Core Insights - The Shanghai Composite Index rose by 0.66% on August 4, with the total margin trading balance reaching 1,991.31 billion yuan, an increase of 11.456 billion yuan from the previous trading day [1] Margin Trading Overview - As of August 4, the margin trading balance in the Shanghai market was 1,014.72 billion yuan, up by 6.534 billion yuan; in the Shenzhen market, it was 970.35 billion yuan, increasing by 4.912 billion yuan; and in the Beijing Stock Exchange, it was 6.244 billion yuan, up by 0.96997 million yuan [1] - The total margin trading balance across Shanghai, Shenzhen, and Beijing markets combined was 1,991.31 billion yuan, reflecting an increase of 11.456 billion yuan [1] Industry Performance - Among the industries tracked by Shenwan, 26 sectors saw an increase in margin trading balances, with the pharmaceutical and biological sector leading with an increase of 1.367 billion yuan; followed by machinery and electrical equipment sectors with increases of 1.228 billion yuan and 1.043 billion yuan, respectively [1] Individual Stock Performance - A total of 1,999 stocks experienced an increase in margin trading balances, accounting for 53.85% of the total; 350 stocks had an increase exceeding 5% [1] - The stock with the highest increase in margin trading balance was Longzhu Technology, which saw a balance of 10.5554 million yuan, up by 178.58% from the previous trading day, and its stock price rose by 5.79% [1] - Other notable stocks with significant increases included Beifang Changlong and Shanshi Network Technology, with increases of 43.96% and 36.81%, respectively [1] Top Gainers and Losers - Among the top 20 stocks with the highest increase in margin trading balances, the average increase in stock prices was 5.75%, with Beifang Changlong, Jinke Environment, and Xingyun Co., Ltd. leading with increases of 20.00%, 15.30%, and 14.90%, respectively [2] - Conversely, the stocks with the largest declines included Dingjia Precision, Poli Clean, and Keli Co., Ltd., with declines of 4.91%, 1.92%, and 0.83%, respectively [2] Margin Trading Balance Changes - The top 20 stocks with the largest increases in margin trading balances included Longzhu Technology, Beifang Changlong, and Shanshi Network Technology, with respective increases of 178.58%, 43.96%, and 36.81% [3][4] - In contrast, 1,713 stocks saw a decrease in margin trading balances, with 178 stocks experiencing declines exceeding 5%; the largest decline was observed in Hongyu Packaging, which saw a decrease of 64.96% [4][5] - Other significant declines were noted in Feilihua and Tiancheng Technology, with decreases of 26.56% and 22.93%, respectively [4][5]

Group 1 - The "drone swarm + robotic dog" collaborative system has been showcased, with Kesi Technology's control chip achieving millisecond-level response for hundreds of devices, and the procurement budget for a single system exceeding 50 million yuan [1] - As of August 4, 2025, the CSI Defense Index (399973) rose by 0.56%, with notable increases in constituent stocks such as Haige Communication (002465) up 3.11% and AVIC Aircraft (600038) up 2.29% [1] Group 2 - The current "14th Five-Year Plan" is nearing its conclusion, and the upcoming September 3 military parade is expected to catalyze a significant reshaping of the military industry sector, which has shown a strong upward trend recently [2] - The military industry is anticipated to enter a new phase of growth and value, moving away from previous cyclical fluctuations driven solely by events, supported by the strategic goal of building a world-class military by 2050 [2] Group 3 - The Defense ETF closely tracks the CSI Defense Index, which includes listed companies under the ten major military groups and those providing weaponry to the armed forces, reflecting the overall performance of defense industry stocks [3] - As of July 31, 2025, the top ten weighted stocks in the CSI Defense Index accounted for 43.88% of the index, with companies like AVIC Shenyang Aircraft (600760) and AVIC Engine (600893) among the leaders [3]

