1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - The core purposes of the new bond VAT policy may include two aspects: unifying the bond market tax system and increasing government tax revenue to relieve fiscal pressure [2][15]. - The move to resume VAT collection on bonds may signal a gradual reduction in tax - incentives for the investment demand side in the bond and capital markets, and the reduction rhythm is affected by the maturity of asset categories and macro - economic and fiscal factors [2][15]. 3. Summary According to the Directory 3.1 Bond VAT Adjustment Policy Interpretation - Since August 8, 2025, interest income from newly - issued government bonds, local government bonds, and financial bonds will be subject to VAT, while previously issued bonds will remain tax - exempt until maturity. For new bonds, ordinary self - operating institutions and asset management products will be taxed at 6% and 3% respectively [1][14]. - The policy aims to unify the bond market tax system and increase government revenue. It may also indicate a gradual reduction in tax incentives in the bond and capital markets, with the reduction rhythm affected by asset category maturity and macro - economic and fiscal conditions [2][15]. 3.2 Impact of the New Bond VAT Policy on the Credit Bond Market 3.2.1 Impact Logic and Magnitude Calculation - After interest income from interest - rate bonds loses the VAT exemption advantage, the relative value of credit bonds increases. The spread between self - operating departments' credit bonds and other bonds narrows by about 10BP, and the relative value of credit bonds may increase by 5 - 15BP for self - operating departments and 3 - 10BP for asset management products and public funds [3][20]. - The credit spread of credit bonds compared to government bonds may decline due to the increase in the benchmark rate of newly - issued government bonds. The new policy may attract more funds from local government bonds and financial bonds to credit bonds, and the market sentiment after the policy implementation will affect the timing of credit bond allocation [3][21]. 3.2.2 Impact on Different Financial Institutions - For public funds, although the VAT rate on bond interest income rises to 3%, their investment advantage in bonds still exists and may attract more funds into the credit bond market, bringing trading volume to sub - categories of credit bonds [6][29]. - For self - operating departments, with the VAT rate rising to 6%, they may increase credit bond allocation through funds, and pay more attention to urban investment bonds and industrial bonds [6][29]. - For other asset management institutions, with the VAT rate rising to 3%, they may invest in public funds or private asset management products and slightly increase the proportion of credit bonds and inter - bank certificates of deposit [6][30]. 3.3 Impact of the New Bond VAT Policy on the Bank's Perpetual and Tier - 2 Bonds Market 3.3.1 Impact Logic and Magnitude Calculation - In the short - term, due to the tax - exemption advantage of existing bonds, the demand for bank perpetual and tier - 2 bonds in the secondary market will increase, and the yields of 5 - year tier - 2 capital bonds (AAA -) and 5 - year perpetual bonds (AAA -) will decline by 11.07BP and 11.44BP respectively. In the long - term, the policy may have little impact on bank perpetual and tier - 2 bonds [7][32]. 3.3.2 Impact on Different Financial Institutions - Public funds still have the motivation to allocate high - liquidity bank perpetual and tier - 2 bonds and can improve portfolio liquidity through credit bond ETFs [8][35]. - Self - operating departments may increase the allocation of bank perpetual and tier - 2 bonds and strengthen entrusted investment to reduce tax costs [8][35]. - Other asset management institutions may adopt a strategy of "shortening duration + exploring individual bonds" to deal with the tax policy change [8][36].

