Report Summary 1. Report Industry Investment Rating - No industry investment rating is provided in the report. 2. Core Viewpoints - The market's expectation of the capital market is marginally cautious, as indicated by the upward movement of certificate of deposit (CD) yields and interest rate swaps (IRS) [2]. - The repo trading volume increased, while the lending scale of large - scale banks decreased, and the lending scale of money market funds increased [3]. - The bill rate decreased, indicating a decrease in credit demand and an increase in bill - padding demand, with general credit demand expected in July. The USD/CNY exchange rate increased, and the Sino - US interest rate spread widened [4]. - The capital market is expected to remain balanced this week, but capital interest rate fluctuations may increase [5]. 3. Summary by Content 3.1 Certificate of Deposit and Interest Rate Swap - Last week, the total maturity of CDs was 510.52 billion yuan, and the issuance was 427.13 billion yuan, with a net financing scale of - 83.39 billion yuan. As of the last trading day of last week, the 1 - year AAA CD maturity yield was 1.63%, up from the previous week. This week, the single - week maturity scale of CDs is about 802.81 billion yuan, with greater maturity pressure than the previous week [2]. - In terms of interest rate swaps, the average value of the 1 - year FR007 interest rate swap last week was 1.53%, up from the previous week [2]. 3.2 Repo Market - Last week, the pledged repo trading volume was between 7.7 trillion and 8.6 trillion yuan. The average trading volume of R001 repos was 7,355.9 billion yuan, an increase of 545 billion yuan from the previous week. As of the last trading day of last week, the outstanding repo balance was 11.8 trillion yuan, down from the previous week [3]. - By institution, the lending scale of large - scale banks decreased, and the lending scale of money market funds increased. The borrowing scales of securities firms, funds, and wealth management products decreased. As of Friday, the repo balances of large - scale banks and money market funds were 4.89 trillion yuan and 2.12 trillion yuan, down 694.7 billion yuan and up 48.8 billion yuan from the previous week respectively. The positive repo balances of securities firms, funds, and wealth management products were 1.79 trillion yuan, 2.29 trillion yuan, and 704 billion yuan, down 78.5 billion yuan, 150.3 billion yuan, and 140.5 billion yuan from the previous week respectively [3]. 3.3 Bill and Exchange Rate - Last Friday, the 6M national stock bill transfer quotation was 0.89%, down from the last trading day of the previous week. The decrease in the bill rate indicates a decrease in credit demand and an increase in bill - padding demand, with general credit demand expected in July [4]. - Last Friday, the USD/CNY exchange rate was 7.17, slightly up from the previous week, and the Sino - US interest rate spread widened. The strong US non - farm payrolls data in June led to a decline in the expectation of the Fed's interest rate cut, and the increase in short - term supply pressure after the debt ceiling increase pushed up US Treasury yields [4]. 3.4 This Week's Focus - This week, 525.7 billion yuan of open - market funds will mature, including 425.7 billion yuan of reverse repos and 100 billion yuan of MLFs [5]. - China's June trade data will be released on Monday, and the performance of imports and exports will be monitored. China's June and Q2 economic data will be released on Tuesday, and the domestic fundamental performance will be monitored. The US June CPI and PPI data will be released on Tuesday and Wednesday respectively, and the US inflation performance will be monitored. June's financial data may be released this week, and the performance of credit and social financing will be monitored. Tuesday is the tax payment deadline, and the central bank's hedging efforts and capital market disturbances will be monitored [5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 53.19, based on a 40x PE for 2026 [1][6]. Core Views - The company is transitioning from incremental to stock demand in the domestic market, focusing on three new retail formats to enhance brand strength and drive sustainable revenue growth [1][14]. - The company is expected to see a profit margin inflection point and operational performance elasticity due to steady market share gains in the small B and C-end markets, alongside improved product and channel offerings [1][14]. Summary by Sections Retail Business - The company is targeting a total home decoration demand area of approximately 1.7 billion square meters from 2024 to 2026, with a compound annual growth rate (CAGR) of 5.0% for stock renovation demand, leading to a retail paint market exceeding RMB 60 billion annually [2][14]. - The company's retail market share is projected to reach about 7.9% in 2024, indicating significant room for growth compared to competitors [2][14]. Engineering Coatings - The company has shifted its channel strategy towards engineering distribution, with small B distribution revenue maintaining steady growth at a CAGR of 13.1% from 2020 to 2024, despite a decline in large B direct sales [3][16]. - The engineering coatings market is estimated to be around RMB 50-60 billion annually, with the company's market share expected to stabilize around 13% [3][16]. Market Positioning - The company is evolving from a single paint manufacturer to a comprehensive service provider, integrating paint, consulting, and construction services, which is expected to become a new growth driver [4][15]. - The company has established a solid position in the engineering market, with a stable market share and improved accounts receivable turnover, indicating a controlled risk environment [14][16]. Profit Forecast and Valuation - The company has adjusted its net profit forecasts for 2025-2027 to RMB 7.8 billion, RMB 9.8 billion, and RMB 12.1 billion, respectively, reflecting a CAGR of 54.0% [5][14]. - The target price of RMB 53.19 is based on a 40x PE for 2026, with the company expected to benefit from the rapid replication of new business formats and reduced impairment risks [5][14].

