Investment Rating - The report suggests a focus on three main investment lines: multi-financial sectors with strong performance, brokerage firms with significant earnings improvement, and companies in the technology sector benefiting from venture capital [4][5]. Core Insights - The brokerage sector shows a clear trend of improving performance in the first half of the year, highlighting a mismatch between high profitability and low valuations, indicating a favorable investment opportunity [4]. - The report emphasizes the potential of Hong Kong Exchanges and Clearing to benefit from the deepening of cross-border trading and the increase in market capitalization from A-share companies listing in Hong Kong [4]. - The insurance sector is expected to see a reduction in liability costs due to a decrease in the preset interest rate, which is projected to improve the cost structure for insurance companies [5][44]. Market Review - The A-share market saw the CSI 300 index increase by 1.7%, with the non-bank financial sector outperforming by 1.8 percentage points [11]. - The average daily trading volume in the A-share market reached 18,487 billion yuan, reflecting a 19.6% increase week-on-week [14]. Data Tracking - The report notes that the average daily trading volume for equity funds in the first half of 2025 was 16,432 billion yuan, a year-on-year increase of 65.7% [14]. - The report highlights that the total fundraising scale for IPOs and refinancing in June 2025 reached 374 billion yuan and 7,243 billion yuan, respectively, marking increases of 15% and 416% year-on-year [14]. Industry Dynamics - The National Financial Regulatory Administration is exploring ways to expand health insurance coverage and improve service levels, indicating a potential shift in policy that could benefit the health insurance sector [44]. - The report mentions that approximately 20% of dividend insurance products have achieved a dividend realization rate of 100% or more, which is an improvement compared to the previous year [45]. - The report also highlights that the premium income from new energy commercial vehicle insurance reached approximately 66.17 billion yuan in the first half of the year, a year-on-year increase of 41.44% [46].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The reading of the micro - trading thermometer for this period dropped by 5 percentage points to 51%. The indicators with relatively large declines include the TL/T long - short ratio, fund ultra - long bond buying volume, fund - rural commercial bank buying volume, and policy spread. The indicators with relatively large increases include institutional leverage, allocation disk strength, and commodity price ratio [2][14]. - The proportion of indicators in the over - heated range this period rose to 35%. Among the 20 micro - indicators, 7 (35%) were in the over - heated range, 5 (25%) were in the neutral range, and 8 (40%) were in the cold range. The TL/T long - short ratio and policy spread dropped from the neutral range to the cold range, the fund - rural commercial bank buying volume dropped from the over - heated range to the cold range, and the commodity price ratio rose from the cold range to the neutral range [3][19]. - The average value of the price ratio matching quantile increased significantly. The trading heat quantile average decreased by 3 percentage points, the institutional behavior quantile average decreased by 11 percentage points, the spread quantile average decreased by 15 percentage points, and the price ratio quantile average increased by 10 percentage points [4][19]. 3. Summary According to Relevant Catalogs 3.1 TL/T Long - Short Ratio Quantile Drops - In the trading heat indicators this period, the proportion of indicators in the over - heated range remained at 50%, the proportion in the neutral range dropped to 17%, and the proportion in the cold range rose to 33%. The TL/T long - short ratio quantile decreased by 33 percentage points, dropping from the neutral range to the cold range [5][20]. - The 30/10Y treasury bond turnover rate dropped to 1.95%, and its past - year quantile decreased by 2 percentage points to 90% [20]. 3.2 Allocation Disk Strength Increases - In the institutional behavior indicators this period, the proportion of indicators in the over - heated range remained at 50%, the proportion in the neutral range remained at 25%, and the proportion in the cold range remained at 25%. The fund - rural commercial bank buying volume quantile dropped significantly by 73 percentage points, from the over - heated range to the cold range [6][26]. - The allocation disk strength increased by 0.06 percentage points to 0.23%, and its past - year quantile also increased by 14 percentage points to 90% [27]. 3.3 Policy Spread Widens - The 3 - year treasury bond yield rose significantly this period. The policy spread widened from 0bp to 8bp, and its quantile dropped by 28 percentage points to 21%, falling into the cold range [7][29]. - The credit spread and IRS - SHIBOR 3M spread widened by 4bp and 1bp respectively, and the average spread of the three widened from 16bp to 18bp, with its quantile dropping by 3 percentage points to 47%, in the neutral range [7][29]. 3.4 Commodity Price Ratio Quantile Rises Significantly - The proportion of price ratio indicators in the cold range dropped to 75%, and the proportion in the neutral range rose to 25%. The real estate price ratio quantile dropped by 2 percentage points, the commodity price ratio quantile rose significantly by 40 percentage points, from the cold range to the neutral range, the consumer goods price ratio quantile also rose slightly by 9 percentage points, and the stock - bond price ratio quantile changed little [8][32].

