1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - After last week's unexpected adjustment, bond market interest rates may reach their peak. The main reasons for the adjustment are tight liquidity, increased inflation expectations due to "anti - involution", and the impact of the rising equity market on the bond market [7][14]. - The tight liquidity is not a cause - effect relationship with the bond market adjustment but a synchronous one. The central bank's increased MLF and reverse - repo operations on Friday indicate its intention to break the negative feedback, so the tight liquidity is not expected to last [7][14]. - The inflation expectations increase caused by "anti - involution" will not last long. It is difficult for the PPI to turn positive this year, and the market expectations will gradually subside, reducing the impact on the bond market [7][14]. - The equity market will continue to rise, but the stock market's rise is not a sufficient condition for interest rate hikes. The continued rise of the equity market will mainly be driven by the improved expectations of national governance and technological - led economic transformation, with a limited impact on the bond market. A scenario of both rising stocks and bonds is still possible [7][15]. - For highly liquid interest - rate bonds, it is recommended to gradually participate, such as 10 - year treasury bonds with yields above 1.7% and 30 - year treasury bonds with yields above 1.95%. For less liquid credit bonds, there may still be a risk of catch - up decline, so it is advisable to wait and see. For convertible bonds, although the valuation is expensive, their investment value driven by the equity market is still optimistic [7][19]. 3. Summary According to the Table of Contents 3.1 Interest Rate Viewpoint: Re - examining the Reasons for Bond Market Adjustment - Interest Rates May Reach the Peak - The reasons for the bond market adjustment include tight liquidity, increased inflation expectations due to "anti - involution", and the impact of the rising equity market. However, these factors are not expected to have a long - term negative impact on the bond market [7][14]. - The tight liquidity is part of a negative feedback loop but the central bank's actions suggest it will not persist. The inflation expectations increase from "anti - involution" will fade as PPI is unlikely to turn positive this year. The equity market's rise does not necessarily lead to a bond market decline, and a dual - bull market for stocks and bonds is possible [7][15]. 3.2 This Week's Key Points in the Fixed - Income Market: The Fed's Interest Rate Decision Will Be Announced 3.2.1 Intensive Release of Overseas Data - This week, China will release July PMI, the US will release July non - farm payrolls, July ADP, and the Fed's interest rate decision, and the Eurozone will release the June unemployment rate [21]. 3.2.2 The Issuance of Interest - Rate Bonds This Week Continues to Remain at a Relatively High Level - This week, it is expected to issue 677.2 billion yuan of interest - rate bonds, which is at a relatively high level compared to the same period [22]. 3.3 Review and Outlook of Interest - Rate Bonds: Bond Funds Have Experienced Continuous Redemptions 3.3.1 Slight Net Withdrawal of Reverse Repos - The central bank's open - market operations maintained a neutral net injection. The reverse - repo issuance volume first decreased and then increased, with a total of 1.6563 trillion yuan, and a slight net withdrawal of 7.05 billion yuan. The MLF had a net injection of 10 billion yuan this month [31][32]. - The capital interest rate increased from a low level, and the trading volume showed an obvious reverse change. The weekly average of the repurchase trading volume was around 7.7 trillion yuan, and the overnight ratio averaged 88.5%. The overnight and 7 - day DR and R interest rates all increased [32]. - A large number of certificates of deposit (CDs) matured, resulting in a significantly negative net financing. The secondary market yield of CDs increased rapidly, driving up the primary issuance rate [39]. 3.3.2 Obvious Upward Adjustment of Interest Rates - At the beginning of the week, with loose liquidity but hot sentiment in the stock and commodity markets, there was a large amount of profit - taking funds in the bond market, and the long - end interest rates adjusted slightly. In the second half of the week, as the central bank's injection weakened, the liquidity pressure increased sharply, and bond funds faced a large number of redemptions, causing interest rates to continue to rise. On July 27, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year treasury bonds all increased compared to the previous week [55]. 3.4 High - Frequency Data: The Improvement in the Operating Rate Did Not Persist - On the production side, the operating rates were divided. The blast furnace and PTA operating rates remained flat, while the semi - steel tire and petroleum asphalt operating rates declined. The year - on - year growth rate of the average daily crude steel production in mid - July remained negative [66]. - On the demand side, the year - on - year growth rates of passenger car manufacturers' wholesale and retail sales remained high. The year - on - year growth rate of the commercial housing transaction area continued to be negative. The SCFI and CCFI composite indexes both decreased [66]. - On the price side, the crude oil price decreased, the copper and aluminum prices increased, the coal prices were divided, the coking coal price rose rapidly, and the power coal price remained flat. The building materials composite index increased, the cement index decreased, and the glass index increased significantly. The production and inventory of rebar increased, and the futures price increased. The prices of vegetables and pork increased, while the price of fruits decreased [67].

