Investment Rating - The report maintains an "Overweight" rating for the steel and non-ferrous metals sectors [5] Core Insights - The report highlights that the steel sector's profitability is expected to recover to historical average levels, supported by government policies aimed at phasing out outdated production capacity [4][5] - The report notes significant fluctuations in commodity prices, particularly in coking coal, and suggests monitoring the risks associated with futures price volatility [4] Liquidity Analysis - The M1 and M2 growth rate difference was -3.7 percentage points in June 2025, indicating a potential impact on market liquidity [11][20] - The BCI small and medium enterprise financing environment index was 49.12 in June 2025, showing a slight month-on-month increase of 0.07% [11][20] Infrastructure and Real Estate Chain - Rebar prices reached a new high for the year, increasing by 5.50% to 3450 CNY/ton [9][41] - The national average capacity utilization rate for blast furnaces was 90.81%, reflecting a slight decrease of 0.08 percentage points [41] Industrial Products Chain - The operating rate for semi-steel tires was reported at 75.87%, a decrease of 0.12 percentage points [2] - Major commodity prices showed varied performance, with cold-rolled steel prices increasing by 6.42% [2] Subsector Performance - The prices of main coking coal and iron ore reached four-month highs, with coking coal prices at 1227 CNY/ton, up 6.6% [9][2] - The report indicates that the profit margins for titanium dioxide and flat glass are currently low, with flat glass margins at -58 CNY/ton [78][80] Valuation Metrics - The report notes that the PB ratio for the steel sector relative to the broader market is currently at 0.57, with historical highs reaching 0.82 [9][4] - The Shanghai Composite Index increased by 1.69%, with the best-performing sector being cement manufacturing, which rose by 13.13% [9] Export Chain - The PMI new export orders for China were at 47.70% in June 2025, indicating a slight month-on-month increase [3][9] - The CCFI composite index for container shipping rates was reported at 1261.35 points, down 3.24% [3]

Overall View - The report maintains a "Buy" rating for the sectors of Power Equipment, Public Utilities, and Environmental Protection, indicating a positive outlook for these industries [1][3][4]. Solar Energy - In the solar sector, the focus is on the rising attention towards silicon material "stockpiling," with a reasonable price benchmark set at 60,000 yuan/ton. The market is optimistic about supply-demand matching, leading to significant price increases in polysilicon futures [3]. - The convertible bond price of JA Solar has been adjusted down to 11.66 yuan, enhancing its value and leading to price increases. More solar companies are expected to follow suit [3]. - Key companies to watch include TBEA, Tongwei, Aiko Solar, and Trina Solar, particularly in segments with price elasticity like silicon materials and glass [3]. Hydropower - The Yarlung Tsangpo River downstream hydropower project commenced on July 19, 2025, with a total investment of approximately 1.2 trillion yuan. The market is currently overly enthusiastic about turbine investments, leading to inflated stock prices for companies like Dongfang Electric [4]. - The report suggests focusing on Gas Insulated Transmission Lines (GIL), which have substantial investment potential, alongside traditional turbine investments [4]. Wind Power - The wind power sector is expected to benefit from "anti-involution" policies, with significant performance elasticity anticipated in the wind turbine assembly segment for 2026. The report notes a favorable output curve for wind power, which may lead to a recovery in development and sales [4]. - Key companies to monitor include Windar, Mingyang Smart Energy, and Goldwind, with a focus on the trend of larger turbine components and opportunities in offshore wind products [4]. Solid-State Batteries - The report expresses optimism for solid-state batteries, highlighting potential benefits from new tenders initiated by major lithium battery manufacturers. Companies like Hong Kong Technology and Xiamen Tungsten are recommended for investment [5]. Energy Storage - The introduction of new pricing policies for large-scale energy storage in Gansu is expected to improve independent storage IRR. The report anticipates a high level of bidding activity in the domestic energy storage market due to consumption pressures and improved business models [5]. - Recommended companies in this sector include Sungrow Power Supply, Goodwe, and Deye [5]. Public Utilities - As of July 25, 2025, the price of thermal coal at Qinhuangdao Port is reported at 650 yuan/ton, reflecting an increase from the previous week. The report also notes stable prices for imported thermal coal [36]. - In June, the total electricity consumption in China reached 867 billion kWh, marking a year-on-year growth of 5.4%, with significant increases in consumption across various sectors [37].

