Core Viewpoint - The construction materials industry is experiencing a "de-involution" policy direction since July, with different segments showing distinct rhythms and strategies. The market is increasingly focused on the demand side's recovery after supply expectations have been sufficiently addressed. The industry maintains an "overweight" rating [1]. Group 1: Cement Industry - The cement industry is focusing on limiting overproduction as a key policy measure, aiming to improve off-peak production. The actual capacity has exceeded designed capacity due to capacity replacement and technological upgrades from 2016 to 2022. The expected policy to limit overproduction could raise the national average capacity utilization from 50% to 70% if fully implemented [2]. - The recent initiation of hydropower projects is expected to catalyze demand recovery in the industry, creating a resonance between supply and demand expectations [2]. Group 2: Glass Industry - In the photovoltaic glass sector, leading companies are proactively reducing production to improve supply-demand balance, with a reduction of around 30% needed for equilibrium. The pace of implementation by leading firms is crucial for monitoring [3]. - For float glass, there are currently no mandatory policies, but the focus is on optimizing energy consumption structures. Some regions may see increased production costs, and cold repairs are expected to accelerate, benefiting overall supply-demand improvement [3]. Group 3: Consumer Building Materials - The consumer building materials sector is witnessing a stabilization in its structure, with proactive measures to improve profitability already underway. Some sub-sectors, such as waterproofing, piping, and coatings, have begun to raise prices, indicating a rational growth expectation [3]. - After a prolonged adjustment period in the real estate market, the long-term certainty of consumer building materials is solid, with leading companies expected to continue outperforming through structural optimization and expansion into new categories and markets [3].

Group 1: Medical Devices - The procurement scale of medical devices in the first half of 2025 shows strong growth, with a 25% year-on-year increase in June and a cumulative 41% increase for the first half of the year [2] - The implementation of equipment update policies is expected to drive long-term growth in medical device procurement, with a target of over 25% increase in investment by 2027 compared to 2023 [2] - Hospital funding pressures are easing, which is likely to lead to a gradual recovery in the performance of medical device companies, supported by increased issuance of special bonds for hospital equipment procurement [3] Group 2: Forklift Industry - The rise of autonomous forklifts is anticipated, driven by advancements in AI technology and a mature supply chain, making them economically viable [6] - Traditional forklift companies are expected to benefit from the shift towards automation, leveraging their established sales networks and operational quality [7] - Different leading domestic forklift companies are focusing on various aspects of autonomous forklift development, with partnerships and technology integration playing a crucial role in their strategies [8]

Group 1: Humanoid Robots and AI Innovations - The global first Tesla-themed restaurant will open on July 21, featuring Tesla's Optimus robot as a waiter, enhancing customer service through QR code ordering and autonomous delivery to car windows [1] - Zhiyuan and Yushu jointly won a procurement order for bipedal robots from China Mobile, with a total order value of 124 million yuan, which is expected to accelerate the application of humanoid robots and create a development ecosystem [1] - The World Artificial Intelligence Conference will be held on July 26 in Shanghai, featuring discussions on embodied intelligence and humanoid robots, with participation from notable industry players like Tesla and Yushu [1] Group 2: Solid-State Battery Industry - The solid-state battery project by Qingtai Energy has entered trial production, with multiple production bases established across China, indicating positive signals for the industry [2] - Solid-state batteries are expected to gradually replace liquid batteries as the next mainstream power source due to their performance and safety advantages, with project construction accelerating [2] - Attention is recommended for the equipment-related supply chain, including dry mixing, coating, and packaging inspection processes [2] Group 3: Other Key Sectors - In the photovoltaic equipment sector, silicon wafer prices have rebounded, and domestic silicon material companies are responding to government policies to avoid excessive competition, focusing on cost-based pricing adjustments [3] - Xiaopeng Huitian and Yunlu Composite Materials have signed a project cooperation agreement to collaborate on lightweight flying cars, focusing on high-performance carbon fiber composite materials [3] - The collaboration aims to address traditional composite material production challenges, enhancing weaving efficiency and optimizing precision for new fiber materials [3]