Group 1 - The report indicates that the recent adjustment in the bond market is driven by a strong rebound in commodity prices, which has led to a rise in market risk appetite and a corresponding increase in stock prices [3][7]. - The current commodity price rebound is characterized as a "lagging pricing" response to the previous mild expansion of the credit cycle, rather than the start of a new macroeconomic cycle [4][10]. - The report suggests that the market environment in the second half of the year may resemble that of 2019 and 2022, with a mild expansion of the credit cycle followed by a potential decline in social financing momentum [5][25]. Group 2 - The report emphasizes that the recent commodity price increases are more of a "catch-up" effect due to previous underpricing in relation to the credit cycle recovery, rather than an indication of a new macroeconomic expansion [11][18]. - It is noted that the leading commodities in the recent price surge were those that had previously underperformed, indicating a tendency towards "oversold recovery" [14][17]. - The analysis highlights that the current credit cycle is nearing its peak, and any adjustments in the bond market are expected to be less severe than those observed in the first half of the year [6][30].

Investment Rating - The report maintains a positive investment rating for the electronic industry, highlighting a historical high in allocation and overweight ratios for active equity funds [10][24]. Core Insights - The electronic industry saw a record allocation ratio of 19.11% in Q2 2025, with an overweight ratio of 7.73%, indicating strong confidence from institutional investors [10][24]. - The semiconductor sector is emphasized as a key area for investment, driven by domestic supply chain localization and improving fundamentals [27][28]. - AI PCB is identified as a core investment direction due to its high demand and growth potential linked to AI server deployments [18][34]. Summary by Sections Public Fund Allocation - In Q2 2025, the allocation ratio for the electronic industry reached 19.11%, ranking first among all sectors, with a slight increase of 0.01 percentage points from the previous quarter [10][24]. - The electronic sector's overweight ratio also reached a historical high of 7.73%, reflecting strong institutional interest [10][24]. Sub-Industry Analysis Semiconductor - The semiconductor sector's allocation ratio was 9.53%, accounting for 53.65% of the total industry allocation, despite a decrease of 0.7 percentage points [24][27]. - Key companies in this sector include SMIC, North Huachuang, and Zhaoyi Innovation, with significant increases in their market values [27][28]. Consumer Electronics - The consumer electronics sector's allocation ratio was 4.03%, with a decrease of 0.61 percentage points, reflecting some valuation pressures due to tariff uncertainties [24][31]. - Major players include Xiaomi and Luxshare Precision, with notable growth in their market values despite the overall sector challenges [31][32]. Components - The components sector saw an increase in allocation ratio to 2.92%, with a significant rise of 1.07 percentage points, driven by AI PCB demand [24][34]. - Key companies include Shenghong Technology and Huadian, which experienced substantial growth in their market values [34]. Investment Recommendations - The report suggests focusing on AI PCB, semiconductor self-sufficiency, and the Apple supply chain as key investment areas, anticipating strong growth in ASIC demand and related technologies [18][34].