Investment Rating - The report maintains an "Overweight" rating for the electronic industry [1] Core Insights - The ASIC business model requires service providers to possess capabilities in IP design and SoC design, with companies like Broadcom and Marvell leading the market [6][11] - The custom chip market is projected to reach $55.4 billion by 2028, with a CAGR of 53% from 2023 to 2028, driven by increasing demand for AI and data center applications [6][43] - The performance of major players like Broadcom and Marvell continues to show strong growth, with Broadcom's AI business revenue exceeding $4.4 billion in FY25Q2, a 46% year-on-year increase [6][49] Summary by Sections 1. ASIC Business Model Requirements - Service providers need strong IP design capabilities, including high-speed SerDes and SoC design [6][11] - Broadcom and Marvell dominate the ASIC market, holding over 60% market share [36] 2. Market Space - The ASIC market is expected to grow significantly, with Broadcom and Marvell forecasting substantial increases in data center capital expenditures [43][44] - By 2028, the global data center market is projected to exceed $940 billion, with ASICs accounting for a significant portion of this growth [44] 3. Custom Business Outlook - The custom chip business is experiencing high demand, with Broadcom and Marvell reporting strong revenue growth [49][50] - Broadcom's semiconductor segment generated $8.4 billion in revenue, with AI business contributing significantly [51] - Marvell's data center business revenue reached $1.441 billion in FY26Q1, a 76% year-on-year increase [52] 4. Profitability Analysis - Broadcom and Marvell maintain higher gross margins compared to other custom chip manufacturers, with margins around 60% [54] - The gross margin for Broadcom's semiconductor division is approximately 67%, while Marvell's overall gross margin is around 60% [54]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a significant increase in Q2 performance, emphasizing the opportunities in domestic computing power [1] - The company is actively integrating its supply chain and strengthening the domestic computing power ecosystem [8] - The demand for AI computing power is surging, presenting historical opportunities for domestic chip manufacturers [8] - The company has leading products in both CPU and DCU segments, with expected steady revenue growth [8] Financial Summary - Total revenue for 2023 is projected at 6,012 million yuan, with a year-on-year growth of 17.30% - By 2025, total revenue is expected to reach 12,915 million yuan, reflecting a growth of 40.96% [1] - The net profit attributable to the parent company for 2023 is estimated at 1,263 million yuan, with a year-on-year increase of 57.17% - By 2025, net profit is projected to be 2,867 million yuan, showing a growth of 48.49% [1] - The latest diluted EPS for 2023 is 0.54 yuan, expected to rise to 1.23 yuan by 2025 [1] - The P/E ratio is forecasted to decrease from 252.72 in 2023 to 111.33 in 2025 [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's Q2 net profit attributable to shareholders increased by 28% year-on-year, exceeding expectations, indicating robust growth in profitability [2] - The company achieved a total revenue of 3.4 billion yuan in the first half of 2025, a year-on-year increase of 20%, with a net profit of 640 million yuan, up 30% year-on-year [2] - The company maintains a strong profit margin, with a net profit margin of 18.7% in the first half of 2025, an increase of 1.5 percentage points year-on-year [2] - The company is expected to benefit from geopolitical tensions and increased energy independence, leading to higher demand for valve procurement [3] - The company has a solid order backlog from major clients like Saudi Aramco and ADNOC, with ongoing expansion of new products and market share [3] - The 2025 stock incentive plan aims to motivate key employees and reflects the company's long-term confidence in its development [4] Financial Summary - Total revenue forecast for 2023 is 5.544 billion yuan, with a year-on-year growth of 36.59% [1] - Net profit attributable to shareholders is projected to be 721.8 million yuan in 2023, representing a year-on-year increase of 54.85% [1] - The earnings per share (EPS) for 2023 is estimated at 0.94 yuan, with a price-to-earnings (P/E) ratio of 35.39 [1] - The company expects to achieve a net profit of 1.15558 billion yuan in 2024, with a year-on-year growth of 60.10% [1] - The projected net profit for 2025 is 1.4499 billion yuan, with a growth rate of 25.47% [1]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is facing significant revenue pressure in the first half of 2025, with expected revenue decline of 38.3% to 41.9% year-on-year, and net profit decline of 23% to 24% [7] - Despite the challenges, the company is actively managing its operations, maintaining a stable profit margin of 24% to 25% in the first half of 2025, indicating strong cost and expense control capabilities [7] - The company is focusing on clearing inventory and optimizing its distribution channels, with expectations for a more controlled revenue decline in the second half of 2025 as market conditions improve [7] - The company is adapting to industry pressures by shifting its customer base and product offerings, including the introduction of new products at competitive price points [7] Financial Forecasts - Total revenue is