Market Overview - The A-share market indices all rose last week (July 23 - July 29), with the STAR 50 showing the largest increase of 5.33%, while the Shanghai 50 had the smallest rise of 0.59% [2] - The Shanghai Composite Index increased by 0.78%, the Shenzhen Component rose by 1.71%, the ChiNext Index went up by 4.14%, the CSI 300 gained 0.80%, and the CSI 500 increased by 2.30% [2] - As of July 29, the margin trading balance in the two markets reached 1,976.307 billion yuan, an increase of 49.208 billion yuan from the previous week [2] - The financing balance was 1,962.087 billion yuan, up by 48.647 billion yuan, while the securities lending balance was 14.220 billion yuan, increasing by 0.056 billion yuan [2] - The average number of investors participating in margin trading daily was 470,483, which is a 10.97% increase from the previous week [2] Industry Insights - The pharmaceutical, non-ferrous metals, and electronics industries had the highest net financing inflows last week, while the oil, agriculture, and comprehensive industries had the lowest [3] - The industries with a higher proportion of financing buy-in relative to transaction volume were non-bank financials, telecommunications, and non-ferrous metals, whereas textiles, light manufacturing, and social services had lower proportions [3] - In terms of securities lending, the non-bank financial, electric equipment, and pharmaceutical industries had the highest net selling amounts, while basic chemicals, food and beverage, and oil and petrochemicals had the lowest [3] Specific Securities - As of July 29, the market ETF financing balance was 98.208 billion yuan, an increase of 0.283 billion yuan, while the securities lending balance was 6.370 billion yuan, up by 0.454 billion yuan [3] - The top five ETFs by net financing inflow were: - Fuguo Zhongzhai 7-10 Year Policy Financial Bond ETF - E Fund CSI Hong Kong Securities Investment Theme ETF - Hang Seng Technology ETF - Huaxia Hang Seng Technology ETF (QDII) - GF CSI Hong Kong Stock Connect Non-Bank ETF [3] - The top five individual stocks by net financing inflow were: - Xinyi Sheng (300502) - China Power Construction (601669) - Cambricon Technologies (688256) - Northern Rare Earth (600111) - Minsheng Bank (600016) [3] - The top five individual stocks by net securities lending outflow were: - China Ping An (601318) - BYD (002594) - Hengrui Medicine (600276) - Dongfang Electric (600875) - WuXi AppTec (603259) [3]

Fixed Income Research - The report indicates that the overall issuance guidance rates for credit bonds have mostly decreased, with a change range of -5 BP to 2 BP [2] - The issuance scale of credit bonds has increased on a month-on-month basis, with net financing amounts for medium-term notes and short-term financing bonds rising, while corporate bonds, company bonds, and targeted tools saw a decrease [2] - In the secondary market, the transaction amount of credit bonds has increased, with all varieties showing growth; however, credit bond yields have risen by 4-14 BP [2] - The report suggests that despite the recent yield adjustments, the conditions for a trend reversal in credit bonds remain insufficient, but the support from insufficient supply and strong demand may lead to a potential decline in yields [2] - The report emphasizes a cautious yet optimistic approach to current configurations and trading strategies, focusing on the trends in interest rate bonds and the coupon value of individual bonds [2] Industry Research - In the steel sector, prices have rebounded, leading to some replenishment intentions downstream, with macro "anti-involution" news positively impacting steel prices [5] - The aluminum market is expected to experience price fluctuations due to insufficient fundamental support, with attention on the outcomes of the July Politburo meeting and US-China trade negotiations [5] - Lithium prices have been positively influenced by "anti-involution" news, but there is still significant pressure from oversupply, necessitating caution regarding speculative demand [5] - The rare earth sector has seen a significant increase in exports, with June exports rising by 32.02% month-on-month, indicating potential for further price strength due to improving export demand [5] - The report maintains a "positive" rating for the steel industry and the non-ferrous metals sector, highlighting specific companies for potential investment [6]

