Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [1][10]. Core Insights - The basic chemical index experienced a decline of 1.46% over the past week, outperforming the CSI 300 index, which fell by 1.75%, resulting in a relative outperformance of 0.29 percentage points [14]. - Key sub-industries that performed well include synthetic resin (4.60%), food and feed additives (2.99%), adhesives and tapes (2.95%), carbon black (2.03%), and non-metallic materials III (0.69%) [15]. - The report highlights a significant price increase in several chemical products, with liquid chlorine rising by 28.57%, epoxy chloropropane by 9.81%, and TDI by 8.81% [22][23]. - Conversely, lithium carbonate (industrial grade) and lithium carbonate (battery grade) saw declines of 10.53% and 10.39%, respectively [22][23]. Market Trends - The basic chemical sector is currently benefiting from a favorable market environment, with the "anti-involution" policy being reiterated by the Central Political Bureau, aiming to optimize market competition and regulate disorderly competition among enterprises [6][7]. - The report notes that the air conditioning production data for August indicates a year-on-year decline of 2.8% in household air conditioning production, with domestic sales down by 11.9% [8][9]. Chemical Price Trends - The report provides a detailed analysis of chemical price movements, indicating that the top five products with the highest weekly price increases include liquid chlorine, epoxy chloropropane, soft foam polyether, TDI, and concentrated nitric acid [22][23]. - The report also highlights significant price drops in lithium carbonate and natural latex, indicating volatility in the chemical market [22][23]. Investment Recommendations - The report suggests focusing on several key sectors: 1. Refrigerant sector, with companies like Jinshi Resources and Juhua Co. recommended for their potential price increases [10]. 2. Chemical fiber sector, with recommendations for Huafeng Chemical and Xin Fengming [10]. 3. High-quality stocks such as Wanhua Chemical and Hualu Hengsheng are also highlighted [10]. 4. Tire sector recommendations include Sailun Tire and Linglong Tire [10]. 5. Agricultural chemicals sector with a focus on Yara International and Salt Lake Potash [10]. 6. Growth stocks like Bluestar Technology and Shengquan Group are also recommended [10].

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The automotive sector has shown a mixed performance, with a recent decline of 2.36% in the automotive sector compared to a 1.75% decline in the CSI 300 index, ranking 21st among 31 first-level industries [4] - The report highlights the establishment of China Changan Automobile Group Co., Ltd., which aims to innovate in smart vehicles and expand globally, targeting an annual revenue of 355 billion yuan and a production goal of 3 million vehicles [6] - New vehicle launches, such as the Leidao L90 and Li Auto i8, are expected to enhance market competitiveness and consumer interest [7] Market Review - The automotive sector's performance has been underwhelming, with commercial vehicles performing the best among sub-sectors, while passenger vehicles and automotive services saw significant declines [4] - In July, heavy truck sales reached approximately 83,000 units, showing a year-on-year increase of about 42%, driven by trade-in policies [9] Investment Recommendations - The report suggests focusing on companies involved in smart vehicle technology, those with potential for overseas sales, and component manufacturers benefiting from domestic substitution effects [10] - Specific companies to watch include Beiqi Blue Valley, Great Wall Motors, and China National Heavy Duty Truck Group [12]

Report Summary 1. Report Industry Investment Rating The document does not provide the industry investment rating. 2. Core Viewpoints - Most global equity markets declined in the past week, with US stocks, A - shares, and the Hang Seng Index all falling. However, some sectors like communication and innovation - drugs showed positive performance [3][4][5]. - Interest rates on bonds decreased, with the price of interest - rate bonds rising and the yield curve shifting downwards. The central bank conducted net open - market operations [6][7]. - The US dollar appreciated, while the domestic gold price declined. The policy of resuming VAT on new bonds may lead to a divergence between new and existing bonds [11][12]. - The US non - farm payrolls were lower than expected, increasing the market's expectation of a Fed rate cut in September. There are also concerns about the reliability of employment data and the Fed's independence [13][14][15]. - In the future, A - shares are expected to have investment opportunities, the bond market will likely maintain a low - yield narrow - range oscillation, and gold may continue to rise [16]. 