Group 1: Macroeconomy - The core of the "Great Beautiful Act" signed by Trump includes significant tax cuts for corporations and individuals, reductions in clean energy subsidies, and cuts to Medicaid and SNAP, which will increase the fiscal deficit in the future [3] - The act is projected to boost the actual GDP by less than 0.5 percentage points and has an inflationary impact of no more than 0.15 percentage points by 2026 [3] - Over the next decade, the combination of tariffs and tax cuts is expected to increase the net deficit by approximately $1.3 trillion, maintaining a deficit rate around 6% [3] - Current economic conditions, including low unemployment and moderate inflation, suggest that the U.S. government debt does not face immediate risks [3] Group 2: Strategy - The passage of the "Great Beautiful Act" is anticipated to increase bond supply, which may lead to higher U.S. Treasury yields, potentially affecting market sentiment and stock prices in the short term [7] - Despite short-term liquidity disturbances, the overall credit cycle recovery and the Federal Reserve's interest rate reduction trajectory remain unchanged, providing better buying opportunities for both U.S. stocks and bonds [7] Group 3: Quantitative & ESG - A real-time forecasting model driven by large language models (LLMs) is proposed to address the lag in macroeconomic indicators, allowing for timely adjustments in investment strategies based on economic changes [11] Group 4: Strategy - A forecast for the mid-year report indicates that A-share earnings growth may slow compared to the first quarter, but the second half of the year could see improved performance, particularly in the non-bank financial sector due to high market activity [14] - In the non-financial sector, midstream and upstream companies may face performance pressures due to price impacts, while sectors like gold, consumer upgrades, and tech hardware are expected to show structural strengths [14] Group 5: Food and Beverage Industry - The food and beverage sector is expected to stabilize in demand in the second half of 2025, driven by government policies aimed at boosting consumption and encouraging births [17] - The mass food segment has shown signs of improvement since March, with new consumption trends in snacks and health drinks likely to drive valuation increases in the sector [17] - The liquor sector is currently in a valuation correction phase, but the basic valuation has reflected pessimistic expectations, indicating emerging investment value [17]

Core Viewpoint - The resilience of the power grid and industrial control sectors is expected to continue in the first half of 2025, with potential opportunities for performance and valuation recovery in the second half of the year [1] Power Grid Sector - Domestic power grid investment showed strong growth in the first five months of 2025, with a total investment of 204 billion yuan, a year-on-year increase of 19.8% [5] - The approval pace for ultra-high voltage projects is expected to accelerate in the second half of the year, with significant projects already approved [7] - The demand for ultra-high voltage equipment remains strong, with a projected annual growth rate of around 10% for power grid investment from 2024 to 2026 [10] - The first half of 2025 saw a robust demand for primary network investments, with a notable increase in bidding amounts for key equipment [10] Industrial Control Sector - The industrial control market has shown signs of recovery, with the OEM market experiencing a 3.3% year-on-year growth in the first quarter of 2025, marking the first positive growth in three years [24] - The demand for new technologies, particularly in automation and robotics, is expected to enhance profitability and valuation flexibility for industrial control companies [3] - The overall capital expenditure momentum remains slightly subdued, but a narrow fluctuation in the new cycle is anticipated [18] Investment Themes - Focus on new productive forces, including AIDC and humanoid robots, which are expected to bring significant valuation elasticity [3] - The revival of nuclear energy is highlighted, with a focus on nuclear power equipment and small modular reactors (SMR) as key investment areas [48] - The overseas market for power grid investment is projected to maintain high growth, driven by energy transition and grid upgrades, with a 14.4% year-on-year increase expected in 2024 [4] Nuclear Energy Sector - The global nuclear power industry is experiencing a strategic revival, with significant investments and approvals in various countries, including China and the U.S. [49] - The demand for nuclear energy is increasing due to the need for stable, low-carbon baseload power, with a focus on SMR and controlled nuclear fusion technologies [62] - The nuclear power sector is expected to see a re-evaluation of its investment value as countries prioritize energy security and decarbonization [61]