Investment Rating - The steel industry is rated as "Positive" and the non-ferrous metals industry is also rated as "Positive" [4] Core Views - The report highlights a rebound in steel prices, driven by downstream replenishment intentions and macroeconomic "anti-involution" messages, while cautioning against price volatility due to speculative demand [4][16] - The report emphasizes the potential for demand growth in special steel sectors due to high-altitude corrosion environments [3][16] - The report notes that aluminum prices are expected to fluctuate in the short term due to insufficient fundamental support, despite positive macro sentiment [3][48] - Lithium prices are supported by "anti-involution" news, but there are concerns about oversupply and speculative demand [3][54] - The report indicates a significant increase in China's rare earth exports in June, with expectations for further growth in July [3][67] Summary by Sections Steel Industry - Steel prices have rebounded, with downstream purchasing intentions increasing; however, speculative demand may lead to price fluctuations [4][16] - As of July 25, the total steel inventory was 13.30 million tons, down 0.11% from the previous week and down 22.78% year-on-year [26] - The average price index for steel on July 25 was 3,606.18 CNY/ton, up 4.16% from the previous week [39] Copper - The copper market is experiencing tight supply and low inventory, which supports prices; however, the market is currently in a seasonal lull [41] - As of July 25, LME copper spot prices were 9,800 USD/ton, up 1.25% from the previous week [46] Aluminum - The aluminum market is under pressure from seasonal demand, with expectations of inventory accumulation; however, macroeconomic sentiment remains positive [48] - As of July 25, LME aluminum spot prices were 2,700 USD/ton, up 2.53% from the previous week [49] Precious Metals - Gold prices are under pressure due to reduced risk aversion following trade agreements between the US and other countries [51] - As of July 25, COMEX gold closed at 3,338.50 USD/oz, down 0.51% from the previous week [51] New Energy Metals - The lithium sector is expected to see accelerated capacity clearance, with prices for battery-grade lithium carbonate rising to 74,000 CNY/ton, up 12.12% from the previous week [55] - The report highlights the potential for new demand in the lithium sector due to government policies supporting solar energy [54] Rare Earths and Minor Metals - The report notes a significant increase in the price of light rare earths, with praseodymium-neodymium oxide priced at 513,500 CNY/ton, up 7.31% from the previous week [67] - Tungsten concentrate prices rose to 188,000 CNY/ton, up 4.44% from the previous week [69]

Report Industry Investment Rating No relevant content provided. Core Views - During the period from July 21st to July 27th, most of the issuance guidance rates announced by the National Association of Financial Market Institutional Investors (NAFMII) declined, with an overall change range of -5 BP to 2 BP. The issuance scale of credit bonds increased month - on - month, and the issuance amount of each variety increased. The net financing of credit bonds increased month - on - month. The yield of credit bonds all increased, and the credit spreads of medium - and short - term notes, enterprise bonds, and urban investment bonds mostly widened, but the 7 - year varieties still mainly narrowed. [1][58] - From an absolute return perspective, after adjustment, the yields of most varieties have retraced to the level of 2 months ago, but the conditions for a trend reversal of credit bonds are still insufficient. Supply shortage and relatively strong allocation demand will still support credit bonds, and the marginal loosening of the capital side will also help promote the repair market. The possibility of a decline in yields in the future is still high, and the idea of increasing allocation on adjustments is still feasible. [1][58] - From a relative return perspective, given that rating spreads are generally at historical lows, credit sinking is not effective at present. In the short term, high - grade varieties have greater potential for a catch - up rise. In the real estate bond market, as the market stabilizes, risk - preference funds can consider early layout. Urban investment bonds can still be a key allocation variety for credit bonds. [1][60][58] Summary