3. Summary by Related Content Stock Market Performance - **US Stocks**: In the past week (20250728 - 20250803), the Nasdaq, S&P 500, and Dow Jones Industrial Average declined by 2.17%, 2.36%, and 2.92% respectively. The Nasdaq China Technology Index fell 3.20% [3]. - **A - shares**: The Wind All - A Index dropped 1.09%. Most sectors and industries declined, with communication and innovation - drugs leading the gainers. Among the 30 Citic industries, 24 declined and 6 rose. The leading industries had a weekly gain of over 2% [4][5]. - **Hong Kong Stocks**: The Hang Seng Index declined 3.47% in the past week [3]. Bond Market Performance - **Interest - rate Bonds**: The 10 - year Treasury bond futures rose 0.24% compared to July 25, 2025. The yield of the 10 - year Treasury bond active bond decreased by 2.65 BP to 1.7059%. The yield curve shifted downwards [6]. - **Funding Costs**: As of August 1, 2025, R007 was 1.4864%, down 20.73 BP from July 25, 2025; DR007 was 1.4242%, down 22.81 BP. The central bank had a net open - market operation of 69 billion yuan [7]. - **US Treasury Bonds**: The yield of the 10 - year US Treasury bond decreased by 17 BP to 4.23% compared to July 25, 2025, and the yield curve shifted downwards [10]. Commodity Market Performance - **US Dollar and Gold**: The US dollar index rose 1.04%. The domestic gold price declined, with Shanghai gold spot down 0.89% to 767.29 yuan/gram and futures down 0.94% to 767.44 yuan/gram [11]. Policy Impact - **VAT on Bonds**: Newly issued Treasury bonds, local government bonds, and financial bonds will be subject to VAT starting from August 8, 2025, while existing bonds remain tax - exempt until maturity. This may lead to a divergence in the performance of new and existing bonds [12]. US Economic Data - **Non - farm Payrolls**: In July, the US non - farm payrolls increased by 73,000, significantly lower than the expected 106,000. The market's expectation of a 25 - BP Fed rate cut in September rose from 38.4% to 77.7% [13][14]. - **Employment Data Concerns**: The significant downward revision of May and June non - farm payrolls and the firing of the BLS director may have raised concerns about the reliability of employment data and the Fed's independence [13][15].

Core Insights - The report highlights that the service sector is performing strongly, which is expected to drive economic demand expansion both overseas and domestically [1][17][25] - It emphasizes the continuous improvement of the domestic economic fundamentals, indicating a high probability of long-term allocation success for risk assets [1][25][36] - The report notes that improving demand may influence the trading logic of crude oil and gold [1][41][52] Market Review - As of July 30, 2025, global equity assets showed good performance, with MSCI global returning 1.79% and emerging markets at 2.43%, outperforming developed markets [8] - The domestic market performed well, with the CSI All Share Index yielding 5.80% and active equity funds showing exceptional performance, with the China Equity Index rising 8.77% [8][14] - Commodity assets, particularly crude oil and gold, experienced significant price movements influenced by demand and geopolitical factors [8][41] Market Outlook Overseas Market - The service sector's strong performance is expected to positively impact overall economic demand expansion [17][18] - Despite challenges in the manufacturing sector and rising long-term bond yields, the service sector's growth is seen as a stabilizing factor for the global economy [18][20] Domestic Market - The domestic economy has shown resilience, with GDP growth of 5.3% in the first half of 2025, driven by consumption and exports [25][27] - Industrial value-added increased by 6.8% year-on-year, with notable growth in sectors such as automotive and machinery [25][26] - Consumer spending is improving, with retail sales growing by 5.0% year-on-year in the first half of 2025, supported by government subsidies and innovative consumption trends [25][27] Asset Allocation Strategy Equity Funds - The report suggests a "core + opportunity" barbell strategy, focusing on stable, high-performance assets while also seeking growth opportunities in sectors like technology and consumer goods [3][36] - Emphasis is placed on long-term allocations in risk assets due to favorable economic conditions [3][36] Fixed Income Funds - The report recommends focusing on medium to short-duration bonds for better risk-reward ratios, as long-duration bonds may present diminishing returns [3][36] - Financial and interest rate bonds are highlighted as preferred choices for conservative investors [3] QDII Funds - The report indicates that new economic drivers, particularly AI, are accelerating economic demand growth, presenting long-term opportunities for QDII funds [3][41] - Attention is drawn to the potential impacts of geopolitical tensions on crude oil prices and the ongoing demand for gold as a safe-haven asset [41][47]

