Core Viewpoint - The report highlights significant adjustments in the heavy holdings of Liu Gesong's six funds managed by GF Fund, particularly in the new energy vehicle and semiconductor sectors, with a notable shift towards new consumption, internet, and military industries [1][2]. Fund Holdings Adjustment - Liu Gesong's funds have reduced their positions in several previously favored stocks, including: - North Huachuang: Holdings decreased by approximately 17.69% to 161,240 shares [2]. - Seres: Holdings reduced by 9.14% [6]. - EVE Energy: Holdings decreased by 4.16% [6]. - JinkoSolar: Holdings down by 10.77% [6]. - Conversely, there has been a significant increase in holdings of stocks such as: - DeYe Co.: Increased by 40% [3][8]. - Xichuang Data: Increased by nearly 76% [3]. - Xiaomi Group-W: Increased by 25.66% [7]. Fund Performance - The overall performance of Liu Gesong's funds in Q2 was underwhelming, with all funds experiencing net redemptions: - The best-performing fund, GF Multi-Dimensional Emerging, recorded a net value growth rate of 7.91% [4]. - Other funds, such as GF Small Cap Growth A and C, reported growth rates of 2.38% and 2.28%, respectively [4]. - GF Innovation Upgrade and GF Technology Pioneer recorded negative returns [4]. Market Context - The A-share market saw mixed performance in Q2, with the Shanghai Composite Index rising by 3.26% and the Shenzhen Component Index slightly declining by 0.37% [5]. - Key sectors such as military, banking, and telecommunications showed significant gains, while sectors like food and beverage, home appliances, and steel performed poorly [5]. - Liu Gesong remains optimistic about the domestic economy's resilience, citing factors such as the easing of geopolitical tensions and supportive domestic policies [5].

Core Viewpoint - The China Securities Military Industry Leading Index has shown significant growth, reflecting the strong performance of leading companies in the military sector [1][2]. Group 1: Index Performance - The China Securities Military Industry Leading Index opened lower but closed higher, increasing by 3.56% to 3044.24 points, with a trading volume of 26.227 billion yuan [1]. - Over the past month, the index has risen by 4.29%, by 11.43% over the last three months, and by 6.85% year-to-date [2]. Group 2: Index Composition - The index comprises 30 listed companies involved in military products and services, reflecting the overall performance of leading companies in the military sector [2]. - The top ten weighted companies in the index are: AVIC Shenyang Aircraft (11.42%), Aero Engine Corporation of China (8.21%), AVIC Optical-Electrical Technology (8.05%), AVIC Xi'an Aircraft (6.48%), AVIC Aircraft (4.77%), Aerospace Electronics (4.33%), Haige Communications (4.16%), AVIC Chengfei (4.11%), Western Superconducting Technologies (3.8%), and AVIC High-Tech (3.63%) [2]. Group 3: Industry Breakdown - The industry composition of the index shows that 86.78% is in the industrial sector, 6.68% in materials, 4.16% in communication services, and 2.38% in information technology [2]. Group 4: Index Adjustment - The index samples are adjusted semi-annually, with adjustments occurring on the next trading day after the second Friday of June and December [3]. - Weight factors are generally fixed until the next scheduled adjustment, with special circumstances allowing for temporary adjustments [3]. Group 5: Investment Products - Public funds tracking the military industry leading index include the Fortune China Securities Military Industry Leading ETF [4].

Group 1 - The core viewpoint of the news is the performance and holdings of the Jiao Yin State-Owned Enterprise Reform Flexible Allocation Mixed A Fund, which has shown a recent net value increase of 1.04% [1] - The fund's recent one-month return is -0.06%, ranking 71 out of 73 in its category, while its six-month return is 8.76%, ranking 19 out of 72 [1] - Year-to-date, the fund has achieved a return of 6.18%, ranking 26 out of 72 in its category [1] Group 2 - The top ten stock holdings of the fund account for a total of 50.78%, with significant positions in SF Express (9.90%), China Chemical (6.04%), and ShouLve Hotel (5.44%) [1] - The fund was established on June 10, 2015, and as of March 31, 2025, it has a total scale of 1.802 billion yuan [1] - The fund manager is Shen Nan, who has been in this role since the fund's inception [2]