by Directory 1. Primary Market Situation 1.1 Issuance and Maturity Scale - From July 21st to July 27th, a total of 371 credit bonds were issued, with an issuance amount of 352.639 billion yuan, a month - on - month increase of 25.49%. The net financing of credit bonds was 57.525 billion yuan, a month - on - month increase of 12.623 billion yuan. [12] - By variety, the issuance amount of enterprise bonds, corporate bonds, medium - term notes, short - term financing bills, and private placement notes all increased month - on - month. The net financing of medium - term notes and short - term financing bills increased, while that of enterprise bonds, corporate bonds, and private placement notes decreased. [12] 1.2 Issuance Interest Rates - Most of the issuance guidance rates announced by NAFMII declined, with an overall change range of -5 BP to 2 BP. By term, the 1 - year variety had an interest rate change range of -5 BP to 0 BP, the 3 - year variety -3 BP to 1 BP, the 5 - year variety -3 BP to 2 BP, and the 7 - year variety -1 BP to 1 BP. By grade, the interest rate change range of key AAA - grade and AAA - grade varieties was -5 BP to 0 BP, AA + - grade -1 BP to 2 BP, AA - grade 0 BP to 2 BP, and AA - - grade -3 BP to -1 BP. [14] 2. Secondary Market Situation 2.1 Market Trading Volume - From July 21st to July 27th, the total trading volume of credit bonds was 897.286 billion yuan, a month - on - month increase of 3.78%. The trading volume of each variety increased. [17] 2.2 Credit Spreads - For medium - and short - term notes, the credit spreads of each variety were differentiated. The 1 - year credit spread widened, the 3 - year AA - grade and above varieties' credit spreads widened, the 5 - year AAA - grade and AA + - grade credit spreads widened, and the rest of the 5 - year varieties' spreads narrowed, while the 7 - year credit spread narrowed. [20] - For enterprise bonds, most varieties' credit spreads widened. The 1 - year, 3 - year, and 5 - year credit spreads widened, and the 7 - year credit spread narrowed. [27] - For urban investment bonds, most varieties' credit spreads widened. The 1 - year and 3 - year credit spreads widened; among the 5 - year varieties, the AAA - grade and AA + - grade credit spreads widened, and the rest narrowed; among the 7 - year varieties, the AA - - grade spread widened, and the rest narrowed. [34] 2.3 Term Spreads and Rating Spreads - In terms of term spreads, the 3Y - 1Y spread of AA + medium - and short - term notes widened by 1.79 BP, the 5Y - 3Y spread narrowed by 0.83 BP, and the 7Y - 3Y spread narrowed by 6.64 BP. In terms of rating spreads, the 3 - year medium - and short - term notes' (AA - )-(AAA) spread narrowed by 3.00 BP, (AA)-(AAA) spread widened by 1.00 BP, and (AA + )-(AAA) spread widened by 1.00 BP. [43] - Similar analyses were also conducted for enterprise bonds and urban investment bonds in terms of term spreads and rating spreads, with different changes in spreads and their positions in historical quantiles. [48][52] 3. Credit Rating Adjustment and Default Bond Statistics 3.1 Credit Rating Adjustment Statistics - From July 21st to July 27th, a total of 3 companies' ratings (including outlooks) were adjusted, with 1 downgraded and 2 upgraded. [55] 3.2 Default and Extension Bond Statistics - There were no credit bond defaults during the period from July 21st to July 27th. The corporate bonds of Shenzhen Longfor Holdings Co., Ltd. and Aoyuan Group Co., Ltd. were extended, with a total bond balance of 10.892 billion yuan at the time of extension. [57] 4. Investment Views - The issuance guidance rates mostly declined, the issuance scale of credit bonds increased, and the net financing increased. The yield of credit bonds rose, and the credit spreads mostly widened. [1][58] - For real estate bonds, as the market stabilizes, risk - preference funds can consider early layout, focusing on central and state - owned enterprises with stable historical valuations and excellent performance, as well as high - quality private enterprise bonds with strong guarantees. [60] - Urban investment bonds can still be a key allocation variety for credit bonds, with low short - term credit risk, and the current strategy can be positive. [60]

