Summary of Key Points Core Viewpoint - The average stock price in the A-share market is 11.97 yuan, with 43 stocks priced below 2 yuan, the lowest being Hengli Tui at 0.15 yuan [1] Group 1: Market Overview - As of July 8, the Shanghai Composite Index closed at 3497.48 points, with a notable presence of low-priced stocks [1] - Among the low-priced stocks, 30 out of 43 showed an increase in price, with *ST Huifeng, Yabo Co., and Meibang Fashion leading the gains at 4.65%, 4.35%, and 3.83% respectively [1] Group 2: Low-Priced Stocks Details - The list of stocks priced below 2 yuan includes: - Hengli Tui (0.15 yuan), with a market-to-book ratio of 0.38 [1] - Tui Shi Jiu You (0.17 yuan), with a market-to-book ratio of 2.82 [1] - Zhong Cheng Tui (0.25 yuan), with a market-to-book ratio of 2.17 [1] - The low-priced stocks include 10 ST stocks, accounting for 23.26% of the total [1] Group 3: Performance of Specific Stocks - The top gainers among low-priced stocks include: - *ST Huifeng (1.80 yuan) with a daily increase of 4.65% [2] - Yabo Co. (1.68 yuan) with a daily increase of 4.35% [2] - Meibang Fashion (1.90 yuan) with a daily increase of 3.83% [2] - The top losers include: - Tui Shi Jin Gang (0.53 yuan) with a decrease of 7.02% [1] - Tui Shi Jiu You (0.17 yuan) with a decrease of 5.56% [1] - *ST Baoying (1.98 yuan) with a decrease of 1.00% [2]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The trade agreement between the US and Vietnam provides a sample for subsequent trade negotiations between other countries, leaving uncertainties for future China-US negotiations. China may face difficulties in countering the increased costs of re-export trade tariffs. Attention should be paid to trade agreement news before July 9. The non-farm payroll data released today is also a key focus [6][9][12]. - Due to the influence of news, the "anti-involution" seems to bring a new round of supply-side reform in cyclical industries, with traditional sectors rising. However, the sustainability of the rise in oversold sectors is questionable, and it is more likely to be a structural market. The index will fluctuate between 3400 - 3500 points. Given the intertwining of overseas tariffs, Fed rate cuts, and domestic policies, the subsequent market is likely to continue with a structural trend. A dumbbell strategy should be adopted, and attention should be paid to the linkage between Hong Kong stocks and A-shares [2][4][12]. Summary by Relevant Catalogs 1. Market Views 1.1 Overseas Overnight - The US ADP employment change in June was -33,000, significantly lower than the expected 95,000 and the previous value of 29,000. This was the first employment contraction since March 2023, indicating weakness in the US labor market. As the employment data weakened, the market increased its bets on a Fed rate cut in July, with the probability rising from 20% to 27.4% [6]. - Trump announced a trade agreement with Vietnam. Vietnam will implement a 0% tariff on US imports, while Vietnamese goods exported to the US will face a 20% tariff, and goods deemed to be "transshipped through Vietnam" will be subject to a 40% tariff, targeting China. The previous agreement framework with China may face uncertainties. In the overnight market, although the US employment data was weak, the trade news had a greater impact. The US dollar index rose, US Treasury yields declined at both short and long ends, gold prices increased, the Dow Jones Industrial Average slightly fell, the Nasdaq and S&P 500 rose, the Nasdaq Golden Dragon China Index slightly increased, and the offshore RMB exchange rate remained basically flat. Attention should be paid to the US non-farm payroll data today, as the weak ADP data does not necessarily mean the non-farm payroll data will be weak [6]. 1.2 Domestic Market Review - On Wednesday, the broader market opened lower, fluctuated, and slightly declined by 0.09%. The Shenzhen Component Index fell by 0.61%, and the ChiNext Index dropped by 1.13%. The market showed a differentiated adjustment trend. Although the broader market was supported by banks and did not decline, individual stocks tumbled. Similar to the previous rise of Guotai Junan International in Hong Kong stocks, Chongqing Iron & Steel Co., Ltd. in Hong Kong stocks soared by 91.11%, mainly affected by a 30% limit on sintering machines in Tangshan, which also drove up the A-share steel sector and other cyclical sectors. Cyclical industries seem to be starting a new round of supply-side reform, consistent with the "anti-involution" tone. However, the sustainability of the rise in oversold sectors may be problematic. Among sectors, steel, coal, building materials, agriculture, forestry, animal husbandry, and banking rose, while electronics, communications, military, computer, and beauty care sectors led the decline. There were 1,943 rising stocks and 3,282 falling stocks in the entire market [2][7]. - The People's Bank of China issued the "Administrative Measures for Anti-Money Laundering and Anti-Terrorist Financing of Precious Metals and Gemstone Industry Institutions," requiring industry institutions to submit large transaction reports within 5 working days for transactions with a single or daily cumulative amount of over RMB 100,000 [7]. 