critical, once again confirming that the world has entered a new period of turbulence and transformation. If the conflict escalates further, not only will both sides suffer greater losses, but countries in the region will also be severely affected. In response to the current situation, President Xi proposed four points. First, promoting a ceasefire and ending the war is the top priority. Second, ensuring the safety of civilians is of utmost importance. Third, initiating dialogue and negotiations is the fundamental way out. Fourth, the efforts of the international community to promote peace are indispensable.

2. Foreign Ministry spokesperson Guo Jiakun hosted a regular press conference yesterday. A reporter asked about Iran's first use of long-range super-heavy missiles, "Sejjil", to launch strikes against targets inside Israel in the early hours of the 19th, Beijing time. Meanwhile, Israel's strikes on the Iranian capital are also intensifying. Guo Jiakun pointed out that China strongly calls on the parties involved in the conflict, especially Israel, to prioritize the interests of the people in regional countries, immediately cease fire and end the war, and alleviate the current tense situation.

3. Yesterday, the Ministry of Commerce held a regular press conference. When asked about issues related to rare earth exports, spokesperson He Yadong stated that the review of applications for rare earth export licenses would be continuously accelerated in accordance with laws and regulations. A reporter also asked about China-EU economic and trade relations. He Yadong said that China and the EU are each other's major trading partners. China attaches great importance to China-EU economic and trade relations and has maintained close communication with the EU at all levels.

4. The International Atomic Energy Agency (IAEA) stated on the 19th local time that information it has indicates that Iran's Arak heavy water reactor, which is under construction, has been attacked. The IAEA said that the reactor was not in operation and did not contain any nuclear materials, so there was no radioactive impact.

Industry News

1. On June 19, the Ministry of Industry and Information Technology (MIIT) and two other departments jointly held a video conference on strengthening the safety management of new energy vehicles (NEVs). The meeting required that long-termism should be upheld, and "cut-throat competition" should be avoided. There should be no cutting corners, using inferior materials, or sacrificing product performance and reducing product quality to achieve short-term "cost reduction and efficiency enhancement."

2. The Publicity Department of the Beijing Municipal Committee of the Communist Party of China and other departments issued the "Interim Support Measures for Promoting the High-Quality Development of Beijing's Game and Esports Industry." The measures propose supporting game enterprises in improving their R&D efficiency through methods such as computing power construction, large model deployment, and data governance, and carrying out intelligent technological transformation. Rewards of up to 30 million yuan will be given based on the investment that can be included in the scope of support for the projects.

3. The National Narcotics Control Commission held a press conference in Beijing on the 19th, releasing the "Announcement on Including N-Ethylhexedrone-Type Substances and 12 Other Substances (Including Etflazenil)" and deciding to include N-Ethylhexedrone-type substances and 12 other new psychoactive substances under control to strengthen supervision and crackdowns, preventing their abuse and spread.

4. A reporter from the "Science and Technology Innovation Board Daily" confirmed from multiple sources that Unitree recently completed the closing of its Series C financing round, which began at the end of last year. The round was co-led by funds under China Mobile, Tencent, Jinqiu, Alibaba, Ant Group, and Geely Capital, with most existing shareholders participating in the follow-on investment.

5. Insiders revealed that the theme of the meeting held by the China Photovoltaic Industry Association (CPIA) this week was still centered around "production restrictions to stabilize prices." Insiders stated that the PV industry will face more significant production cuts in Q3, with the expected operating rate projected to decrease by approximately 10%-15% MoM. Meanwhile, low-price sales will be subject to audit and verification.

6. POP MART's THE MONSTERS "High Energy Ahead" Series - Vinyl Plush Keychain Blind Boxes (LABUBU 3.0 Series) were restocked on channels such as the POP MART official mall mini-program, with many consumers reporting on social media that they had successfully purchased them. Insiders from POP MART stated that the restocking of POP MART's related products does not follow a regular pattern, partly to avoid the influence of scalpers. After the restocking, the price of Labubu 3.0 in the secondary market was halved.

Corporate News

1. Taiji Semiconductor announced that its actual controller is proposed to be changed to the Hubei Provincial State-owned Assets Supervision and Administration Commission, and its stock will resume trading.

2. Lianchuang Optoelectronics stated on an interactive platform that there is robust demand for counter-UAV equipment in the Middle East, and the company is actively engaging with potential local customers and partners.

3. Jinzhongzi Liquor announced that there has been no change in its main business scope.

4. Hisun Pharmaceutical announced its intention to establish a synthetic biology-focused independent subsidiary through a joint venture.

5. Sirnaomics announced that it expects its net profit in H1 to increase by 254%-332% YoY.

6. CloudWalk Technology stated on an interactive platform that its liveness detection and dynamic verification technology based on multimodal AI can be applied to stablecoin wallet scenarios.

7. Zhongyan Chemical announced its intention to approve the capital reduction by shareholders of Zhongyan Alkali Industry, which is expected to constitute a major asset restructuring.

8. Huitong Energy announced that its subsidiary intends to invest 30 million yuan in an industrial fund, which will focus on hard technology sectors centered around semiconductors and intelligent manufacturing.

9. Zensun Pharma announced that the first participant has been enrolled in the Phase III clinical trial of its Class I innovative drug, RAY1225 Injection, for the treatment of obesity/overweight.