Macro and Strategy Research - In the first half of 2025, the profits of industrial enterprises above designated size decreased by 1.8% year-on-year, with a narrowing decline of 4.3% in June [2][3] - The industrial added value increased by 6.4% year-on-year in the first half of 2025, supported by increased working days and the delayed effect of tariff suspension on exports [3][4] - The operating income grew by 2.5% year-on-year, while the profit margin decreased to 5.15%, down 4.8% year-on-year, indicating pressure on enterprise profits [3][4] Fiscal Data Analysis - In the first half of 2025, the national general public budget revenue was 115,566 billion yuan, a decrease of 0.3% year-on-year, while expenditure increased by 3.4% to 141,271 billion yuan [6][9] - Government fund budget revenue fell by 2.4% to 19,442 billion yuan, but expenditure surged by 30% to 46,273 billion yuan, indicating a strong push in fiscal spending [6][10] - The overall fiscal expenditure (public fiscal expenditure + government fund expenditure) increased by 8.9% year-on-year, reflecting a robust fiscal support environment [10] Fund Research - All major indices in the equity market were raised, with public fund scale surpassing 34 trillion yuan, indicating a positive market sentiment [12][14] - The week saw a net inflow of 19.22 billion yuan into the ETF market, with significant inflows into cross-border ETFs, while stock ETFs experienced net outflows [14][15] - The issuance of new funds decreased, with 23 new funds launched, raising 276.61 billion yuan, reflecting a slight contraction in market activity [14][15] Industry Research - The paper industry is experiencing a rebound driven by "anti-involution" sentiments, with a 5.07% increase in the paper sector from July 1 to 25, 2025 [16][20] - The third batch of national subsidies amounting to 69 billion yuan has been allocated to support the consumption of old goods, which is expected to stabilize furniture product sales [20] - The light industry manufacturing sector outperformed the market, while the textile and apparel sector lagged behind, indicating sector-specific performance variations [16][20]

Revenue Analysis - In the first half of 2025, the national general public budget revenue was 1,155.66 billion yuan, a year-on-year decrease of 0.3%[2] - The national general public budget expenditure was 1,412.71 billion yuan, showing a year-on-year increase of 3.4%[2] - Government fund budget revenue was 194.42 billion yuan, down 2.4% year-on-year[2] Expenditure Insights - Government fund budget expenditure reached 462.73 billion yuan, marking a significant year-on-year increase of 30%[2] - Public finance expenditure growth slowed to 3.4%, with a notable focus on social welfare and technology sectors[3] - Social security and employment expenditures grew by 9.2%, indicating strong support for public welfare[3] Structural Changes - The expenditure structure emphasized "people's livelihood" and "technology," while infrastructure spending continued to decline, with a negative growth rate of 4.5%[3] - The overall broad fiscal expenditure (public finance expenditure + government fund expenditure) increased by 8.9% year-on-year[4] Performance Metrics - The completion rate of the national general public budget revenue for the first half of 2025 was 52.6%, lower than the average of the past five years (53.9%) [3] - The completion rate of public finance expenditure was 47.6%, also below the five-year average of 48.1%[3] Risk Factors - Economic environment changes could significantly impact tax revenue bases[5] - Unexpected policy changes may alter the scale and pace of fiscal expenditures[5]

Investment Rating - The report maintains a "Neutral" rating for the light industry manufacturing and textile apparel sectors [2][43] - The report recommends "Buy" ratings for specific companies: Oppein Home (603833), Sophia (002572), Explorer (300005), Semir Apparel (002563), Guibao Pet (301498), and Zhongchong Co. (002891) [2][45] Core Insights - The report highlights the impact of the third batch of national subsidies, which is expected to stimulate demand for furniture products and stabilize domestic sales growth for the year [2][42] - The "anti-involution" sentiment has positively influenced the paper industry, with corrugated board prices rising by 5.07% from July 1 to July 25, 2025 [2][41] - The report notes that major paper companies are set to increase prices for corrugated paper and recycled cardboard, which may help boost packaging paper prices [2][41] Industry News - Eldorado and Suzano signed an