1.3 Important News - Trump announced a trade agreement with Vietnam, where the Vietnamese market will fully open to the US. Vietnam will pay a 20% tariff on any goods entering US territory, and a 40% tariff will be imposed on transshipped goods. Vietnamese state media reported that the US will significantly reduce tariffs on various Vietnamese products [9]. - Richmond Fed President Barkin stated that there is currently no urgency to change policies [10]. - Vice Premier Zhang Guoqing conducted research in Hubei, emphasizing technology empowerment, accelerating industrial innovation, and continuously promoting high-quality development of the manufacturing industry [10]. - The National Development and Reform Commission allocated over RMB 300 billion to support the third batch of "two major" construction projects in 2025. So far, the RMB 800 billion list of "two major" construction projects for this year has been fully issued [10]. - European Commission President von der Leyen met with Wang Yi. Wang Yi said that the upcoming China-EU leaders' meeting is an important meeting at a critical juncture [10]. - The China Securities Regulatory Commission stated that it will prevent and control risks in areas such as bond defaults and private funds in an orderly manner, and continuously optimize capital market mechanisms such as stock and bond financing and mergers and acquisitions to promote the efficient concentration of factors in the most promising areas [10]. - In the first half of this year, 12.6 million new A-share accounts were opened, a year-on-year increase of 32.77% [11]. - The China Passenger Car Association estimated that the wholesale sales of new energy passenger vehicles by manufacturers nationwide in June were 1.26 million, a year-on-year increase of 29% [11]. 1.4 Today's Strategy - The trade agreement between the US and Vietnam provides a sample for subsequent trade negotiations between other countries, leaving uncertainties for future China-US negotiations. China may face difficulties in countering the increased costs of re-export trade tariffs. Attention should be paid to trade agreement news before July 9. The non-farm payroll data released today is also a key focus. In the A-share market, due to the influence of news, the "anti-involution" seems to bring a new round of supply-side reform in cyclical industries, with traditional sectors rising. However, the sustainability of the rise in oversold sectors is questionable, and it is more likely to be a structural market. The index will fluctuate between 3400 - 3500 points. Given the intertwining of overseas tariffs, Fed rate cuts, and domestic policies, the subsequent market is likely to continue with a structural trend. A dumbbell strategy should be adopted, and attention should be paid to the linkage between Hong Kong stocks and A-shares [12]. 2. Futures Market Tracking - The report provides detailed data on the performance, trading volume, and open interest of various stock index futures contracts, including the Shanghai 50 Index, CSI 300 Index, CSI 500 Index, and CSI 1000 Index, as well as their corresponding futures contracts such as IH2507, IF2507, IC2507, and IM2507 [14][15]. 3. Spot Market Tracking - The report presents data on the performance of the spot market, including the trading volume, current points, daily, weekly, and monthly returns of major indices such as the Wind All A Index, Shanghai Composite Index, Shenzhen Component Index, ChiNext Index, Shanghai 50 Index, CSI 300 Index, CSI 500 Index, and CSI 1000 Index, as well as the performance of various sectors [39]. - It also analyzes the impact of market styles (cyclical, consumer, growth, financial, and stable) on the performance of major indices [40][41]. - Additionally, the report shows the valuation levels of important indices and Shenwan sectors, as well as data on market trading volume, turnover rate, the number of rising and falling stocks, index trading volume changes, stock-bond relative returns, Hong Kong Stock Connect, margin trading balance, and net margin trading purchases [43][47][49]. 4. Liquidity Tracking - The report provides data on central bank open market operations and Shibor interest rate levels to track market liquidity [54][55][56].