projected to be 7,060 million in 2023, with a slight increase to 7,067 million in 2024, followed by a significant drop to 5,026 million in 2025 [1] - The net profit for 2023 is estimated at 2,327 million, decreasing to 1,324 million in 2024, and further to 1,158 million in 2025 [1] - Non-IFRS net profit is expected to be 1,623 million in 2023, with a decline to 1,676 million in 2024, and a drop to 1,233 million in 2025 [1] - The report adjusts the non-IFRS net profit forecasts for 2025 to 12.3 billion, 13.7 billion, and 16.8 billion for 2025, 2026, and 2027 respectively [7] Market Data - The closing price of the stock is 7.38 HKD, with a market capitalization of approximately 22,749.82 million HKD [5] - The company has a price-to-earnings (P/E) ratio of 9.77 for the current price and latest diluted earnings per share (EPS) of 0.69 [1] - The company’s book value per share is 4.12, with a debt-to-asset ratio of 28.84% [6]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The company reported a significant increase in Q2 non-net profit, which grew by 37% year-on-year, indicating that the performance inflection point has been reached [2] - In the first half of 2025, the company achieved total revenue of 6.9 billion yuan, a year-on-year increase of 39%, and a net profit attributable to shareholders of 1.24 billion yuan, up 14% year-on-year [2] - The company’s revenue and profit in Q2 exceeded expectations, with total revenue reaching 4.21 billion yuan, a 49% increase year-on-year, and a net profit of 780 million yuan, a 9% increase year-on-year [2] Revenue and Profit Analysis - The revenue from high-end equipment manufacturing in H1 2025 was 4.22 billion yuan, up 22.4% year-on-year, primarily driven by natural gas compression equipment [2] - The oil and gas engineering and technical services segment saw revenue of 2.07 billion yuan in H1 2025, an impressive 88.1% increase year-on-year, mainly benefiting from EPC deliveries in the Middle East [2] Margin and Cash Flow Performance - The company's gross margin for H1 2025 was 32.2%, a decrease of 3.6 percentage points year-on-year, while the net profit margin was 18.4%, down 4.1 percentage points year-on-year [3] - The domestic gross margin was 27.1%, down 7.5 percentage points year-on-year, primarily due to the delivery schedule of drilling and completion products [3] - The operating cash flow for H1 2025 was 3.14 billion yuan, a substantial increase of 196% year-on-year, attributed to excellent collection quality from overseas clients [3] International Market Expansion - The company is entering a harvest phase in its overseas layout, with the Middle East and North America being key markets for growth [4] - The Middle East is experiencing urgent economic transformation needs, leading to increased natural gas extraction and expansion of the natural gas equipment and EPC market, where the company is gaining market share [4] - In North America, the company is well-positioned to tap into the large replacement market for fracturing equipment, supported by its performance advantages [4] Financial Forecasts - The report maintains profit forecasts for the company at 3.03 billion yuan for 2025, 3.49 billion yuan for 2026, and 3.99 billion yuan for 2027, with corresponding P/E ratios of 14, 12, and 10 times [4]

Macro Strategy - The report analyzes three historical cases of capacity adjustment over a century, providing insights into supply-demand rebalancing: the long depression in the late 19th century in Europe and America, the 1929 Great Depression, and Japan's capacity reduction in the 1970s and 1990s [1][11] - Key conclusions include that capacity imbalance can lead to a negative feedback loop lasting 20-30 years if uncontrolled, and government intervention is more effective than non-intervention in addressing capacity imbalances [1][11] - Effective supply-demand rebalancing requires simultaneous efforts in controlling capacity, restoring credit, and stabilizing employment, rather than relying solely on supply or demand policies [1][11] Fixed Income - The report discusses the micro-guided convertible bond, which has a total issuance scale of 1.17 billion yuan, with net proceeds used for the construction of an intelligent factory for semiconductor thin film deposition equipment [2][12] - The expected listing price range for the convertible bond is between 128.84 and 143.03 yuan, with a predicted subscription rate of 0.0036% [2][12] - The company, Micro-Guided Nano, has shown steady revenue growth with a compound annual growth rate of 71.44% from 2020 to 2024, achieving 2.7 billion yuan in revenue in 2024, a year-on-year increase of 60.74% [2][12] Industry Analysis - The report on Chuanfeng Power highlights the company's leading position in the all-terrain vehicle and motorcycle markets, with three major business segments experiencing rapid growth [3][14] - The investment recommendation maintains a "buy" rating for Chuanfeng Power, anticipating higher valuations due to its significant market position and growth potential across its business segments [3][14] - Jiuhua Tourism is positioned to leverage its unique cultural and natural resources, with projected net profits of 220 million, 240 million, and 270 million yuan from 2025 to 2027, corresponding to price-earnings ratios of 18, 16, and 15 times [4][14] Company-Specific Insights - Crystal Technology has secured a significant contract for drug discovery, with potential payments exceeding 5.89 billion USD, indicating strong future growth prospects [5][16] - The company is expected to achieve revenues of 552 million, 924 million, and 1.503 billion yuan from 2025 to 2027, with a forecasted return to profitability by 2027 [5][16] - Zhongchong Co., a leader in the pet food industry, reported a 42.6% year-on-year increase in net profit for the first half of 2025, driven by strong growth in its proprietary brands [17][18]

