Report Industry Investment Rating - The document does not mention the industry investment rating. Core Viewpoints of the Report - The Senate version of the "Big and Beautiful" bill may increase the federal budget deficit by an additional $95 billion over 10 years (from fiscal year 2025 to 2034) compared to the House version, intensifying the US fiscal balance pressure. The Trump administration will mainly rely on tariffs and cuts in government discretionary spending to balance the deficit [3][11]. - If the Trump administration significantly raises tariffs, it may face more domestic resistance and cause greater inflation uncertainty, potentially exacerbating the US government's financing difficulties. The Fed may restart interest rate cuts in October after observing the impact of tariffs on inflation from June to August [3][12]. - In July, US tariff policies will reach two critical junctures. On July 9, the tariff grace - period for most trading partners expires. A significant tariff increase may benefit gold and harm US Treasuries, while a reduction in trade friction has the opposite effect. Around the end of July, the US Federal Appellate Court will hold a hearing on a tariff ruling. If the court does not support the Trump administration, it may increase concerns about US fiscal balance and harm US Treasuries [3][14]. - From June 30 to July 5, 2025, the average wholesale price of pork increased by 0.75% week - on - week and decreased by 16.16% year - on - year. The Shandong vegetable wholesale price index increased by 2.26% week - on - week, but the year - on - year decline widened to 9.35%. The edible agricultural product price index increased by 0.20% week - on - week and decreased by 5.23% year - on - year [3]. Summary According to the Table of Contents High - Frequency Data Panoramic Scan - The Senate version of the "Big and Beautiful" bill may increase the federal budget deficit by an additional $95 billion over 10 years compared to the House version. The Trump administration will mainly rely on tariffs and cuts in government discretionary spending to balance the deficit. After the bill passes, the US fiscal balance pressure increases, and there is uncertainty about future fiscal policies [11]. - If the Trump administration significantly raises tariffs, it may face more domestic resistance and cause greater inflation uncertainty, potentially exacerbating the US government's financing difficulties. The Fed may restart interest rate cuts in October after observing the impact of tariffs on inflation from June to August [12]. - In July, US tariff policies will reach two critical junctures. On July 9, the tariff grace - period for most trading partners expires. A significant tariff increase may benefit gold and harm US Treasuries, while a reduction in trade friction has the opposite effect. Around the end of July, the US Federal Appellate Court will hold a hearing on a tariff ruling. If the court does not support the Trump administration, it may increase concerns about US fiscal balance and harm US Treasuries. The risk of the US unilaterally escalating tariffs in the short - term is relatively high [14]. - The report provides week - on - week and year - on - year data on various high - frequency indicators such as food, energy, and metals, including the average wholesale price of pork, vegetable prices, and crude oil prices [17][18]. Comparison of High - Frequency Data and Important Macroeconomic Indicators - The document shows the comparison between high - frequency data and important macro - indicators through multiple charts, and the data sources are mainly Wind and BOC Securities [22]. Key High - Frequency Indicators in the US and Europe - The report presents US and European high - frequency indicators through charts, including US weekly economic indicators, initial jobless claims, and the Chicago Fed Financial Conditions Index, and the data sources are mainly Wind, Bloomberg, and BOC Securities [77][80][81]. Seasonal Trends of High - Frequency Data - The report shows the seasonal trends of high - frequency data through charts, and the data sources are mainly Wind and BOC Securities [90]. High - Frequency Traffic Data in Beijing, Shanghai, Guangzhou, and Shenzhen - The report presents the year - on - year changes in subway passenger volume in Beijing, Shanghai, Guangzhou, and Shenzhen through charts, and the data source is Wind [141][143].