Revenue Analysis - The cumulative year-on-year growth rate of national general public budget revenue from January to June 2025 is -0.3%, unchanged from the previous value[1] - The cumulative year-on-year growth rate of general public budget expenditure is +3.4%, down from +4.2%[1] - Government fund budget revenue shows a cumulative year-on-year growth rate of -2.4%, improving from -6.9% previously[1] Tax Revenue Insights - In June, tax revenue shows a year-on-year growth of +1.04%, an improvement compared to May[3] - The domestic consumption tax in June increased by +1.96%, while the vehicle purchase tax rose by +5.99%, indicating a positive contribution from automotive consumption[4] - The corporate income tax grew by +2.73%, reflecting a low base effect, but remains lower than the growth rate of value-added tax[4] Government Fund Performance - Government fund budget revenue in June increased significantly by +20.8%, recovering from -8.1% the previous month, driven by land sales[25] - The expenditure of government funds in June surged by +79.2%, compared to +8.8% in the previous month, with land-related expenditures showing a year-on-year growth of +5.9%[25] Expenditure Trends - General public budget expenditure growth in June is +0.38%, a decrease of 2.25 percentage points from the previous month[15] - Infrastructure-related expenditure in June fell by -8.80%, while social security and health expenditures also saw declines[15] - The completion rate for general public budget revenue from January to June is 48.8%, lower than the average of the past five years[15]

Investment Rating - The report maintains a "Buy" rating for the agriculture, forestry, animal husbandry, and fishery sector [5] Core Views - The second quarter saw a slight recovery in production capacity, with an increase in average weight and stock levels [2][4] - The overall pig price trend is weak, influenced by increased supply and high temperatures affecting demand [1][38] - The report highlights potential investment opportunities in pig farming, feed, animal health, and planting sectors due to favorable market conditions [4] Summary by Sections 1. Pig Farming Sector - As of June, the number of breeding sows was 40.43 million, showing a quarter-on-quarter increase of 0.1% and a year-on-year increase of 0.1% [2][14] - In Q2 2025, the total pig slaughter volume was 171.43 million heads, a year-on-year increase of 1.2% but a quarter-on-quarter decrease of 12% [2][15] - The average price of live pigs in June dropped to 14.57 yuan/kg, a decrease of 2.3% month-on-month and 20.6% year-on-year [21][38] 2. Market Performance - The agriculture, forestry, animal husbandry, and fishery sector outperformed the market, with a weekly increase of 3.62% compared to the Shanghai Composite Index's 1.67% [28] - Key stocks in the sector showed significant gains, with Shennong Group rising by 15.42% and Juxing Agriculture increasing by 6.79% [32][33] 3. Price Trends - The average price of live pigs was 14.15 yuan/kg as of July 25, reflecting a week-on-week decline of 0.84% [1][38] - The price of white feather broiler chickens increased to 6.7 yuan/kg, up 4.69% week-on-week, while chick prices surged by 40.88% to 1.93 yuan/chick [49][37] 4. Investment Recommendations - The report recommends focusing on pig farming stocks such as Muyuan Foods, Wens Foodstuff Group, and Juxing Agriculture due to expected price recovery [4] - It also suggests monitoring feed and animal health companies like Haida Group and Ruipu Biological Products, as well as planting companies like Suqian Agricultural Development and Beidahuang Group [4]

Investment Rating - The report maintains a "Buy" rating for the banking industry, indicating an expected investment return exceeding the market benchmark index by over 15% in the next 6-12 months [1][29]. Core Insights - The banking wealth management market saw a net increase of 0.72 trillion yuan in the first half of 2025, with the total balance exceeding 30 trillion yuan, reflecting a 2.4% growth since the beginning of the year [2][3]. - The average annualized yield of wealth management products was 2.12% in the first half of 2025, supported by a loose monetary policy and a decline in bond market yields [2][3]. - The report highlights a trend of "disintermediation," where funds are increasingly flowing from deposits to wealth management products, driven by lower deposit rates and a favorable bond market environment [3][25]. Summary by Sections Scale Changes - As of the end of Q2 2025, the total balance of wealth management products reached 30.67 trillion yuan, with a quarterly increase of 1.53 trillion yuan, although this was lower than the same period last year [2][3]. - The increase in wealth management scale was primarily driven by a supportive monetary policy and a decline in deposit rates, which encouraged a shift towards wealth management products [3][4]. Product Characteristics - Fixed income products accounted for 97.2% of the total wealth management product balance, with a slight increase in the proportion of mixed and equity products due to improved market conditions [14][19]. - Open-ended products contributed 86.1% of the scale increase in the first half of 2025, indicating a strong investor preference for liquidity and redemption convenience [11][12]. Asset Allocation - The report notes a shift towards high liquidity assets, with significant increases in cash and bank deposits, while credit bonds saw a decrease in holdings [18][19]. - The allocation to public funds rose significantly, with a balance of 1.38 trillion yuan by the end of Q2 2025, reflecting a growing preference for flexible investment options [19][21]. Future Outlook - The report anticipates that the disintermediation trend will continue, but potential market disturbances may arise as the valuation adjustment process nears completion [25][26]. - There is an emphasis on enhancing net asset value resilience through diversified asset allocation strategies, particularly in a low-interest-rate environment [26][27].