Group 1: CPI Analysis - The core viewpoint indicates that the CPI turned positive in June, primarily driven by the recovery in industrial consumer goods prices, with energy and core goods showing improvement [1][2] - CPI food prices decreased by 0.3% year-on-year, with pork prices shifting from a 3.1% increase to an 8.5% decrease, negatively impacting CPI by 0.14 percentage points [2] - Industrial consumer goods prices improved, with CPI for these goods decreasing by 0.8%, a reduction in the decline by 0.4 percentage points compared to the previous month [2][9] Group 2: PPI Analysis - The PPI further widened its year-on-year decline from -3.3% to -3.6%, marking the seventh consecutive month of negative growth, with 26 out of 30 categories showing no growth month-on-month [4][5] - Domestic and international energy prices exhibited divergent trends, with international oil prices recovering due to geopolitical tensions, while coal prices fell due to seasonal demand and high inventory levels [5][6] - The "anti-involution" policy is expected to improve prices in certain sectors, with prices for gasoline and new energy vehicles showing smaller year-on-year declines [6] Group 3: Policy Implications - The focus is on expanding domestic demand and the implementation of "anti-involution" policies, addressing the supply-demand imbalance exacerbated by external uncertainties [7][8] - Policies are anticipated to promote consumption and improve supply-side regulations to correct market failures, aiming for a reasonable recovery in prices and sustainable innovation [8]

Core Viewpoint - The global energy storage market is expected to experience rapid growth in the second half of 2025, with total shipments projected to reach 390 GWh, representing a year-on-year increase of 16% [2][4]. Group 1: Global Energy Storage Demand - Global energy storage shipments are anticipated to exceed 390 GWh in 2025, with regional breakdowns: China (133 GWh, +16%), Europe (63 GWh, +29%), Australia (7 GWh, +15%), Japan (3 GWh, +12%), and other regions (83 GWh, +59%) [2][7]. - The U.S. forecast has been revised down from 143.5 GWh to 90 GWh due to tariff issues [2][7]. - Front-of-the-meter storage is expected to exceed 300 GWh globally, driven by increased penetration of renewable energy and supportive policies [2][3]. Group 2: Policy and Market Drivers - Policies aimed at enhancing energy security in Europe are expected to boost renewable energy development and, consequently, energy storage demand [2][3]. - The U.S. market may see a surge in demand due to potential tariff increases in 2026, prompting preemptive installations [2][21]. - In China, the cessation of mandatory storage requirements is expected to positively impact the economic viability of energy storage [27]. Group 3: Regional Insights - In Europe, the commercial storage market is poised for rapid growth, supported by government subsidies and dynamic pricing mechanisms [3][35]. - Australia is experiencing a significant increase in household storage demand due to extreme weather and rising electricity prices, with a projected 30% subsidy enhancing economic viability [28][65]. - India is implementing mandatory storage requirements for solar projects, indicating a growing market for energy storage solutions [30]. Group 4: Economic Viability and Market Trends - The economic feasibility of energy storage is improving globally, with various regions implementing supportive policies and incentives [4][35]. - The U.S. is witnessing a robust growth in household storage driven by tax incentives and increasing electricity demand [60][64]. - In emerging markets like Pakistan, high electricity prices and frequent outages are driving demand for solar-plus-storage solutions [56][71].

Core Viewpoint - The company is optimistic about the recovery of the Macau gaming industry, raising the total gaming revenue forecast for 2025 to a 7% year-on-year growth, reaching 83% of the 2019 level [1][46]. Revenue Forecast Adjustments - The company has increased the 2025 EBITDA forecast by 3%, expecting a 9% year-on-year growth, recovering to 89% of the 2019 level [2][46]. - The estimated EBITDA for Q2 2025 is projected to grow by 6% year-on-year, reaching $2.098 billion, which is 87% of the Q2 2019 level [2]. Market Dynamics - Macau is gradually transforming into a travel destination centered around entertainment performances, which may help attract more tourists [4]. - The increase in rebate expenses is expected to enhance the market size of the Macau gaming industry, with a focus on absolute EBITDA levels [4]. - The depreciation of the Hong Kong dollar may boost tourism demand from neighboring Asian countries [4][26]. Performance Analysis - In Q2 2025, Macau achieved a total gaming revenue of MOP 61.1 billion, a year-on-year increase of 8.3% and a quarter-on-quarter increase of 6.0%, recovering to 83.3% of the Q2 2019 level [6]. - The company expects mass gaming revenue to grow by 2.7% year-on-year, while VIP gaming revenue is anticipated to grow by 26.6% year-on-year [6][9]. Factors Driving Growth - The strong performance in Q2 2025 is attributed to popular non-gaming activities attracting tourists, the opening of new hotels, and the relaxation of rebate strategies by gaming operators [7]. - The company notes that the focus on hosting various entertainment events can drive repeat visits and attract new customers to Macau [19]. Strategic Adjustments - Sands China has shifted its market strategy to focus on EBITDA returns rather than restrictive profit margins, which is expected to drive domestic demand [33]. - The company has increased its reinvestment rate since May 2025, which is anticipated to enhance market scale [34]. Hotel and Capacity Insights - By mid-2025, all new properties and renovation projects in Macau are expected to be operational, with a total of 45,200 hotel rooms and an occupancy rate of 88% [43]. - Sands China, with over 12,000 hotel rooms, is positioned to leverage its capacity to attract overseas customers, particularly from Asia [41].