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company is undergoing an active adjustment period in 2025, with short-term pressure on revenue and profit. The latest interim performance forecast has led to a downward adjustment in key assumptions regarding sales growth, channel expansion pace, and expense ratio improvement. However, the long-term product and channel expansion logic remains unchanged. The adjusted earnings per share (EPS) forecasts for 2025-2027 are 3.33, 4.08, and 4.68 yuan respectively, down from previous forecasts of 5.37 and 6.52 yuan for 2025 and 2026. Given the company's multi-brand and multi-channel layout, the recovery in profitability is highly certain. A price-to-earnings (PE) ratio of 19 times for 2025 is suggested, corresponding to a target price of 63.27 yuan, maintaining the "Accumulate" rating [5][10]. Financial Performance Summary - The company’s projected financial performance for 2023A to 2027E is as follows: - Revenue (million yuan): 1,848 (2023A), 2,257 (2024A), 2,341 (2025E), 2,668 (2026E), 2,985 (2027E) with year-on-year growth rates of 27.4%, 22.2%, 3.7%, 13.9%, and 11.9% respectively [7][12] - Operating profit (million yuan): 406 (2023A), 441 (2024A), 368 (2025E), 450 (2026E), 516 (2027E) with year-on-year growth rates of 91.7%, 8.7%, -16.6%, 22.4%, and 14.6% respectively [7][12] - Net profit attributable to the parent company (million yuan): 329 (2023A), 376 (2024A), 310 (2025E), 381 (2026E), 436 (2027E) with year-on-year growth rates of 107.8%, 14.3%, -17.5%, 22.6%, and 14.7% respectively [7][12] - Earnings per share (yuan): 3.53 (2023A), 4.04 (2024A), 3.33 (2025E), 4.08 (2026E), 4.68 (2027E) [7][12] Market Performance Summary - The company's absolute performance over different time frames is as follows: - 1 week: +0.75% - 1 month: -4.07% - 3 months: -20.17% - 12 months: +18.59% [2]

Group 1 - The report suggests that the bond market interest rates may have reached a peak after an unexpected adjustment, driven by three main factors: tight liquidity, rising inflation expectations due to "anti-involution," and the impact of a rising equity market on the bond market [4][7][11] - The analysis indicates that the tight liquidity is not a causal factor for the bond market adjustment but rather a synchronous relationship, with the central bank's recent operations showing an intention to alleviate the negative feedback loop [4][7][11] - The report anticipates that the inflation expectations driven by "anti-involution" will not persist for long, with the Producer Price Index (PPI) unlikely to turn positive within the year, leading to a gradual calming of market expectations [4][7][11] Group 2 - The report highlights that the equity market is expected to continue rising, but this does not necessarily imply an increase in interest rates. The upward momentum in the equity market will likely return to expectations of improved national governance and technological leadership in economic transformation [8][11] - The report recommends gradual participation in liquid interest rate bonds, such as 10-year government bonds yielding over 1.7% and 30-year government bonds yielding over 1.95%, while advising caution with less liquid credit bonds due to potential downside risks [11][12] - The report notes that the bond market experienced a significant adjustment, with the 10-year government bond yield surpassing 1.7%, reflecting a broader trend of rising yields across various maturities [35][36][41]

Investment Rating - The report maintains a "Positive" outlook for the media industry as of July 28, 2025 [6] Core Insights - The music industry is expected to transition from a paid growth model to a dual growth model of traffic and payment, driven by the expansion of audio content and refined operations of fan economy [4][10] - The resilience of streaming music against macroeconomic headwinds is highlighted, with a projected CAGR of 22% for China's streaming music industry from 2021 to 2024, significantly outpacing retail sales growth [9][20] - The report emphasizes the importance of expanding content pools to shift the music market from a stock game to a growth game, with Tencent Music and NetEase Cloud Music both enhancing their content offerings [9][10] Summary by Sections 1. Emotional Value Driving High Growth in Online Music Platforms - China's online music platforms are projected to reach revenues of 27.1 billion in 2024, reflecting a 25% year-on-year growth [18][19] - The emotional value derived from music consumption is increasingly recognized, with a shift towards subscription models providing significant psychological benefits to users [20] 2. Traffic: Copyright Expansion Expected to Drive Growth - The overall DAU for the music industry is expected to reach 183.73 million in 2024, with a 2% year-on-year increase [22] - Tencent Music's DAU has been declining, but the acquisition of Himalaya is anticipated to reverse this trend by introducing long audio users [24][41] - ByteDance's platforms have seen significant DAU growth, with a 100% increase in the first half of 2025 [26] 3. Payment: Expansion of Rights Driving Payment Increases - The report notes a significant increase in the proportion of songs available to VIP members, with QQ Music's share rising from 38% to 95% and NetEase Cloud Music's from 4% to 48% [48][49] - The introduction of SVIP memberships is expected to enhance ARPPU, with Tencent Music's acquisition of SM Entertainment and Himalaya providing additional content [50][51] 4. Cost: Operational Leverage and AI Expected to Optimize Margins - The report discusses how the management of top-tier copyrights is improving, leading to increased gross margins for music platforms [9] - AI is expected to decentralize music production, further optimizing margins [9] 5. Investment Recommendations and Targets - The report suggests focusing on Tencent Music and NetEase Cloud Music due to their strategic acquisitions and content expansions, which are expected to drive user growth and payment increases [4][13]