Market Overview - The Shanghai Composite Index rose by 0.18% on July 3, with 24 out of the 28 sectors experiencing gains. The leading sectors were electronics and electrical equipment, with increases of 1.69% and 1.38% respectively [1] - Conversely, the coal and transportation sectors saw declines of 1.16% and 0.28%, with the steel industry ranking third in terms of decline [1] Fund Flow Analysis - The main funds in the two markets experienced a net outflow of 4.511 billion yuan throughout the day. Nine sectors saw net inflows, with the electronics sector leading at a net inflow of 7.820 billion yuan and a daily increase of 1.69%. The pharmaceutical and biological sector followed with a 1.35% increase and a net inflow of 1.382 billion yuan [1] - In contrast, 22 sectors experienced net outflows, with the machinery equipment sector leading at a net outflow of 2.317 billion yuan, followed by the basic chemical sector with a net outflow of 1.908 billion yuan. Other sectors with significant outflows included defense and military, media, and electrical equipment [1] Steel Industry Performance - The steel industry saw a decline of 0.13% with a net outflow of 666 million yuan. Out of 44 stocks in this sector, 15 rose, including one that hit the daily limit, while 28 fell [2] - The stocks with the highest net inflows included Baosteel Co., Ltd. with a net inflow of 42.3547 million yuan, followed by Yongjin Co. and New China Casting with net inflows of 20.8219 million yuan and 11.5805 million yuan respectively [2] - The stocks with the highest net outflows included Chongqing Steel with a net outflow of 109.2709 million yuan, New Steel Co. with 95.6172 million yuan, and Liugang Co. with 63.7315 million yuan [2][3]

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Group 1 - The Hong Kong steel sector stocks have experienced a decline, with Chongqing Steel (01053.HK) dropping by 19% and Ansteel (00347.HK) falling by 3% [1]

Investment and Financial Policies - Zhipu announced a strategic investment of 1 billion yuan from Pudong Venture Capital Group and Zhangjiang Group, with the first transaction completed recently [1] - The Guangzhou Housing Provident Fund Management Center is soliciting public opinions on the implementation of the "Commercial Housing Loan to Housing Provident Fund Loan" policy from July 2 to July 11, aiming to reduce the interest burden on contributors [6][9] Market Developments - The first batch of 10 Science and Technology Innovation Bond ETFs was approved on July 2 [2][15] - The People's Bank of China conducted a reverse repurchase operation of 98.5 billion yuan at a fixed rate of 1.4% on July 2, with a net withdrawal of 266.8 billion yuan [4] Industry Performance - From January to May, the added value of China's electronic information manufacturing industry grew by 11.1% year-on-year, with a revenue of 6.49 trillion yuan, up 9.4% year-on-year [7] - Zhejiang Province announced the establishment of a financial service mechanism for urban renewal, with 49 key projects expected to have a total investment of over 110 billion yuan [7] Corporate Actions - Taobao announced a consumer and merchant subsidy of 50 billion yuan over the next 12 months [19] - Longhua District in Shenzhen released a three-year action plan to promote the cultivation of listed companies, enhancing cooperation with financial research institutions [8] Regulatory Updates - The National Internet Information Office launched a special action to rectify illegal online activities related to enterprises, focusing on managing and addressing false information [5] - The China Securities Regulatory Commission reported that 24 out of the first 26 new floating rate funds have completed fundraising, totaling 22.68 billion yuan [17]