Investment Rating - The report maintains an "Overweight" rating for the company [7]. Core Views - The company has a leading cost advantage in the C2 and C3 light hydrocarbon integration layout, with significant cost advantages in ethylene production from ethane cracking. The company has established a global ethane supply chain through strategic investments in U.S. ports and VLEC fleets, positioning itself for a new growth phase with upcoming project launches in ethylene production [1][17]. - The ethylene and propylene industry is expected to see a recovery in demand, with structural contradictions in the high-end polyethylene market creating significant opportunities for domestic production to replace imports. The company is actively expanding its high-end polyethylene product offerings, which are anticipated to drive its next growth phase [3][19]. Summary by Sections Company Overview - The company has successfully integrated C2 and C3 light hydrocarbons, achieving a cost advantage over peers. The ethylene production process from ethane is notably cost-effective, and the company has built a robust global supply chain for ethane, ensuring a steady supply for its production needs [1][17]. Industry Outlook - The ethylene and propylene industry is projected to experience a recovery, with new capacity expected to come online in 2025-2026. The industry is currently facing a structural imbalance characterized by low-end oversupply and high-end shortages, particularly in high-end polyethylene products, which are heavily reliant on imports [3][19]. Financial Projections - The company forecasts net profits of 6.3 billion, 7.4 billion, and 9.2 billion RMB for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 3.1%, 18.4%, and 23.6%. The expected EPS for the same years is 1.86, 2.20, and 2.72 RMB per share [5][11]. Competitive Position - The company is positioned as a leader in the ethylene market, with a current capacity of 2.5 million tons and additional capacity expected to come online by 2026-2027. The strategic focus on high-end polyethylene products is anticipated to fill domestic supply gaps and enhance the company's competitive edge [3][19][23].

Investment Rating - The report maintains an "Overweight" rating for the cement industry [6][27]. Core Insights - The cement industry is expected to see significant improvement in performance forecasts for the first half of 2025, driven by anti-involution measures and a focus on high-quality development [1][4]. - The historical success of supply-side reforms has led to a reduction in new cement production lines, alleviating supply-demand imbalances, but recent market demand declines have intensified competition [2][3]. - The regulatory framework for anti-involution policies is being strengthened, with measures to address overproduction expected to be a key focus in the second half of 2025 [3][4]. - Companies with integrated operations and global expansion strategies are positioned for long-term growth, with specific recommendations for Huaxin Cement, Conch Cement, and China National Building Material [1][4][8]. Summary by Sections Industry Overview - The cement industry has experienced a significant drop in average prices, with a year-on-year decrease of 11.5% as of July 11, 2025, leading to a renewed call for anti-involution measures [2][3]. Performance Forecasts - Five cement companies have reported impressive performance forecasts for the first half of 2025, with some expecting net profit increases of over 100% year-on-year [4][8]. Policy Developments - Recent policies from the Ministry of Industry and Information Technology and the inclusion of the cement industry in carbon emissions trading are expected to enhance the regulatory framework for managing overproduction [3][4]. Company Recommendations - The report highlights Huaxin Cement, Conch Cement, and China National Building Material as key investment opportunities due to their competitive advantages in scale, cost, and energy efficiency [1][4][8].

Investment Rating - The industry investment rating is "Overweight" [5] Core Viewpoints - The demand for advanced processes remains strong, with TSMC's 2Q25 revenue exceeding expectations, achieving NT$933.8 billion, a quarter-on-quarter increase of 11.3% and a year-on-year increase of 38.6% [1] - The N3 platform demand is rapidly increasing, with over 70 new tape-out products received in April, indicating structural growth potential [2] - The forecast for computing power demand has been raised, with significant growth expected in the AI custom acceleration chip market, projected to grow from $6.6 billion in 2023 to $55.4 billion by 2028, with a CAGR of 53% [3] Summary by Sections Section 1: TSMC's Performance - TSMC's 2Q25 revenue reached NT$933.8 billion, surpassing Bloomberg's consensus estimate of NT$929.1 billion, with a quarter-on-quarter increase of 11.3% and a year-on-year increase of 38.6% [1] - The average exchange rate of the New Taiwan Dollar appreciated by 6.7% against the US Dollar, leading to a dollar-denominated revenue increase of 18.8% [1] Section 2: N3 Platform Demand - Concerns about TSMC's revenue growth in April and May being driven by tariff impacts are mitigated by the company's indication that there has been no change in customer order patterns [2] - The N3 platform and its derivatives are experiencing rapid demand growth, with a significant number of new tape-outs expected [2] Section 3: AI Demand and Market Outlook - Major companies are continuously iterating on pre-trained models, with OpenAI and xAI's large-scale computing clusters driving demand for pre-training and inference [3] - Marvell has revised its 2028 data center total addressable market (TAM) forecast from $75 billion to $94 billion, indicating strong growth potential in the AI sector [3] Section 4: Advanced and Mature Process Pricing - TSMC plans to increase prices for advanced processes to mitigate margin dilution from overseas factory expansions, while competition in mature processes remains intense [4] - The upcoming N2 node production is expected to enhance product structure and drive advanced average selling price (ASP) increases [4]

