Core Viewpoint - The A-share market is experiencing strong momentum, with the Shanghai Composite Index reaching a ten-year high of 3883.56 points as of August 25, 2025, and total trading volume on the Shanghai and Shenzhen main boards hitting a record 27,953.8 billion yuan for the year [2][10]. Group 1: Micro-Plate Style - The advantages of the micro-plate style are diminishing, with excess returns decreasing from 7.2% in May to -3.3% in August compared to the CSI All Share Index [5][30]. - The current crowding degree of the micro-plate style is low, with a score of 1.5 as of August 22, 2025, indicating a relatively low level of crowding [5][35]. - Despite increased participation from individual investors, the overall crowding degree remains low, with large orders showing increased volatility while smaller orders remain stable [5][35]. Group 2: Growth Style - There has been a slight increase in individual investor participation in the growth style since July 2025, while institutional investor participation has slightly decreased [6][38]. - The relative heat of news sentiment for the growth style has not reached overheating levels, indicating that there is still room for growth [7][40]. - The growth style is expected to maintain its advantages, supported by a favorable macro environment characterized by ample liquidity and relaxed risk appetite [7][42].

Core Viewpoint - The article discusses the unexpected resilience of the US stock market and inflation despite concerns over tariffs and the Federal Reserve's interest rate decisions, suggesting that the market's fears may be misplaced [2][5]. Group 1: Tariff Impact on Inflation - The impact of tariffs on inflation has been underestimated due to a focus on the end effects rather than the transmission process, which allows for a gradual adjustment [3][9]. - The actual tariff rate is currently at 10.6%, significantly lower than the theoretical rate of 16-17%, indicating that the immediate impact on consumer prices has been limited [7][9]. - Tariff costs are primarily absorbed by exporters and importers, with consumers only bearing 8-10% of the costs, which further dilutes the immediate inflationary impact [16][18]. Group 2: Transmission Delays and Cost Sharing - The transmission of tariff costs to consumer prices is slow, with delays of 2-3 months due to logistics and customs processes [11][12]. - The share of taxable imports has increased, but the overall impact on inflation remains controlled due to trade agreements and exemptions [12][19]. - Inventory accumulation has provided a buffer against immediate price increases, allowing businesses to manage costs more effectively [12][19]. Group 3: Market Reactions and Future Outlook - The market's concerns about tariffs and inflation have created a divergence between expectations and reality, presenting potential investment opportunities [5][6]. - The Federal Reserve's interest rate decisions will be influenced by how much of the tariff burden is passed on to consumers, affecting corporate profit margins and inflation metrics [5][19]. - The article emphasizes the importance of understanding the distribution of tariff costs among exporters, importers, and consumers to gauge future market conditions [19][22].

Core Viewpoint - A-share companies' profitability showed a modest increase in the first half of 2025, with a year-on-year growth of 2.8%, while non-financial profits grew by only 1.5% [1][5][20]. Financial Performance - In the first half of 2025, the net profit attributable to shareholders for the entire A-share market, financial sector, and non-financial sector grew by 2.8%, 4.2%, and 1.5% respectively [1][5]. - Non-financial operating revenue experienced a slight decline of 0.4% year-on-year [1]. - In Q2 2025, the net profit growth rates for the entire A-share market, financial sector, and non-financial sector were 1.6%, 5.7%, and -1.6% respectively, indicating a negative growth for non-financial profits [1][19]. Sector Analysis - The real estate and export sectors saw a slowdown in growth compared to Q1, with PPI's year-on-year decline further widening, impacting non-financial revenue growth and profit margins [1]. - The financial sector remained active in Q2, with the securities and insurance industries experiencing a profit growth of 16.6%, driven by a 49.2% increase in securities profits and a 5.9% increase in insurance profits [1][19]. - The main board, ChiNext, and Sci-Tech Innovation Board saw year-on-year profit changes of -2.7%, +4.1%, and +24.5% respectively in Q2 [1][19]. Economic Segmentation - The new economy's profitability improved by 6.8% year-on-year in Q2, while the old economy turned negative with a decline of 8.3% [1][19]. - Profit growth in upstream, midstream, and downstream sectors was -16.3%, +3.7%, and +1.7% respectively, with upstream performance weakened by the widening PPI decline [1][19]. Industry Highlights - The TMT sector, non-ferrous metals, and certain midstream areas performed well, with specific growth characteristics including: - Energy and raw materials sector profits increased by 12.7%, 77.5%, and 40.5% for industrial metals, precious metals, and rare metals respectively [18]. - The midstream manufacturing sector, particularly in power equipment and new energy, saw a profit increase of 26.8% [18]. - The consumer sector's profitability was supported by price and cost reductions, with agriculture, forestry, animal husbandry, and fishery profits up by 20.4% [18]. Profit Distribution - The profitability of energy raw materials as a percentage of total profits decreased from nearly 40% in 2022 to 30.8% in Q2 2025 [1][14]. Performance Quality - Non-financial ROE remained stable, with upstream sectors experiencing a decline while midstream sectors stabilized [24][25]. - A-share companies' cash flow statements showed improvement, with operating cash flow reaching the highest level since 2010 [31][34]. - Capital expenditure growth improved, with new economy sectors showing positive growth for the first time since Q2 2024 [39][41].

