Investment Rating - The industry investment rating is maintained as "Buy" [2] Core Views - The June PMI for the machinery industry has rebounded to 49.7%, indicating a recovery in general equipment and engineering machinery sectors [4][6] - Despite a decline in domestic engineering machinery operations, exports are experiencing rapid growth, with a year-on-year increase of 8.8% in May [5][6] - The overall demand for machinery equipment is expected to improve in the second half of the year due to easing US-China trade tensions and supportive fiscal and monetary policies [6] Summary by Sections Industry Performance - Over the past 12 months, the machinery industry has shown a relative return of 19.5% and an absolute return of 35.6% [3] General Equipment - The production index and new orders index have increased to 51.0% and 50.2%, respectively, indicating expansion [4] - The overall manufacturing sector is showing resilience, with a continuous recovery in PMI for May and June [4] Engineering Machinery - The average working hours for major engineering machinery products in June were 77.2 hours, down 9.1% year-on-year [5] - The average operating rate for engineering machinery was 56.9%, a decline of 7.55 percentage points year-on-year [5] Investment Recommendations - The report suggests focusing on the engineering machinery sector, which is expected to benefit from domestic demand recovery and strong export growth [6] - Specific companies to watch include Anhui Heli, Hangcha Group, Sany Heavy Industry, XCMG, Zoomlion, and Hengli Hydraulic [6] Key Company Forecasts - The report includes earnings forecasts and ratings for key companies, with several companies rated as "Buy" [20]

Investment Rating - The industry rating is maintained at "Overweight" [6] Core Insights - The Chinese medicine sector saw a 1.27% increase last week, lagging behind other pharmaceutical segments, with the overall pharmaceutical sector rising by 3.64% [2] - The price-to-earnings (PE) ratio for the Chinese medicine sector is 27.57X, up 0.34X week-on-week, while the price-to-book (PB) ratio is 2.28X, also showing a slight increase [3] - The market for traditional Chinese medicine materials is experiencing increased supply but declining prices, with a 0.5% drop in the total price index last week [4] Summary by Sections Market Performance - The Chinese medicine sector's performance is weaker compared to other pharmaceutical segments, with notable companies like Jiuzi Tang and Zoli Pharmaceutical performing well, while others like Mayinglong and Dong'e Ejiao lag behind [2][15] Valuation - The current PE ratio of 27.57X places the sector at the 29.53% percentile since 2013, while the PB ratio of 2.28X is at the 5.37% percentile [3] Supply Chain Dynamics - The market for Chinese medicinal materials is characterized by increased production and declining prices, with a significant number of categories experiencing price drops [4] Policy Developments - The dual-track system for medical insurance and commercial insurance is being implemented, allowing for dynamic adjustments and submissions for inclusion in the basic medical insurance directory [5][6] Investment Recommendations - The report suggests focusing on three main investment themes: price governance, consumption recovery, and state-owned enterprise reform, highlighting companies with strong R&D capabilities and unique products [11][12][13]

Investment Rating - The industry investment rating is maintained as "Buy" [1] Core Views - The report highlights that new and second-hand housing transactions are slowing down year-on-year, indicating a need for continued policy support to stimulate demand [4][6] - The Beijing government is actively optimizing real estate policies to enhance housing supply and improve living conditions for residents [3][8] Summary by Sections Policy Tracking - On July 1, the Beijing government held a meeting to discuss advancing housing policies, emphasizing a multi-supplier and multi-channel housing supply system [3][8] - The focus is on improving the quality of housing and ensuring adequate land supply near transportation hubs and employment centers [3][8] Transaction Data - In June, Beijing's second-hand housing transactions reached 16,800 units, showing a year-on-year increase of 2.3% but a slowdown compared to previous months [4][6] - For new homes, the transaction area in 30 major cities was 2.63 million square meters, reflecting a year-on-year decrease of 20.8% [5][9] Investment Recommendations - The report suggests focusing on leading real estate companies with strong land acquisition capabilities and reasonable land reserves, such as Poly Developments [6][15] - It also recommends attention to major intermediary firms benefiting from active second-hand housing transactions, like I Love My Home [6][15]

