1. Report Industry Investment Rating No information provided regarding the report industry investment rating. 2. Core View of the Report The report indicates that recent Trump policies have made progress in areas such as finance, deregulation, and tariffs. The market has started to price in the medium - term "Goldilocks" scenario, bypassing short - term mild stagflation. There is a path from the current short - term mild stagflation (economic decline and inflation rise) to the "Goldilocks" scenario, and the probability of this scenario has increased with the advancement of recent policy combinations. However, the stability of this path remains to be confirmed [7]. 3. Summary according to Related Content Impact of the "Big and Beautiful" Act - **Deficit Impact**: By 2035, the act will increase national debt issuance by $4.1 trillion. The fiscal deficit rates from 2026 - 2029 may all be above 7%, with the peak in 2028. Compared with not implementing the act, the deficit rates in 2026 and 2027 will increase by over 1 percentage point, which will have a certain stimulating effect on economic growth in the next two years [2]. - **Distribution Aspect**: Tax cuts are mainly TCJA extensions, tax - free deductions for tips and overtime pay, and an increase in the deduction limit for state and local taxes, showing regressive characteristics. Expenditure cuts focus on reducing welfare such as Medicaid and SNAP, reducing student loans, and canceling clean - energy tax incentives, which have a greater impact on low - income groups. The final act may cause the income of the bottom fifth of the population to decline by 2.9% (about $700), while the income of the top 1% will increase by 1.9% (about $30,000) [2][3]. - **Debt Ceiling**: The federal debt ceiling is raised by $5 trillion, the largest increase in history. This avoids the debt - ceiling issue before next year's mid - term elections and provides room for fiscal expansion in the next 2 - 3 years. It also affects the fiscal strength in the second half of this year compared to the first half. Additionally, the rapid replenishment of the TGA account may temporarily affect liquidity [3]. - **Clause Deletion**: Deleting the previous "Capital Tax" Clause 899 reduces the uncertainty for foreign investors, and the market may have already priced it in [4]. - **Industry Aspect**: In the United States, sectors such as semiconductors, defense, aerospace, and traditional energy are expected to benefit, while subsidies for the new - energy, electric - vehicle, and medical industries will be reduced, which is a negative factor. In terms of overall economic impact, the profitability of the consumer sector may be affected by tariffs. In the short term, focus on interest - sensitive growth sectors, and in the medium term, focus on fiscal - related pro - cyclical sectors [4]. Tariff Policy Concerns - **Tariff Rate Setting**: The US will start sending letters to countries as early as Friday to set new tariff rates before July 9, which will be implemented from August 1. Negotiations with key countries such as Europe and Japan may continue, and the new tariffs may postpone the negotiations until August 1, with the possibility of further postponement [5]. - **Tariff Rate Ranges**: The approximate tariff rate ranges for different countries are: about 10% for allied countries, about 20% for friendly countries, and over 30% for competing countries (referring to the 40% tariff on Vietnam's trans - shipped goods). Trump's claimed 60% - 70% tariff may have a punitive nature. The market's reaction to tariffs may continue to show a blunted characteristic, with expected disturbances but limited amplitude [5]. - **US - Vietnam Agreement**: The US will impose at least a 20% tariff on Vietnamese products and a 40% tariff on goods from other countries trans - shipped through Vietnam. This further strengthens the prediction of tariff rate ranges. The direct impact on China is limited, and the US's intention to promote Vietnam's industrial chain localization through origin - related regulations can be hedged by China's strong industrial chain advantages in capital goods and raw materials, but the demonstrative effect is worthy of vigilance [6]. Outlook on the US Economic Scenario - **Short - term Situation**: In the short term, the US economy is in a state of mild stagflation with economic decline and inflation rise. However, there is a path to the "Goldilocks" scenario. The probability of this scenario has increased with the advancement of recent policies, and appropriate trading can be considered [7]. - **Stability Uncertainty**: The stability of this path needs to be confirmed. The key for the US economy not to enter a recession is that financial conditions should not tighten rapidly, which requires the stability of the US stock and bond markets. The specific impact of tariffs remains to be seen after the consumption of excess inventory. If inflation or corporate profitability deviates from expectations, market trading may shift again [8]. - **Long - term Outlook**: In the long run, the reconstruction of the global trade, financial, and geopolitical order is a more fundamental factor beyond economic growth rates [9].

