Core Viewpoint - The article highlights the accelerated rebound of A-shares in Q2, emphasizing the critical role of foreign public funds' portfolio adjustments in this context [1] Group 1: Foreign Fund Adjustments - Major foreign public funds such as JPMorgan, BlackRock, and Morgan Stanley have revealed their portfolio adjustments for Q2 2025, indicating a shift in their market expectations [1] - Notably, the significant increase in stock market value for funds like LGM and LGT, with growth rates of 491.66% and over 340% respectively, showcases a more aggressive adjustment strategy compared to traditional players [2] - The focus of these funds has shifted towards "core assets" in the technology sector, with companies like Xinyiseng and Shenghong Technology becoming key targets for investment [2][3] Group 2: Investment Strategies - The current round of foreign investment is characterized by a focus on "industrial hubs" rather than just technology, with companies spanning multiple segments of the hardware supply chain being prioritized [3] - Leading institutions like JPMorgan and Morgan Stanley have adopted a more stable investment approach, maintaining significant positions in high-profit assets while balancing short-term themes with mid-term fundamentals [4][5] - The strategy of Morgan Stanley emphasizes "performance first," focusing on sectors like AI chips and pharmaceuticals, which are expected to deliver consistent profits [5] Group 3: Core Assets and Defensive Positions - Despite a trend of reducing positions in the pharmaceutical sector, Morgan Stanley continues to hold substantial stakes in innovative pharmaceutical companies, indicating a belief in their long-term potential [5][6] - Foreign funds are maintaining or increasing their holdings in core financial and consumer assets such as Kweichow Moutai and China Ping An, which serve as stable anchors in their portfolios [6] Group 4: Localization of Investment Strategies - The article notes a shift in foreign funds from a mechanical strategy of "low valuation + large blue chips" to a more localized approach that adapts to the high volatility and rotation of the Chinese market [7] - Funds like BlackRock are demonstrating a dual-driven strategy of thematic flexibility and fundamental stability, indicating a more nuanced approach to portfolio construction [7][8] - New entrants like Fidelity and Allianz are exploring innovative small-cap technology stocks, reflecting a strategy aimed at identifying future consensus assets [8]

Investment Rating - The report maintains a positive investment rating for the electronic industry, highlighting a historical high in allocation and overweight ratios for active equity funds [10][24]. Core Insights - The electronic industry saw a record allocation ratio of 19.11% in Q2 2025, with an overweight ratio of 7.73%, indicating strong confidence from institutional investors [10][24]. - The semiconductor sector is emphasized as a key area for investment, driven by domestic supply chain localization and improving fundamentals [27][28]. - AI PCB is identified as a core investment direction due to its high demand and growth potential linked to AI server deployments [18][34]. Summary by Sections Public Fund Allocation - In Q2 2025, the allocation ratio for the electronic industry reached 19.11%, ranking first among all sectors, with a slight increase of 0.01 percentage points from the previous quarter [10][24]. - The electronic sector's overweight ratio also reached a historical high of 7.73%, reflecting strong institutional interest [10][24]. Sub-Industry Analysis Semiconductor - The semiconductor sector's allocation ratio was 9.53%, accounting for 53.65% of the total industry allocation, despite a decrease of 0.7 percentage points [24][27]. - Key companies in this sector include SMIC, North Huachuang, and Zhaoyi Innovation, with significant increases in their market values [27][28]. Consumer Electronics - The consumer electronics sector's allocation ratio was 4.03%, with a decrease of 0.61 percentage points, reflecting some valuation pressures due to tariff uncertainties [24][31]. - Major players include Xiaomi and Luxshare Precision, with notable growth in their market values despite the overall sector challenges [31][32]. Components - The components sector saw an increase in allocation ratio to 2.92%, with a significant rise of 1.07 percentage points, driven by AI PCB demand [24][34]. - Key companies include Shenghong Technology and Huadian, which experienced substantial growth in their market values [34]. Investment Recommendations - The report suggests focusing on AI PCB, semiconductor self-sufficiency, and the Apple supply chain as key investment areas, anticipating strong growth in ASIC demand and related technologies [18][34].