Investment Rating - The industry maintains a "Buy" rating [7][5][33] Core Viewpoints - The "Big and Beautiful" Act in the US increases tax credits for semiconductor manufacturers building new factories from 25% to 35%, which is expected to significantly lower expansion costs and encourage companies like TSMC, Intel, and Micron to accelerate their projects in the US [3][11][21] - The Philadelphia Semiconductor Index has shown a continued upward trend, supported by strong capital expenditures and positive long-term technology demand expectations, with a year-to-date increase of 12.46% as of July 3, 2025 [4][15] - The demand for AI-related hardware is expected to rise due to the proliferation of AI large models and devices like AI smart glasses and AI smartphones, driving steady growth in the market for high-performance Ethernet switches, advanced storage products, GPUs, and edge computing chips [5][33] Summary by Sections Industry Investment Rating - The report maintains a "Buy" rating for the semiconductor industry, suggesting a positive outlook for the sector [7][5][33] Market Overview - The semiconductor industry index experienced a decline of 1.18% from June 30 to July 4, 2025, while the broader market indices showed gains [10][13] - The semiconductor equipment sector led the performance among sub-sectors, while other sectors recorded declines [14] Key Legislative Developments - The "Big and Beautiful" Act was signed into law, which is expected to stimulate high-end manufacturing in the US and increase import tariffs on semiconductor manufacturing equipment and high-end chips [11][22] Company Recommendations - The report recommends focusing on companies such as Zhaoyi Innovation, Lanke Technology, Juchen Co., Shenkong Co., and Longxin Zhongke, which are expected to benefit from the ongoing trends in the semiconductor market [5][33]

Investment Rating - The industry investment rating is maintained at "Overweight" [2] Core Views - The medical consumables sector saw a 3.77% increase last week, outperforming the CSI 300 index by 2.1 percentage points, indicating a positive trend in the sector [4][12] - The current PE ratio for the medical consumables sector is 32.6X, with a PB ratio of 2.37X, reflecting a slight increase in valuation metrics [5][18] - Recent favorable policies in the pharmaceutical sector are expected to boost market confidence and support the recovery of the medical consumables industry, particularly high-value consumables affected by national procurement policies [6][24] Summary by Sections Industry Performance - The medical consumables sector reported a 3.77% increase, with the overall medical sector also trending upwards [4][12] - The sector's PE ratio has increased by 1.24 percentage points compared to the previous week, with a one-year range of 28.42X to 41.66X [5][17] Industry Dynamics and Key Announcements - The National Healthcare Security Administration issued guidelines for the adjustment of the 2025 basic medical insurance directory, emphasizing the role of commercial health insurance in the multi-tiered medical security system [20][21] - The adjustment of the medical insurance directory is expected to enhance the market entry of innovative drugs, which is a significant step for commercial health insurance [20][21] Investment Recommendations - The report suggests focusing on two main lines for investment: 1. Opportunities for performance recovery post-collection pressure, particularly in orthopedic consumables [24] 2. Increased penetration of innovative products in high-value consumables, such as electrophysiology and interventional devices [24] - The recommendation to maintain an "Overweight" rating on the medical consumables sector highlights the potential for growth in companies with improving performance metrics and innovative product lines [24]