Industry Overview - The steel sector experienced a sudden surge on July 2, with Chongqing Steel (601005) seeing a dramatic increase of over 130% during trading, closing up 91.11% [1] - Other steel stocks also rose significantly, including China Iron Titanium (20.97%), Ansteel (12.73%), China Oriental Group (11.45%), and Maanshan Steel (3.59%) [1] - The central government's emphasis on promoting a unified national market and addressing low-price competition is expected to impact the steel industry positively [1] Supply-Side Reforms - Market interpretations suggest that expectations for supply-side reforms in the steel industry have strengthened [2] - Reports indicate that approximately half of the steel mills in Tangshan have received notifications regarding production cuts, which could reduce daily sinter production by 30,000 tons [2] - The steel industry faces challenges from a sluggish real estate market, limited infrastructure investment, and increased export pressure [2] Financial Performance - The steel industry showed signs of recovery in profitability during the first half of 2025, with total revenue for black metal smelting and rolling processing reaching 31,364.5 billion yuan, a year-on-year decrease of 7.0% [2] - The total profit for the industry turned positive, amounting to 316.9 billion yuan, indicating a recovery from previous losses [2] Cost and Profitability - Major raw material prices have declined, leading to a noticeable reduction in steel mills' costs, which has supported profit recovery [3] - Future supply adjustments could further suppress raw material prices and improve the supply-demand relationship, potentially enhancing steel profits [3] Investment Opportunities - Analysts suggest that the steel industry is likely to see a structural improvement, with some companies currently undervalued, presenting investment opportunities [3] - Companies with high gross margins and strong cost control are expected to benefit from valuation recovery [3] Company-Specific Developments - Ansteel (00347) has developed a new composite pipe technology for deep-sea oil and gas transport, enhancing its competitive position [4] - Maanshan Steel (00323) reported a revenue of approximately 19.425 billion yuan for Q1 2025, a year-on-year decrease of 4.74%, but managed to narrow its net loss significantly [4] - Chongqing Steel (01053) reported a revenue of 6.614 billion yuan for Q1 2025, with a net loss reduction of 64.82% compared to the previous year [5] - China Oriental Group (00581) reported sales of approximately 1.8 million tons of steel products in Q1 2025, with a gross profit margin of 100-150 yuan per ton [5]

Market Overview - The Hong Kong stock market opened high but closed lower, with the Hang Seng Index rising by 0.62% to 24,221.41 points, while the Hang Seng Tech Index fell by 0.64% to 5,269.11 points, and the National Enterprises Index increased by 0.54% to 8,724.9 points [1][2]. Steel Sector - The steel sector saw significant gains in the afternoon, with Chongqing Steel's stock reaching a peak increase of 135.56% before closing with a 91.11% rise at HKD 1.72 per share. Other companies like Ansteel and China Oriental Group also saw increases of over 10% [5][7]. - A rumor regarding production limits in Tangshan from July 4 to July 15, with a potential reduction in daily output by 30%, has drawn market attention. Current production data indicates a utilization rate of 83%, which could drop to 70% under the new limits [7]. Gold Sector - Gold stocks performed well, with Shandong Gold rising over 5%. Other companies such as Zijin Mining and China National Gold also experienced gains [8][10]. - Macau's gaming revenue for June reached MOP 210.64 billion, a year-on-year increase of 19%, driven by events like concerts [11]. Solar Sector - The solar sector showed strong performance, with companies like Fuyao Glass increasing by over 11%. A collective decision by major solar glass manufacturers to reduce production by 30% is expected to address supply-demand imbalances [12]. Chip and Military Sectors - The chip sector faced declines, with Shanghai Fudan dropping over 4%, and other companies like Huahong Semiconductor and SMIC also experiencing losses [13][14]. - The military sector also saw declines, with China Shipbuilding Defense falling over 4% [15]. Investment Outlook - Analysts from CICC suggest that the macro environment for Hong Kong stocks is characterized by abundant liquidity and structural highlights, leading to index fluctuations. UBS forecasts continued net inflows from mainland investors, with significant buying activity noted earlier in the year [16].