10. Guosen Securities announced that its acquisition of 96.08% of shares in Vanho Securities had been approved by the Merger and Acquisition Review Committee of the Shenzhen Stock Exchange.

11. Online and Offline announced that its controlling shareholder and actual controller were planning a change in control, and its shares were suspended from trading.

12. Shandong Gold International announced that it had authorized its management to initiate preparations for the overseas issuance of H shares and listing in Hong Kong.

13. Sanhua Intelligent Controls announced that it had determined the final price for this issuance of H shares at HKD 22.53 per share.

14. GigaDevice announced that it had submitted an application for the issuance and listing of H shares to the Hong Kong Stock Exchange and published the application materials.

15. Kangda New Materials announced that it intended to acquire no less than 51% of the equity in CASIC Microelectronics to expand into the semiconductor integrated circuit sector.

Global Markets

1. Affected by Juneteenth, the US stock market was closed on Thursday. Major European stock indices closed lower, with the German DAX30 index closing down 0.88%.

2. The settlement price for the August contract of Brent crude oil futures rose by $2.15, or 2.8%, to $78.85 per barrel.

3. COMEX gold futures fell by 0.61% to $3,387.4 per ounce. COMEX silver futures fell by 1.5% to $36.36 per ounce.

4. On June 19 local time, the US White House stated regarding the Iran issue that US President Trump would decide within two weeks whether to attack Iran. White House Press Secretary Levitt also said on the same day that communication between the US and Iran was continuing. US President Trump claimed that there was a "good" chance of negotiations with Iran.

Investment Opportunities Reference

1. Institutions say Samsung is reducing DDR4 supply, and DDR4 may face undersupply until Q3

Market research firm TrendForce stated that Samsung continues to reduce DDR4 supply, and it is expected that the undersupply of DDR4 may continue until Q3 of this year. As DDR4 prices rise, it will accelerate users' upgrades to DDR5. According to TrendForce's survey, the spot price of DDR4 has surged significantly. Since June, the average spot price of DDR4 8Gb chips has risen from $2.73 to $4.28, an increase of over 50%; the average spot price of DDR4 16Gb chips has risen from $6.1 to $9.5, also an increase of over 50%.

According to CFM Flash Market, the shortage and price increase of spot DRAM resources produced using older processes continue. Storage producers are firmly maintaining a stance of reporting price increases for spot prices of products such as channel memory modules, industry memory modules, and LPDDR4X. Yongxing Securities' research report states that, benefiting from supply-driven price increases, a gradual return of inventory to normal levels, and AI-driven demand increases for HBM, SRAM, and DDR5, the industry chain is expected to bottom out and rebound.

2. Accelerated Development Expected in This Segment Driven by AI Computing Power Demand

Alibaba Cloud will launch its second data center in South Korea by month-end to meet the surging demand fueled by the rapid advancement of generative AI.

The rapid growth of intelligent computing power has directly spurred an urgent need for efficient cooling technologies. Guotai Junan Securities noted that the surging demand for AI computing power is expected to accelerate the development of liquid cooling in data centers. With the rapid expansion of AI applications and increasing computing power density, the cooling requirements for computing equipment and data center racks have surged, driving faster adoption of liquid cooling technology. Guosen Securities believes that in the AI era, the continuous rise in power consumption of computing chips and the power density of equipment are reaching the limits of traditional air cooling, making liquid cooling an inevitable trend. Currently, cold plate technology dominates liquid cooling applications, while immersion cooling represents the long-term direction. Meanwhile, stricter PUE regulations in China and the anticipated release of operators' liquid cooling whitepapers are expected to further accelerate domestic adoption.

3. Critical Window for Scale-Up Development in This Strategic Emerging Industry

At the 55th Paris Air Show, United Aircraft Group from Longgang, Shenzhen, showcased its flagship products—the Platinum Shadow T1400 tandem unmanned helicopter and the Lanthanum Shadow R6000 tiltrotor—highlighting China's technological prowess and industrial depth in low-altitude intelligent equipment. The drone's superior performance made it the "star of the show."

Since 2021, industrial drones have rapidly penetrated sectors like agricultural pest control, surveying, industrial inspection, logistics, emergency response, and security, with applications expanding alongside technological advancements. The global and Chinese civilian drone industry has transitioned from "consumer-led" to "industrial-driven." Market analysts suggest that with ongoing policy support for the low-altitude economy and reforms in airspace management, the drone industry is entering a critical window for scaled and intelligent development. As infrastructure projects for the low-altitude economy commence and pilot programs emerge in emergency services, forestry, smart governance, and urban logistics, related projects are expected to accelerate, shifting demand from pilot testing to widespread adoption.

4. April Sales Achieved Double-Digit YoY and MoM Growth, Signaling Potential Full Recovery in 2025 for This Segment

Recent media reports highlight a surge in upgraded ratings for semiconductor stocks. As of June 18, among stocks covered by five or more rating agencies, 21 met the criteria of three consecutive months of MoM rating improvements, with the latest ratings up over 6% compared to three months prior. From the perspective of the industry distribution of the 21 potential stocks, there are relatively more individual stocks in the semiconductor industry.

According to a research report by Shanghai Securities, global semiconductor sales in April 2025 achieved double-digit growth both YoY and MoM. The electronic semiconductor industry may be undergoing a comprehensive recovery in 2025, with the industrial competition landscape expected to accelerate in being cleared and repaired, and the industrial profit cycle and profits of related companies are expected to continue recovering.