unprecedented cooperation agreement involving the exchange of "standing timber" for pulp production [8] - Puma forecasts a loss in 2025, with sales expected to decline by over 10% due to weak sales and tariff impacts [8] Company Announcements - Yuanfei Pet plans to implement a stock incentive plan for 62 employees, involving 2.5095 million shares [33] - Rebecca reported a more than 15% year-on-year increase in net profit for the first half of 2025, driven by growth in cross-border e-commerce [33] Market Review - From July 21 to July 25, the light industry manufacturing sector outperformed the CSI 300 index by 0.15 percentage points, with notable performances in the paper sector [34] - The textile and apparel sector underperformed the CSI 300 index by 0.24 percentage points, with some stocks facing pressure after previous gains [38]

Group 1: Profit Trends - In the first half of 2025, the profit of large-scale industrial enterprises decreased by 1.8% year-on-year, with June's profit decline narrowing to 4.3%[1] - The cumulative profit growth rate for large-scale industrial enterprises showed a marginal improvement for foreign and Hong Kong-Macau-Taiwan invested enterprises, while private, state-owned, and joint-stock enterprises experienced a decline[1] - The profit margin for large-scale industrial enterprises in the first half of 2025 was 5.15%, down 4.8% year-on-year, indicating a widening decline compared to the previous month[1] Group 2: Economic Indicators - The industrial added value for large-scale enterprises grew by 6.4% year-on-year in the first half of 2025, an increase of 0.1 percentage points compared to the previous month[1] - The operating revenue for large-scale industrial enterprises increased by 2.5% year-on-year, a decrease of 0.2 percentage points from the previous month[1] - In the first half of 2025, 17 out of 41 industrial sectors achieved positive profit growth, with notable increases in black metal smelting, non-ferrous metal mining, and equipment manufacturing sectors[1] Group 3: Policy and Market Outlook - The improvement in June's industrial enterprise profits is attributed to the delayed effects of tariff suspensions and the release of "two new" policy efficiencies, alongside a rebound in exports[2] - The expectation of continued marginal improvement in July's industrial enterprise profits is based on the ongoing implementation of anti-involution measures, which are anticipated to alleviate price pressures[2] - Risks include the potential underperformance of anti-involution measures and uncertainties in the external environment that could disrupt domestic economic conditions[3]

Report Industry Investment Rating - No industry investment rating information is provided in the document. Core Views - This week, the major market indices all increased. Among them, the CSI 500 led in terms of the increase in the valuation quantile of the price - earnings ratio index, and the STAR 50 led in terms of the increase in the valuation quantile of the price - to - book ratio index. In the industry aspect, 27 out of 31 Shenwan primary industries rose, with the top five gainers being building materials, coal, steel, non - ferrous metals, and building decoration; the declining industries were banking, communication, public utilities, and comprehensive [2]. - In the public fund market, the hot topics included the release of public fund market data by the Asset Management Association of China and the expansion of personal pension funds. In terms of performance, equity funds generally rose this week, with quantitative funds having the largest increase of 2.22%. Pure - bond funds ranged from a decline of 0.30% to an increase of 0.34%. Among FOF funds, pension - target FOF rose 0.60% with a positive - return ratio of 98.09%. Additionally, QDII funds rose an average of 1.10% with a positive - return ratio of 85.36% [3]. - In the ETF market, the overall capital inflow was 1.922 billion yuan this week, with the scale significantly decreasing compared to the previous period. Structurally, cross - border ETFs had the largest capital inflow of 10.322 billion yuan this week, while stock - type ETFs had a net outflow of 5.453 billion yuan. In terms of liquidity, the average daily trading volume of the overall ETF market reached 383.785 billion yuan, the average daily trading volume was 170.951 billion shares, and the average daily turnover rate was 