Core Viewpoint - The article discusses the development of a real-time forecasting framework driven by large language models (LLMs) to predict macroeconomic indicators, addressing the inherent lag in traditional macroeconomic data collection and reporting processes [1][7]. Group 1: Real-time Forecasting Methods - Macroeconomic indicators typically experience delays due to the time-consuming data collection and validation processes, often resulting in the release of data in the following month or quarter [2][7]. - Three common methods for addressing the lag in macroeconomic data are outlined: 1. **Periodic Lagging Method**: Using previously published data, which is reliable but relies on linear extrapolation [8]. 2. **Dynamic Lagging Method**: Adjusting data based on historical release patterns, which also relies on linear extrapolation [8]. 3. **Real-time Forecasting Method**: Building models for real-time state predictions, which may introduce randomness [8]. Group 2: Specific Forecasting Techniques - The article details various forecasting techniques: 1. **High-Frequency Data Splitting**: Involves using dynamic high-frequency macro data to update low-frequency macro data predictions, exemplified by the GDPNow model. This method is interpretable but requires extensive domain knowledge and may lead to overfitting due to noise in high-frequency data [9]. 2. **SARIMAX Model**: A seasonal autoregressive integrated moving average model that incorporates seasonal parameters and exogenous variables to enhance predictive power. It is suitable for stable, high-frequency indicators with limited external shocks [10][14]. 3. **LLMs for Text Interpretation**: Utilizing LLMs to analyze unstructured text data (e.g., macro news, analyst reports) to generate predictive signals based on semantic relationships and logical reasoning. This method captures market reactions to sudden events more quickly than traditional models [3][15]. Group 3: Performance of Forecasting Models - The effectiveness of real-time forecasting methods is evaluated: 1. **Autoregressive Predictions**: Limited improvement in predictive accuracy for indicators with weak correlation to previous values, such as CPI month-on-month and new RMB loans. Strongly correlated indicators (≥0.8) can simply use lagged data without modeling [4][27]. 2. **LLMs Enhancements**: Significant improvements in predictive accuracy for various indicators when using LLMs, with notable increases in correlation for new RMB loans (from -0.1 to 0.9) and export amounts (from 0.37 to 0.72) [5][35]. Group 4: Conclusion and Recommendations - The article concludes with a recommended approach for real-time forecasting of lagging macroeconomic data: 1. For indicators with high correlation to previous values, use lagged data directly. 2. For stable indicators with weak trends, apply the SARIMAX model with seasonal adjustments. 3. Utilize LLMs in conjunction with news or report data for real-time predictions when other methods are unsuitable [45].

