Zhongtong Finance has learned from a research report released by gtja Securities that the export trend continues to improve due to low base effect last year, increased corporate export behavior, the domestic policy of stabilizing foreign trade is further strengthened, and external demand remains resilient. External events affected the sector's sentiment. Many companies are advancing overseas supply chains, multi-regional layouts, and other strategies, such as Anker's new fire plan, and Amazon's own policy optimization (such as commission rates) to partially hedge potential tariff risks. With Amazon's Prime Day about to start, sales growth for top cross-border e-commerce companies in Q2 is expected to be good, demonstrating their operational resilience.

June's exports were better than expected due to the low base, increased corporate export behavior, and continued resilience in foreign demand. 1) The General Administration of Customs disclosed foreign trade data for June, which, calculated in US dollars, showed an increase of 3.6% YoY for China's exports and 2% YoY for imports from January to June. This is compared to +0.9pct and -0.9pct from January to May and January to April, respectively. For June exclusively, exports increased by 8.6% YoY and imports decreased by 2.3% YoY. 2) GTJA Securities believes the export trend continues to improve due to low base effect last year, increased corporate export behavior, the domestic policy of stabilizing foreign trade is further strengthened, and external demand remains resilient. 3) By country, the growth rate of developed regions such as the EU/USA has marginally improved, with growth rates reaching 4/7%, while the growth rate for ASEAN/Latin America/BRICs is faster, reaching 15/16/6%, respectively. 4) By product: capital goods and intermediate goods performed the best; ships 54%, unwrought aluminum and aluminum products 25%, refined oil 24%, integrated circuits 23% have grown rapidly; consumer goods exports are polarized, textiles and clothing growth rates have declined, but toy declines have narrowed.

External events are affecting the sector's sentiment, and many companies are advancing overseas supply chains and multi-regional layouts. 1) US presidential candidate and former president Trump was shot at a rally in Pennsylvania on Saturday night and is currently safe and continues to participate in campaign events as scheduled. Despite the fact that Trump's approval rating was significantly ahead of Biden's prior to the shooting, his chance of winning has now increased significantly. 2) Looking back at history, during Trump's last term in office, he launched a trade dispute with China, causing tariffs to rise from about 3% to about 21%. Although trade issues were not discussed in detail during the televised debate in June, Trump has mentioned several times previously that he would impose tariffs if elected. 3) GTJA Securities believes that many companies have been advancing overseas supply chains and multi-regional layouts in recent years, such as Anker's new fire plan, and Amazon's own policy optimization (such as commission rates) to partially hedge potential tariff risks. 4) From the perspective of the proportion of US (or North American) business, SITIME accounts for about 90%, Anker Innovations accounts for about 48%, Zhiou Technology accounts for about 36%, Huakai Yibai Technology accounts for about 30-35%, Focus Technology accounts for about 10%, Miniso accounts for about 10%, and Zhejiang China Commodities City Group accounts for less than 5%.

Amazon's Prime Day is about to start, and we are expecting continued good growth by the leading companies. 1) GTJA Securities expects continued good growth in sales for top cross-border e-commerce companies in Q2, showing their operational resilience; 2) Amazon's Prime Day annual shopping event for 2024 will be held on July 16-17. Considering the following: ①The growth rate of Prime Day sales from 2021 to 2023 is 5.8/8.2/6.7% respectively, with better growth resilience than offline, and under current consumption environment, consumers prefer online cost-effective consumption; ②Prime membership breaks through 0.18 billion, setting a new high; ③Logistics performance is strengthened, and Q1 has set a new record for Prime member delivery speed. Therefore, GTJA Securities expects this year's Prime Day to have a strong performance, and we are looking forward to continued good growth by the leading companies.

Going global continues to have a high level of prosperity in the long term, and we recommend targets with strong operational resilience and relatively low exposure to external risks. 1) Main line 1: the Q2 performance of the cross-border e-commerce sector is expected to diverge, with high-order and low-volume companies being relatively less affected by the rising sea freight prices, and companies with low US content being relatively less affected in the short term by external events affecting sentiment. 2) Main line 2: Retail going global sector; 3) pay close attention to the progress of new company listings.

Risk warnings: risks of tariffs and other trade frictions, upward international logistics prices, supply chain management risks, risks of large exchange rate fluctuations, intensified competition, etc.