Core Viewpoint - The steel industry is experiencing a significant price increase due to production cuts driven by environmental regulations and government policies aimed at eliminating outdated capacity. This has led to a reduction in steel output expectations, particularly in Tangshan, where a 30% production cut has been mandated from July 4 to July 15. The market anticipates further impacts on steel production as a result of these measures [1][3]. Group 1: Steel Industry Insights - The recent meeting of the Financial and Economic Committee emphasized the need to push for the elimination of outdated production capacity, directly influencing the steel market [1]. - Tangshan steel mills have received directives for a 30% production cut, which is expected to significantly lower steel inventories and production levels [1]. - The China Iron and Steel Association reported that steel billet exports in the first four months of 2025 have already surpassed the total for 2024, prompting suggestions for export restrictions [1]. - A total of approximately 30 million tons of production cuts have been ordered for the year, coinciding with a seasonal demand lull, which has heightened market expectations for reduced steel output [1]. Group 2: Market Reactions and Trends - Longjiang Securities noted that administrative production cuts could act as a bullish option for the steel sector, particularly in July, which is traditionally a slow season for demand [3]. - The announcement of production cuts in the photovoltaic glass sector has also led to significant price increases in that market, indicating a broader trend of supply-side reforms impacting various sectors [3]. - The steel sector saw a strong rally in stock prices, with companies like Liugang and Chongqing Steel hitting their daily price limits amid these developments [9][10]. Group 3: Broader Economic Context - The overall A-share market experienced a decline, with major indices falling and a significant number of stocks trading lower, reflecting broader economic pressures [9]. - The government is expected to focus on structural adjustments across multiple industries, including steel, refining, and new energy sectors, as part of its economic strategy [7]. Group 4: Investment Trends - Institutional investors have begun to sell off some positions in response to the recent price increases in steel, indicating a cautious approach to the current market dynamics [1][4]. - The market's reaction to production cuts in both the steel and photovoltaic sectors suggests a growing trend towards supply-side management as a means to stabilize prices and manage excess capacity [3].

Group 1: Market Performance - On July 2, 2023, 14 stocks had a closing limit order amount exceeding 100 million yuan, with the highest being Xishanghai at 582 million yuan [2] - Xishanghai led in limit order volume with 839,500 hands, followed by Juyi Suoj, Jixin Technology, and Chongqing Steel with 521,700 hands, 477,600 hands, and 447,600 hands respectively [2] - The stocks with significant limit order amounts included Juyi Suoj, Dongfang Ocean, and Jixin Technology, all of which are related to the marine economy [2] Group 2: Company Insights - Xishanghai is focused on automotive logistics services and the production and sales of automotive parts, and it reported a revenue of 371 million yuan in Q1, a year-on-year increase of 40.61%, but incurred a net loss of 7.66 million yuan [2][3] - The company is actively pursuing business transformation and upgrading through strategic acquisitions to enhance its manufacturing capabilities in passenger and commercial vehicles [3] - The marine economy sector saw several stocks, including Shenkai Co., Aikang International, and Yaxing Anchor Chain, achieving limit increases, supported by the central government's emphasis on high-quality development of the marine economy [4] Group 3: Steel Industry - The steel sector had stocks like Chongqing Steel, Liugang Co., and Shougang Co. achieving limit increases, with the government promoting the orderly exit of backward production capacity [5][6] - Chongqing Steel primarily produces medium and heavy plates, hot coils, and construction steel, which are widely used in hydropower station construction projects [6] - Liugang Co. is one of the top 50 steel companies globally and focuses on steel production and sales [6] Group 4: Investment Trends - The top net purchases on the Dragon and Tiger list included stocks like Kelaite, Guolian Aquatic Products, and Xiugang Co., with net purchases exceeding 100 million yuan [7] - Institutional investors showed significant net buying in stocks such as Anglikang and Feiyada, indicating strong interest in these companies [7]