Core Insights - The report highlights the potential for an "anti-involution" trend in the industry, which is expected to improve the nominal economic growth rate that has been weak [1][2] - The report discusses the recent meeting of the Central Financial Committee, emphasizing the need to address chaotic low-price competition and promote product quality [2] - The "anti-involution" movement is anticipated to boost prices from the supply side, thereby alleviating the current weak nominal economic growth situation [2] Market Update - The report notes that weak pricing has been a significant drag on the fundamentals, particularly the nominal economic growth rate [2] - Since October 2022, the Producer Price Index (PPI) has been below zero for 32 consecutive months, similar to the period from 2012 to 2016 when supply-side reforms helped PPI recover [2] - The report suggests that the "anti-involution" actions taken by various industries, such as solar and automotive, could lead to short-term positive factors for related domestic demand sectors [2] Short-term Trading Opportunities - The report indicates that the current market environment is conducive to a short-term trading rally in cyclical stocks, given the low valuations and the recent actions taken by companies to limit production [2] - It is noted that the market has been performing well across several sectors, including technology and consumer goods, which may lead to a rotation into cyclical stocks [2] Observations on Style Switching - The report expresses caution regarding the sustainability of the style switch, drawing parallels to the economic environment of 2013-2015 [2] - It suggests that while PPI may stabilize in the second half of the year, a strong upward trend is unlikely, and the recovery of fundamentals will require further observation [2] - The report emphasizes that the current cycle is nearing a mid-cycle point, with potential inventory destocking by year-end, and the effectiveness of policy implementation remains to be seen [2]

Core Insights - The report emphasizes the ongoing supply-side reform aimed at the orderly exit of backward production capacity, marking a significant policy shift from self-regulation to higher-level government intervention [6][7] - The market is expected to experience a "pulse-like" behavior due to unclear demand-side conditions, contrasting with the more robust demand seen during the 2016 supply-side reforms [7][9] - There is a notable focus on the differentiation between "old industries" (e.g., steel, coal, cement) and "new industries" (e.g., new energy vehicles, lithium batteries, photovoltaic sectors), with a recommendation to prioritize sectors with external demand [7][8] Market Performance - The report provides a snapshot of market indices, with the Shanghai Composite Index closing at 3472.32, reflecting a 0.32% increase, while the Shenzhen Component Index decreased by 0.25% [4] - The banking sector showed a strong performance with a 1.84% increase, while the beauty care sector declined by 1.87% [5] Industry Analysis - The report indicates a marginal recovery in production and demand expectations for June, with the PMI showing slight improvement, suggesting a potential stabilization in industrial profits [9][10] - It highlights that the price pressures are expected to ease, and inventory levels are likely to remain resilient, indicating a positive outlook for the second half of the year [9][10] - The report suggests that the profitability factors are anticipated to improve, with a focus on high profitability, small-cap, and high-valuation stocks expected to outperform in the coming month [10]

Investment Rating - The report rates the chemical industry as "Outperform" [2] Core Views - The industry has been significantly impacted by tariff-related policies and fluctuations in crude oil prices this year. Key areas to focus on in July include safety regulations, supply changes in the pesticide and intermediate sectors, performance fluctuations due to "export rush," the importance of self-sufficiency in electronic materials, and stable dividend policies in energy companies [2][12] Summary by Sections Industry Dynamics - In the week of June 30 to July 6, among 100 tracked chemical products, 25 saw price increases, 56 saw declines, and 19 remained stable. The average price of TDI increased by 7.02% week-on-week, while the average price of acrylic acid rose by 3.65% [11][36] Investment Recommendations - The report suggests focusing on safety regulations and supply changes affecting the pesticide and intermediate sectors, performance fluctuations from the first half of the year, the growing importance of self-sufficiency in electronic materials, and stable dividend policies in energy companies. Long-term investment themes include sustained high crude oil prices benefiting the oil and gas extraction sector, rapid development in downstream industries, and policy support for demand recovery [12][19] Key Products and Price Changes - TDI prices increased to 12,013 CNY/ton, while acrylic acid prices reached 7,100 CNY/ton, reflecting a 14.52% year-on-year increase. The average price of crude oil also saw slight increases, with WTI at 66.50 USD/barrel and Brent at 68.30 USD/barrel [11][35][36] Company Highlights - Satellite Chemical and Anji Technology are highlighted as "gold stocks" for July, with both companies showing strong revenue and profit growth in 2024. Satellite Chemical reported a revenue of 45.648 billion CNY, a 10.03% increase year-on-year, while Anji Technology achieved a revenue of 1.835 billion CNY, a 48.24% increase year-on-year [13][19]