Investment Rating - The industry investment rating is maintained at "Overweight" [3][10][20] Core Viewpoints - The National Medical Products Administration (NMPA) has issued policies to support the innovation and development of high-end medical devices, addressing industry pain points through ten major initiatives [5][12][20] - The policy focuses on four key areas: medical robotics, high-end medical imaging, AI medical devices, and new biological materials, aiming to enhance international competitiveness and meet public health needs [5][12][20] - The policy is seen as a systematic reconstruction of the development path for high-end medical devices, promoting both technological transformation and market expansion [6][12][20] Summary by Sections Policy Initiatives - The NMPA's announcement includes ten initiatives that cover the entire lifecycle of high-end medical devices, including approval acceleration, standard improvement, and international support [5][12] - Five core initiatives are highlighted: 1. Accelerated innovation approval to shorten product launch cycles for leading companies in AI medical devices and surgical robots [5][12][14] 2. Clarified classification standards to resolve regulatory ambiguities, creating market access opportunities for innovative SMEs [5][12][14] 3. Alignment with international standards to reduce overseas registration costs, benefiting companies with CE/FDA certifications [5][12][14] 4. Strengthened post-market supervision to enhance product quality and compliance among leading companies [5][12][14] 5. Addressing supply chain gaps to promote domestic substitution and structural growth for key component suppliers [5][12][14] Comparison with Previous Draft - The final document has made several optimizations compared to the previous draft, including: 1. Enhanced goals to include "improving international competitiveness" [7][16] 2. More detailed requirements for innovation review and post-market supervision [7][16] 3. Expanded scope to include new technologies and products [7][16] 4. More precise terminology and structure adjustments for clarity [7][16] Investment Recommendations - The report suggests focusing on sectors likely to benefit from the new policies, such as AI medical devices, surgical robots, high-end medical imaging equipment, and brain-computer interfaces, with specific companies like Mindray, Meikang, Sanofi, and Ruimait being highlighted [10][20][21]

Group 1 - The report highlights that large model technology continues to iterate, leading to an innovation wave in consumer electronics driven by AI integration [5][21][30] - Traditional consumer electronics have entered a phase of slow growth, with smartphones and PCs stabilizing in sales, while TWS devices are also experiencing low growth [15][19] - The development of model compression technology lays the foundation for deploying large models on edge devices, which offer low cost, high performance, and privacy advantages [6][30] Group 2 - The penetration rate of AI terminals is expected to rise rapidly as major companies like Google and Huawei launch AI-enabled devices, enhancing user experience [6][34] - The report predicts a compound annual growth rate of approximately 115% for high-end AI PCs and 32% for AI smartphones from 2023 to 2027 [6][52] - The introduction of system-level AI capabilities in smartphones and PCs is anticipated to set new standards in the industry, prompting other manufacturers to follow suit [36][40] Group 3 - The demand for ASICs is strong, driven by their cost-effectiveness compared to GPUs, leading many tech companies to develop their own ASICs [7][75] - The global market for ASICs is projected to grow from $6.6 billion in 2023 to $55 billion by 2028, with a compound annual growth rate of 53% [7][76] - OpenAI's recent decision to rent Google TPU for its products marks a significant milestone for ASICs, indicating their acceptance by leading AI firms [7][76] Group 4 - The report suggests focusing on companies within the edge AI and ASIC supply chains, maintaining an "overweight" rating for the electronics sector [8][9] - Specific companies to watch in the edge AI sector include Rockchip, Hengxuan Technology, and Espressif Technology, while those in the ASIC space include Chipone and Aojie Technology [8][9]

Investment Rating - The report maintains an "Accumulate" rating for the real estate industry [7][26]. Core Views - In June, the transaction area of new and second-hand homes continued to decline year-on-year, influenced by weakened demand and high base effects from the previous year [5][26]. - The report suggests that policy measures in the second half of the year need to be strengthened, particularly regarding special bonds for acquiring idle land and accelerating the progress of existing housing projects, which could help stimulate demand and accelerate inventory clearance [5][26]. Summary by Sections Transaction Data - In June, the transaction area of new homes in 30 major cities decreased by 11.3% year-on-year, while it increased by 13.3% month-on-month. This marks the third consecutive month of year-on-year decline, with a cumulative year-on-year decrease of 4.4% for the first half of the year [2][10]. - The transaction area for second-hand homes in 13 monitored cities increased by 1% year-on-year in June, but the growth rate narrowed by 2 percentage points compared to the previous month. The cumulative year-on-year increase for the first half of the year was 18%, down by 4 percentage points from the previous month [2][10]. Inventory Levels - The inventory level of new homes continued to decline in June, with the available area in the top ten cities being 7,770 million square meters, a year-on-year decrease of 9% and a month-on-month decrease of 0.6%. The absorption cycle remained stable at 19.7 months [3][19]. Sales Performance of Top 100 Real Estate Companies - The sales revenue of the top 100 real estate companies in the first half of the year was 1,836.4 billion yuan, a year-on-year decrease of 11.9%. The sales area was 902.7 million square meters, down 19.7% year-on-year [4][22]. - In June alone, the sales revenue and area were 390.5 billion yuan and 179.5 million square meters, representing year-on-year declines of 15.9% and 25.1%, respectively [4][22]. Investment Recommendations - The report recommends focusing on two areas: (1) leading real estate companies with strong land acquisition capabilities and reasonable land reserve layouts, such as Poly Developments; (2) leading intermediary agencies benefiting from sustained activity in second-hand home transactions, such as Wo Ai Wo Jia [5][26].