Core Viewpoint - The China Securities Central Enterprise New Momentum Theme Index has shown a mixed performance, with a recent increase in value but a year-to-date decline, reflecting the overall market dynamics and the performance of selected central enterprise stocks [1][2]. Group 1: Index Performance - The China Securities Central Enterprise New Momentum Theme Index opened high and fluctuated, rising by 0.5% to 1629.68 points, with a trading volume of 19.58 billion yuan [1]. - Over the past month, the index has increased by 3.32%, while it has risen by 4.02% over the last three months, but has decreased by 0.88% year-to-date [1]. Group 2: Index Composition - The index comprises 45 representative listed companies from central enterprises under the State-owned Assets Supervision and Administration Commission, focusing on manufacturing, technology, and modern service industries [1]. - The top ten weighted stocks in the index include Hikvision (9.61%), Changan Automobile (8.91%), AVIC Optoelectronics (7.0%), and others, indicating a concentration in specific companies [1]. Group 3: Market Segmentation - The index's holdings are primarily concentrated in the Shenzhen Stock Exchange (62.23%), followed by the Shanghai Stock Exchange (37.40%) and a minimal presence in the Beijing Stock Exchange (0.37%) [1]. - In terms of industry distribution, the index shows a significant allocation to industrials (45.87%) and information technology (37.72%), with smaller allocations to consumer discretionary (9.36%), communication services (4.62%), financials (1.60%), and materials (0.84%) [2]. Group 4: Index Adjustment Mechanism - The index samples are adjusted semi-annually, with changes implemented on the next trading day following the second Friday of June and December [2]. - Weight factors are generally fixed until the next scheduled adjustment, with provisions for temporary adjustments in special circumstances, such as delisting or corporate restructuring [2].

Group 1 - The core viewpoint of the news is the performance of the China Defense Index, which has shown significant growth over the past month, three months, and year-to-date, indicating a positive trend in the defense sector [1][2] - The China Defense Index has increased by 7.16% in the last month, 10.26% in the last three months, and 10.50% year-to-date, with a current value of 1589.12 points and a trading volume of 24.275 billion yuan [1] - The index comprises listed companies under the ten major military industrial groups and those providing weaponry and equipment to the armed forces, reflecting the overall performance of defense industry stocks [1] Group 2 - The top ten weighted stocks in the China Defense Index include AVIC Shenyang Aircraft (7.9%), AVIC Optoelectronics (6.1%), Aero Engine Corporation of China (6.0%), and others, indicating a concentration in specific companies [1] - The market distribution of the index shows that the Shanghai Stock Exchange accounts for 56.19% and the Shenzhen Stock Exchange for 43.81%, highlighting the geographical distribution of investments [2] - The industry composition of the index indicates that 75.06% is in the industrial sector, 12.42% in materials, 7.07% in information technology, and 5.45% in communication services, reflecting the focus on industrial applications [2]

Core Viewpoint - The China Securities Index for State-owned Enterprises in Aerospace Technology has shown a mixed performance in the A-share market, with a recent decline but positive growth over the past month, three months, and year-to-date [1] Group 1: Index Performance - The China Securities Index for State-owned Enterprises in Aerospace Technology closed at 2453.88 points, down 0.64% with a trading volume of 17.406 billion [1] - Over the past month, the index has increased by 7.20%, by 18.44% over the last three months, and by 6.34% year-to-date [1] Group 2: Index Composition - The index comprises 40 representative listed companies from state-owned enterprises involved in aerospace technology, including sectors such as aerospace equipment, materials, information, and security [1] - The index was established on December 28, 2018, with a base value of 1000.0 points [1] Group 3: Top Holdings - The top ten weighted companies in the index are: - Aero Engine Corporation (9.24%) - AVIC Xi'an Aircraft Industry (8.48%) - AVIC Optoelectronics (7.72%) - AVIC Shenyang Aircraft Corporation (5.98%) - Hongdu Aviation (4.66%) - Northern Navigation (4.23%) - AVIC Aircraft (3.95%) - AVIC High-tech (3.94%) - Aerospace Electronics (3.91%) - Zhongke Star Map (3.86%) [1] Group 4: Market Distribution - The market distribution of the index holdings shows that the Shanghai Stock Exchange accounts for 63.93%, the Shenzhen Stock Exchange for 35.46%, and the Beijing Stock Exchange for 0.60% [1] Group 5: Industry Breakdown - The industry composition of the index holdings is as follows: - Industrial sector: 82.67% - Materials sector: 5.83% - Information technology: 5.14% - Communication services: 4.70% - Consumer discretionary: 1.67% [2] Group 6: Sample Adjustment - The index samples are adjusted semi-annually, with adjustments occurring on the next trading day after the second Friday of June and December each year [2] - Weight factors are generally fixed until the next scheduled adjustment, with special circumstances allowing for temporary adjustments [2]