宏观经济 | 证券研究报告 — 总量周报 2025 年 7 月 6 日 周度金融市场跟踪 财经委会议"反内卷"，钢铁建材领涨 A 股；债 券市场收益率整体小幅震荡下行 （ 6 月 30 日 -7 月 4 日） 股票方面，本周 A 股震荡上涨，全周累计看，沪深 300 上涨 1.5%，中证 2000 上涨 0.6%。本周港股走势弱于 A 股，恒生指数下跌 1.5%，恒生科技指数下跌 2.3%。行业方面，本周钢铁、建筑材料和银行领涨，计算机、非银金融和美容 护理领跌。周内看，周一（6 月 30 日）上午，6 月制造业 PMI 指数发布，连续 2 个月回升。当天市场超 4000 只股票上涨。周二（7 月 1 日）市场震荡上涨。 周二盘后中央财经委第六次会议新闻发布，会议强调依法依规治理企业低价无 序竞争。受此影响，周三（7 月 2 日）钢铁、煤炭和建筑材料等传统周期类行业 领涨 A 股。周四（7 月 3 日）盘前美国解除对中国芯片设计类软件出口限制新 闻发出，当天市场超 3200 家公司上涨，创业板指数上涨 1.9%。周五（7 月 4 日） 市场有所分化，以沪深 300 为代表的大盘股上涨，但以中证 2000 为代 ...

Core Insights - The report indicates that the A-share market is likely to experience a gradual upward shift in its central tendency, supported by a classic structure of "weight on the platform, technology growth in the spotlight" [3][25] - The "anti-involution" trend in various industries is expected to improve nominal economic growth from the supply side, although the sustainability of style switching remains to be observed [12][27] - The IPO market has shown positive changes, with a significant increase in the number of new projects and financing amounts, benefiting the brokerage sector [42][43] Market Overview - The A-share market is currently supported by ample liquidity, and as the third quarter approaches, expectations for domestic demand are likely to recover with the acceleration of policy implementation [13][35] - The report notes that the banking sector's dividend yield has declined significantly, reaching a three-year low, which historically indicates potential volatility or adjustment risks in the banking market [32][35] Industry Analysis - The medical and pharmaceutical sectors have seen substantial inflows, with net capital inflow reaching 147.38 billion [37] - The report highlights that the "anti-involution" strategy has catalyzed a rebound in several sectors, including new energy, steel, and construction materials, although high inventory levels in some industries remain a concern [27][35] - The report emphasizes that the current market structure supports the notion of "weight on the platform, technology growth in the spotlight," which is crucial for the index's upward movement [25][35] IPO Market Dynamics - The IPO market has experienced a surge, with 53 new projects accepted in June alone, surpassing the total from January to May [42][43] - The financing amount for IPOs in June reached 9.153 billion, marking a 164.82% increase month-on-month, indicating a favorable environment for innovative companies [42][43] Sector Performance - The report notes that the electronic sector received a boost following positive news regarding U.S.-Vietnam tariff negotiations [23] - The report also mentions that the healthcare sector has been a top performer, with significant capital inflows, while sectors like computing and non-bank financials faced the largest outflows [37][38]

Investment Rating - The report maintains an "Outperform" rating for the electric equipment and new energy industry [1]. Core Insights - The photovoltaic supply-side reform is ongoing, with a focus on improving product quality and eliminating low-price competition [1][2]. - In June, the wholesale sales of new energy passenger vehicles in China reached 1.26 million units, a year-on-year increase of 29% [1][2]. - The demand for batteries and materials is expected to grow as new models of electric vehicles are launched in the second half of the year, with projections indicating high growth in domestic sales of new energy vehicles by 2025 [1]. - The solid-state battery industrialization trend is clear, with attention on related materials and equipment companies [1]. - In May, China's photovoltaic installed capacity reached 92.92 GW, a year-on-year increase of 388%, which may suppress demand for photovoltaic installations in the near term [1]. - The hydrogen energy sector is being driven by policies promoting industrialization, with a focus on companies with cost and technological advantages in electrolyzer production and hydrogen infrastructure [1]. Summary by Sections Industry Performance - The electric equipment and new energy sector rose by 1.99% this week, outperforming the Shanghai Composite Index, which increased by 1.4% [10]. - The photovoltaic sector saw a significant increase of 6.80%, while the lithium battery index rose by 3.84% [2][13]. New Energy Vehicles - Major players in the new energy vehicle market reported varying delivery figures for June, with BYD delivering 383,600 units (up 11.98% year-on-year) and Li Auto experiencing a decline of 24% [2][27]. - The report highlights the expected growth in new energy vehicle sales, driven by the introduction of new models [1][2]. Photovoltaic Sector - The central economic work conference emphasized the need to regulate low-price competition and improve product quality in the photovoltaic industry [1][2]. - The report notes the significant increase in installed capacity and the potential impact on future demand [1]. Hydrogen Energy - The approval of a large-scale green hydrogen pipeline project indicates ongoing support for the hydrogen energy sector [1][27]. Company Developments - Companies like EVE Energy and Xinwanda are planning to issue H-shares for overseas listings, indicating growth strategies in the electric equipment sector [2][28].