Profit Trends - In June 2025, industrial enterprise profits continued to decline, with a year-on-year decrease of 4.3%, narrowing from 9.1% in the previous month[4] - Cumulative profit growth for industrial enterprises from January to June 2025 was -1.8%, down from -1.1% in January to May 2025[2] - The profit margin for industrial enterprises in June 2025 was 6.0%, lower than 6.4% in the same month last year[4] Revenue and Production - Cumulative revenue growth for industrial enterprises from January to June 2025 was +2.5%, slightly down from +2.7% in January to May 2025[2] - The industrial production growth rate increased to +6.8% in June 2025, up from +5.8% in May 2025[5] - Export delivery value for industrial enterprises grew by 4.0% year-on-year in June 2025, compared to only 0.6% in May 2025[5] Sector Performance - The equipment manufacturing sector saw a positive profit growth of +9.1% in June 2025, recovering from -3.3% in the previous month, driven by improved exports and policy effects[22] - The upstream raw materials sector experienced a profit decline of -7.3% in June 2025, worsening from -4.0% in May 2025, due to high supply and weak demand[21] - The downstream consumer goods manufacturing sector's profit growth fell to -7.3% in June 2025, down from -6.0% in May 2025, influenced by declining export demand[23] Market Outlook - Future industrial profit performance is expected to depend on the effectiveness of "anti-involution" policies, which have recently led to price rebounds in sectors like steel and coal[3] - The cumulative profit margin for the manufacturing sector was 4.46% from January to June 2025, slightly below the previous year's 4.47%[15]

Investment Rating - The report maintains an "Accumulate" rating for the basic chemical industry [5] Core Views - The chemical industry is expected to undergo a new round of supply-side reforms, driven by the government's initiatives to eliminate outdated production capacity and improve industry structure [1][21] - The "anti-involution" policy is anticipated to support the exit of old capacities, benefiting leading companies in sub-industries such as refining, fertilizers, pigments, organic silicon, soda ash, and chlor-alkali/PVC [1][21] Summary by Sections Refining - Strict control of refining capacity and low operating rates of local refineries in Shandong are expected to improve the profitability of major refineries [2][24] - As of 2024, China's refining capacity is projected to be 934 million tons, with a target to keep crude oil processing capacity below 1 billion tons by 2025 [24][25] Urea - Future supply is expected to decrease, with only 493,000 tons of new urea capacity projected by 2025, representing 6.5% of the current total capacity [2][26] - The industry is likely to benefit from supply reductions and potential export opportunities, particularly for leading companies capable of upgrading their facilities [26] Soda Ash and PVC - Increased demand from infrastructure projects is expected to drive recovery in the soda ash and PVC markets [3][27] - New soda ash capacity planned for 2025-2026 is estimated at 868,000 tons, accounting for 20% of the total capacity in 2024 [28] - The PVC industry is also expected to see limited new capacity, with a projected increase of 500,000 tons by 2025-2026, representing 17% of the total capacity in 2024 [29] Investment Recommendations - The report suggests focusing on leading companies in various sub-industries, including: - Refining: China Petroleum, Sinopec, Hengli Petrochemical, Rongsheng Petrochemical, Dongfang Shenghong [4] - Fertilizers: Hualu Hengsheng, Chuanheng Co., Hubei Yihua, Salt Lake Potash, Yara International, Sinochem Fertilizer [4] - Pigments: Qicai Chemical, Baihehua, Xinkai Technology, Zhejiang Longsheng, Runtu Co. [4] - Chlor-alkali/PVC: Yangmei Chemical, Chlor-alkali Chemical, Xinjiang Tianye [4] - Organic Silicon/Industrial Silicon: Hoshine Silicon, Xin'an Chemical, Silbond Technology [4] - Soda Ash: Sanyou Chemical, Boyuan Chemical, Shandong Haihua [4]