Group 1 - On August 1, among the 31 first-level industries tracked by Shenwan, 11 industries experienced net financing inflows, with the pharmaceutical and biotechnology sector leading at a net inflow of 477 million yuan [1] - Other industries with significant net financing inflows included media, defense and military industry, petroleum and petrochemicals, food and beverage, and real estate, with net inflows of 389 million yuan, 348 million yuan, 204 million yuan, 141 million yuan, and 109 million yuan respectively [1] Group 2 - A total of 1,591 individual stocks received net financing inflows on August 1, with 119 stocks having net inflows exceeding 30 million yuan [1] - Among these, 14 stocks had net financing inflows exceeding 100 million yuan, with Kweichow Moutai leading at 286 million yuan [1] - Other notable stocks with high net inflows included Yidian Tianxia, Yingweike, Ruikeda, Feilihua, Tianfu Communication, Jianghuai Automobile, Zhaoyi Innovation, and China National Petroleum Capital, with net inflows of 278 million yuan, 263 million yuan, 243 million yuan, 179 million yuan, 173 million yuan, 172 million yuan, 163 million yuan, and 160 million yuan respectively [1]

Investment Rating - The report suggests a positive outlook on Sichuan Road and Bridge as a leading player in Southwest infrastructure, highlighting its current combination of regional infrastructure growth and dividend yield [3][15]. Core Insights - The report emphasizes the importance of local manufacturing in Africa, particularly for companies like Keda Manufacturing, which is positioned as a leader in localized production and sales [4][16]. - The report notes a price increase in RTF copper foil, indicating a high demand for HVLP products, and suggests continued investment in copper foil and electronic cloth sectors [5][17]. - The report tracks the performance of various materials, indicating a downward trend in cement prices and a mixed outlook for glass and fiberglass markets [6][18][22]. Summary by Sections Weekly Discussion - Sichuan Road and Bridge is highlighted for its strong position in Southwest infrastructure, with a reported investment of 134.9 billion yuan in transportation construction, ranking second nationally and showing a 3.5% increase year-on-year [3][15]. Cyclical Linkage - Cement prices averaged 340 yuan per ton, down 43 yuan year-on-year, with an average shipment rate of 44.7% [6][18]. - Glass prices increased to 1295.28 yuan per ton, reflecting a 4.58% rise, while concrete mixing stations reported a capacity utilization rate of 7.12% [6][18]. - The report warns of potential price declines in steel due to market fundamentals [6][18]. National Subsidy Tracking - The report mentions the allocation of 690 billion yuan for consumer goods replacement subsidies, with plans for further funding in October [7][19]. Important Changes - Notable acquisitions include Defu Technology's purchase of Circuit Foil Luxembourg for 174 million euros and the listing of Hanhai Group on the A-share market [8][20][21]. Market Performance - The construction materials index fell by 3.96% over the week, with specific declines in glass manufacturing and fiberglass sectors [24]. Material Price Changes - Cement prices continued to decline, with a national average of 340 yuan per ton, while glass prices showed a slight increase [32][41]. - Fiberglass prices remained under pressure, with a reported average of 3595.25 yuan per ton [66].

Investment Rating - The report does not explicitly state an investment rating for the defense and military industry but highlights a positive outlook for long-term growth potential [4]. Core Insights - The defense and military industry is expected to experience a recovery in demand as the "14th Five-Year Plan" approaches its final year, with a clear directive for modernization by 2035 and a world-class military by 2050 [4]. - The report emphasizes the significant impact of AI technology on military equipment and decision-making, showcasing its transformative value in modern warfare, particularly highlighted by the ongoing Russia-Ukraine conflict [2][39]. - The report identifies specific investment opportunities in the military sector, particularly in AI applications, low-altitude economy developments, and the upcoming commissioning of the Fujian aircraft carrier [3][38]. Summary by Sections Market Review - The defense and military index rose by 0.08% last week, ranking 6th among 31 primary industries, while the overall market indices declined [2][13]. - The current PE (TTM) for the defense and military sector is 84.92, with sub-sectors showing varied valuations, such as aerospace equipment at 146.02 and ground armaments at 189.72 [2][21]. Key Recommendations - The report recommends focusing on companies involved in downstream manufacturing, military technology, underwater equipment, missile supply chains, titanium materials, electronic components, and laser weapons [4]. - Specific companies highlighted include Hongdu Aviation, AVIC Shenyang Aircraft, and Reicoh Laser among others [4]. Industry Dynamics - The report discusses the emergence of low-altitude economy opportunities, driven by recent policy initiatives and technological advancements in drone logistics and infrastructure [3][32][37]. - The military AI sector is identified as a core growth driver, with expectations for a surge in orders for AI-enabled equipment by 2025 [40].