Quantitative Models and Construction Methods Model 1: High Prosperity Industry Rotation Strategy (S1) - **Model Construction Idea**: The model aims to select industries with upward profit expectations by tracking industry profitability using a multi-factor model based on analysts' consensus expectations[16] - **Model Construction Process**: - Construct three major types of factors based on the original value, slope, and curvature of profit expectations - Screen candidate factors with annualized excess return >3% - Use hierarchical clustering to classify candidate factors into 8 categories and select the highest excess return factor from each category for rank equal-weighted composite - Exclude overvalued industries and select the top 3 industries with the highest factor values weekly[16] - **Model Evaluation**: The model effectively captures industries with high profitability expectations[16] Model 2: Implicit Sentiment Momentum Tracking Strategy (S2) - **Model Construction Idea**: The strategy constructs a sentiment momentum model that runs ahead of earnings expectation data by capturing "unproven sentiment" in the market[19] - **Model Construction Process**: - Perform cross-sectional regression of industry daily returns on daily turnover rate changes to strip out "expected sentiment" - Calculate the residual as "unproven sentiment" - Construct half-month and 12-month momentum factors based on cumulative unproven sentiment factor net value - Rank and equal-weight composite the two momentum factors - Exclude overvalued industries and select the top 3 industries with the highest factor values weekly[20] - **Model Evaluation**: The model captures market sentiment ahead of earnings expectation data[19] Model 3: Macro Style Rotation Strategy (S3) - **Model Construction Idea**: The strategy predicts the long-short situation of four industry styles (high beta, high valuation, 12-month momentum, high volatility) based on current macro indicators and their correlation with the returns of these styles[22] - **Model Construction Process**: - Construct a fundamental indicator system from "economic growth," "inflation," "currency," "credit," and "market sentiment" - Calculate the exposure of each industry to the four styles and estimate the expected long-short returns of the style factors - Use a weak voting classifier to predict the long-short of the styles - Map the style predictions to industries and select the top 6 industries with the highest total scores monthly[23] - **Model Evaluation**: The model effectively integrates macro indicators with industry style predictions[22] Model 4: Long-term Reversal Strategy (S4) - **Model Construction Idea**: The strategy leverages the momentum effect within 2 years and the reversal effect beyond 3 years in industries[27] - **Model Construction Process**: - Construct a "1-year momentum" factor excluding the most recent month's returns - Construct a "3-year reversal" factor using the period from 3 years ago to 2 years ago - Construct a turnover factor using the turnover rate of free float market value - Rank and equal-weight composite the three factors - Select the top 5 industries with the highest factor values monthly[27] - **Model Evaluation**: The model captures long-term reversal and medium-term momentum effects in industries[27] Model 5: Fund Flow Industry Rotation Strategy (S5) - **Model Construction Idea**: The strategy constructs an industry rotation model based on "market main fund flow and strength" and "late trading fund flow and strength"[29] - **Model Construction Process**: - Construct an "institutional order trend strength factor" using the net buy amount of institutional orders - Construct a "late trading fund flow and strength factor" using the average daily inflow of late trading funds - Rank and equal-weight composite the two factors - Select the top 5 industries with the highest fund inflow strength monthly[30] - **Model Evaluation**: The model effectively captures the flow and strength of market funds[29] Model 6: Financial Report Factor Failure Reversal Strategy (S6) - **Model Construction Idea**: The strategy leverages the phenomenon of financial report factors performing poorly in recent years to construct an industry rotation model based on the mean reversion theory of factor effectiveness[34] - **Model Construction Process**: - Classify financial report factors into categories and screen for "long-term effective factors" with annualized excess return >5.5% - Identify "short-term failure factors" that underperform the industry equal-weight benchmark for 4 consecutive months - Composite the highest annualized excess return factors from each category - Select the top 5 industries with the highest factor values monthly[35] - **Model Evaluation**: The model captures the mean reversion of financial report factors[34] Model 7: Multi-factor Scoring Composite Strategy (S7) - **Model Construction Idea**: The strategy is a quarterly rebalancing strategy that composites factors from "momentum," "liquidity," "valuation," and "quality" dimensions[39] - **Model Construction Process**: - Exclude industries with a weight below 2% in the CSI 800 - Select 2 factors from each dimension and rank equal-weight composite - Select the top 5 industries with the highest factor values quarterly[40] - **Model Evaluation**: The model effectively integrates multiple factor dimensions[39] Model Backtest Results - **S1**: Annualized excess return -1.8% YTD[66] - **S2**: Annualized excess return 5.6% YTD[66] - **S3**: Annualized excess return 2.7% YTD[66] - **S4**: Annualized excess return 4.8% YTD[66] - **S5**: Annualized excess return -0.2% YTD[66] - **S6**: Annualized excess return 0.6% YTD[66] - **S7**: Annualized excess return 3.9% YTD[66] - **Composite Strategy**: Annualized excess return 2.0% YTD[66]