Core Viewpoint - Consumer demand in the food and beverage sector is stabilizing at a low level, with structural highlights emerging despite overall weak consumer confidence. The sector is expected to improve marginally in the second half of 2025 due to government policies aimed at boosting domestic demand and consumption [1][4]. Group 1: Food and Beverage Sector Overview - The food and beverage sector is anticipated to see a marginal improvement in demand in the second half of 2025, driven by government policies to stimulate consumption and encourage childbirth [1]. - The mass food segment has shown signs of improvement since March 2025, with expectations for continued growth in new consumption trends such as spicy snacks, healthy beverages, and sparkling yellow wine [1][4]. - The liquor sector, particularly baijiu, is experiencing a valuation correction due to macroeconomic factors and policy impacts, with the fundamentals currently at a bottoming stage [1][4]. Group 2: Mass Food Segment - The mass food sector is expected to see stable demand growth, with high-growth sub-sectors like leisure snacks and soft drinks maintaining innovation and high market activity [4][7]. - The leisure snack market is witnessing a shift towards health-oriented and flavorful products, with ingredients like konjac and high-protein snacks gaining popularity [11][17]. - The soft drink sector is experiencing robust growth, particularly in health-related subcategories, with innovations in products like sugar-free tea and electrolyte water [19][27]. Group 3: Channel Trends - The snack retail channel is expanding, with significant growth in discount supermarkets and membership-based stores, indicating a shift in consumer purchasing behavior [8][9]. - E-commerce channels, including short video platforms and community group buying, continue to grow, with notable sales increases during shopping festivals [9][19]. - Traditional supermarkets are undergoing transformations to adapt to changing consumer preferences, with a focus on enhancing product offerings and store formats [9][10]. Group 4: Liquor Sector - The liquor industry is facing a downturn, with demand expected to remain under pressure in the second half of 2025, although leading brands are focusing on long-term value creation [4][52]. - The impact of government regulations on consumption patterns is being monitored, with expectations for gradual recovery in consumer demand for baijiu [53][55]. - The pricing dynamics of leading brands like Moutai are stabilizing after significant fluctuations, indicating a potential for recovery in the market [55][57]. Group 5: Dairy Products - The dairy sector is experiencing a mixed recovery, with some categories like liquid milk and cheese showing signs of improvement, while overall demand remains weak [30][31]. - The cost of raw milk has decreased, which is expected to benefit dairy companies' profit margins in 2025 [31][37]. - Long-term growth opportunities exist in emerging dairy categories and international markets, as companies expand their product lines and distribution channels [46][47]. Group 6: Frozen Foods and Condiments - The frozen food sector is expected to see revenue growth in the second half of 2025 as companies shift focus to consumer channels amid weak restaurant demand [49][50]. - The condiment industry is facing pressure from external demand but is benefiting from lower raw material costs, which may enhance profit margins [51]. - Companies are actively pursuing innovation and market expansion to adapt to changing consumer preferences and competitive pressures [51].

Core Viewpoint - The transportation sector is expected to see small-cap stocks outperforming large-cap stocks and H-shares outperforming A-shares in the first half of 2025, driven by lower valuations and higher dividends in H-shares, as well as frequent thematic market trends. The outlook for the second half of 2025 remains positive, focusing on dividend-paying stocks and those with improved free cash flow [1][3]. Group 1: Transportation Sector Opportunities - The transportation sector in Hong Kong is characterized by low valuations and high dividend yields, with the TTM PE for the transportation industry at 7.6 times, compared to 10.6 times for all Hong Kong stocks, and a dividend yield of 3.1%, which is 100 basis points higher than the overall market [7][10]. - The sector is expected to benefit from a recovery in domestic air travel demand, with a projected annual growth rate of over 6% in passenger volume and a significant improvement in profitability due to lower oil prices and improved pricing strategies [12][24]. - The logistics sector is anticipated to see a recovery driven by new technologies, global expansion, and the rise of instant retail, while the express delivery sector is expected to stabilize after intense price competition [3][52]. Group 2: Shipping and Port Operations - The oil shipping market is expected to see improved demand due to OPEC+ production increases, with a focus on the VLCC market benefiting from seasonal demand in the fourth quarter [32][37]. - The container shipping sector is under pressure from supply but is expected to see high dividend-paying stocks as attractive investment opportunities, especially with limited new supply expected until 2027-2028 [44][46]. - Port operations are projected to benefit from increased cargo throughput, with container throughput expected to grow modestly in the second half of 2025, supported by improved domestic demand [49][50]. Group 3: Express Delivery and Logistics - The express delivery sector is experiencing double-digit growth, with a 20% increase in business volume in the first five months of 2025, driven by trends such as small parcelization and the growth of live e-commerce [52][54]. - The logistics sector is expected to see a technological revolution that will enhance efficiency and reduce costs, leading to improved profitability and valuation expectations [60][61]. - The cross-border logistics market is adjusting to changes in tariffs, with resilient demand expected despite geopolitical tensions affecting supply chains [63][68].