Investment Rating - The report maintains an "Overweight" rating for the petrochemical industry [6] Core Insights - The central state-owned enterprises (SOEs) are focusing on developing new quality productivity and restructuring to enhance competitiveness [1][4] - R&D investment in the petrochemical sector has increased, with the R&D expense ratio for central SOEs rising from 0.55% in 2019 to 0.77% in 2024, while local SOEs increased from 1.44% to 2.49% in the same period [2][12] - A shift in capital expenditure is anticipated, with a slowdown expected in 2024, indicating a potential reversal in the capital expenditure cycle [3][15] - The report emphasizes the importance of asset restructuring among central SOEs to optimize capital allocation and enhance core competitiveness [4][18] - Investment opportunities are highlighted in companies such as China National Petroleum Corporation, Sinopec, and various subsidiaries of state-owned enterprises [5] Summary by Sections Section 1: Development of New Quality Productivity - The State-owned Assets Supervision and Administration Commission (SASAC) emphasizes the need for SOEs to focus on strategic guidance and long-termism to cultivate new quality productivity [1][11] - The meeting highlighted the importance of resisting "involution" competition and optimizing the allocation of state-owned assets [1][11] Section 2: R&D Investment - Central SOEs in the petrochemical sector have significantly increased their R&D efforts, with notable advancements in key technologies [2][12] - For instance, China National Petroleum Corporation established new research institutes to focus on critical technologies in new materials [2][12] Section 3: Capital Expenditure Trends - After peaks in capital expenditure in 2021 and 2023, a decrease is expected in 2024, with projected capital expenditure of 248.5 billion yuan, close to the 2019 level of 242 billion yuan [3][15] - The report anticipates that the Ministry of Industry and Information Technology will introduce new policies aimed at optimizing the industry structure and promoting supply-side reforms [3][15] Section 4: Asset Restructuring Opportunities - The report suggests that the restructuring of state-owned assets will create investment opportunities, particularly in sectors critical to national security and public services [4][18] - The focus is on optimizing the layout of state-owned capital to enhance overall efficiency and functionality [4][18] Section 5: Investment Recommendations - The report recommends focusing on specific companies such as China National Petroleum Corporation, Sinopec, and leading local SOEs like Wanhua Chemical and Hualu Hengsheng [5]