Investment Rating - The report maintains a "Positive" outlook on the Low Dk electronic fabric industry, highlighting significant growth potential driven by high-speed transmission demands [4][6]. Core Insights - The demand for Low Dk electronic fabric is driven by the need for high-speed transmission, particularly in AI servers and data centers, which are expected to become core growth points for the industry [5][7]. - The Low Dk electronic fabric industry chain presents opportunities across all segments, with a focus on high-barrier core areas such as quartz fiber manufacturing, Low Dk electronic fabric production, and high-frequency copper-clad laminate (CCL) manufacturing [6][8]. Summary by Sections 1. High-Speed Transmission Demand - Low Dk electronic fabric is essential for ensuring the structural safety and signal transmission quality of copper-clad laminates, with data centers and servers being key growth areas [16][18]. - The increasing penetration of AI servers is driving the demand for high-speed switches and optical modules, necessitating the use of Low Dk materials to reduce dielectric loss [23][25]. 2. Industry Chain Highlights - **Upstream**: Quartz fiber is identified as a critical component, with few manufacturers capable of mass production, giving companies like 菲利华 a competitive edge [39][44]. - **Midstream**: Leading manufacturers are rapidly expanding production capacity for Low Dk electronic fabrics, with companies like 中材科技 and 宏和科技 making significant advancements [47][48]. - **Downstream**: Attention is drawn to CCL manufacturers that supply to the NVIDIA chain, as their product development and testing progress will significantly impact market share [5][8]. 3. Recommended Core Stocks - **Upstream**: Focus on quartz fiber suppliers such as 菲利华 [6][17]. - **Midstream**: Monitor companies like 中材科技 and 宏和科技 that are expanding their Low Dk electronic fabric production capabilities [6][18]. - **Downstream**: Keep an eye on high-frequency CCL manufacturers like 生益科技 and 胜宏科技 [6][20].

Group 1 - The AI PC concept index rose by 1.99%, ranking 7th among concept sectors, with 32 stocks increasing in value, including TaiJia Co., which hit the daily limit, and YunCong Technology, JingWang Electronics, and DangHong Technology, which rose by 11.13%, 6.64%, and 6.55% respectively [1] - The AI PC sector saw a net inflow of 983 million yuan from main funds, with 26 stocks receiving net inflows, and 6 stocks attracting over 50 million yuan, led by ShengHong Technology with a net inflow of 211 million yuan [2][3] - The top three stocks by net inflow ratio were TaiJia Co. at 20.30%, China Great Wall at 11.47%, and DangHong Technology at 8.90% [3] Group 2 - The Sora concept (text-to-video) led the day's gains with an increase of 2.98%, while the Hainan Free Trade Zone saw a decline of 3.77% [2] - Other notable concept sectors included photolithography at 2.79% and multi-modal AI at 2.30%, while the underground pipeline sector fell by 1.80% [2] - The AI PC concept was among the top gainers, reflecting strong market interest and investment activity [1][2]

Key Points - The report highlights a selection of stocks for July, including companies such as Binjiang Group (002244.SZ) and SF Holding (002352.SZ) as part of the recommended investment portfolio [1] - The establishment of China Fusion Energy Co., Ltd. marks a significant step in the commercialization of fusion energy in China, with a capital increase of 11.5 billion yuan from seven state-owned enterprises [2][7][9] - The fusion company aims to develop fusion energy through a phased approach, focusing on magnetic confinement Tokamak technology, with the goal of achieving commercial application [8][10] - The report discusses the acquisition plan by GoerTek to purchase 100% equity of Mega Precision Technology Limited and Channel Well Industrial Limited for approximately 9.5 billion yuan, which is expected to enhance the company's performance [3][12][13] - The report emphasizes the strong competitive position of the target companies in the precision metal components sector, which is crucial for high-tech industries [14]

Key Insights - The report highlights a focus on the humanoid robot industry, which has seen a significant increase in market attention, with the National Securities Robot Industry Index rising by 7.6% from July 7 to July 18, 2025 [6][8] - Major factors driving this resurgence include substantial orders from leading companies, capital acquisitions, influential statements from industry leaders, and supportive government policies aimed at fostering innovation in humanoid robotics [7][8] - The report also notes that the active equity fund median position reached 90.63% in Q2 2025, indicating a historical high and a shift towards increased allocations in TMT, Hong Kong stocks, and machinery sectors [9][10] Humanoid Robot Industry - The humanoid robot market is experiencing a revival, with key players like China Mobile placing significant orders, which serve as a validation of product functionality and market readiness [6][7] - The report identifies a trend of increased capital activity, with companies pursuing mergers and acquisitions to enhance their market positions [7] - Government initiatives are also playing a crucial role, with policies aimed at promoting the development of humanoid robots and related technologies [8] Active Equity Fund Analysis - The report indicates that the highest allocation sectors for active equity funds in Q2 2025 were TMT (23.37%), Hong Kong stocks (20.41%), and machinery (19.68%), reflecting a strategic shift in investment focus [9][10] - The report emphasizes that the current allocation levels are above historical averages for several sectors, indicating a bullish sentiment among fund managers [9][10] AI Computing Industry - The AI computing supply chain is entering a phase of maturity, driven by advancements in generative AI and large language models, leading to a closure of the demand-supply loop [11][12] - The report highlights that the infrastructure for AI computing is expected to see continued investment, with significant growth in demand for high-end AI servers [12][13] - The competition in the PCB industry is intensifying due to the rising demand for AI servers, with a projected 150% increase in demand for high-density interconnect (HDI) boards [13]

