Report Industry Investment Rating The provided documents do not mention the industry investment rating. Core Viewpoints - Liquidity tightening and emotional shocks have led to a comprehensive increase in credit spreads. This week, the adjustment trend of interest - rate bonds continued, and credit bond yields also significantly increased, with overall performance weaker than interest - rate bonds. Credit spreads across all tenors and ratings have risen [2][5]. - The spreads of urban investment bonds at all levels have increased by 3BP on the whole, with most spreads rising [2][9]. - Most industrial bond spreads have increased, while the spreads of mixed - ownership real - estate bonds have continued to decline [2][17]. - The yields of secondary and perpetual bonds have all increased, and the spreads of 3 - 5Y bonds have significantly widened again [2][23]. - The excess spreads of perpetual bonds have significantly increased [2][25]. Summary by Directory I. Liquidity tightening and emotional shocks lead to a comprehensive increase in credit spreads - This week, the yields of 1Y, 3Y, 5Y, 7Y, and 10Y Guokai bonds increased by 4BP, 3BP, 4BP, 4BP, and 2BP respectively. Credit bond yields also rose significantly, with 1Y - term credit bonds of all ratings rising by 5BP, 3Y - term by 6 - 8BP, 5Y - term by 5 - 6BP, 7Y - term by 10 - 11BP, and 10Y - term by 6 - 7BP. Credit spreads across all tenors increased, with 3Y and some long - term credit bonds having larger adjustment amplitudes [2][5]. - Rating spreads changed slightly, and term spreads showed different trends among different ratings and tenors [5]. II. The spreads of urban investment bonds at all levels have increased by 3BP on the whole - The credit spreads of external - rated AAA, AA +, and AA - level urban investment platforms increased by 3BP compared with last week, with different changes in different regions [2][9]. - The spreads of platforms at all administrative levels also increased by 3BP compared with last week, with most spreads of provincial, municipal, and district - county - level platforms rising [2][15]. III. Most industrial bond spreads have increased, while the spreads of mixed - ownership real - estate bonds have continued to decline - The spreads of central and state - owned real - estate bonds increased by 2 - 3BP, those of mixed - ownership real - estate bonds decreased by 4BP, and those of private real - estate bonds increased by 8BP. The spreads of some real - estate enterprises such as Longhu and Midea Real Estate decreased, while that of CIFI increased [2][17]. - The spreads of coal bonds at all levels increased by 2BP, those of steel bonds at all levels increased by 3BP, the spreads of AAA - level chemical bonds increased by 3BP, and those of AA + chemical bonds increased by 1BP [17]. IV. The yields of secondary and perpetual bonds have all increased, and the spreads of 3 - 5Y bonds have significantly widened again - The yields of 1Y - term secondary capital bonds of all ratings increased by 4 - 6BP, and the spreads increased by 0 - 1BP; the yields of 1Y - term perpetual bonds of all ratings increased by 4BP, and the spreads were basically flat [2][23]. - The yields of 3Y - term secondary capital bonds of all ratings increased by 6 - 9BP, and the spreads increased by 4 - 6BP; the yields of 3Y - term perpetual bonds of all ratings increased by 6BP, and the spreads increased by 4BP [23]. - The yields of 5Y - term secondary capital bonds of all ratings increased by 7 - 8BP, and the spreads increased by 3 - 4BP; the yields of 5Y - term perpetual bonds of all ratings increased by 6BP, and the spreads increased by 2BP [23]. V. The excess spreads of perpetual bonds have significantly increased - The excess spreads of industrial AAA 3Y perpetual bonds increased by 5.82BP to 15.99BP, at the 42.33% quantile since 2015; the excess spreads of industrial AAA 5Y perpetual bonds increased by 1.72BP to 13.55BP, at the 29.49% quantile since 2015 [2][25]. - The excess spreads of urban investment AAA 3Y perpetual bonds increased by 1.79BP to 5.13BP, at the 3.15% quantile; the excess spreads of urban investment AAA 5Y perpetual bonds increased by 4.84BP to 12.35BP, at the 17.90% quantile [25]. VI. Credit spread database compilation instructions - The overall market credit spreads, commercial bank secondary and perpetual spreads, and urban investment/industrial perpetual credit spreads are calculated based on ChinaBond medium - and short - term notes and ChinaBond perpetual bond data, with historical quantiles since the beginning of 2015; the credit spreads related to urban investment and industrial bonds are sorted and statistically analyzed by the R & D center of Cinda Securities, with historical quantiles since the beginning of 2015 [28]. - The calculation methods and sample screening criteria for various types of credit spreads are provided [31].