Group 1: Report Industry Investment Rating - No information provided Group 2: Core Views of the Report - In June, the risk appetite of the equity market rebounded, but the performance of convertible bonds was weak. The CSI Convertible Bond Index rose 2.98% from June 1 to 27, while the CSI All-Share Index rose 3.13%. Year-to-date, the CSI Convertible Bond Index and the CSI All-Share Index increased by 6.65% and 3.43% respectively. Overall, the CSI Convertible Bond Index rose in tandem with the equity market in June but underperformed the CSI 500 (-0.42pct) and the CSI 1000 (-1.17pct) [3][12]. - The information technology sector rose significantly, and there was a large divergence between the underlying stocks and convertible bonds in the consumer staples sector. According to the Wind primary industry classification, the information technology sector performed best in June, with a gain of 4.65%, a significant improvement from May. This was mainly due to the substantial rise in the underlying stocks of the information technology sector, and its increase ranked first among the Wind primary industries. The market risk appetite increased significantly compared to the previous month. In addition, the underlying stocks of the financial and materials industries ranked second and third in terms of gains, but the convertible bonds did not show a significant increase. The industries where the underlying stocks and convertible bonds performed in opposite directions were consumer staples, utilities, healthcare, and consumer discretionary [4][22]. - In terms of convertible bond investment suggestions, as the uncertainty in the macro - environment continues, the option attribute of convertible bonds will further play a role. The dual - low strategy, which is both offensive and defensive, is beneficial for grasping the asymmetry of up and down movements. In terms of industry selection, it is believed that in July, the equity market tends to bet on policy expectations and interim report performance, and the risk appetite is difficult to rebound in the short term. Therefore, dividend - paying assets have more advantages in an uncertain environment, while the technology sector mainly benefits from the elasticity brought by policy catalysts [5]. Group 3: Summary by Relevant Catalogs 1. Convertible Bond Monthly Market Tracking - **Overall performance**: In June, the risk appetite of the equity market rebounded, but convertible bonds underperformed. The CSI Convertible Bond Index rose 2.98% from June 1 - 27, and the CSI All - Share Index rose 3.13%. Year - to - date, the CSI Convertible Bond Index and the CSI All - Share Index increased by 6.65% and 3.43% respectively. The CSI Convertible Bond Index underperformed the CSI 500 (-0.42pct) and the CSI 1000 (-1.17pct) [3][12]. - **By price classification**: In June, the Wind Low - price Convertible Bond Index rose 3.35%, significantly higher than the high - price (+2.52%) and medium - price (+2.72%) indices. Year - to - date, low - price convertible bonds (+6.99%) performed better than medium - price (+5.93%) and high - price (+4.76%) ones [3][13]. - **By convertible bond outstanding**: In June, small - cap convertible bonds slightly outperformed medium - and large - cap ones. The Wind Large - cap (+2.92%) and Medium - cap (+2.99%) Convertible Bond Indices performed basically the same, while the small - cap index had the largest increase (+3.23%). Year - to - date, the small - cap index (+10.26%) had a significantly higher increase than the large - cap index (+5.68%) and the medium - cap index (+5.25%) [16]. - **By credit rating**: In June, AA+ (+3.8%) and AA - and below (+3.6%) convertible bonds had relatively large increases. AAA (+2.4%) and AA (+2.86%) convertible bonds also achieved good returns. Year - to - date, low - rated convertible bonds still significantly outperformed high - rated ones, especially AA - and below convertible bonds, with a cumulative increase of up to 11.55% [3][18]. - **By industry**: The information technology industry's underlying stocks and convertible bonds rose significantly, and there was a large divergence between the underlying stocks and convertible bonds in the consumer staples sector. The information technology sector had a gain of 4.65% in June. The financial and materials industries' underlying stocks had relatively large increases, but the convertible bonds did not rise significantly. The industries where the underlying stocks and convertible bonds performed in opposite directions were consumer staples, utilities, healthcare, and consumer discretionary [4][22]. - **By strategy index**: In June, the dual - low strategy and the high - price low - premium strategy had similar increases. The dual - low strategy index with bond floor protection and underlying stock elasticity rose 2.45% in June and 6.47% year - to - date. In contrast, the high - price low - premium strategy, which focuses more on equity characteristics, rose 2.44% in June and 5.22% year - to - date, performing weaker overall than the dual - low strategy with bond floor protection [29]. 2. Convertible Bond Monthly Investment Suggestions 2.1 Strategy Suggestion: The Dual - Low Strategy is Both Offensive and Defensive - **June dual - low portfolio performance**: The June dual - low portfolio constructed included 44 targets. The top three industries with the largest number of targets were basic chemicals (8), banks (6), and light manufacturing (5). From June 1 to 27, the portfolio's return was 1.5% (equal - weighted allocation without individual bond screening), underperforming the CSI Convertible Bond Index by 2pct [32]. - **July dual - low portfolio recommendation**: In July, the standard for the dual - low value was adjusted to the bottom 5%, further narrowing the scope of targets to 22. The industries with the largest number of targets were basic chemicals (5), banks (4), and light manufacturing (2). The average convertible bond price, conversion value, and premium rate of the portfolio were 119 yuan, 109 yuan, and 10% respectively [35]. 2.2 Allocation Suggestion: Continue to Be Optimistic about Dividend - Paying and Technology Sectors - The technology sector's previous valuation adjustment was sufficient, the trading congestion declined, and it has now returned to the cost - effective range. It is recommended to focus on the highly prosperous robotics sector and related targets for self - controllability [37]. - High - dividend targets (banks, utilities) are favored during the interest rate decline period. Against the backdrop of the decline in the risk - free yield, the high dividends of bank stocks are more attractive. However, it should be noted that the outstanding scale of bank convertible bonds is decreasing, and attention should mainly be paid to the remaining low - price bank convertible bonds [7][37].