Group 1 - The core viewpoint of the report indicates that the pharmaceutical and communication sectors performed well during the period, while the overall market saw declines in major indices [2][8][13] - The report highlights that the average return of actively managed equity funds decreased by 0.26%, while actively managed bond funds saw a slight increase of 0.08% [2][16] - The report notes that the long-term pure bond funds outperformed other bond categories, with an average return of 0.15% for the period [16][17] Group 2 - The report identifies that the pharmaceutical sector has shown strong performance, with several actively managed equity funds focused on this sector achieving high returns [14][15] - The report provides a detailed analysis of various fund categories, indicating that the average return for QDII funds varied significantly, with energy commodity QDII funds leading at 4.54% [18][20] - The report emphasizes that the average return for the equity funds in the Greater China region was notably high at 33.16% for the year [18][20]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - A - shares are currently experiencing a normal pull - back during an upward trend and still offer good investment opportunities in sectors like rare earths, artificial intelligence, and innovative drugs. Bond market yields are expected to remain in a narrow low - level range. Gold may continue to rise under Trump's actions and has short - term long - making value [10] Group 3: Summary by Related Catalogs Stock Market - In the past week (20250728 - 20250803), US stocks declined, with the Nasdaq, S&P 500, and Dow Jones Industrial Average changing by - 2.17%, - 2.36%, and - 2.92% respectively. The Nasdaq China Technology Index dropped 3.20%, and the Hang Seng Index fell 3.47% [1] - Most A - share sectors declined. The Wind All - A Index dropped 1.09%. Among different indices, the CSI A100, CSI 300, CSI 500, CSI 1000, CSI 2000, and Wind Micro - cap stocks changed by - 2.15%, - 1.75%, - 1.37%, - 0.54%, - 0.01%, and 1.09% respectively. From a sector style perspective, both blue - chip and growth stocks in the Shanghai and Shenzhen markets declined, and the North - bound 50 Index dropped 2.70% [1] - Most industries declined, with communication and innovative drugs leading the gains. Among 30 CITIC industries, 24 declined and 6 rose. The leading industries were communication and pharmaceuticals, with weekly gains of over 2% [1] Bond Market - In the past week, the price of interest - rate bonds rose, and the yield curve shifted downward. The 10 - year Treasury bond futures main contract rose 0.24% compared to July 25, 2025. The yield of the 10 - year active Treasury bond decreased by 2.65 BP to 1.7059% [1] - The cost of funds decreased. As of August 1, 2025, R007 was 1.4864%, down 20.73 BP from July 25, 2025, and DR007 was 1.4242%, down 22.81 BP. The central bank conducted a net injection of 69 billion yuan in open - market operations last week. In July, the net injection in the repurchase operation was 200 billion yuan, and the Treasury bond trading operation remained at zero [2] - The bond market leverage level declined. The 5 - day average of inter - bank pledged repurchase volume decreased from 7.70 trillion yuan on July 25, 2025, to 6.72 trillion yuan on August 1, 2025 [3] - US Treasury yields declined, and the curve shifted downward. As of August 1, 2025, the 10 - year US Treasury yield decreased by 17 BP to 4.23% compared to July 25, 2025 [4] - The policy of restoring VAT on new - issued Treasury bonds, local government bonds, and financial bonds from August 8, 2025, while keeping existing bonds tax - free until maturity, may lead to a divergence between existing and new bonds. Existing bonds may be favored, and new bonds may require higher yield compensation [6] Foreign Exchange and Commodity Markets - The US dollar appreciated. The US dollar index rose 1.04%. The exchange rates of the US dollar against the euro, pound, and yen changed by 1.33%, 1.18%, and - 0.18% respectively. The exchange rates of the US dollar against the offshore and onshore RMB rose by 0.35% and 0.60% respectively [5] - The price of gold in the domestic market declined. The Shanghai gold spot price dropped 0.89% to 767.29 yuan/gram, and the futures price fell 0.94% to 767.44 yuan/gram. The price of foreign gold had mixed performance [5] Macroeconomic Data - The US non - farm payrolls in July were lower than expected, with 73,000 new jobs, significantly lower than the expected 106,000. The new non - farm payrolls in May and June were revised downwards. The market's expectation of a Fed rate cut in September increased, with the probability rising from 38.4% to 77.7% [7][8] - Trump's order to fire the director of the Bureau of Labor Statistics and the early resignation of a Fed governor have raised concerns about the reliability of employment data and the Fed's independence [9]