Investment Rating - The report maintains an optimistic outlook on the Hong Kong stock market, particularly in sectors such as stablecoins, new consumption, and innovative pharmaceuticals [3][10]. Core Views - The overseas Chinese asset earnings season has begun, with a significant increase in risk appetite for Hong Kong and US-listed Chinese stocks, as active funds seek undervalued stocks with low price-to-book ratios [3][10]. - There is a sustained bullish outlook on virtual assets, including stablecoins, with traditional virtual asset exchanges expected to enter the traditional capital markets through IPOs, reverse mergers, and acquisitions [3][10]. - The potential risks for overseas Chinese assets remain, particularly concerning US-China tariff issues, necessitating close monitoring of global tariff negotiations [3][10]. Industry Situation Tracking Education - The Chinese education index fell by 0.82% during the period from July 21 to July 25, underperforming compared to major indices [11][21]. - Notable stock performances include Oriental Selection rising by 13.67% and New Oriental falling by 10.03% [11][21]. Luxury Goods - The S&P Global Luxury Goods Index increased by 2.75%, while the MSCI European Luxury Goods and Apparel Index rose by 2.52% during the same period [22][25]. - Key luxury stocks showed mixed results, with Samsonite up by 3.16% and Prada down by 1.94% [22][25]. Coffee and Tea - The Hang Seng Non-Essential Consumer Index rose by 1.30%, outperforming the Hang Seng Index [27][30]. - Notable stock performances include Haidilao up by 4.31% and various tea brands experiencing declines [27][30]. E-commerce - The Hang Seng Internet Technology Index increased by 1.86%, with Pinduoduo rising by 8.67% and Alibaba declining by 0.17% [30][31]. - The competitive landscape remains intense, with significant investments in logistics and marketing by leading platforms [30][31]. Streaming Platforms - The Hang Seng Media Index fell by 1.2%, underperforming compared to other indices [35][39]. - Key stocks like iQIYI and Tencent Music experienced varied performance, with iQIYI up by 2.04% and Tencent Music down by 4.45% [35][39]. Virtual Assets & Internet Brokers - As of July 25, the global cryptocurrency market cap reached $393.75 billion, with Bitcoin and Ethereum prices at $117,482 and $3,765, respectively [41][42]. - The report highlights the ongoing development of regulatory frameworks for virtual assets, with significant movements in the market [41][42]. Automotive Services - The Hang Seng Composite Index rose by 2.45%, with notable performances from companies like Zhongsheng Holdings up by 17.27% [49][50]. - The automotive service sector is witnessing growth, with new partnerships and service offerings emerging [49][50].

Investment Rating - The report indicates a neutral investment rating for the agricultural sector, with expectations of limited price fluctuations in the near term [74]. Core Insights - The agricultural sector index increased by 3.62% week-on-week, but underperformed compared to the Shanghai Composite Index [13][14]. - The report highlights a focus on high-quality development in the pig farming industry, with a call for better market guidance and policy support [3][22]. - The poultry farming sector is experiencing price adjustments due to weak downstream demand, but there are expectations for recovery as consumer demand improves [4][35]. - The beef and dairy sectors are seeing price stability, with expectations for a new cycle in beef prices as supply constraints continue [5][39][42]. - The planting industry is stabilizing, with potential improvements if grain production decreases due to external uncertainties [6][45]. Summary by Sections 1. Market Review - The agricultural index closed at 2855.04 points, with a week-on-week increase of 3.62%, while the Shanghai Composite Index rose by 1.67% [13][14]. 2. Key Data Tracking 2.1 Pig Farming - The average weight of pigs at market was 128.48 kg, with a slight increase in slaughter rates due to high temperatures [3][22]. - The average price of pigs was 14.15 yuan/kg, showing a week-on-week decrease of 0.84% [21]. - Leading pig farming companies are expected to maintain profitability above 200 yuan per pig, with a focus on low-cost operations [3][23]. 2.2 Poultry Farming - The average price of white feather chickens was 6.70 yuan/kg, with a week-on-week increase of 4.69% [29]. - The overall poultry sector is stabilizing, with expectations for price recovery as consumer demand improves [4][35]. 2.3 Livestock - The price of live cattle was 26.49 yuan/kg, with a slight increase of 0.04% week-on-week [5][40]. - The dairy sector is expected to see a stabilization in prices as supply constraints continue [5][42]. 2.4 Planting Industry - Domestic corn prices were 2,332.86 yuan/ton, showing a slight increase of 0.12% [44]. - The planting sector is stabilizing, with potential improvements if grain production decreases [6][45]. 2.5 Feed & Aquaculture - Feed prices for fattening pigs remained stable at 3.35 yuan/kg [61]. - Aquaculture prices are showing positive trends, with certain fish prices increasing [61][66].