Investment Rating - The investment rating for the utility sector is "Positive" [2] Core Insights - In July, the total electricity consumption increased by 8.6% year-on-year, with the fastest growth in the primary industry at 20.2% [4] - The LNG import volume in July decreased by 7.8% year-on-year [4] - The utility sector underperformed the broader market, with a weekly increase of 1.9% compared to the 4.2% rise in the CSI 300 index [3][11] Electricity Industry Data Tracking - The price of thermal coal at Qinhuangdao Port (Q5500) increased by 7 CNY/ton week-on-week, reaching 702 CNY/ton [3][21] - The coal inventory at Qinhuangdao Port rose by 180,000 tons week-on-week, totaling 5.85 million tons [3][27] - The daily coal consumption in 17 inland provinces increased by 312,000 tons/day week-on-week, reaching 3.888 million tons [3][30] - The available days of coal supply in inland provinces decreased by 1.9 days to 22.1 days [3][30] Natural Gas Industry Data Tracking - The LNG ex-factory price index in Shanghai was 4,099 CNY/ton, down 17.01% year-on-year [55] - The average LNG import price in July was 532.19 USD/ton, a decrease of 0.47% year-on-year [55] - The European TTF gas price increased by 4.1% week-on-week, while the US HH price decreased by 1.3% [58] Key Industry News - The maximum annual storage and extraction capacity of the largest underground gas storage in the Beijing-Tianjin-Hebei region exceeded 3 billion cubic meters [4] - The electricity market in Guangdong saw a weekly average price of 274.24 CNY/MWh, up 29.40% week-on-week [48] - The total natural gas consumption in the EU for the 29th week of 2025 was estimated at 3.71 billion cubic meters, down 1.7% week-on-week [4][62] Investment Recommendations - For the electricity sector, companies such as Guodian Power, Huaneng International, and Huadian International are recommended due to expected profit improvements and value reassessment [4] - In the natural gas sector, companies like Xin'ao and Guanghui Energy are highlighted as potential beneficiaries of stable margins and high sales volume [4]

Investment Rating - The investment rating for the company is "Buy" [2] Core Views - The report highlights that the coal business has maintained stable production and reduced costs, indicating a potential long-term value reassessment [2][3] - The company reported a decline in revenue and net profit for the first half of 2025, with revenue at 74.436 billion yuan, down 19.9% year-on-year, and net profit at 7.705 billion yuan, down 21.3% year-on-year [2] - Effective cost control measures have helped mitigate the impact of falling prices on profitability, with a significant reduction in unit sales costs for self-produced coal [2][3] - The company is actively optimizing its industrial layout and advancing key projects, including coal, electricity, and chemical sectors [3][5] Financial Summary - For the first half of 2025, the company achieved a self-produced coal output of 67.34 million tons, an increase of 1.3% year-on-year, and sales of 67.11 million tons, an increase of 1.4% year-on-year [2] - The average selling price of self-produced coal was 470 yuan/ton, a decrease of 19.5% year-on-year, with specific declines in power coal and coking coal prices [2] - The company’s financial structure has improved, with a reduction in asset impairment losses and a decrease in the debt-to-asset ratio to 45.02% [5] - The forecast for net profit for 2025-2027 is 16.9 billion, 17.6 billion, and 18.3 billion yuan respectively, with diluted EPS projected at 1.27, 1.33, and 1.38 yuan [5][6]