Investment Rating - The report maintains an "Outperform" rating for the industry [1]. Core Insights - The report highlights that AI is driving upgrades in upstream materials for PCB, with quartz fabric reshaping the competitive landscape and leading companies emerging [1]. Summary by Sections Section 1: Copper Clad Laminate (CCL) - The performance requirements for CCL are increasing due to enhanced computational efficiency [3]. - CCL is an essential material in PCB manufacturing, made from reinforced materials like glass fiber cloth and resin, coated with copper foil [8]. - High-frequency and high-speed CCL are designed for high-frequency signal transmission, requiring low dielectric constant and loss [11]. - The demand for CCL is expected to rise as AI development and data transmission speeds increase, with Df values projected to drop below 0.006 [16]. - The PCB industry is projected to grow approximately 5% year-on-year in 2024, with the global server PCB market expected to reach $16 billion by 2026, reflecting a CAGR of 12.8% from 2022 to 2026 [19]. Section 2: Electronic Fabric - The quality requirements for electronic-grade glass fiber fabric are high, with Low-Dk electronic yarn being a core material for high-frequency PCBs [34]. - Different grades of electronic fabric have varying performance indicators, with Q fabric currently being the best choice [38]. - The demand for electronic fabric is increasing due to the high-performance requirements of AI servers and 5G base stations [48]. Section 3: Quartz Fiber - Quartz fiber, with a silica content of over 99.90%, exhibits excellent thermal resistance and electrical insulation properties, making it suitable for aerospace, military, and semiconductor applications [58]. - The production of high-purity quartz fiber involves complex processes, and companies like Feilihua have established significant capabilities in this area [66][72]. - The competitive landscape for quartz fiber is evolving, with high-purity quartz fibers expected to dominate the third-generation electronic fabric market [59].

- The report introduces a quantitative model named "250-Day New High Distance" to track market trends and identify leading stocks. The model calculates the distance between the latest closing price and the highest closing price over the past 250 trading days using the formula: $ 250\text{-Day New High Distance} = 1 - \frac{\text{Close}_{t}}{\text{ts\_max(Close, 250)}} $ where $\text{Close}_{t}$ represents the latest closing price, and $\text{ts\_max(Close, 250)}$ is the maximum closing price in the past 250 trading days. If the latest closing price reaches a new high, the distance equals 0; otherwise, it indicates the percentage drop from the peak[10][11][12] - The report evaluates the model positively, citing its ability to capture momentum and trend-following strategies effectively. It references prior research, such as [George@2004] and insights from investment books like "Stock Market Wizard," which emphasize the importance of tracking stocks near their 52-week highs[10][18][21] - The report applies the model to major indices, showing their respective 250-Day New High Distances as of August 1, 2025: - Shanghai Composite Index: 1.54% - Shenzhen Component Index: 4.38% - CSI 300: 4.73% - CSI 500: 2.25% - CSI 1000: 1.53% - CSI 2000: 1.08% - ChiNext Index: 8.93% - STAR 50 Index: 7.99%[11][12][33] - The report identifies industries and concept indices close to their 250-Day New Highs, such as Media, Communication, Pharmaceuticals, Defense, and Steel. Concept indices like Wind Microcap Equal Weight, Electronic Equipment, CRO, and Innovative Drugs also show proximity to their 250-Day New Highs[12][14][33] - The report tracks stocks that have reached 250-Day New Highs in the past 20 trading days. A total of 1,239 stocks are identified, with the highest counts in industries like Pharmaceuticals (192 stocks), Machinery (169 stocks), and Basic Chemicals (132 stocks). The highest proportions are found in Banking (64.29%), Steel (56.60%), and Nonferrous Metals (41.94%)[19][20][34] - The report introduces a factor named "Stable New High Stocks," which selects stocks based on criteria such as analyst attention, relative price strength, price path smoothness, and sustained new highs. Specific metrics include: - Analyst attention: At least five buy or overweight ratings in the past three months - Relative price strength: Top 20% in 250-day returns - Price path smoothness: Evaluated using metrics like cumulative absolute daily returns over 120 days - Sustained new highs: Average 250-Day New High Distance over the past 120 days - Trend continuation: Average 250-Day New High Distance over the past five days[24][27][28] - The report lists 50 stocks selected as "Stable New High Stocks," with the highest counts in Manufacturing (15 stocks) and Technology (14 stocks). Examples include Shenghong Technology, Borui Pharmaceuticals, and Feilihua[28][32][34]