Investment Rating - The report maintains a positive outlook on the photovoltaic and wind energy sectors, indicating potential for recovery and growth in demand and pricing [1][8]. Core Insights - The report highlights the ongoing adjustments in the "Price Law" to combat "involution" in the industry, which is expected to stabilize pricing and improve market conditions [7][8]. - There is a notable increase in demand for wind turbines, with significant orders and tenders indicating a robust market outlook for the second half of the year [8][10]. - The report emphasizes the importance of monitoring the supply chain dynamics and pricing trends across various segments, particularly in photovoltaic materials and components [7][23]. Summary by Relevant Sections Photovoltaic & Energy Storage - The report discusses the recent legislative changes aimed at improving product quality monitoring and energy consumption standards in the photovoltaic sector, which are expected to positively impact market dynamics [1][7]. - Despite concerns over potential negative feedback on terminal demand due to price increases, the report anticipates a recovery in demand as the market enters the traditional stocking season in Q3 [1][7]. Wind Energy - The signing of a €4.3 billion order by a major company for offshore wind turbine foundations is highlighted, along with an upward revision of expected shipments and performance for 2026 [8][10]. - The report notes a significant increase in tender sizes for wind turbines, reinforcing optimistic demand expectations for 2026 [8][10]. Power Grid - The commencement of a major hydropower project with an investment of approximately ¥1.2 trillion is expected to drive significant demand for ultra-high voltage (UHV) and gas-insulated line (GIL) equipment [2][11]. - The report indicates a strong growth trend in the export of major electrical equipment, with a notable increase in transformer and high-voltage switch exports [2][12]. Lithium Battery - The report identifies advancements in semi-solid and solid-state battery technologies as key areas for commercialization, with companies making progress in overcoming existing technical challenges [13][16]. - The application of lithium metal anodes is highlighted as a significant development that could enhance energy density in solid-state batteries [16][17]. Hydrogen and Fuel Cells - The report notes a recovery in fuel cell electric vehicle (FCEV) registrations and a significant increase in the bidding for electrolyzers, indicating a growing market for hydrogen technologies [3][20]. - The report emphasizes the potential for green hydrogen projects, particularly in maritime applications, to drive demand for hydrogen production equipment [20][21]. Investment Recommendations - The report suggests focusing on companies with strong valuation margins and those positioned to benefit from technological advancements and market recovery in the photovoltaic sector [8][10]. - In the wind energy sector, the report recommends companies that are expected to benefit from increased orders and favorable pricing dynamics [10][11]. - For the hydrogen sector, the report highlights companies involved in fuel cell systems and hydrogen storage as key investment opportunities [20][21].