10.33%. In terms of individual bonds, the inflow trend of STAR - bond - related ETFs continued this week. Among broad - based indices, the CSI A500 index had an outflow close to 8 billion yuan. From the perspective of industry themes, sectors such as Hong Kong non - banking and construction were favored by funds [4]. - This week, 23 new funds were issued, 10 fewer than last week; 36 new funds were established, 2 more than last week. The new funds raised a total of 27.661 billion yuan, 3.003 billion yuan less than last week [5]. Summary by Relevant Catalogs 1. This Week's Market Review 1.1 Domestic Market Situation - From July 21 to July 25, 2025, the major equity market indices continued to rise. The STAR 50 had the largest increase of 4.63%, and the CSI 500 also had an increase of over 3%. In the industry sector, 27 out of 31 Shenwan primary industries rose, with the top five gainers being building materials, coal, steel, non - ferrous metals, and building decoration; the declining industries were banking, communication, public utilities, and comprehensive. In the bond market, the ChinaBond Composite Full - Price Index fell 0.44%, and the ChinaBond Treasury Bond, Financial Bond, and Credit Bond Total Full - Price Indices fell between 0.23% and 0.61%. The CSI Convertible Bond Index rose 2.14%. In the commodity market, the Nanhua Commodity Index rose 2.73% [13]. 1.2 European, American, and Asia - Pacific Market Situation - This week, the major indices in European, American, and Asia - Pacific markets showed mixed performance. In the US stock market, the S&P 500 index rose 0.98%, the Dow Jones Industrial Average rose 1.30%, and the Nasdaq index rose 1.02%. In the European market, the French CAC40 rose 0.15%, and the German DAX fell 0.30%. In the Asia - Pacific market, the Hang Seng Index rose 2.27%, and the Nikkei 225 rose 4.11% [22]. 1.3 Market Valuation Situation - This week, the major market indices all increased. The CSI 500 led in terms of the increase in the valuation quantile of the price - earnings ratio index, and the STAR 50 led in terms of the increase in the valuation quantile of the price - to - book ratio index. In the industry aspect, the top five industries with the highest historical quantiles of the price - earnings ratio valuation of the Shenwan primary index this week were real estate, banking, automobiles, electronics, and steel. Among them, the price - earnings ratio valuation quantile of real estate had reached 98.6%, and attention should be paid to the potential correction risk in the future. The five industries with relatively low historical quantiles of the price - earnings ratio valuation this week were agriculture, forestry, animal husbandry, and fishery, non - banking finance, food and beverage, non - ferrous metals, and light manufacturing [25]. 2. Active Public Fund Situation - Market hot topics: On July 24, the Asset Management Association of China released public fund market data. As of the end of June 2025, there were 164 public fund management institutions in China, including 149 fund management companies and 15 asset management institutions with public fund qualifications. These institutions managed a total net asset value of public funds of 34.39 trillion yuan. Personal pension funds had a significant expansion, with the CSI 500 index - enhanced funds from Guotai Haitong Asset Management, Bodao Fund, and Tianhong Fund, as well as the China Merchants CSI 300 index - enhanced fund, announcing the addition of Class Y fund shares only available for purchase with personal pension funds and revising legal documents such as the fund contract. So far, the number of index - enhanced fund products in personal pension funds has increased from 19 to 23, with underlying indices covering many options such as the SSE 50, CSI 300, CSI 500, CSI 800, and CSI Dividend [33]. - Market performance: This week, equity funds generally rose, with quantitative funds having the largest increase of 2.22%. Pure - bond funds ranged from a decline of 0.30% to an increase of 0.34%. Among FOF funds, pension - target FOF rose 0.60% with a positive - return ratio of 98.09%. Additionally, QDII funds rose an average of 1.10% with a positive - return ratio of 85.36% [33]. - Through the calculation of the industry positions of active equity funds, the industries with the largest increase in positions this week were building materials, coal, and building decoration; the industries with the largest decline were national defense and military industry, electronics, and biomedicine. The overall position of active equity funds on July 25, 2025, was 75.38%, a decrease of 3.14 percentage points compared to last week [3][41][43]. 