Market Overview - The A-share market experienced a technical adjustment with all three major indices slightly declining, reflecting a market structure that necessitates a pullback after rapid gains [2][9] - The Shanghai Composite Index fell by 0.37%, the Shenzhen Component Index by 0.17%, and the ChiNext Index by 0.24%, with over 3,300 stocks rising throughout the market [1][2] Sector Performance - The pharmaceutical sector showed resilience, with companies like Angli Kang (002940) and Weikang Pharmaceutical (300878) hitting the daily limit [1] - The photovoltaic sector rebounded, supported by regulatory measures aimed at enhancing energy efficiency in the polysilicon industry, leading to price stabilization across the supply chain [3] - The logistics and express delivery sector strengthened due to recent regulatory discussions aimed at promoting high-quality development and addressing competitive issues [4] Investment Trends - The innovation drug sector continues to thrive, with a positive outlook for Chinese innovative drugs entering international markets, although short-term volatility may increase [5] - Financing balance in A-shares reached a ten-year high of 1.971 trillion yuan, indicating strong market risk appetite, with net purchases exceeding 130 billion yuan in July [6][7] - A significant portion of the financing activity was concentrated in the pharmaceutical, electronics, and non-ferrous metals sectors, with notable net purchases [7][8] Future Outlook - Analysts suggest that despite the current technical adjustments, the medium-term upward trend in A-shares remains intact, with average P/E ratios indicating a favorable environment for long-term investments [9] - Investment strategies should focus on high-growth technology sectors, industries with strong earnings support, and potential opportunities arising from policy changes [10]

Group 1 - In July, the financing balance increased by over 130 billion yuan, marking the highest monthly growth in financing balance for the year [2] - Six industries attracted over 10 billion yuan in net financing, including electronics, pharmaceuticals, electric equipment, non-ferrous metals, computers, and non-bank financials [2] - The top three industries by net financing in July were electronics (14.7 billion yuan), pharmaceuticals (14.1 billion yuan), and electric equipment (12.7 billion yuan) [2] Group 2 - Among individual stocks, nine stocks saw net financing exceeding 1 billion yuan, with notable mentions being Xinyi Technology, Northern Rare Earth, and Shenghong Technology [2][3] - Xinyi Technology experienced a nearly 50% increase in July, with its stock price nearly doubling over the past two months [3] - The top five stocks with the highest net selling amounts included Wuliangye, Sunshine Power, BeiGene, Muyuan Foods, and Hengli Petrochemical, each exceeding 300 million yuan [3] Group 3 - As of July 30, six companies had financing balances exceeding 10 billion yuan, including Dongfang Wealth, China Ping An, Kweichow Moutai, CITIC Securities, BYD, and Yangtze Power, all of which are large-cap blue-chip stocks [3]

Market Overview - The market continued to rise in July, supported by both policy and liquidity[5] - Policies aimed at "anti-involution" have led to higher elasticity in commodity prices, driving cyclical industries to lead the market[5] - Future focus will remain on liquidity support and the gradual increase in risk appetite, although the likelihood of market adjustments is rising[5] Investment Recommendations - The "Golden Stock Portfolio" has achieved a year-to-date return of 30.37%[15] - Key recommended stocks include: - China Pacific Insurance (601601.SH) - Innovent Biologics (1801.HK) - Bairun Food (002568.SZ) - Muyuan Foods (002714.SZ) - Filihua (300395.SZ) - CATL (300750.SZ) - Hubei Yihua (000422.SZ) - Luoyang Molybdenum (603993.SH) - Conch Cement (600585.SH) - North Huachuang (002371.SZ)[12] Risk Factors - Risks include macroeconomic performance falling short of expectations, policy implementation delays, and overseas expansion not meeting projections[12]