Investment Rating - The transportation sector has shown a positive trend with a 3.2% increase in the transportation index, outperforming the Shanghai Composite Index by 1.5% during the week of July 19-25, 2025 [1][12]. Core Insights - The transportation sector's fund holdings increased to 32.5 billion yuan, a 17.0% rise compared to the previous quarter, with a market share of 1.95% [2]. - The express delivery segment saw a significant year-on-year growth of 15.8% in June, with SF Express leading the growth [2]. - The logistics sector is under pressure, particularly in hazardous materials logistics, but there is a push towards smart logistics, with Hai Chen Co. being recommended [3]. - The aviation sector is experiencing a steady recovery, with a 3% increase in domestic passenger volume in June compared to the previous year [4]. - The shipping sector is stabilizing, with the Baltic Dry Index (BDI) increasing by 10.9% week-on-week, indicating a positive trend in dry bulk shipping [5][34]. Summary by Sections Transportation Market Review - The transportation index rose by 3.2%, with the airport sector showing the highest increase of 5.6% [1][12]. Industry Fundamentals Tracking Shipping and Ports - The export container freight index (CCFI) was 1261.35 points, down 3.2% week-on-week and down 40.9% year-on-year [20]. - The domestic container freight index (PDCI) increased by 1.1% week-on-week, indicating a slight recovery in domestic shipping [28]. Aviation and Airports - The average daily flights reached 16,945, a 3.68% increase year-on-year, with domestic flights up by 2.51% [4]. - The introduction of a new ticket purchasing feature on the airline service platform is expected to enhance customer experience [4]. Rail and Road - National highway freight traffic increased by 0.67% week-on-week, with a year-on-year increase of 2.01% [6][76]. - The railway passenger volume in June was 373 million, a 3.61% increase year-on-year [73]. Express Delivery - The express delivery business volume reached 16.87 billion pieces in June, with a notable increase in the market share of SF Express [2][44].

Group 1: Reform and Market Dynamics - The principle of "minimum resistance" applies to both physical laws and human behavior, suggesting that reforms must overcome significant obstacles to achieve optimal outcomes[4] - The "anti-involution" reform aims to address chaotic price wars and unfair competition, particularly in industries closely related to local government actions, such as "new three samples" and e-commerce platforms[2] - The reform is expected to enhance product quality and improve profit margins and investment returns for leading companies in relevant industries[12] Group 2: Industry Focus and Implications - The report highlights that the automotive and solar energy sectors have seen significant growth, with electric vehicle sales up 40.3% and exports up 75.2% year-on-year, yet profit margins are declining due to oversupply and inefficiencies[6] - The upcoming "15th Five-Year Plan" is likely to incorporate the anti-involution reforms, indicating that more policies will be implemented in the future[12] - The focus on reform is not merely about raising prices or reducing capacity but involves a comprehensive approach to improve industry standards and governance[12] Group 3: Risks and Challenges - There is a risk that local governments and industries may misinterpret policy intentions, leading to ineffective capacity reduction efforts[3] - External factors, such as upcoming US-China trade talks, may influence domestic policy focus and implementation effectiveness[13]

Investment Rating - The industry investment rating is "Buy" (maintained) [1] Core Insights - Yonghui Supermarket announced a detailed private brand plan, aiming to increase the number of private brand products from 60 to 500 and penetration rate from 5% to 40% by 2029 [11][12] - The offline retail sector is seeing steady progress in store renovations, with 143 out of 523 stores (27.34%) already renovated as of July 25 [11] - Online retail competition remains intense, with expectations of subsidy wars continuing until the end of summer, potentially leading to a recovery in order sizes post-subsidy [11][18] Summary by Sections 1. Core Insights and Company Dynamics - Yonghui's private brand plan includes developing 2 products with over 1 billion in sales by 2026 and 15 such products by 2029 [11] - The online retail sector is expected to see a shift in competition dynamics, with Meituan likely regaining market share after the subsidy wars [11][18] 2. Industry Data Tracking - In the second week of July, the overall GMV for Tmall and JD.com decreased by 14.24% year-on-year [20] - The top five categories in terms of growth were toys, consumer electronics, home appliances, maternal and infant products, and pet supplies [20] 3. Market Review - From July 21 to July 25, the Shanghai Composite Index rose by 1.67%, while the retail sector (Shenwan) increased by 2.65%, ranking third among nine major consumption sectors [3][30] - Notable stock performers included Dalian Friendship and Lion Head Shares, with significant gains [3][29] 4. Investment Recommendations - Yonghui Supermarket is recommended for its transformation towards a selective retail model, which is expected to have long-term growth potential in the post-consumption era [32] - Meituan is viewed positively for its established barriers in user perception, rider management, and merchant relationships, despite competitive pressures from JD.com [34]