Investment Rating - The report maintains a "Positive" investment rating for the computer industry, indicating an expectation of returns exceeding the market benchmark by more than 5% [5]. Core Insights - The continuous development of domestic AI large models, the ongoing enhancement of domestic AI chip performance, and the flourishing of AI applications are expected to drive the sustained growth of China's AI industry, thereby boosting market confidence in AI development [3][8]. Summary by Sections Domestic AI Development - Recent months have seen a slight decline in domestic AI enthusiasm, but recent catalysts in AI models, applications, and computing power are beginning to restore market confidence [8]. - The World Artificial Intelligence Conference (WAIC) showcased significant advancements in domestic AI chip performance, exceeding market expectations, with companies like Huawei and MuXi unveiling new products [8]. AI Applications - Breakthroughs in AI applications such as embodied intelligence, AI glasses, and AI agents are expected to reignite investment interest in the AI sector [8]. - Notable products include Alibaba's Quark AI glasses, which integrate various functionalities, and the Galbot humanoid robot capable of precise item recognition in real-world settings [8]. Investment Recommendations - For AI computing chain investments, the report suggests focusing on companies like Cambricon (未评级), Haiguang Information (Buy), and Inspur Information (未评级) among others [8]. - In the AI application sector, recommended stocks include Kingsoft Office (Buy), Tax Friend (Buy), and Fanwei Network (Buy) [8].

Group 1 - The report highlights the re-pricing risk of the components of the Sci-Tech Bond ETF index, suggesting that investors should avoid chasing high prices [5][10][19] - The average "overheated" yield spread of the Sci-Tech Bond ETF index components is approximately 7 basis points, with the top 25% showing around 12 basis points [15][19] - The report indicates that the "overheated" performance of the Sci-Tech Bond ETF index components is closely linked to liquidity improvements and the rhythm of ETF listings and redemptions [19][20] Group 2 - The report notes that the overall adjustment in the bond market has not significantly negatively impacted the valuation of the index components, maintaining a stable valuation gap compared to non-index components [20][21] - It emphasizes the need to be cautious of potential negative feedback from redemptions, which could lead to significant price adjustments for the index components [20][21] - The report suggests that current trading opportunities for the Sci-Tech Bond ETF index components are limited, advising against further price chasing [20][21] Group 3 - The report observes a significant increase in credit bond issuance, with a total of 350.8 billion yuan issued, reflecting a 25% week-on-week increase, while the total repayment amount also rose to 295.9 billion yuan [27][30] - It highlights that the average valuation of credit bonds has increased significantly, with an average rise of about 11 basis points across various grades [30][31] - The report indicates that credit spreads have generally widened, with an average increase of approximately 4 basis points, particularly in the short-term [30][32]