Strategy - The recent underperformance of Hong Kong stocks is attributed to liquidity issues (rising Hibor), downward revisions in earnings, and low AH premium. The market has not formed an effective breakthrough despite previous upward movements, with a baseline target of 24,000 and an optimistic target of 25,000-26,000 remaining unchanged due to insufficient support from overall and structural analysis [5][7]. Macroeconomy - The stock market is showing improvement despite ongoing economic downward pressure. The report suggests that understanding the financial cycle can provide better insights into the stock market's positive performance amid economic challenges. Key differences between stock market rebounds following financial versus economic cycle adjustments are highlighted, including the need for fiscal stimulus to enhance ROE during financial cycle adjustments [9][11]. Macroeconomy - Powell's recent speech at the Jackson Hole meeting is interpreted as a "dovish" signal, but it does not provide strong guidance on the sustainability or extent of interest rate cuts. The speech emphasizes the Fed's response function, indicating that if employment risks outweigh inflation, rate cuts may occur. However, if inflation risks surpass employment concerns, the Fed may halt rate cuts, suggesting challenges for monetary policy amid conflicting employment and inflation targets [9][11]. Macroeconomy - The A-share market has shown a significant turnaround since 2025, with the Shanghai Composite Index reaching a nearly 10-year high. However, the underlying economic fundamentals have not improved significantly, leading to a divergence between economic stability and market enthusiasm. The report analyzes the root causes of the current bull market, emphasizing that capital inflows are not the sole driver of market performance [11][13]. Strategy - The recent increase in market activity and inflow of new capital is partly due to the initial signs of residents moving their deposits, driven by the attractiveness of A-shares amid an "asset shortage" environment. This trend is expected to continue, with the potential for increased trading volume and short-term volatility, but it is not anticipated to affect the medium-term market trajectory [13].

Core Viewpoint - The article discusses the implications of the Federal Reserve's shift towards a dovish stance, indicating a potential interest rate cut in September, which may lead to a temporary easing of dollar liquidity and impact various asset classes positively [2][4][6]. Group 1: Federal Reserve and Inflation Outlook - The Federal Reserve's recent comments suggest a preference for stabilizing growth over controlling inflation, which may reduce recession risks but increase stagflation risks [4]. - Market expectations for a September rate cut have risen to 86%, reflecting investor sentiment towards a more accommodative monetary policy [2]. - The article predicts that inflation in the U.S. may have reached an upward turning point, with an expected upward cycle lasting nearly a year [4][6]. Group 2: Market Reactions and Asset Performance - Historical data indicates that during periods of "inflation rising + growth declining," the dollar typically depreciates, U.S. Treasury yields decline, and gold prices increase, while stock market performance can be mixed [6]. - The article highlights that the current liquidity in the U.S. market is robust, with bank reserves significantly higher than during the 2019 liquidity crisis, which reduces liquidity risks [13][15]. Group 3: China’s Economic Environment - China's fiscal policies have been proactive, enhancing macro liquidity and shifting it towards the stock market, which has improved market sentiment and reduced downside risks for equities [18][21]. - The article notes that the correlation between stocks and bonds in China may turn negative in a low-inflation environment, leading to a "stock-bond seesaw" effect [24]. Group 4: Investment Recommendations - The article recommends overweighting A-shares and Hong Kong stocks, maintaining a standard allocation to U.S. and Chinese bonds, and adjusting U.S. stocks from underweight to standard weight due to improved liquidity conditions [29][42]. - It emphasizes the potential for gold to perform well in a declining interest rate environment, suggesting a continued overweight position in gold [34][40].