Group 1 - The U.S. "GENIUS Act" signed by Trump on July 18 establishes the first federal regulatory framework for stablecoins, promoting global compliance in the stablecoin sector [1] - Major stablecoin issuers, cross-border payment institutions, and companies involved in Real World Assets (RWA) are expected to benefit significantly from this regulatory development [1] - Hong Kong and Singapore have introduced supportive regulatory frameworks for stablecoin development, providing new compliance pathways for cross-border fintech platforms [1] Group 2 - Leading brokerage firms like Futu Holdings and Tiger Brokers possess advantages in user base, technological capabilities, and payment channel development, which may enhance their international user expansion and revenue diversification [1] - Since Q2 2024, the rapid decline in short- to medium-term interest rates has led to an increase in existing bond prices and improved yield opportunities for new bond subscriptions and market-making transactions [1] - Brokerage firms are extending duration in the current interest rate environment, which is expected to yield significant valuation gains, with fixed income business becoming a key driver of brokerage mid-year performance, potentially exceeding expectations for some companies [1] Group 3 - The global leading aircraft manufacturers are experiencing extended order delivery cycles, resulting in a surge in demand for aircraft leasing [2] - Leasing companies with available aircraft fleets are seeing increased bargaining power and rental income, entering a high prosperity cycle driven by supply-demand mismatches [2] - Top leasing firms are leveraging flexible financing and a global customer network to quickly capture excess returns, leading to significant increases in asset yield and Return on Equity (ROE) [2]

Summary of Key Points Core Viewpoint - The article discusses the impact of U.S. tariff measures, indicating that the actual tax rate increase is significantly lower than the theoretical value, leading to limited effects on the economy. The second half of the tariff measures may address existing loopholes, making the economic impact clearer [2][4]. Group 1: Tariff Measures - The U.S. tariff measures in the first half of 2025 can be characterized as "high open, low close," with a series of announcements leading to a gradual reduction in tariff intensity [6][7]. - The TACO (Trump Always Chicken Out) phenomenon has emerged, suggesting market desensitization to tariff changes due to the inconsistent application of tariffs [8]. Group 2: Tariff Revenue - Tariff revenue growth has been disappointing, with an actual increase of 6.5% compared to a theoretical increase of 14.5%, indicating that revenue expectations have not been met [11][12]. - Three main reasons for this underperformance include: 1. China has reduced the proportion of high-tariff products in U.S. imports through transshipment and expedited shipping, with China's share of U.S. imports dropping from 13.4% in 2024 to 7.4% in May 2025 [14]. 2. The 25% fentanyl tariff on Mexico and Canada has had minimal practical effect, with actual tax rate increases of only 1.8% and 4.1%, respectively [14]. 3. There has been a shift in product-level adjustments, with higher tariff products seeing a more significant decline in import proportions [14]. Group 3: Economic Impact of Tariffs - The impact of tariffs on China's exports and U.S. inflation has been less than expected. Chinese exports have shown stable volume and price increases, with a potential mild decline in the future [21][22]. - U.S. inflation has remained low, partly due to the actual tax rate increases being lower than theoretical values, and weak demand in the automotive market and fluctuations in oil prices have further suppressed inflation [24]. Group 4: Future Tariff Measures - The second half of the tariff measures may see an increase in actual tax rates, as there are indications that the Trump administration may seek to address the shortcomings of the initial measures [26][27]. - If there is a genuine intent to raise tariff rates for revenue or other purposes, the economic impact could exceed expectations, highlighting the need to be cautious of excessive TACO trading risks [27].

Core Viewpoint - The article discusses the implications of the People's Bank of China's decision to cancel the freezing of pledged bonds in the context of bond repurchase agreements, highlighting potential impacts on the bond market and monetary policy operations [3][6][7]. Group 1: Regulatory Changes - The central bank's decision aims to facilitate open market operations involving government bonds and promote a higher level of openness in the bond market [3]. - The cancellation of the freezing of pledged bonds may significantly enhance the convenience of the central bank's operations in buying and selling government bonds, although it does not necessarily indicate a strong market rally [6][7]. Group 2: Comparison with International Practices - The current domestic repurchase framework differs from the international GMRA framework, particularly in terms of ownership transfer, collateral usage, and risk management mechanisms [4]. - The new pledged reverse repurchase agreements may align more closely with the GMRA framework, allowing for the re-pledging and trading of bonds while still being bound by repurchase agreements [4][7]. Group 3: Market Implications - The total amount of bonds involved in domestic pledged repurchase agreements could exceed 10 trillion, with a significant portion related to major banks and the central bank's open market operations [5]. - The cancellation of the freezing of pledged bonds is expected to have a neutral impact on the bond market in the short term, with a cautious outlook suggested [6][7].

Core Viewpoint - The Yarlung Tsangpo River downstream hydropower project has officially commenced, with a total investment of approximately 1.2 trillion yuan, aiming to construct five tiered power stations and primarily focusing on power transmission and local consumption needs [1]. Group 1 - The groundbreaking ceremony for the Yarlung Tsangpo River downstream hydropower project took place on July 19 in Linzhi City, Tibet, attended by the State Council Premier who announced the official start of the project [1]. - The project will utilize a method of bending and straightening, along with tunnel water diversion, to develop the hydropower stations [1]. - The newly established China Yajiang Group Co., Ltd. aims to ensure the project becomes a century project with Chinese characteristics that withstands historical scrutiny [1].