Group 1 - The core index of the aerospace and military industry, the China Securities Aerospace and Military Integration Index, experienced a slight decline of 0.06%, closing at 2045.92 points with a trading volume of 13.86 billion yuan [1] - Over the past month, the index has increased by 5.31%, by 7.83% over the last three months, and by 6.40% year-to-date [1] - The index includes leading companies related to the aerospace and military integration strategy, covering sectors such as aircraft, power and control systems, early warning systems, weapon systems, C4ISR systems, military digitalization, and aerospace materials [1] Group 2 - The top ten weighted companies in the index are: AVIC Shenyang Aircraft (9.35%), Aero Engine Corporation of China (7.0%), AVIC Optoelectronics (6.99%), AVIC Xi'an Aircraft (5.36%), AVIC Aircraft (4.07%), Aerospace Electronics (3.8%), Haige Communications (3.66%), Ruichuang Micro-Nano (3.48%), AVIC Chengfei (3.47%), and Western Superconducting (3.24%) [1] - The index's holdings are primarily from the Shanghai Stock Exchange (56.09%) and the Shenzhen Stock Exchange (43.91%) [2] - The industrial sector constitutes 72.33% of the index holdings, followed by materials (13.27%), information technology (8.07%), and communication services (6.33%) [2] Group 3 - Public funds tracking the aerospace and military industry include Penghua China Securities Aerospace and Military Integration C and Penghua China Securities Aerospace and Military Integration A [3]

Core Viewpoint - The demand for electrical connectors in China is significantly increasing due to the rapid development of 5G and 6G networks, the growth of the electric vehicle industry, and the evolution of consumer electronics, leading to a projected market size of 174.9 billion yuan in 2024, representing a year-on-year growth of 6.27% [1][14]. Market Overview - Electrical connectors are essential components for transmitting electrical signals between devices, systems, and components, widely used in telecommunications, automotive, consumer electronics, industrial control, and aerospace [2][4]. - The electrical connector market is supported by various government policies aimed at promoting the development of the electronic components industry, creating a favorable environment for growth [5][7]. Industry Chain - The upstream of the electrical connector industry includes suppliers of raw materials such as metals, plastics, and plating materials, while the downstream encompasses application markets in telecommunications, automotive, consumer electronics, and industrial control [8][10]. Market Demand - The telecommunications and automotive sectors are the primary demand markets for electrical connectors in China, accounting for over 40% of the market share in 2024. The automotive industry is experiencing significant growth, with production and sales increasing by 14.5% and 11.2% year-on-year, respectively [12][14]. Competitive Landscape - The electrical connector market is dominated by established international brands like Tyco and Amphenol, which have advantages in funding, technology, and global sales networks. However, domestic companies such as Luxshare Precision and AVIC Optoelectronics are gaining ground through competitive pricing and improved technology [16][18]. Key Companies - AVIC Optoelectronics specializes in high-end interconnection solutions and is projected to achieve a revenue of 20.69 billion yuan in 2024, with 78.3% of its revenue coming from electrical connectors [18]. - Luxshare Precision focuses on providing integrated manufacturing solutions for consumer electronics and automotive products, with an expected revenue of 268.8 billion yuan in 2024, where consumer electronics account for 83.37% of its revenue [20]. Development Trends - Future trends in the electrical connector market include the need for higher transmission speeds, lower signal delays, and better electromagnetic compatibility, driven by advancements in 5G, big data, and cloud computing technologies. There is also a push towards miniaturization and high-density designs to meet the demands of modern consumer electronics [22].