Investment Rating - The report maintains a positive outlook on the steel sector, emphasizing its mid-term investment value under the "anti-involution" policy context [9][14]. Core Viewpoints - The steel sector is expected to have fundamental support for mid-term investment value, driven by supply-side, cost, and profit release expectations [9][14]. - The "anti-involution" policy is seen as a short-term catalyst for realizing mid-term investment logic, with three favorable mid-term logic points identified [9][14]. Supply and Demand Logic - The ultra-low emission transformation is nearing completion, which is expected to reverse structural supply issues and serve as a mid-term capacity clearance tool [15]. - As of April 20, 2025, approximately 760 million tons of capacity have completed or partially completed ultra-low emission transformations [15]. - Downstream demand from infrastructure and shipbuilding industries is anticipated to grow, supporting steel price stabilization and profit release [15]. Cost Logic - The West Mangu project is set to commence production by the end of 2025, with an annual output of 120 million tons, potentially contributing nearly 5% to global supply [15]. - The project is expected to alleviate profit pressure on midstream steel companies from upstream raw material costs [15]. High Dividend Logic - With the completion of ultra-low emission transformations and capacity replacements, capital expenditures for steel companies are expected to decline [15]. - The report anticipates accelerated profit release for midstream steel companies, making high dividends a reality [15]. Steel Price Outlook - The report indicates that the steel price index is expected to continue rising, with a notable increase of 4.16% in the overall steel price index this week [35]. - The price of cold-rolled steel has seen a significant rise of 4.67% [35]. Inventory and Production Data - The report notes a weekly rebar consumption of 2.17 million tons, reflecting a week-on-week increase of 5.05% [16]. - Social inventory and steel mill inventory are showing signs of divergence, with expectations for continued improvement on the demand side [22]. New Energy Metals - The report highlights a significant year-on-year increase of 20.95% in lithium carbonate production in June 2025, reaching 71,890 tons [39]. - The demand for new energy vehicles remains strong, with June 2025 production of 1.1923 million units, a year-on-year increase of 24.11% [43]. Price Trends in New Energy Metals - The average price of battery-grade lithium carbonate has risen significantly, reaching 77,000 yuan per ton, a week-on-week increase of 17.56% [48]. - Nickel prices have also shown upward trends, with LME nickel settling at 15,330 USD per ton [48].

Election Results - The ruling coalition (LDP + Komeito) failed to secure a majority, holding 122 seats, 3 seats short of the majority line of 125 seats[9] - The opposition parties, particularly the Democratic Party for the People, increased their seats from 9 to 22, and the Sanseito party grew from 2 to 15 seats[10] Political Implications - Japan's political landscape has shifted to a more balanced power structure, making legislative processes more challenging as the ruling coalition must collaborate with opposition parties[15] - Prime Minister Ishihara's control is weakened, with a public support rate dropping to 20.8%, the lowest in history[15] Fiscal Policy Outlook - The ruling coalition shows a conservative inclination towards fiscal expansion, while opposition parties advocate for more aggressive measures like consumption tax cuts and increased social welfare[16] - The likelihood of significant fiscal policy changes is limited, with potential progress expected in 2026[16] Monetary Policy Impact - The impact on monetary policy is expected to be minimal, with the Bank of Japan likely to maintain its current stance until uncertainties regarding inflation and tariffs are resolved[20] - Market expectations suggest that the Bank of Japan may resume interest rate hikes in early 2026[20] Market Reactions - The risk of fiscal expansion has been priced in, leading to a stabilization of Japanese government bonds and the yen[28] - The global trend towards fiscal expansion is reinforced, with developed markets like the US, Europe, and Japan signaling marginal changes in fiscal policy in 2025[28]

Investment Rating - The industry investment rating is "Positive (Maintain)" [5] Core Viewpoints - The report emphasizes the transformation and upgrading of the industry, highlighting the investment opportunities in companies with genuine brand strength [3][8] - The report notes that the gold jewelry sector is facing challenges due to rising gold prices and declining sales, with a significant drop in gold jewelry consumption [8] - Despite industry pressures, certain leading companies have seen stock price increases due to their differentiated transformation strategies and market expectations [8] Summary by Sections Investment Recommendations and Targets - The report recommends focusing on companies that have begun to establish a brand presence, including: - Chao Hong Ji (002345, Increase) - Lao Pu Gold (06181, Increase) - Chow Tai Fook (01929, Not Rated) - Lao Feng Xiang (600612, Buy) - Zhou Da Sheng (002867, Increase) [3] Industry Overview - The report indicates that gold jewelry consumption in China decreased by 3.54% year-on-year in the first half of 2025, with gold jewelry sales down by 26.00% [8] - The average gold price in China for the first half of 2025 was 725.28 yuan per gram, reflecting a year-on-year increase of 41.07% [8] - The report highlights a shift in consumer demand towards self-purchase and emotional consumption, particularly among younger consumers [8] Future Trends - The report anticipates a trend towards brandization and stratified development in the gold jewelry sector, with investment opportunities emerging from both high-end and light luxury fashion brands [8] - High-end brands are expected to focus on original design and craftsmanship, while light luxury brands will cater to younger consumers with affordable, stylish products [8]