Core Viewpoint - Bloom Energy is positioning its solid oxide fuel cell (SOFC) systems as a new solution for powering data centers, with significant agreements already in place, including a notable partnership with Oracle for on-site fuel cell deployment [2][6]. Group 1: Market Dynamics - The North American data center power supply landscape is shifting from traditional sources like nuclear and gas to newer technologies such as SOFC, driven by shorter delivery times and increasing demand for reliable power [3][4]. - The projected annual installation capacity for SOFC in North America is expected to reach between 0.5 to 1.25 GW from 2026 to 2030, as data center projects totaling around 68 GW are in various stages of development [3][20][21]. Group 2: SOFC Technology and Economics - SOFC technology is characterized by high efficiency, cleanliness, and flexibility in deployment, making it suitable for various applications, including data centers [4][25]. - Current economic challenges for SOFC include the need to improve system lifespan and efficiency to reduce the cost per kilowatt-hour, with long-term goals set by the U.S. Department of Energy to lower costs to $225/kW for stacks and below $900/kW for systems by 2025/2030 [4][37]. Group 3: Competitive Landscape - Diesel generators remain the dominant choice for backup power in data centers due to their lower capital expenditure (capex) compared to SOFC, which is around $5/W, even after tax credits [14][17]. - The delivery time for SOFC systems is approximately 90 days, significantly shorter than the 2-3 years required for gas turbines, positioning SOFC as a competitive option in the evolving data center power supply market [18][36]. Group 4: Future Outlook - The demand for SOFC is expected to grow as data centers increasingly adopt off-grid power solutions, with a potential 50% of new data centers opting for such models between 2025 and 2030 [20][21]. - As the market for SOFC expands, the technology's adaptability to various fuels, including natural gas and hydrogen, will enhance its appeal, particularly as green energy initiatives gain traction [25][34].

Core Viewpoint - The article discusses the increasing political influence of the Trump administration over the Federal Reserve, particularly through recent personnel changes that could undermine the Fed's independence and affect monetary policy decisions [2][3][4]. Group 1: Importance of the Board of Governors - The Federal Reserve Board of Governors consists of 7 members with a 14-year term, designed to minimize political interference [3]. - The President has the authority to fill vacancies but requires "just cause" to remove members, which typically refers to serious misconduct rather than policy disagreements [3][4]. - Control over the Board can indirectly allow the President to influence the appointment of regional Federal Reserve Bank presidents, thereby impacting the Federal Open Market Committee (FOMC) and monetary policy [3][4]. Group 2: Historical Context and Current Trends - Historically, the power to veto or dismiss regional Federal Reserve Bank presidents has never been exercised, but recent political divisions within the Board suggest a shift towards increased politicization [4]. - The independence of the Federal Reserve has been challenged during periods of significant political pressure, particularly in the 1960s and 1970s when fiscal dominance was prevalent [5]. Group 3: Potential Future Actions by Trump - If Trump gains control of 4 votes on the Board, he could significantly influence FOMC personnel decisions [6]. - The expected steps include securing a majority on the Board before the 2026 regional Federal Reserve Bank president elections, replacing current presidents, and establishing a dovish team aligned with Trump's policies [6]. - This could lead to the implementation of accommodative monetary policies, such as interest rate cuts and quantitative easing [6]. Group 4: Asset Implications - The article suggests that fiscal dominance may lead to a weaker dollar and benefit assets like gold, while also positively impacting emerging market equities [7]. - The anticipated economic recovery, coupled with low interest rates, could elevate inflation expectations and support sectors such as manufacturing, military, and energy infrastructure [7].