Investment Rating - The report rates the military industry as "Buy" [1] Core Viewpoints - The military industry is expected to perform well in the long term due to increasing great power competition and rising defense expenditures [3][9][10] - A grand military parade is scheduled for September 3, 2025, showcasing domestic military equipment and advancements [8][20] - Japan is set to deploy F-35B stealth fighters as early as August, indicating a shift in regional military dynamics [8][10] Summary by Sections Investment Highlights - Key investment areas include: 1. Assembly: AVIC Shenyang Aircraft Corporation, Aerospace South Lake, AVIC Xi'an Aircraft Industry [4] 2. Components: AVIC Optoelectronics, Guobang Electronics, Ruichuang Micro-Nano [4] 3. Subsystems: AVIC Avionics, North Navigation [4] 4. Materials and Processing: Feilihua, Guangwei Composite, Huaqin Technology, Bolite, Western Materials, Aviation Materials [4] - Notable stocks include: - Assembly: Aerospace Rainbow, AVIC Chengfei [4] - Components: Unisoc, Aerospace Electric, Hongyuan Electronics, Zhenhua Technology, Torch Electronics [4] - Subsystems: Aero Engine Corporation, Jianghang Equipment [4] - Materials and Processing: AVIC Heavy Machinery, AVIC High-Tech, Western Superconducting, Aerospace Technology [4] Market Review - The military sector saw a 7.46% increase last week, outperforming the market by 5.54 percentage points [12][13] - The Shanghai Composite Index rose by 1.91%, while the ChiNext Index increased by 5.69% [12][13] - The China Securities National Security Index performed the best, rising by 8.31% [16] Major News in the Military Industry - The Shanghai Cooperation Organization defense ministers' meeting was held in Qingdao, emphasizing regional security cooperation [20] - The upcoming military parade will feature all domestically produced active combat equipment, highlighting advancements in military capabilities [21][23] - The focus of the parade will be on commemorating the victory in the Anti-Japanese War and showcasing the modernization of the military [24][25]

Core Viewpoint - The high-end equipment sector is experiencing mixed performance, with specific stocks showing significant gains while others decline, indicating a volatile market environment [1][4]. Group 1: Market Performance - As of July 3, 2025, the CSI High-End Equipment Sub-Index decreased by 0.07%, with stocks like Jiuziyang rising by 18.64% and China Haifang leading the decline [1]. - The High-End Equipment ETF (159638) saw a turnover of 2.07% during the trading session, with a total transaction value of 24.12 million yuan [3]. - Over the past week, the average daily transaction value of the High-End Equipment ETF was 83.12 million yuan, with the latest fund size reaching 1.158 billion yuan [3]. Group 2: Investment Trends - Leveraged funds are increasingly investing in the high-end equipment sector, with the latest margin buying amounting to 2.36 million yuan and a margin balance of 20.91 million yuan [3]. - The High-End Equipment ETF has shown a net value increase of 27.22% over the past year, with the highest single-month return recorded at 19.30% [3]. Group 3: Industry Outlook - The military industry is expected to experience three growth curves: domestic demand focusing on low-cost precision-guided munitions, unmanned systems, and information technology; military trade demand potentially surging due to regional conflicts; and broader military demand in areas like large aircraft, low-altitude economy, commercial aerospace, and deep-sea technology [3][4]. - China's defense spending is projected to grow significantly, likely outpacing GDP growth, with 2025 marking a turning point for the industry as it emerges from a period of stagnation [4]. - The top ten weighted stocks in the CSI High-End Equipment Sub-Index account for 45.22% of the index, indicating concentrated investment in key players like AVIC Shenyang Aircraft and AVIC Engine [4][6].