Quantitative Models and Construction Methods 1. Model Name: Dividend Forecast Model - **Model Construction Idea**: The model aims to predict the impact of dividends on index futures pricing by estimating the dividend points for each index and calculating the theoretical cost of holding futures contracts until expiration[7][11][19] - **Model Construction Process**: 1. **Estimate Component Stocks' Net Profit**: Use annual reports, earnings forecasts, and other financial data to estimate the net profit of index component stocks[21][23] 2. **Calculate Pre-Tax Total Dividends**: Based on the estimated net profit and assuming a constant dividend payout ratio, calculate the total pre-tax dividends for each stock[21][24] 3. **Assess Dividend Impact on Index**: Using the latest market capitalization and weight of each stock, calculate the dividend impact on the index as follows: $$\text{w}_{it} = \frac{\text{w}_{i0} \times (1 + R)}{\sum_{1}^{n} \text{w}_{i0} \times (1 + R)}$$ where \( \text{w}_{i0} \) is the initial weight of stock \( i \), and \( R \) is the return over the period[24] 4. **Predict Dividend Impact on Futures Contracts**: Aggregate the dividend impact for all component stocks before the contract expiration date to estimate the total dividend points for each futures contract[25][28] - **Model Evaluation**: The model provides a systematic approach to quantify dividend impacts, but its accuracy depends on assumptions about dividend payout ratios and timing[19][28] 2. Model Name: Futures Pricing Model with Discrete Dividends - **Model Construction Idea**: This model calculates the theoretical price of index futures by incorporating discrete dividend distributions during the contract period[30] - **Model Construction Process**: 1. Assume the futures price \( F_t \), spot price \( S_t \), and the present value of dividends \( D \) over the period \( T-t \) 2. For \( m \) discrete dividend payments at times \( t_1, t_2, ..., t_m \), the present value of dividends is: $$D = \sum_{i=1}^{m} \frac{D_i}{(1 + r_i)}$$ where \( r_i \) is the risk-free rate for the period between \( t_i \) and \( t \) 3. The theoretical futures price is then: $$F_t = (S_t - D)(1 + r)$$ where \( r \) is the risk-free rate over the period \( T-t \)[30] - **Model Evaluation**: This model is effective for scenarios with discrete dividend distributions but may require adjustments for continuous dividend flows[30] 3. Model Name: Futures Pricing Model with Continuous Dividends - **Model Construction Idea**: This model simplifies the pricing of index futures by assuming continuous dividend distributions over the contract period[31] - **Model Construction Process**: 1. Assume the futures price \( F_t \), spot price \( S_t \), annualized dividend yield \( d \), and annualized risk-free rate \( r \) 2. The theoretical futures price is calculated as: $$F_t = S_t \cdot e^{(r-d)(T-t)}$$ where \( T-t \) is the time to maturity[31] - **Model Evaluation**: This model is suitable for markets with frequent and evenly distributed dividends, providing a more streamlined calculation compared to the discrete model[31] --- Model Backtesting Results 1. Dividend Forecast Model - **Annualized Hedging Costs (Excluding Dividends)**: - **IH (SSE 50)**: -1.56% for August contracts[7][11] - **IF (CSI 300)**: -0.19% for August contracts[7][11] - **IC (CSI 500)**: 8.55% for August contracts[7][11] - **IM (CSI 1000)**: 8.78% for August contracts[7][11] 2. Futures Pricing Model with Discrete Dividends - **Remaining Impact of Dividends on August Contracts**: - **IH (SSE 50)**: 0.09%[12] - **IF (CSI 300)**: 0.12%[13] - **IC (CSI 500)**: 0.12%[14] - **IM (CSI 1000)**: 0.07%[15] 3. Futures Pricing Model with Continuous Dividends - **Remaining Impact of Dividends on Futures Prices**: - **IH (SSE 50)**: 2.43 points for August contracts[7][11] - **IF (CSI 300)**: 4.81 points for August contracts[7][11] - **IC (CSI 500)**: 7.39 points for August contracts[7][11] - **IM (CSI 1000)**: 4.54 points for August contracts[7][11] --- Quantitative Factors and Construction Methods 1. Factor Name: Dividend Impact Factor - **Factor Construction Idea**: Quantify the impact of dividends on index futures pricing by calculating the dividend points and their contribution to the futures basis[7][11][19] - **Factor Construction Process**: 1. Estimate the dividend points for each index based on component stocks' dividend payouts and weights[21][24] 2. Incorporate the dividend points into the futures pricing model to adjust the theoretical basis[30][31] - **Factor Evaluation**: This factor effectively captures the influence of dividends on futures pricing, aiding in arbitrage and hedging strategies[19][28] --- Factor Backtesting Results 1. Dividend Impact Factor - **Dividend Points for August Contracts**: - **IH (SSE 50)**: 2.43[7][11] - **IF (CSI 300)**: 4.81[7][11] - **IC (CSI 500)**: 7.39[7][11] - **IM (CSI 1000)**: 4.54[7][11]