Core Viewpoint - The article discusses the recent improvement in the Chinese stock market, emphasizing the importance of understanding the financial cycle perspective to explain the market's positive performance despite ongoing economic downward pressure [2][5]. Group 1: Financial Cycle vs Economic Cycle - The financial cycle adjustment leads to a significant deterioration in balance sheets, while the economic cycle adjustment has a relatively smaller impact on balance sheets [6][9]. - In the financial cycle adjustment phase, the stock market may experience a "reallocation" effect driven by balance sheet changes, whereas in the economic cycle adjustment, the stock market's recovery is more synchronized with economic improvements [12][11]. - The ideal policy mix differs between the two cycles; the financial cycle requires more fiscal stimulus, while the economic cycle relies more on monetary policy [7][30]. Group 2: Three-Step Process of Stock Market Recovery - The recovery of the stock market post-financial cycle adjustment can be divided into three steps: 1. Housing market adjustment and deterioration of private balance sheets, leading to an increase in the proportion of safe assets [3][12]. 2. Policy intervention to stabilize growth and improve private balance sheets, increasing the attractiveness of risk assets relative to safe assets, resulting in a rise in the stock market [3][12]. 3. Economic recovery, transitioning the stock market from being driven by reallocation effects to being driven by earnings [3][12]. Group 3: Factors Supporting Stock Market Rebound - Several factors support the current rebound in the Chinese stock market, including accelerated technological advancements and a correction of overly cautious market expectations regarding the medium to long-term economic outlook [3][47]. - The government's increased focus on the economy, housing market, and stock market has led to a perception that downside risks are limited [3][47]. - The decline in the cost-effectiveness of safe asset allocations has motivated investors to increase their allocation to risk assets, further supporting the stock market [3][47]. Group 4: Comparison with International Experiences - The article draws comparisons with the U.S. financial cycle, noting that the U.S. stock market recovery post-financial cycle adjustment occurred earlier than the recovery of nominal GDP and the housing market [17][15]. - The U.S. experience shows that stock prices may recover before economic indicators due to improvements in corporate balance sheets, even when the economy has not yet shown signs of recovery [11][21]. - Japan's experience illustrates that addressing debt issues is crucial for stock market recovery, as the Japanese market did not stabilize until after significant debt problems were resolved [41][43]. Group 5: Implications for China - The financial cycle adjustment in China is expected to have a lesser impact on various sectors' balance sheets compared to the U.S. and Japan during their respective financial crises [51][56]. - The heavy debt burden on local governments in China poses challenges, but improving balance sheets could support corporate development and enhance stock market potential [56][53]. - The article suggests that the ongoing structural improvements in the Chinese economy, particularly in innovation, may lead to a more resilient market compared to past financial cycle adjustments in other countries [56][58].