Report Industry Investment Rating No information about the industry investment rating is provided in the content. Report's Core View From July 21 to July 25, 2025, the secondary - market prices of publicly - listed REITs in China generally declined. The weighted REITs index had a return rate of - 1.73%. Compared with other mainstream asset classes, REITs performed weakly. In terms of different project attributes and underlying asset types, there were differences in price trends, trading volumes, and capital flows. A new REIT, Chuangjin Hexin Shounong REIT, was listed on July 25, 2025, and a new project, "Zhonghang Tianhong Consumption Closed - end Infrastructure Securities Investment Fund", was reported for the first time [1][4]. Summary According to Relevant Catalogs 1. Secondary Market 1.1 Price Trends - **At the level of major asset classes**: From July 21 to July 25, 2025, the secondary - market prices of publicly - listed REITs in China generally declined. The returns of the CSI REITs (closing) and CSI REITs total return indices were - 1.79% and - 1.56% respectively, and the weighted REITs index return was - 1.73%. Among major asset classes, the return of REITs ranked the lowest, with the order from high to low being convertible bonds > A - shares > US stocks > gold > pure bonds > crude oil > REITs [10]. - **At the level of underlying assets**: Both equity - type and franchise - type REITs' secondary - market prices declined, with equity - type REITs having a smaller decline. In terms of underlying asset types, park - type REITs had the smallest decline. The top three underlying asset types in terms of returns were park - type, warehousing and logistics, and transportation infrastructure, with returns of - 0.63%, - 1.09%, and - 1.44% respectively [15][18]. - **At the single - REIT level**: Excluding the newly - listed Chuangjin Hexin Shounong REIT, 9 REITs rose and 59 declined. The top three in terms of increase were Boshi Jinkai Industrial Park REIT, China Merchants Science and Technology Innovation REIT, and Huatai Jiangsu Expressway REIT, with increases of 8.49%, 3.79%, and 2.2% respectively. The top three in terms of decline were CITIC Construction Investment Mingyang Smart New Energy REIT, ICBC Mengneng Clean Energy REIT, and AVIC Yishang Warehousing and Logistics REIT, with declines of 8.49%, 6.89%, and 6.07% respectively [1][22]. 1.2 Trading Volume and Turnover Rate - **At the level of underlying assets**: The trading volume of publicly - listed REITs this week was 3.35 billion yuan, and the average daily turnover rate of park infrastructure - type REITs was the highest. The top three in terms of trading volume were park infrastructure, transportation infrastructure, and consumer infrastructure, with trading volumes of 1.042 billion, 0.59 billion, and 0.457 billion yuan respectively. The top three in terms of average daily turnover rate were park infrastructure, ecological and environmental protection, and municipal facilities, with rates of 1.70%, 1.21%, and 1.15% respectively [26]. - **At the single - REIT level**: The trading volume and turnover rate of single REITs continued to show differentiation. The top three in terms of trading volume were Chuangjin Hexin Shounong REIT, Huaan Zhangjiang Industrial Park REIT, and Southern SF Logistics REIT. The top three in terms of trading amount were Chuangjin Hexin Shounong REIT, Huaxia China Resources Commercial REIT, and Huaan Zhangjiang Industrial Park REIT. The top three in terms of turnover rate were Chuangjin Hexin Shounong REIT, Huaxia Jinyu Zhizao Factory REIT, and CICC Yizhuang Industrial Park REIT [27]. 1.3 Main Force Net Inflow and Block Trading - **Main force net inflow situation**: The total net inflow of the main force this week was 95.17 million yuan, and the market trading enthusiasm increased. The top three underlying asset types in terms of net inflow were park infrastructure, warehousing and logistics, and water conservancy facilities, with net inflows of 97.18 million, 10.64 million, and 3.21 million yuan respectively. The top three single REITs in terms of net inflow were Chuangjin Hexin Shounong REIT, Huaxia Shen International REIT, and Hongtu Innovation Yantian Port REIT, with net inflows of 88.48 million, 4.95 million, and 4.9 million yuan respectively [31]. - **Block trading situation**: The total block trading amount this week was 127.05 million yuan, a decrease compared with last week. The highest single - day block trading amount was on July 22, 2025, which was 50.12 million yuan. The top three single REITs in terms of block trading amount were Ping An Guangzhou Guanghe REIT, AVIC Jingneng Photovoltaic REIT, and CITIC Construction Investment Mingyang Smart New Energy REIT, with trading amounts of 50.12 million, 39.96 million, and 19.37 million yuan respectively [32]. 2. Primary Market 2.1 Listed Projects As of July 25, 2025, there were 69 publicly - listed REITs in China, with a total issuance scale of 180.746 billion yuan. The transportation infrastructure - type had the largest issuance scale, followed by park infrastructure - type. Chuangjin Hexin Shounong REIT was listed on July 25, 2025, with an asset type of park infrastructure and an issuance scale of 3.685 billion yuan [36]. 2.2 Projects to be Listed There were 26 REITs in the state of being to be listed, including 15 initial - offering REITs and 11 REITs to be expanded. The status of the initial - offering project of "Zhonghang Tianhong Consumption Closed - end Infrastructure Securities Investment Fund" was updated to "reported" this week [39].

Investment Rating - The report maintains a "Buy" rating for the company [6]. Core Views - The demand for active magnesium oxide is expected to increase significantly, benefiting the domestic refractory materials sector amid the steel industry's "anti-involution" trend [4]. - The strategic agreement with Greenmeadow is projected to enhance the certainty of active magnesium oxide demand, with a forecasted net profit of 305 million, 547 million, and 759 million yuan for 2025, 2026, and 2027 respectively [4]. Summary by Sections Strategic Cooperation - The company has signed a supplementary agreement with Greenmeadow, expecting to supply 500,000 tons of low-cost core precipitant products by December 31, 2028 [1]. - The supply schedule for active magnesium oxide is estimated at 50,000 tons in 2025, 150,000 tons in 2026, and 150,000 tons in 2027 and 2028 [2]. Cost Reduction and Competitive Advantage - Active magnesium oxide can reduce the hydrometallurgical nickel smelting costs by 10%-15%, significantly improving the profitability and global competitiveness of Greenmeadow's nickel resource projects [3]. Industry Context - The domestic refractory materials business is expected to gradually recover as the steel industry improves profitability, following the central government's emphasis on regulating low-price competition and promoting the orderly exit of backward production capacity [4]. Financial Forecasts - The report projects revenues of 5.759 billion, 6.377 billion, and 6.943 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 305 million, 547 million, and 759 million yuan [5][11]. - The earnings per share (EPS) are forecasted to be 0.30, 0.54, and 0.75 yuan for 2025, 2026, and 2027 respectively [5][11].