Investment Rating - The report assigns a "Buy" rating for Jiuhua Tourism (603199) [1] Core Views - Jiuhua Tourism is leveraging its unique Buddhist mountain resources to develop a regional cultural tourism complex, with a projected revenue of 764.44 million yuan in 2024, reflecting a year-on-year growth of 5.64% [1][12] - The company is expected to benefit from the ongoing recovery in domestic tourism, with a significant increase in young visitors to temple tourism, which is becoming a new trend in emotional consumption [2][40] - The company plans to enhance its capacity through new projects and improved transportation, which will likely drive customer growth and revenue [3][56] Summary by Sections Company Overview - Jiuhua Tourism, established in December 2000, is located in the Jiuhua Mountain scenic area of Anhui Province and operates in various sectors including transportation, hotels, and travel agencies [12][17] - The company aims to build a regional tourism complex, with a projected revenue of 764.44 million yuan in 2024, where hotel, cable car, transportation, and travel agency businesses contribute 31%, 38%, 21%, and 8% respectively [20][12] Tourism Market Trends - The domestic tourism market is experiencing high growth, with a 20.6% increase in travel volume and a 15.2% increase in total spending in the first half of 2025 [40][41] - Young visitors, particularly those born in the 1990s and 2000s, are increasingly engaging in temple tourism, which is becoming a popular form of emotional consumption [48][49] Company Highlights - Jiuhua Mountain is one of China's four major Buddhist mountains, providing a stable flow of visitors due to its unique cultural and natural resources [56][58] - The company is investing in new projects, including a 326 million yuan cable car project and various hotel renovations, which are expected to enhance its service capacity and profitability [37][38] - Improvements in external transportation, such as the opening of the Pihuang high-speed railway, are anticipated to boost visitor numbers [56][58] Financial Analysis - The company forecasts a net profit of 217.09 million yuan for 2025, with a corresponding P/E ratio of 18 times [1][11] - Revenue projections for 2025-2027 indicate a steady growth trajectory, with net profits expected to reach 267.37 million yuan by 2027 [1][11]

Investment Rating - The report maintains a "Buy" rating for Chuanfeng Power, indicating a positive outlook on the company's growth potential in the all-terrain vehicle (ATV) and motorcycle sectors [6]. Core Insights - Chuanfeng Power has experienced significant growth since its listing in 2017, with a market capitalization increase of 13.3 times and an annualized return of 38% [3]. - The all-terrain vehicle market is approximately 950,000 to 1,000,000 units, with North America being the largest market, accounting for about 80% of global sales [3][69]. - The company has successfully expanded its product lines, including ATVs, motorcycles, and electric two-wheelers, with revenue contributions of 48%, 40%, and 3% respectively in 2024 [21]. - The report highlights the potential for Chuanfeng Power to double its all-terrain vehicle revenue by 2030, driven by new product launches and market expansion [4]. Summary by Sections Company Overview - Chuanfeng Power has evolved from a parts manufacturer to a leading player in the ATV and motorcycle markets, with significant milestones including entering the ATV market in 2005 and launching its electric motorcycle brand ZEEHO in 2020 [11]. Stock Price Review - The stock price of Chuanfeng Power has been influenced by product cycles, external tariffs, shipping costs, and exchange rate fluctuations, with long-term growth driven by business expansion and product cycles [3][31]. All-Terrain Vehicles - The all-terrain vehicle segment has seen a compound annual growth rate (CAGR) of 32% from 2019 to 2024, with revenue increasing from 1.83 billion to 7.21 billion yuan [3]. - Chuanfeng Power's market share in the U.S. increased from 5.8% in 2020 to 17.6% in 2022, capitalizing on supply shortages faced by competitors during the pandemic [3]. Motorcycles - The motorcycle segment has also shown robust growth, with revenue rising from 1.15 billion to 6.04 billion yuan from 2019 to 2024, reflecting a CAGR of 39% [5]. - The domestic market for recreational motorcycles has expanded significantly, with sales increasing from 140,000 units in 2020 to 400,000 units in 2024 [5]. ZEEHO Brand - The ZEEHO brand is projected to achieve sales of 600,000 to 700,000 units by 2025, with significant growth potential similar to that of other successful electric motorcycle brands [6]. Profit Forecast and Investment Recommendations - The report anticipates continued growth across all three business segments (ATVs, motorcycles, and ZEEHO), suggesting that Chuanfeng Power should command a higher valuation due to its leading market position [6].