证券研究报告 电力设备与新能源 周观点：工信部召开座谈会，治理低 价无序竞争 华泰研究 2025 年 7 月 06 日│中国内地 行业周报（第二十七周） 周观点：工信部部长召开座谈会，治理低价无序竞争 7 月 3 日，工业和信息化部党组书记、部长李乐成主持召开光伏行业制造业 企业座谈会，聚焦加快推动光伏产业高质量发展，听取光伏行业企业及行业 协会情况介绍和意见建议。14 家光伏行业头部企业及光伏行业协会负责人 作交流发言，介绍企业基本情况、面临的困难和问题，提出政策建议。会议 强调，要依法依规、综合治理光伏行业低价无序竞争，引导企业提升产品品 质，推动落后产能有序退出，实现健康、可持续发展。我们认为本次会议工 信部部长主持，头部企业负责人参会，为历次光伏企业座谈会的最高规格， 明确了政府与行业协同推动供给侧改革的大方向，看好后续供给侧改革细则 陆续落地，推动行业供需格局重塑。 子行业观点 1）新能源车：6 月国内新能源车销量走势较好；2）储能：SPE 提出欧洲储 能十倍扩容目标，我们看好欧洲大储起量；3）光伏：工信部部长召开座谈 会，治理低价无序竞争；4）风电：国内海风招中标稳步推进。 重点公司及动态 1）宁 ...

Investment Rating - The report initiates coverage on Huafeng Technology with an "Accumulate" rating and a target price of 59.86 RMB per share, based on a 75x PE valuation for 2026 [6][5]. Core Views - Huafeng Technology is positioned as a leader in high-speed connectors in China, benefiting from the increasing demand for short-distance interconnects driven by AI and domestic computing power expansion. The company is gradually releasing production capacity for high-speed line modules developed for major clients, which is expected to lead to sustained performance growth [1][15]. - The report highlights the growth potential in the communications sector, driven by the demand for high-speed interconnects in AI clusters, with a projected market size of 24.1 billion RMB by 2029, growing at a CAGR of 45% from 2025 to 2029 [2][16]. - In the defense sector, the company is expected to benefit from the "14th Five-Year Plan" military budget increase, with a projected 7.2% year-on-year growth in military spending in 2025, enhancing the outlook for defense orders [3][17]. - The industrial segment is anticipated to see stable growth due to the rising penetration of new energy vehicles and the trend towards 800V high-voltage systems, with the high-voltage connector market projected to reach 33.7 billion RMB by 2026, growing at a CAGR of 42% from 2022 to 2026 [3][18]. Summary by Sections Company Overview - Established in 1958, Huafeng Technology is a leading supplier of optical connectors and interconnection solutions in China, focusing on high-speed connectors and system interconnection solutions across communications, defense, and industrial sectors. The company has achieved significant milestones in developing high-speed backplane connectors, breaking the monopoly of foreign leaders in the domestic market [15][25]. Communications Sector - The company is deeply collaborating with major clients to meet the growing demand for high-speed interconnects in AI clusters. The increasing GPU computing power and bandwidth requirements are driving the need for higher signal transmission rates. The domestic high-speed backplane connector market is projected to reach 24.1 billion RMB by 2029, with a CAGR of 45% from 2025 to 2029 [2][16]. Defense Sector - The defense segment focuses on defense connectors and related system interconnection products. With the military budget expected to reach 1.78 trillion RMB in 2025, a 7.2% increase year-on-year, the company is well-positioned to capture growth in defense orders [3][17]. Industrial Sector - The industrial connectors primarily serve the new energy vehicle and rail transportation sectors. The market for high-voltage connectors in new energy vehicles is projected to reach 33.7 billion RMB by 2026, with a CAGR of 42% from 2022 to 2026. The company is also expanding its applications in drone and eVTOL systems [3][18].