Core Viewpoint - The industry is expected to see continuous improvement in its prosperity due to the gradual implementation of counter-cyclical fiscal policies and a cyclical upswing in the industry, with excavator domestic sales growth likely to continue rising. Although exports face certain trade friction risks, most major engineering machinery manufacturers have limited exposure to the U.S. market, making the risks manageable. Overall, opportunities outweigh risks in 2025 [1]. Group 1: Industry Performance - In June 2025, domestic excavator sales reached 8,136 units, a year-on-year increase of 6.20%, while total excavator sales were 18,804 units, up 13.3% year-on-year. Exports accounted for 10,668 units, reflecting a 19.3% increase [2]. - For the first half of 2025, total excavator sales were 120,520 units, a 16.8% year-on-year increase, with domestic sales at 65,637 units, up 22.9%, and exports at 54,883 units, up 10.2% [2]. - The average monthly working hours for major engineering machinery in June 2025 were 77.2 hours, down 9.11% year-on-year, with excavators averaging 64.2 hours [2]. - The monthly operating rate for major engineering machinery in June 2025 was 56.9%, a decrease of 7.55 percentage points year-on-year, with excavators at 58.2% [2]. Group 2: Trade Risks - Most Chinese engineering machinery manufacturers have limited exposure to the U.S. market, with XCMG's U.S. market revenue accounting for less than 1% of total revenue, and Zoomlion's around 1%. Hengli Hydraulic's export revenue to the U.S. is approximately 5% of total revenue, indicating that overall risks are manageable [3].

Market Overview - The trading heat continues to rise, with new issuance of equity funds and accelerated inflow of financing funds, while retail investor activity increases and foreign capital turns to outflow [1][2] - The average daily trading volume exceeds 1.5 trillion, indicating a marginal increase in market sentiment [1] Market Sentiment - Market sentiment is on the rise, with the average daily trading volume of the entire A-share market exceeding 1.5 trillion, and the turnover rate of the Shanghai Composite Index falling to 88% [1] - The number of daily limit-up stocks has decreased to 59, with the maximum consecutive limit-up stocks being 8, and the sealing rate dropping to 70.2% [1] Fund Flows - New issuance of public equity funds has increased to 12.6 billion, with an ordinary stock position rising by 0.1% [2] - Foreign capital has seen a net outflow of 1.4 million USD, with the northbound capital transaction proportion dropping to 11.6% [2] - The net inflow of financing reached 28.57 billion, with the transaction proportion rising to 9.7% [2] Industry Allocation - There is a notable divergence in funding within the electronics sector, with financing and ETF allocations increasing while foreign capital allocation decreases [3] - The net inflow in financing for the computer sector is 4.42 billion and for the electronics sector is 3.07 billion [3] - The non-bank financial sector and media sectors saw net inflows of 0.71 billion and 0.57 billion respectively in ETFs [3] Hong Kong and Global Fund Flows - The southbound capital inflow has decreased to 21.46 billion, representing the 76th percentile since 2022 [4] - Global foreign capital primarily flows into developed markets, with the US and Japan seeing inflows of 3.02 billion and 1.16 billion respectively [4]

Core Insights - The article highlights a resurgence in thematic trading, with optical communication and innovative pharmaceuticals leading the charge, while traditional sectors are expected to show price elasticity under significant policy or event catalysts [1] Thematic Summaries Theme 1: Urban Renewal - The Central Urban Work Conference emphasizes urban renewal as a key strategy for building modern, livable cities, with urbanization rates projected to rise from 53.1% in 2012 to 67% by 2024, increasing urban population from 720 million to 940 million [2] - Recommendations include investments in water and electricity infrastructure benefiting from the renovation of old neighborhoods and smart city developments [2] Theme 2: Yarlung Tsangpo Hydropower - The Yarlung Tsangpo hydropower project has officially commenced, with a total investment of approximately 1.2 trillion yuan, aiming to construct five tiered power stations [3] - The project is expected to stimulate investments in regional engineering, transportation, and power industries [3] Theme 3: Production Limits and Price Stabilization - The State Council is taking measures to regulate competition in the new energy vehicle sector and address low-price disorder in the photovoltaic industry, which is expected to stabilize price expectations in cyclical industries like steel, chemicals, and pig farming [4] - Recommendations focus on new energy vehicles and photovoltaic supply chains facing low-price competition, as well as cyclical industries benefiting from supply-side improvements [4] Theme 4: AI New Infrastructure - Nvidia's founder Huang Renxun's visit to China and the approval of H20 chip exports signal positive developments in the chip trade between China and the US, potentially accelerating capital expenditures in domestic internet companies [4] - Recommendations include investments in optical modules and domestic computing power supply chains benefiting from increased demand [4]