Investment Rating - The report maintains a "Buy" rating for Xinji Energy (601918.SH) [1][6] Core Views - The report highlights that the decline in coal prices and electricity generation prices has negatively impacted the company's performance in the first half of 2025, but there is an expectation for significant improvement in the second half of the year [1][2][3] - The coal sector experienced a drop in prices despite an increase in production, with Q2 coal sales price averaging 477.60 RMB/ton, down 12.58% year-on-year [2][3] - The electricity sector saw a substantial increase in sales volume, with a 44.22% year-on-year growth in electricity generation in the first half of 2025, although there was a 16.75% decline in generation volume quarter-on-quarter in Q2 [3][4] Financial Performance Summary - In H1 2025, Xinji Energy reported operating revenue of 5.811 billion RMB, a decrease of 2.91% year-on-year, and a net profit attributable to shareholders of 920 million RMB, down 21.72% year-on-year [1][2] - The company’s coal production in H1 2025 reached 11.1965 million tons, an increase of 7.88% year-on-year, while coal sales volume was 9.4337 million tons, up 3.63% year-on-year [2] - The average coal sales price in H1 2025 was 528.53 RMB/ton, reflecting a decrease of 6.32% year-on-year [2] Future Outlook - The report anticipates that the coal market will see improved supply and demand dynamics in Q3 2025, driven by increased electricity consumption due to rising temperatures and government initiatives to stabilize coal supply [2][3] - The company is expected to benefit from the commissioning of new power plants, which will enhance its electricity generation capacity and profitability in the medium term [4][6] - The projected net profit for 2025-2027 is adjusted to 2.069 billion RMB, 2.592 billion RMB, and 2.615 billion RMB respectively, with corresponding P/E ratios of 8.06, 6.44, and 6.38 [6]

Quantitative Models and Construction Methods - **Model Name**: Dividend Adjustment for Futures Basis **Construction Idea**: Adjust the futures basis by incorporating the expected dividend impact during the contract's lifespan[9][21] **Construction Process**: Futures basis is calculated as the difference between the futures contract closing price and the underlying index closing price. The adjustment accounts for dividends expected during the contract's lifespan, which are reflected in the futures price. The formula is: $ Annualized Basis = (Actual Basis + Expected Dividend Points) / Index Price × 360 / Remaining Days of Contract $[21] **Evaluation**: Provides a more accurate representation of the futures basis by accounting for dividend effects[21] - **Model Name**: Continuous Hedging Strategy **Construction Idea**: Optimize hedging by continuously rolling futures contracts based on expiration dates[44][45] **Construction Process**: - Hold the corresponding total return index for the spot side - Use 70% of funds for the spot side and 30% for shorting futures contracts - Roll futures contracts when the remaining days to expiration are less than 2 days, using the closing price for both closing and opening positions[45] **Evaluation**: Effective for maintaining consistent exposure but sensitive to transaction costs and market conditions[45] - **Model Name**: Minimum Basis Hedging Strategy **Construction Idea**: Select futures contracts with the smallest annualized basis for hedging[46] **Construction Process**: - Calculate the annualized basis for all available futures contracts - Open positions in the contract with the smallest basis - Hold the contract for 8 trading days or until the remaining days to expiration are less than 2 days[46] **Evaluation**: Reduces basis risk but requires frequent monitoring and adjustments[46] Quantitative Factors and Construction Methods - **Factor Name**: Cinda-VIX **Construction Idea**: Reflect market expectations of future volatility using a modified VIX calculation tailored to China's market[62] **Construction Process**: - Based on overseas VIX methodologies, adjusted for China's market conditions - Incorporates the term structure of volatility to capture expectations across different time horizons[62] **Evaluation**: Provides valuable insights into market sentiment and volatility expectations[62] - **Factor Name**: Cinda-SKEW **Construction Idea**: Measure the skewness in implied volatility across different strike prices to assess tail risk[67] **Construction Process**: - Analyze the implied volatility of options with varying strike prices - Higher SKEW values indicate increased tail risk expectations, while lower values suggest reduced concerns[67] **Evaluation**: Useful for understanding market sentiment regarding extreme events and tail risks[67] Model Backtesting Results - **Dividend Adjustment for Futures Basis**: - IC contract: Current basis -5.89%[22] - IF contract: Current basis -0.05%[27] - IH contract: Current basis +1.70%[32] - IM contract: Current basis -6.92%[37] - **Continuous Hedging Strategy**: - IC: Annualized return -3.07%, volatility 3.82%, max drawdown -9.27%, net value 0.9086[48] - IF: Annualized return 0.38%, volatility 2.97%, max drawdown -3.95%, net value 1.0116[53] - IH: Annualized return 0.97%, volatility 3.08%, max drawdown -4.22%, net value 1.0302[57] - IM: Annualized return -6.21%, volatility 4.72%, max drawdown -14.01%, net value 0.8345[59] - **Minimum Basis Hedging Strategy**: - IC: Annualized return -1.40%, volatility 4.60%, max drawdown -7.97%, net value 0.9577[48] - IF: Annualized return 1.18%, volatility 3.10%, max drawdown -4.06%, net value 1.0366[53] - IH: Annualized return 1.63%, volatility 3.09%, max drawdown -3.91%, net value 1.0511[57] - IM: Annualized return -4.04%, volatility 5.55%, max drawdown -11.11%, net value 0.8702[59] Factor Backtesting Results - **Cinda-VIX**: - 30-day volatility: - CSI 500: 32.58[62] - CSI 1000: 29.50[62] - HS 300: 22.97[62] - SSE 50: 24.31[62] - **Cinda-SKEW**: - 30-day skewness: - CSI 500: 98.22[68] - CSI 1000: 106.46[68] - HS 300: 104.77[68] - SSE 50: 99.82[68]