Employment Data - In June, the U.S. added 147,000 non-farm jobs, exceeding Bloomberg's consensus estimate of 110,000[2] - The unemployment rate fell by 0.1 percentage points to 4.1%, driven by a rebound in household employment from -696,000 to 93,000[2][5] - Private sector job growth slowed significantly, with an increase of only 74,000 jobs, down from 137,000 in May[8] Wage and Labor Market Trends - Hourly wage growth on a year-over-year basis decreased to 3.7%, down from 3.8% in May[9] - The average weekly hours worked fell to 34.2 hours, a decrease of 0.1 hours from the previous month[16] - Labor force participation rate declined by 0.1 percentage points to 62.3%[17] Economic Outlook - The Federal Reserve's interest rate cut expectations for July have decreased, with market pricing reflecting a cumulative cut of 51 basis points by 2025, down from 61 basis points[2][5] - The report indicates potential risks to employment growth in Q3 due to tariffs and immigration slowdowns, leading to a forecast of two preventive rate cuts in September and December[5][6] - The NFIB's hiring intentions suggest an increased risk of weakening job growth in the coming months[10]

Investment Rating - The report maintains an "Overweight" rating for the real estate development and real estate services sectors [7]. Core Insights - The retail sales in Hong Kong showed a positive trend with a year-on-year increase of 2.4% in May 2025, marking the first positive growth in 15 months, driven by factors such as improved local consumption and a rebound in tourism [2][3]. - Non-essential consumption has recovered, with a year-on-year growth of 3.5% in May 2025, significantly outpacing essential consumption, which is expected to positively impact commercial real estate [3][4]. - The commercial real estate sector remains at a low level of activity, but the recovery in retail sales is seen as a leading indicator for potential rent stabilization and improvement in occupancy rates [4]. Summary by Sections Retail Sales Performance - In May 2025, Hong Kong's retail sales reached HKD 31.3 billion, with a month-on-month increase of 7% after seasonal adjustments [1][2]. - The improvement in retail sales is attributed to the "May Day" holiday and the positive effects of talent policies implemented in late 2022, which have started to show results in 2023 [2]. Non-Essential Consumption Recovery - Non-essential consumption categories, such as pharmaceuticals and cosmetics, saw significant growth, with increases of 8.7% and 6.9% respectively [3]. - Luxury goods, while still declining by 3.2%, have shown a narrowing of the decline compared to previous months, indicating a potential recovery [3]. Commercial Real Estate Outlook - The commercial real estate sector's rental index remains below the threshold of recovery, but the rebound in retail sales could enhance tenant leasing willingness and reduce vacancy rates [4]. - The Hong Kong government is actively promoting consumption through incentives for the retail and dining sectors, which may further support the recovery of commercial real estate [4]. Investment Recommendations - The report recommends focusing on local developers and commercial operators in Hong Kong, particularly those with high dividend yields and substantial land reserves along the MTR lines [5][9]. - Specific stock recommendations include "Link REIT" (823 HK) with a target price of HKD 50.59 and "MTR Corporation" (66 HK) with a target price of HKD 29.50, both rated as "Buy" and "Overweight" respectively [9][14].