Investment Rating - The industry investment rating is maintained at "Overweight" [2][10]. Core Viewpoints - The report highlights the recent release of the "136 Document" implementation plans in Xinjiang and Inner Mongolia, indicating a stable transition for existing projects [7][9]. - The report emphasizes the acceleration of the national unified electricity market construction, which is expected to lead to a revaluation of electricity asset values [10][42]. - The report recommends focusing on three main lines: hydropower targets with stable fundamentals, thermal power targets with improving performance due to cost reductions, and leading companies with strong operational capabilities in the green electricity sector [10][42]. Summary by Sections Industry Performance - The public utility sector (Shenwan) rose by 0.09% this week, underperforming the market by 1.86 percentage points, ranking 28th among Shenwan's primary industries [4]. - Sub-sectors showed varied performance, with heating services up 6.5%, photovoltaic power up 2.41%, and thermal power down 0.63% [4]. Key Data Tracking - Domestic natural gas prices slightly increased, with the LNG ex-factory price at 4416 RMB/ton, a week-on-week increase of 0.2% [6]. - The average inflow of the Three Gorges Reservoir increased significantly by 29.14% week-on-week [6]. Industry Dynamics - The "136 Document" implementation plans detail fixed electricity prices for existing projects in Inner Mongolia and Xinjiang, with specific pricing mechanisms for different project types [7][9]. Investment Recommendations - The report suggests investing in companies like Huaneng Hydropower, Huaneng International, Jingneng Power, and Funiu Co., which are expected to benefit from the ongoing market reforms and stable project profitability [10][42].