3. ETF Fund Situation - This week, the overall capital inflow of the ETF market was 1.922 billion yuan, with the scale significantly decreasing compared to the previous period. Structurally, cross - border ETFs had the largest capital inflow of 10.322 billion yuan this week, while stock - type ETFs had a net outflow of 5.453 billion yuan. In terms of liquidity, the average daily trading volume of the overall ETF market reached 383.785 billion yuan, the average daily trading volume was 170.951 billion shares, and the average daily turnover rate was 10.33% [4][48]. - In terms of individual bonds, the inflow trend of STAR - bond - related ETFs continued this week. Among broad - based indices, the CSI A500 index had an outflow close to 8 billion yuan. From the perspective of industry themes, sectors such as Hong Kong non - banking and construction were favored by funds. ETF targets with relatively large net inflows included the CSI Hong Kong Securities Investment Theme, the CSI Hong Kong Stock Connect Non - Banking Financial Theme, and the CSI All - Share Building Materials Index; ETF targets with relatively large net outflows included the SSE STAR Market Composite, the SSE STAR 50 Component, and the ChiNext Index [4][49]. 4. Fund Issuance Statistics - This week, 23 new funds were issued in China, 10 fewer than last week. Among them, there were 6 actively managed equity - biased funds and 10 passive index funds. Among the 10 passive index funds, 8 were stock - type, mainly tracking indices such as the China Securities General Aviation Industry, the CSI All - Share Free Cash Flow, the CSI 800 Free Cash Flow, and the China Securities Robot Industry Index [55]. - This week, 36 new funds were established in China, 2 more than last week. The new funds raised a total of 27.661 billion yuan, 3.003 billion yuan less than last week. The largest - raising fund was the Huatai - PineBridge Stable - Benefit 6 - Month Holding Bond A managed by Li Wei and Gan Xinyu, with a raising scale of approximately 3.741 billion yuan [59].

Macro and Strategy Research - The report highlights a persistent "anti-involution" sentiment in the macroeconomic environment, with the U.S. manufacturing PMI falling to a new low since December 2024, while the service sector shows signs of recovery [2][3] - In the domestic context, various sectors including automotive, photovoltaic, cement, and steel are actively implementing measures to curb disorderly competition and promote industrial upgrades, significantly boosting market sentiment [4] - The upcoming Politburo meeting is expected to provide further insights into policy directions, particularly regarding the importance of "anti-involution" in addressing supply-demand imbalances [4] Fixed Income Research - The report notes that the bond market is under pressure, with the 10-year government bond yield rising above 1.7%, influenced by a tightening of the monetary environment and expectations of increased infrastructure investment [6][7] - The central bank has conducted a net withdrawal of over 500 billion yuan in the open market, leading to a noticeable increase in funding prices [7] - The issuance of bonds has seen weak subscription sentiment, with a total issuance of 90 bonds amounting to 940.9 billion yuan, indicating a continued lack of enthusiasm in the primary market [7] Industry Research - The report discusses the "anti-involution" in centralized procurement within the pharmaceutical and biotechnology sectors, emphasizing the need to focus on beneficiaries of optimized procurement rules [10] - Key industry news includes the approval of new treatments and the establishment of a biopharmaceutical industrial park in Pudong, which is expected to enhance the sector's growth [10][11] - The report indicates a positive performance in the pharmaceutical sector, with the Shanghai Composite Index rising by 2.53% and the pharmaceutical sector increasing by 2.94% during the week [11] - The report suggests that the innovation drug sector is supported by ongoing policy initiatives, and it recommends focusing on companies that are expected to benefit from these changes [11]