Investment Rating - The report maintains a "Buy" rating for the following companies: Guodian NARI (国电南瑞), Pinggao Electric (平高电气), China XD Electric (中国西电), and XJ Electric (许继电气) [8][9]. Core Insights - The approval of the Southeast Tibet to Guangdong-Hong Kong-Macao ultra-high voltage (UHV) transmission line marks an upward cycle for the UHV sector, with an expected investment of 53.168 billion yuan and a total transmission capacity of 10GW [1]. - The "Three North" photovoltaic desertification control plan aims to add 253GW of solar capacity by 2030, indicating sustained growth in renewable energy infrastructure [2]. - The acceleration of UHV project construction is evident, with multiple projects expected to be operational within the year, enhancing the overall market dynamics [3]. - The UHV market exhibits high barriers to entry and profitability, with significant value in components such as converters and transformers, indicating a concentrated competitive landscape [4]. Summary by Sections UHV Projects and Approvals - The National Development and Reform Commission approved the Southeast Tibet to Guangdong-Hong Kong-Macao UHV project, with a total length of 2681.3 kilometers and dynamic investment of 53.168 billion yuan [1]. - It is anticipated that 5-6 additional UHV direct current lines will be approved in 2025, with key equipment suppliers likely to benefit significantly from this trend [1]. Photovoltaic Development - The "Three North" photovoltaic desertification control plan has been approved, targeting the addition of 253GW of solar capacity by 2030 and the reclamation of 10.1 million acres of desertified land [2]. - The ongoing construction of large-scale wind and solar bases in desert areas is expected to drive long-term demand for UHV transmission [2]. Market Dynamics and Company Performance - The UHV market is characterized by high profit margins and a limited number of participants, with significant revenue potential for core equipment manufacturers [4]. - Guodian NARI is projected to generate net profits of 1.15-1.64 billion yuan from each UHV project, while Pinggao Electric and China XD Electric are also expected to see substantial profit increases due to the anticipated surge in UHV orders [5]. - The report highlights the strong growth potential for these companies, with expected net profit growth rates of 23.8% CAGR from 2025 to 2027 for XJ Electric [10].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 60.06 [6][4]. Core Views - The company is positioned as a "healthcare enterprise driven by both consumption and medical sectors," with its brands "Winner" and "Purcotton" gaining influence. The consumption segment is expected to maintain growth momentum despite short-term fluctuations due to public sentiment events, while the medical segment is anticipated to recover due to both internal and external growth drivers [1][3]. - The company has shown strong performance in its core product categories, particularly during the 618 shopping festival, with significant sales growth in key items such as facial towels and baby products [2][3]. Summary by Sections Consumption Segment - In Q1 2025, the consumption segment achieved revenue of RMB 1.34 billion, representing a year-on-year increase of 28.8%. Although Q2 revenue growth is expected to slow due to industry sentiment issues, core categories continue to perform well. The company has implemented product innovation and precise marketing strategies, leading to significant sales in e-commerce platforms [2][3]. - The marketing strategy has focused on product safety and brand recognition, particularly in the sanitary napkin category, which is expected to see continued growth alongside innovations in adult underwear and cotton soft towels [3][4]. Medical Segment - The medical segment is benefiting from ongoing product innovation and channel expansion, with a focus on domestic hospital channels and consumer medical channels. The acquisition of GRI is expected to enhance export capabilities due to its global production capacity [3][4]. Financial Forecast and Valuation - The company is projected to achieve net profits of RMB 1.061 billion, RMB 1.301 billion, and RMB 1.589 billion for the years 2025, 2026, and 2027, respectively, with corresponding EPS of RMB 1.82, RMB 2.23, and RMB 2.73. The report maintains a target PE of 33 times for 2025, reflecting the dual growth drivers of consumption and medical sectors [4][10].

Employment Data - In June, the U.S. added 147,000 non-farm jobs, exceeding Bloomberg's consensus estimate of 110,000[1] - The unemployment rate fell by 0.1 percentage points to 4.1%, primarily due to a rebound in household employment from -696,000 to 93,000[1] - The labor force participation rate declined by 0.1 percentage points, potentially due to immigration policies[1] Wage and Hourly Earnings - Hourly wage growth slowed to 0.2% month-on-month, below the expected 0.3%[1] - The three-month annualized growth rate of hourly wages decreased from 3.6% to 3.2%[5] - Average weekly hours worked fell to 34.2 hours, down from 34.3 hours[6] Sector Performance - Private sector job growth weakened, with a decline of 63,000 jobs to 74,000 in June, particularly in the service sector[5] - Government employment surged, contributing over half of the new jobs, with state and local government jobs rising significantly from 32,000 to 80,000[5] - The service sector saw a notable slowdown, with education and healthcare services declining by 32,000 jobs to 51,000[5] Market Implications - Due to the stronger-than-expected employment data, the probability of a rate cut by the Federal Reserve in July decreased, with market pricing for cumulative rate cuts in 2025 falling by 10 basis points to 51 basis points[1] - U.S. Treasury yields rose, with the 2-year and 10-year yields increasing by 12 basis points and 8 basis points, respectively, to 3.88% and 4.34%[1]