Core Viewpoint - The article emphasizes that the transformation of asset and funding structures in the Hong Kong stock market is expected to enhance trading activity and liquidity, leading to long-term growth opportunities for capital market institutions with high business exposure and competitive advantages [1]. Group 1: Changes in Assets - The "A+H" listing and potential return of Chinese concept stocks are expected to inject quality assets into the Hong Kong market, enhancing valuation and trading turnover [3]. - The market is witnessing an increase in new economy companies, with their market capitalization share projected to rise from 27% in 2015 to 51% by the end of 2024, and trading volume share from 30% to 59% [21][24]. - The average turnover rate for new economy stocks is estimated to be 1.3 times that of traditional assets, with a projected price-to-earnings (P/E) ratio of 4.3 times higher than traditional sectors [25][28]. Group 2: Changes in Funding - The influx of southbound capital and increased retail trading are expected to drive the turnover rate higher, with southbound trading turnover averaging 2.4 times that of non-southbound trading [4][30]. - The share of southbound capital in the Hong Kong market has increased from 1.8% in March 2017 to 12.0% by June 2025, indicating a growing trend in high-frequency trading [30][31]. - Retail investor participation is on the rise, with internet brokerage firms' market share increasing from 4.5% in 2023 to 5.1% in 2025, suggesting a shift towards more active trading behavior among individual investors [36][41]. Group 3: Market Liquidity and Valuation - The average daily trading volume (ADT) in the Hong Kong market is projected to grow at a compound annual growth rate (CAGR) of 14% over the next decade, driven by both asset and funding transformations [41]. - The total market capitalization is expected to increase due to both existing companies' performance and new listings, with a historical average of IPO financing accounting for 1.9% of the total market capitalization [6][12]. - The article highlights that the ongoing optimization of listing mechanisms and the influx of new economy companies will further support the upward movement of the valuation and trading activity in the Hong Kong market [21][24].

Investment Background - Domestic demand is currently insufficient, with the medical insurance revenue-expenditure gap widening, maintaining a "tight balance" state [11] - Tariff conflicts create uncertainty for external demand, particularly influenced by US-China trade tensions [11] - Expectations for liquidity are improving, with a trend towards looser monetary policy globally [12] - The rise of AI applications is generating renewed interest in technological advancements within the medical field [12] Investment Strategy - The "barbell investment strategy" remains applicable for the second half of 2025, focusing on stable dividend blue-chip stocks and capitalizing on investment windows around ASCO/ESMO academic conferences for innovative drugs [3][4] Innovative Drug Sector - The innovative drug industry is showing clear investment trends, with potential opportunities along the industrial chain as China transitions from following innovation to gradual innovation, gaining international competitiveness [3][17] - Short-term catalysts include significant data disclosures and business development announcements around major academic conferences [3][27] - The collaboration with multinational corporations (MNCs) is becoming a crucial catalyst for competitive clinical data [3][21] Traditional Blue-Chip Stocks - Traditional blue-chip assets are recommended for stable allocation due to challenges in the pharmaceutical sector, including cost control and corruption issues [3][40] - Positive changes and investment highlights are expected in traditional blue-chip stocks in 2025, driven by mergers and acquisitions and innovation direction transformations [3][40] Medical Devices - The medical device sector is entering a new growth phase after a price base clearance period, with IVD devices showing global growth potential despite domestic cost control pressures [4][60] - The upcoming government policies and market demand are expected to support the recovery of the medical device industry [48][51] Healthcare Services - The core issue in healthcare services is the payment contradiction, with a pressing need for increased funding from commercial insurance to support innovative drug development [4][65] - The integration of "medicine + drugs + insurance" is anticipated to drive new growth in domestic demand [4][65] Investment Opportunities - The innovative drug sector is expected to see a surge in business development projects due to the high quality of research and development outcomes, with a focus on ADC, PD-(L)1 dual antibodies, and CAR-T technologies [29][30] - The CDMO sector is experiencing a positive trend in orders, with strong resilience in gross margins among leading companies [35][39] Digital Health - The digital health sector is showing robust fundamentals, with a relatively stable competitive landscape and growth rates exceeding industry averages [64] - The AI wave is enhancing the valuation of digital health companies, with increased attention on AI applications in healthcare [64]