Investment Rating - The report maintains an "Overweight" rating for the commercial aerospace industry, specifically focusing on satellite internet services [6]. Core Insights - The successful commercialization of Starlink is driven by three core factors: supply-side advantages in satellite launch and production capabilities, strong demand across consumer, industry, and government sectors, and comprehensive technological innovations that create a competitive moat [1][2][3]. Supply-Side Summary - Starlink has launched over 9,000 satellites, with more than 7,000 currently in orbit, establishing a global coverage network with a bandwidth capacity of approximately 350 Tbps [2][12]. - The launch capabilities are enhanced by self-developed rockets and reusable technology, allowing for low-cost and rapid network construction [2][18]. - Manufacturing capabilities are globally leading, with plans to produce 5,000 next-generation satellites annually, potentially reaching 10,000 units [28][32]. Demand-Side Summary - Starlink targets remote areas, with a significant user base growth in rural and island regions, and has over 6 million global users [1][3]. - The service is expanding into various sectors, including aviation, maritime, and government applications, with contracts for over 2,000 aircraft and 75,000 ships [3][42]. - The international market share is growing, with 41% of customers located outside North America and Europe, particularly in Southeast Asia and Africa [3][58]. Technology Analysis Summary - Starlink's technological edge comes from innovations in satellite manufacturing, communication networks, and terminal integration, achieving low latency of 20-40 ms [4][34]. - The satellite design incorporates high-capacity and lightweight features, while terminal technology has seen significant cost reductions, promoting user adoption [4][30]. Growth Potential Summary - Starlink's business is expected to grow rapidly, with projected revenues reaching $27.5 billion by 2030, reflecting a CAGR of 23% [5][58]. - The approval of an additional 22,000 satellites by the FCC and the operational launch of the Starship and Starlink V3.0 are key growth drivers [5][24]. - The competitive landscape is evolving with other low-Earth orbit satellite constellations entering the market, indicating a potential shift in industry dynamics [5][58].

Macro Insights - The recent tariff adjustments by the Trump administration have raised concerns about global trade dynamics, with tariffs ranging from 20% to 50% imposed on multiple countries, including major trading partners like Japan, South Korea, and the EU [2][3] - The U.S. manufacturing sector showed marginal improvement, with global manufacturing sentiment returning above the threshold, but the renewed tariff threats cast uncertainty on future growth [3] - The U.S. CPI and PPI data releases are anticipated to provide further insights into inflation trends, with the market closely monitoring these indicators [3] Industry Analysis - The real estate sector is experiencing weaker transaction volumes despite increased travel demand during the summer, influenced by adverse weather conditions [4] - The chemical industry is expected to benefit from supply-side adjustments due to government policies aimed at reducing overcapacity, with a potential recovery in the second half of 2025 [14] - The heavy truck market is projected to see significant growth, with sales expected to exceed one million units, driven by the "old-for-new" policy [15] Company-Specific Insights - Gu Ming, a leading fresh beverage company, is expected to expand its market presence with a target price of 35.27 HKD, supported by a robust store network and efficient supply chain [16] - Si Yuan Electric, a leader in the power equipment sector, reported a 37.80% year-on-year revenue increase for H1 2025, indicating strong growth potential in both domestic and international markets [17] - China Shenhua's H1 2025 net profit is projected to decline by 13.2% to 20.0% year-on-year, primarily due to reduced business scale amid falling coal prices, yet the company maintains a strong position due to high long-term contract ratios [18] - Ecovacs is expected to see a significant recovery in profitability, with a projected net profit increase of 57.64% to 62.57% for H1 2025, driven by the "old-for-new" subsidy and competitive product offerings [19]