Quantitative Models and Construction Methods 1. Model Name: "Clock + Turning Point Improvement Method" Asset Rotation Model - **Model Construction Idea**: This model integrates macroeconomic risk factors with asset rotation strategies, leveraging the "investment clock" concept and improving turning point identification through a combination of momentum and phase judgment methods [8][23][24] - **Model Construction Process**: 1. Macro risk factors (e.g., economic growth, inflation, interest rates, credit, exchange rates, and term spreads) are used to determine the macroeconomic state [8] 2. The "investment clock" framework is applied to link macroeconomic states with asset performance. For example, recovery and overheating phases favor equities and commodities, while stagflation and recession phases favor bonds and gold [9][15] 3. Turning points in macroeconomic factors are identified using a combination of momentum and phase judgment methods: - Momentum is calculated as: $$ Momentum_t = X_t - \frac{1}{3}(X_{t-1} + X_{t-2} + X_{t-3}) $$ where \( X_t \) represents the macro factor value at time \( t \) [16] - Phase judgment uses a 38-month sine wave to identify the current phase of macro factors, categorizing them into upward, downward, top, or bottom regions [21][22] 4. Asset scores are calculated based on the macro factor states, and risk allocation is adjusted accordingly. Initial risk weights are set as large-cap stocks: small-cap stocks: bonds: commodities: gold = 1:1:1:0.5:0.5. Positive scores double the risk allocation, while negative scores halve it [24] 5. Backtesting is conducted over the period from January 2011 to December 2023 [25] - **Model Evaluation**: The model demonstrates strong performance in terms of returns, risk control, and drawdown management, achieving nearly 10% annualized returns while maintaining low volatility and drawdowns [27] --- Model Backtesting Results 1. "Clock + Turning Point Improvement Method" Asset Rotation Model - **Total Return**: 242.45% - **Annualized Return**: 9.93% - **Annualized Volatility**: 6.83% - **Sharpe Ratio**: 1.45 - **Maximum Drawdown**: 6.31% - **Win Rate**: 73.08% [27] 2. Benchmark Equal-Weighted Portfolio - **Total Return**: 83.59% - **Annualized Return**: 4.78% - **Annualized Volatility**: 10.99% - **Sharpe Ratio**: 0.43 - **Maximum Drawdown**: 20.63% - **Win Rate**: 55.77% [27] --- Quantitative Factors and Construction Methods 1. Factor Name: Macro Risk Factors - **Factor Construction Idea**: These factors aim to capture various dimensions of macroeconomic risks, including economic growth, inflation, interest rates, credit, exchange rates, and term spreads, providing a comprehensive view of the macroeconomic environment [8] - **Factor Construction Process**: 1. **Economic Growth**: - Indicators: Industrial production YoY, PMI, retail sales YoY - Processing: HP filtering and volatility-weighted averaging - Interpretation: Positive values indicate economic expansion [8] 2. **Inflation**: - Indicators: PPI YoY, CPI YoY - Processing: HP filtering and volatility-weighted averaging - Interpretation: Positive values indicate rising inflation [8] 3. **Interest Rates**: - Indicators: Bond indices (1-3 years), money market indices - Processing: Equal-weighted portfolio construction and net value calculation - Interpretation: Negative values indicate falling interest rates and loose monetary conditions [8] 4. **Exchange Rates**: - Indicators: Gold prices (Shanghai and London) - Processing: Equal-weighted long-short portfolio construction - Interpretation: Positive values indicate currency depreciation [8] 5. **Credit**: - Indicators: Corporate bond indices (AAA) vs. government bond indices - Processing: Duration-neutral portfolio construction - Interpretation: Positive values indicate widening credit spreads and tighter credit conditions [8] 6. **Term Spreads**: - Indicators: Short-term vs. long-term bond indices - Processing: Duration-neutral portfolio construction - Interpretation: Positive values indicate widening term spreads [8] --- Factor Backtesting Results 1. Macro Risk Factors (July 2025 State) - **Economic Growth**: Upward (Recovery phase) - **Inflation**: Downward - **Interest Rates**: Downward - **Credit**: Downward - **Exchange Rates**: Downward - **Term Spreads**: Downward [36]