Market Overview - A-share market experienced a normal correction with declines of 0.40% and 1.36% on July 30 and 31, 2025, respectively[1] - The bond market showed an upward trend, with 30-year treasury futures rising by 0.47% and 0.57% on the same dates, indicating a stock-bond seesaw effect[2] Economic Factors - Recent US-China trade talks did not yield new agreements, but the market impact is expected to be minimal as tariffs are likely to be extended for 90 days[2] - The Politburo meeting emphasized a proactive fiscal policy and moderate monetary easing, supporting a GDP growth target of 5.0% for the year, which reduces growth pressure for the second half[2] Asset Performance - Major asset classes like cash, bonds, gold, and real estate are underperforming, with bank deposit rates below 1.0% and 10-year treasury yields fluctuating between 1.62% and 1.75%[4][5] - The real estate market shows declining trends, with first-tier cities experiencing a drop in second-hand housing prices and second-tier cities like Nanjing and Xiamen seeing prolonged stagnation[5] Equity Market Insights - The equity market has demonstrated a strong wealth effect, with the Wind ordinary stock fund index rising by 16.18% and QDII funds increasing by 11.85% in 2025[6] - As of July 31, 2025, A-share valuations remain attractive, with average P/E ratios below the 50th percentile of the last 15 years[6] Policy Environment - Continuous policy improvements are enhancing the attractiveness of the A-share market, with recent measures aimed at increasing capital market inclusivity and stability[7] - Initiatives such as the public fund reform and strategies to attract long-term capital are expected to bolster market confidence[7] Future Outlook - The current market correction is viewed as a healthy adjustment within an upward trend, with the potential for the stock market to become a new "wealth anchor" for investors[8] - Given the poor performance of other asset classes, the equity market is positioned to offer better opportunities moving forward[8]

Investment Rating - The report maintains an "Overweight" rating for the communication industry [1][9]. Core Insights - The establishment of China Fusion Energy Co., Ltd. marks a new phase in the development of controllable nuclear fusion, with significant investment from state-owned enterprises totaling 11.492 billion yuan [5][18]. - The investment cycle for controllable nuclear fusion is on the rise, driven by intensified US-China competition and supportive domestic policies [5][18]. - The AI infrastructure expansion and model transition are expected to drive opportunities across the computing and application stack, highlighting the synergy between hardware and software [6][19]. Summary by Sections Market Review - In the past week (July 21-27, 2025), the Shanghai Composite Index and Shenzhen Component Index rose by 1.67% and 2.33%, respectively, while the CITIC Communication Index fell by 0.47%, ranking 28th among 30 primary industries [4][14]. - The top five performing stocks in the communication sector included Dongxin Peace (34.10%), Cheng Tian Wei Ye (17.14%), and Si Nan Navigation (16.54%) [4][15]. Weekly Topic - The focus is on the significant investment in the fusion energy sector by state-owned enterprises, indicating a strategic shift towards large-scale development [5][18]. - The report suggests monitoring related industry chain stocks due to the ongoing investment cycle in controllable nuclear fusion [5][18]. Industry News - China Mobile's centralized procurement for data center switches is expected to involve approximately 33,300 units, with a total budget of about 2.0294 billion yuan [7][21]. - Huawei has the highest share in this procurement, with several other established domestic manufacturers also participating [7][21][23]. Investment Recommendations - The report recommends focusing on key beneficiaries across various sectors, including controllable nuclear fusion and AI-related hardware and software [6][19].