Macro Overview - In early July, global trade shows resilience, with US imports and China's exports maintaining strength, although sustainability is in question [2][4] - Manufacturing recovery continues globally, while inflation expectations in financial markets are rising despite a slight decrease in retail prices in late June [2] - Corporate confidence is weakened due to tariff uncertainties, leading to a decline in capital expenditure expectations [2] Industry Insights - The macroeconomic model indicates a recovery in the overall industry prosperity index in June, with a slowdown in the decline of non-financial industry prosperity [2] - Key sectors to focus on include small metals, PCB, storage, wind power, insurance, thermal power, infrastructure, and certain consumer goods, as well as pharmaceuticals, military, gaming, and communication equipment/software driven by AI [2] - The steel, coal, and some chemical products sectors are expected to benefit from anti-involution policies and signs of a bottoming cycle, with valuations already reflecting downward expectations [2] Real Estate Sector - Real estate financing data shows a continued improvement trend in 1H25, supported by special bonds and a shift from debt extension to debt reduction [7] - The recovery pace in core cities, particularly first-tier cities, is expected to continue, with recommendations for developers with strong credit, good cities, and solid products [7] Aviation Leasing - China Aircraft Leasing Group (BOCA) reported a slight increase in aircraft deliveries in 2Q25, with 13 aircraft delivered compared to 11 in 1Q25, while 14 aircraft were sold, reducing the owned fleet to 441 [9] - The improvement in upstream manufacturing capacity is a positive signal for potential rental income growth, although uncertainties remain regarding the Fed's interest rate decisions [9] E-commerce Sector - JD.com is expected to show steady growth in 2Q25, driven by the trade-in policy, although significant investments in the food delivery business may pressure short-term profits [10] - Alibaba's e-commerce business is projected to perform well, with a 22% expected growth in cloud revenue, but short-term profit impacts are anticipated due to strong investments in flash sales [12] Logistics and Delivery - Jitu Express reported a significant increase in parcel volume, with a 27% year-on-year growth in 1H25, driven by strong performance in Southeast Asia and China [14] - The company is expected to further increase its market share in the logistics sector due to its competitive advantages [14] Chemical Industry - Dongyue Group anticipates a 150% year-on-year increase in net profit for 25H1, benefiting from an upward trend in the refrigerant market [14]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 150.00 and USD 152.90 [6][7]. Core Insights - The company is expected to experience short-term profit pressure due to increased investment in flash sales, although its e-commerce business is projected to perform steadily in 1QFY26 with a year-on-year growth of 11% in CMR [1][2]. - The cloud business is anticipated to continue its accelerated growth, with a projected revenue increase of 22% year-on-year in 1QFY26, supported by strong external demand [1][2]. - The report highlights the rapid growth of the flash sales business, which launched on May 2, and the significant investments made to attract both merchants and consumers [3][4]. Revenue and Profit Forecast - The company’s revenue for 1QFY26 is expected to increase by 1% year-on-year to CNY 245.7 billion, with adjusted EBITA projected to decline by 16.5% to CNY 37.6 billion due to increased spending on flash sales [2][11]. - The adjusted net profit forecast for FY26, FY27, and FY28 has been reduced by 20.6%, 22.2%, and 21.3% respectively, reflecting the higher-than-expected investments in flash sales [4][11]. Business Segments and Performance - The report notes that the flash sales business has seen a rapid increase in daily order volume, reaching over 80 million orders per day, with significant user engagement improvements [3][4]. - The company’s various business segments, including the Taobao Group and local life services, are expected to show mixed performance, with some segments continuing to reduce losses while others face challenges [2][11]. Valuation and Estimates - The report adjusts the valuation based on a sum-of-the-parts (SOTP) approach, with new target prices reflecting a decrease due to increased competition and investment pressures [4][14]. - The estimated non-GAAP net profit for FY26 is projected at CNY 134 billion, with a corresponding PE ratio of 13.36 [10][12].

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The supply of aircraft is slightly improving, with Boeing and Airbus delivering a total of 320 aircraft in 2Q25, up from 266 in 1Q25. The company delivered 13 aircraft in 2Q25, an increase from 11 in 1Q25, but sold 14 aircraft, resulting in a decrease in owned aircraft to 441 [1][2][3] - The company expects a core ROE of 10.6% for 2025, roughly in line with 10.5% in 2024, indicating stable performance despite potential challenges in the debt market due to fluctuating U.S. Treasury rates [1][4] Summary by Sections Supply Chain Improvement - The report highlights that the recovery of aircraft manufacturers' capacity is crucial for the company's performance. The increase in aircraft deliveries is expected to positively impact leasing rates and ROE if the trend continues [2] Fleet Management - In 2Q25, the company executed 75 transactions, including the delivery of 13 aircraft and the sale of 14 aircraft, leading to a net decrease in owned aircraft. The average age of sold aircraft was 10.4 years, which is higher than the overall fleet average of 5 years. The company maintains a strong order book with 351 aircraft on order [3] Financial Projections - The company forecasts a net profit of USD 702.62 million for 2025, with a slight decrease from 2024. The target price is set at HKD 82, based on a 1.06x 2025E PB ratio [5][10]