Core Viewpoint - The recent surge in the Shanghai Composite Index, reaching a nearly 10-year high, is primarily driven by capital inflows rather than significant improvements in domestic fundamentals or unexpected stimulus policies. This indicates a divergence between economic stability and market enthusiasm, suggesting that the relationship between market performance and capital flow is complex and interdependent [2][3][10]. Market Review Since the Beginning of the Year - The market has experienced a three-phase journey since the beginning of the year, with a notable decline in the US dollar and a strong performance in global equities, particularly in emerging markets and Chinese assets [4][5][6]. - The first phase (January to March) saw a narrative shift, leading to a revaluation of Chinese assets, with the Hang Seng Index rising over 30% and A-shares showing moderate gains, driven by technology sector performance [4]. - The second phase (early April) was marked by panic due to unexpected tariff announcements, resulting in significant declines in global risk assets, including a 13% drop in the Hang Seng Index [5]. - The third phase (mid-April to present) has been characterized by improved tariff expectations and a declining dollar, which has driven a global stock market rally, with A-shares leading the way [6][10]. Analysis of Bull Market Drivers - The report identifies several popular hypotheses regarding the drivers of the current bull market, including: 1. **National Team Put Option Theory**: The buying of ETFs by state-owned entities has provided support to the market, but this alone does not explain the sustained upward trend [10]. 2. **Domestic Economic Policy Adjustment**: While macroeconomic policy shifts have stabilized the market, expectations for stimulus have declined since late last year, indicating that policy adjustments are not the primary driver of the bull market [10][11]. 3. **Low Interest Rate Drive**: Although lower interest rates have made equities more attractive, the relationship is complex, as rising risk premiums can offset the benefits of lower rates [10][12]. 4. **Household Deposit Migration**: The significant increase in household savings since 2022 may have contributed to stock market investments, but this is seen as a reaction to prior market performance rather than a primary cause [14][16]. 5. **Dollar Depreciation**: The decline of the dollar has supported A-shares and Hong Kong stocks, but historical data shows that dollar movements do not consistently correlate with Chinese stock performance [16][17]. 6. **Innovation Narrative Reversal**: The emergence of DeepSeek and advancements in military and innovative pharmaceuticals have reshaped the narrative around Chinese innovation, contributing to market optimism [17][19]. Market Outlook - The ongoing restructuring of the global monetary order is viewed as a potential core driver of the current bull market, with implications for capital flows and asset pricing [31][32]. - Despite the current market enthusiasm, the sustainability of this rally will depend on macroeconomic policy support and the underlying fundamentals of the Chinese economy [34].

Core Viewpoint - The AI server power supply market is projected to become a trillion-yuan market, with rapid growth expected between 2025E and 2027E, driven by advancements in GaN/SiC technology and the adoption of 800V HVDC and SST architectures [2][3]. Market Size and Growth - The AI server power module market is expected to reach $74 billion in 2025E, $150 billion in 2026E, and $325 billion in 2027E, with a CAGR of 110%. The AI server power chip market is projected to grow from $55 billion in 2025E to $154 billion in 2027E, with a CAGR of 67% [4][6]. - The global AI server power market (chip basis) is anticipated to grow from approximately $55 billion in 2025 to $154 billion in 2027, driven by the continuous ramp-up of NVIDIA's NVL72 and other high-power ASIC models [6][39]. Key Components and Directions - The AI server power supply system can be divided into three layers: power supply system (UPS, HVDC, PDU), AC-DC conversion (PSU, PMC, BBU), and DC-DC conversion (PDB, VRM). The core drivers are high power density, high efficiency, and intelligent management [5][13]. - Future developments in AI server power supplies are expected to focus on three main directions: the upgrade of power supply architecture, the enhancement of core power devices, and the intelligentization of power management [9][10]. Incremental Growth Areas - The main incremental growth areas in the AI server power supply industry include: 1) PSU and DC-DC benefiting from GaN/SiC penetration, leading to increased value [10]. 2) The transition to 800V HVDC and SST architecture, which is expected to drive power system upgrades [10]. 3) The increasing importance of PDU and BBU in high power density and intelligent management scenarios [10][18]. Component Value Breakdown - The estimated value of the NVL72 server power system is approximately $70,855, with key components valued as follows: PSU at $9,647, BBU at $7,200, PDB at $4,500, and VRM at $5,783 [28][29]. - The market for DC-DC converters is projected to grow from $13.61 billion in 2025 to $28.47 billion by 2032, with a CAGR of 9.66% [21]. Competitive Landscape - The UPS market is expected to maintain high demand due to its critical role in ensuring power continuity and efficiency in AI data centers, despite the rise of HVDC systems [15][16]. - The market for GaN power devices is becoming increasingly competitive, with significant growth expected as companies focus on scaling production and integrating supply chains [24].