Market Overview - The FOF market has shown growth in both product quantity and scale, with a total of 517 public FOF funds and a total scale of 165.67 billion yuan as of the end of Q2 2025, marking a significant increase from 151.04 billion yuan in the previous quarter [1][5] - In Q2 2025, 14 new FOF funds were established, raising a total of 18.60 billion units, with an average fundraising of 1.33 billion units per fund [1][10] - The number of FOF funds that were liquidated increased to 8 in Q2 2025, up from 4 in the previous quarter [1][16] Performance Analysis - All types of FOF recorded positive returns in Q2 2025, with the average return of the pension target date 2060 fund reaching 3.2% [2][31] - The performance of FOF products varied, with those having a higher equity allocation performing better, while bond-focused FOFs lagged behind with average returns of 1.0% [31][32] Asset Allocation - Public FOFs continued to increase their allocation to bond assets, with the proportion of bond funds rising from 55.68% to 61.93%, while equity fund allocation decreased from 14.30% to 11.35% [3][40] - The equity allocation of flexible allocation mixed FOFs and various pension target risk FOFs slightly decreased, while stock-type FOFs increased their equity allocation significantly from 83.57% to 91.94% [3][42] Fund Issuance and Liquidation - The issuance market for FOFs showed signs of recovery, with 14 new funds launched in Q2 2025, although the number of new funds decreased by 2 compared to the previous quarter [8][10] - The distribution of new FOFs varied significantly by type, with ordinary FOFs being the most prominent, accounting for 10 new funds and raising 16.22 billion units [11][12] Fund Management - The top 10 fund companies managed a total of 101.04 billion yuan in FOFs, representing 60.99% of the total market scale [23][24] - Notable fund companies such as Southern Fund and Oriental Red Asset Management saw significant increases in their FOF management scale due to successful new product launches [23][24] Personal Pension Y Shares - The Y shares of pension FOFs, aimed at individual pension investment, have shown strong growth, with a total scale reaching 10.83 billion yuan, an increase of 630 million yuan from the previous quarter [25][26] Fund Subscription and Redemption - Overall, public FOFs experienced a net redemption of 6.1 billion units in Q2 2025, while Y shares maintained positive net subscriptions, indicating strong market appeal [27][29]

Economic Outlook - The "14th Five-Year Plan" period is crucial for achieving socialist modernization and requires a comprehensive effort to build a new development pattern[3] - Despite complex changes in the development environment, the long-term positive support conditions and basic trends remain unchanged[3] Economic Performance - The economy has shown steady progress this year, with high-quality development achieving new results[4] - There is a recognition of existing risks and challenges, with a shift in focus from external shocks to internal economic stability[4] Policy Recommendations - Maintain policy continuity and stability while enhancing flexibility and foresight, focusing on stabilizing employment, enterprises, markets, and expectations[5] - The government is expected to continue a proactive fiscal policy and moderately loose monetary policy, with an emphasis on increasing the efficiency of government bond issuance[6] Domestic Demand and Investment - There is a call to effectively unleash domestic demand potential, particularly through consumption and investment in key projects[7] - Infrastructure investment is expected to be supported by accelerated government bond issuance and project implementation[7] Reform and Opening Up - Emphasis on deepening reforms and expanding high-level opening up, particularly in technology innovation and international competitiveness[9] - The focus is on stabilizing foreign trade and investment, with measures to support affected enterprises[9] Risk Management - Attention to risk prevention in key areas, including real estate market stabilization and local government debt management[10] - The capital market's attractiveness and inclusivity are to be enhanced to support its recovery[10]