Investment Rating - The industry investment rating is "Positive" [2] Core Insights - The report highlights the acceleration of robot applications in Shanghai and anticipates that Xiaomi's automotive division will achieve profitability in the second half of the year [4][7] - The automotive sector is experiencing a positive market performance, with the A-share automotive sector outperforming the broader market [10][12] - Key companies to watch include BYD, Great Wall Motors, and NIO, among others, as they are expected to benefit from ongoing developments in the industry [4][10] Industry News - Shanghai is promoting the development of "AI + manufacturing" and accelerating the application of robots in key industries such as electronics and automotive [7] - Xiaomi is confident in delivering 350,000 vehicles this year and aims to enter the European electric vehicle market by 2027 [7] - Great Wall Motors has launched its first factory in Brazil and plans to establish a second one to enhance production capacity [7] - NIO's founder announced an investment of over 18 billion yuan in charging and battery swap infrastructure over the past decade [7] - The U.S. and EU have announced tariffs of up to 15% on EU automotive products [7] Market Performance - The A-share automotive sector rose by 4.70% this week, outperforming the CSI 300 index, which increased by 4.18% [10][12] - The passenger vehicle sector's price-to-earnings (PE) ratio has increased this week [17] - The commercial vehicle sector's PE ratio has also seen an upward trend [17] - The automotive parts sector's PE ratio has risen, indicating positive investor sentiment [17][20] Key Data Tracking - Steel prices have slightly increased, while aluminum and natural rubber prices have decreased [20][23] - The price of lithium carbonate has risen, reflecting ongoing demand in the electric vehicle sector [26] - Container shipping rates from China to North America and Northern Europe have decreased, which may impact logistics costs for automotive companies [29]

Investment Rating - The investment rating for Miniso (9896.HK) is not explicitly stated in the provided documents, but the report indicates a positive outlook based on performance metrics and growth expectations. Core Insights - Miniso's H1 2025 performance exceeded expectations with revenue of CNY 9.393 billion, a year-on-year increase of 21.1%, and adjusted net profit of CNY 1.279 billion, up 3% [1] - In Q2 2025, the company achieved revenue of CNY 4.966 billion, a 23.1% increase, surpassing the previous guidance of 18-21% [1] - The adjusted operating profit for Q2 2025 was CNY 0.852 billion, reflecting an 8.5% increase, with an adjusted operating profit margin of 17.2% [1] Summary by Sections Financial Performance - For H1 2025, Miniso reported revenue of CNY 9.393 billion, with an adjusted operating profit of CNY 1.587 billion and an adjusted net profit of CNY 1.279 billion [1] - Q2 2025 revenue reached CNY 4.966 billion, with adjusted net profit at CNY 0.692 billion, marking a 10.6% increase year-on-year [1] - The adjusted net profit margin for Q2 2025 was 13.9%, down 1.6 percentage points year-on-year [1] Store Performance - Significant improvement in same-store sales was noted, with the Miniso brand achieving flat same-store sales, while revenue from the Miniso brand increased by 19.5% to CNY 4.563 billion in Q2 2025 [2] - The number of Miniso stores reached 7,612 by June 30, 2025, with 4,305 in mainland China and 3,307 overseas [2] Cost and Profitability - The gross margin for Q2 2025 was 44.3%, an increase of 0.4 percentage points year-on-year, attributed to higher overseas revenue contribution and improved margins from the Top Toy brand [3] - Sales and distribution expenses rose by 40.4% due to investments in direct stores and strategic overseas market expansion [3] Future Projections - Revenue projections for 2025-2027 are CNY 21.5 billion, CNY 25.5 billion, and CNY 29.6 billion, representing growth rates of 27%, 19%, and 16% respectively [4] - Expected net profit for 2025 is CNY 2.312 billion, reflecting a 12% decrease, followed by increases of 32% and 23% in subsequent years [4]