Investment Rating - The report maintains a "Buy" rating for the company [6][20]. Core Views - The company is a leading global supplier of X-ray core components and solutions, with a diversified downstream distribution. The recovery in downstream medical, dental, and industrial sectors since 2025 is promising, and new products like CT tubes and silicon-based OLED microdisplay backplanes are expected to have significant growth potential [1][2]. - The company has announced an investment of up to RMB 1.8 billion for a silicon-based OLED microdisplay backplane production project, which is anticipated to add a capacity of 5,000 units per month [3][15]. - There is substantial domestic replacement potential for core components like CT tubes, with an estimated market space of RMB 1 to 5 billion due to the ongoing anti-dumping investigations against imports from the US and India [4][20]. Summary by Sections Financial Performance - The company expects a revenue decline of 2% in 2024, primarily due to poor downstream conditions, but anticipates a recovery in 2025 with a projected revenue increase of 17.18% [2][10]. - The forecasted net profit for 2025-2027 is RMB 5.9 billion, RMB 8.5 billion, and RMB 11.0 billion, representing year-on-year growth rates of 26%, 46%, and 29% respectively [5][19]. Revenue Breakdown - The detector segment is expected to grow at rates of 16%, 19%, and 19% from 2025 to 2027, with a recovery in demand from the medical and dental sectors [12][17]. - The core components segment is projected to see revenue growth of 43%, 39%, and 28% over the same period, driven by advancements in high-voltage generators and ray sources [13][17]. - The solutions and technical services segment is anticipated to grow significantly, with expected revenues of RMB 350 million, RMB 500 million, and RMB 700 million from 2025 to 2027 [14][17]. Valuation - The target price for the company is set at RMB 132, based on a price-to-earnings (PE) ratio of 45 times for 2025, reflecting a significant adjustment from previous estimates due to overall market conditions [5][20]. - The company's market capitalization is approximately RMB 17.36 billion, with a closing price of RMB 86.70 as of July 2, 2025 [7][10].

Group 1 - The consumer industry is undergoing a profound transformation from scale expansion to quality upgrading, driven by policy incentives, technological iterations, and changes in consumer preferences and habits [1][14]. - The new consumer groups represented by Generation Z, the elderly, and women are pushing consumption demand towards personalization and quality [1][17]. - Domestic brands are experiencing sustained growth, with sensory experiences becoming the core touchpoint linking consumers and products [1][29]. Group 2 - The importance of domestic demand has been reaffirmed, with a shift in focus from short-term demand stimulation to systematically enhancing consumer willingness, supported by policies such as employment and entrepreneurship initiatives [2][50]. - From January to May 2025, the total retail sales of consumer goods increased by 5.0% year-on-year, indicating a recovery in domestic demand [2]. Group 3 - Four major consumption trends are identified: the rise of domestic brands, emotional consumption, the silver economy, and AI+ consumption [3][4]. - The silver economy is driven by an aging population, with the proportion of individuals aged 65 and above exceeding 14% in 2021, and expected to surpass 30% by 2035 [21][23]. - Emotional consumption is characterized by a shift from functional to self-rewarding and social value, with consumers willing to pay for emotional value [3][20]. Group 4 - The report recommends focusing on structural opportunities in the consumer sector, highlighting four core investment themes: the rise of domestic brands, high-growth emotional consumption, the burgeoning silver economy, and AI+ consumption [4][18]. - Specific companies are recommended for investment, including domestic brands like Lao Pu Gold, Shangmei Co., and Midea, as well as emotional consumption leaders like Pop Mart and Heytea [5][4]. Group 5 - The integration of AI into the consumer chain is emphasized, with a focus on companies that demonstrate strong product innovation capabilities [3][4]. - The rise of online sales driven by live streaming and e-commerce is reshaping the retail landscape, with online retail sales reaching 6.0 billion in the first five months of 2025, reflecting an 8.5% year-on-year growth [41][40]. Group 6 - The sensory experience is becoming a core value of brands, with consumers increasingly demanding high-quality sensory interactions [32][39]. - The marketing landscape is shifting towards decentralized models, with KOL and KOC marketing gaining prominence, allowing brands to achieve precise targeting and higher ROI [49][40].