Group 1: Policy Signals and Market Reactions - The recent signals regarding the orderly exit of backward production capacity emerged before the July 1 meeting of the Central Financial Committee, with some product prices stabilizing in June[3] - The Central Financial Committee emphasized the need to promote the orderly exit of backward production capacity, marking a shift from industry self-discipline to top-level policy[3] - Despite the policy signals, related industry stock performances remained subdued until the July 1 meeting, indicating a delayed market reaction[21] Group 2: Market Characteristics and Trends - The current market is expected to exhibit "pulse-like" trends due to unclear demand-side signals, contrasting with the 2016 supply-side reform that saw simultaneous demand boosts[22] - The segmentation of industries will likely show significant differentiation between "old industries" (e.g., steel, coal, cement) and "new industries" (e.g., new energy vehicles, lithium batteries)[22] - Focus should be on new industries with external demand, which may offer higher profit elasticity under similar supply-side adjustments[22] Group 3: Economic Implications and Risks - The stabilization of related industries will significantly aid macroeconomic structural adjustments and improve price factors, contributing to the overall elevation of the A-share market[23] - Risks include the potential underperformance of the orderly exit of backward production capacity, unexpected macroeconomic fluctuations, and unforeseen tariff disputes[28]

Market Update - The production and demand expectations for June show a marginal recovery, indicating a potential repair in profit factors [1][2] - In May, industrial enterprise profits weakened significantly due to a decline in both volume and price, leading to a faster decline in revenue growth [2] - The forward-looking indicator, June PMI, has slightly rebounded, suggesting a continuation of a strong production pattern [2] Inventory and Price Trends - In May, finished product inventory showed a marginal decline, primarily due to weak prices affecting nominal inventory [2] - The June PMI inventory sub-indices have shown varying degrees of recovery, aligning with the economic indicators that suggest a weak May but a recovery in June [2] - Short-term price pressures may have peaked, and the negative impact of base effects is expected to diminish in the second half of the year [2] Profitability Outlook - Entering July, profitability contributions are expected to improve, with the A-share market showing a rebound supported by positive valuation contributions [2] - The market currently undervalues profit factors, and the mid-year performance window in July-August may lead to a phase of recovery for profitability factors [2] - The market is anticipated to exhibit an upward oscillation trend in the second half of the year, supported by a favorable liquidity environment and improved macroeconomic expectations [2]