Group 1: Export Trends - China's export to the US decreased to $251.4 billion in the first seven months of 2025, down from $286.9 billion in the same period of 2024, marking a decline of approximately 12.4%[12] - The share of China's exports to the US fell to 11.8% in 2025 from 14.7% in 2024, a drop of 2.9 percentage points[12] - 70% of the gap left by China's reduced exports to the US is filled by Asia, while 30% is filled by Africa[13] Group 2: Regional Contributions - ASEAN contributed 1.3 percentage points to the increase in China's export share to Asia, with Hong Kong and Taiwan contributing an additional 0.3 percentage points[14] - China's export share to Africa increased by 0.7 percentage points, although the growth is more dispersed across various countries[14] - The US saw a 4 percentage point decline in imports from China, with Europe being the primary source to fill this gap, particularly from non-EU countries[20] Group 3: Market Dynamics - The overlapping and differentiated characteristics of market share changes suggest potential future markets for China's exports, particularly in Africa and other Asian regions[25] - Vietnam plays a crucial role as a hub for US imports, indirectly affecting China's export dynamics despite direct trade challenges[28] - The trade structure between China and Vietnam shows that China primarily exports capital and intermediate goods to Vietnam, which then exports consumer goods to the US[28]

Investment Rating - The investment rating for the company is "Buy" [2] Core Viewpoints - The company is a leader in network security, leveraging AI to open a new chapter in cloud computing and security [5][13] - The integration of AI and cloud computing is expected to drive a new growth cycle for the company's products [5][14] - The company has a differentiated solution combining virtualization, hyper-convergence, and private cloud, effectively replacing VMware [5][15] Summary by Relevant Sections Company Overview - The company has over 20 years of experience in the network security industry and has expanded into cloud computing [16] - It operates a business model that includes a platform, components, and services in network security [26] Network Security Market - The network security market in China is projected to grow from $11 billion in 2023 to $17.1 billion by 2028, with a compound annual growth rate (CAGR) of 9.2% [5][71] - The company holds an 11.1% market share in the domestic network security hardware market as of 2024, leading the competition [5][77] Cloud Computing and AI Integration - The cloud computing market in China reached ¥616.5 billion in 2023, growing by 35.5% from 2022 [5][24] - The company has launched the AICP computing platform, which significantly reduces the cost of deploying large AI models and enhances performance [5][14] Financial Performance and Forecast - The company expects EPS of ¥1.15, ¥1.55, and ¥1.87 for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 90.23, 67.12, and 55.59 [5][6] - Revenue for 2024 is projected at ¥75.2 billion, with a slight decline of 1.9% year-over-year, but is expected to rebound in subsequent years [6][64]

Investment Rating - The investment rating for Shandong Steel is "Buy" [1] Core Views - The report highlights that Shandong Steel has successfully turned losses into profits, with a focus on releasing recovery momentum [1] - The company reported a revenue of 36.806 billion yuan in the first half of 2025, a year-on-year decrease of 18.60%, but achieved a net profit attributable to shareholders of 1.3 million yuan, a year-on-year increase of 101% [1][2] - The report emphasizes the improvement in gross margins for core products despite a decline in production and sales volumes [4] Financial Performance Summary - In the first half of 2025, Shandong Steel's steel production was 7.5 million tons, a decrease of 3.8% year-on-year, with a significant drop in production in the second quarter [4] - The average selling price of steel in the first half of 2025 was 3,464 yuan per ton, down 10% year-on-year [4] - The gross profit margins for various steel products improved significantly compared to the previous year, with an overall gross margin of 6.02%, an increase of 4.15 percentage points year-on-year [4][5] Strategic Initiatives - The company is actively deepening internal and external collaboration to enhance efficiency and effectiveness, focusing on management reforms and cost reductions [5] - Shandong Steel is leveraging the strategic partnership with China Baowu Steel Group to implement management changes and improve operational quality [5][8] - The report outlines the company's goals of turning losses into profits and achieving positive net income for shareholders, supported by a comprehensive management transformation plan [8] Earnings Forecast - The forecast for net profit attributable to shareholders for 2025-2027 is 278 million yuan, 1.322 billion yuan, and 1.698 billion yuan respectively, with corresponding EPS of 0.03, 0.12, and 0.16 yuan per share [8]