Brief

Huatai Securities predicts a significant growth phase for switch chips in data centers, driven by AI, starting in 2026. The firm highlights the increasing demand for more robust and higher-capacity network systems in large-scale AI clusters, which will boost both the volume and price of these chips. Additionally, the emergence of "super node" architectures for domestic AI computing could further drive demand for switch chips, with Huatai Securities forecasting the domestic market to reach 24.2 billion yuan by 2028. AI

Guosheng Securities anticipates significant AI developments from Google's upcoming I/O conference, particularly the potential release of its Omni model, and remains optimistic about the AI token economy. The firm notes China's major telecom operators are accelerating their token business strategies, with China Telecom launching a large-scale "Token Factory" procurement and China Mobile forming an ecosystem alliance. Additionally, Huatai Securities highlights the rapid growth in the memory sector, projecting substantial profits for Changxin Technology due to increased computing power demand and rising DRAM prices, suggesting upstream materials may also benefit. AI

Huatai Securities predicts that the semiconductor materials sector will accelerate due to strong demand, particularly benefiting from the growth in the memory industry. Changxin Technology's projected net profit of 50-57 billion yuan in the first half of 2026, driven by increased computing power demand and rising DRAM prices, highlights this trend. The report also notes the potential for increased domestic production of semiconductor materials in China as self-sufficiency becomes a priority and local companies improve their competitiveness. AI

Huatai Securities is optimistic about the coal sector, predicting continued outperformance due to sustained demand for both thermal and non-thermal coal. They anticipate domestic coal prices to remain strong, potentially exceeding 900 yuan/ton in the summer peak of 2026. Separately, CITIC Securities highlights the standardization and widespread adoption of Token services, driven by major telecom operators. This shift is expected to revalue the industry and transition compute leasing from fixed monthly rates to usage-based billing, favoring leading compute leasing providers. AI

The number of securities brokers in China has fallen below 20,000, marking a significant decline in the industry. Over 5,500 professionals have left the securities sector this year, surpassing last year's total outflow, with brokers accounting for over 80% of these departures. Major firms like China International Capital Corporation Wealth Securities and China Merchants Securities have completed the elimination of this role, while Huatai Securities has a minimal number remaining, signaling a major shift in brokerage operations. AI

Japan's core inflation in April dropped to a four-year low of 1.4%, primarily due to government tuition subsidies. Analysts anticipate inflation will rise again in the coming months, influenced by high oil prices and supply chain disruptions from Middle Eastern conflicts. Separately, China's National Development and Reform Commission and National Energy Administration issued a notice to promote multi-user green electricity direct connection, expanding the scope from one-to-one to one-to-many connections. This policy aims to support zero-carbon park scenarios and is expected to reduce customer risk for developers, accelerate project implementation, and boost demand for grid equipment and energy storage. AI

Huatai Securities reports a strong first quarter for the e-commerce logistics sector, with most major players like STO Express, ZTO Express, and YTO Express showing significant volume growth above the industry average. This performance is attributed to stable pricing and cost reduction efforts, leading to improved per-package profitability compared to the previous year. The firm anticipates continued profit recovery throughout the year, supported by anti-monopoly regulations that are expected to maintain pricing discipline. AI