Market Performance - In Q2 2025, major A-share indices generally rose, with the North Star 50 increasing by 13.85% and the Shanghai Composite Index rising by 3.26%[13][17] - The top five performing sectors included Comprehensive Finance (32.16%), National Defense and Military Industry (16.03%), and Banking (12.62%) while the worst performers were Food and Beverage (-5.13%) and Home Appliances (-3.45%) [17][18] Fund Issuance and Positioning - A total of 66 equity-oriented active funds were established in Q2 2025, with a total share of 338.57 billion, marking an increase in issuance compared to the previous quarter[2][25] - The average stock positions of various types of equity-oriented active funds increased, with mixed equity funds reaching an average position of 88.46%[29] Sector and Stock Holdings - The top five sectors with increased holdings were Communication, Banking, National Defense and Military Industry, Non-Bank Financials, and Media, with Communication and Banking seeing increases of over 1%[4][42] - The top five stocks with the largest increases in holdings were Zhongji Xuchuang, Xinyi Sheng, Hudian Co., Shenghong Technology, and SF Express, while the largest reductions were seen in BYD, Kweichow Moutai, and Wuliangye[5][43] Billion Fund Holdings - The largest changes in holdings among billion-dollar funds were observed in SF Express, Xinlitai, and Ningde Times, with the National Defense and Military Industry sector seeing a significant increase from 0 to 10.76 billion[6] Southbound Capital Analysis - In Q2 2025, the top five stocks held by southbound funds included Tencent Holdings, Xiaomi Group, and Alibaba, with notable increases in holdings for Sinda Biopharmaceuticals and Pop Mart[7]

Core Viewpoint - The computing power sector, likened to "water, electricity, and coal" in the AI field, has become a new favorite among public funds, with significant increases in holdings of four computing power concept stocks in Q2 2025 [1][2]. Group 1: Fund Holdings and Performance - In Q2 2025, active equity funds significantly increased their holdings in four computing power stocks: Zhongji Xuchuang, Xinyi Sheng, Hudian Co., and Shenghong Technology, with the first two being leaders in optical modules and the latter two being core suppliers of printed circuit boards (PCBs) [1]. - As of June 30, 2025, Shenghong Technology entered the top 20 holdings of public active equity funds, with over 300 funds holding a combined market value of approximately 13.2 billion yuan, accounting for about 11.5% of its circulating shares [3]. - The stock price of Shenghong Technology has surged, with a cumulative increase of over 300% since the beginning of the year, and over 1000% since its low in early February 2024 [1][2]. Group 2: Market Trends and Drivers - The high demand for AI chips, particularly GPUs, has directly catalyzed the stock price of Shenghong Technology, as the GPU market's growth is expected to drive demand for optical modules and PCBs [2]. - The computing power sector is experiencing a high boom, with significant increases in the number of funds holding stocks in this sector, particularly for Xinyi Sheng and Zhongji Xuchuang, which have also seen substantial increases in their stock prices [8][9]. Group 3: Future Outlook - Fund managers express optimism about the computing power sector, noting that while cloud computing has seen significant gains, adjustments and volatility are expected in the future [11]. - The ongoing development of artificial intelligence is anticipated to sustain high demand for the computing power supply chain, with expectations of continued growth in the sector driven by advancements in AI applications and increased capital expenditure [12][13]. - There is a strong belief in the potential of Chinese companies to innovate in foundational models, core algorithms, and advanced chips, which could lead to significant advancements in the global AI landscape [14].

Investment Rating - The industry investment rating is "Overweight" as the report anticipates that the interconnection bandwidth demand will experience rapid growth due to the "multiplier effect" [4][90]. Core Insights - The report identifies four major trends in the AI computing interconnection sector: 1. Computing hardware demand is shifting from being anchored to cloud vendors' CapEx to being anchored to the number of tokens processed. 2. The landscape of computing chips is evolving from reliance on GPUs to a coexistence of GPUs and ASICs. 3. Technological iterations are transitioning from product-level upgrades (like optical modules, PCBs, switches, and network cards) to overall upgrades at the network architecture level. 4. The focus of network interconnection upgrades is expanding from Scale Out to Scale Up, enhancing both types of networks and increasing single-chip bandwidth [5][81][85]. Summary by Sections Section 1: Market Trends - The demand for computing power is increasingly linked to the number of tokens processed rather than just cloud vendor capital expenditures [5][81]. - The growth of AI models has led to a significant increase in the demand for high-bandwidth, low-latency interconnections, particularly in the context of large-scale AI training [21][25]. Section 2: Product Innovations - New products like Sora and GB200 are driving demand for multimodal inference, with Sora requiring significantly more inference computing power compared to previous models [27][35]. - The report highlights that the performance of new interconnection technologies, such as GB200, is substantially superior to older models, enhancing overall computational efficiency [75][76]. Section 3: Capital Expenditure Trends - Capital expenditures from major cloud service providers (CSPs) are expected to continue increasing, with a notable shift towards AI computing capabilities [35][37]. - The report estimates that the ratio of NVIDIA's data center revenue from cloud vendors to the capital expenditures of five major cloud vendors has increased from 5% in Q1 2023 to approximately 30% by the second half of 2024 [37][38]. Section 4: Investment Opportunities - The report suggests that various interconnection methods, including optical, copper, and PCB connections, are likely to benefit from the anticipated growth in interconnection demand. Key companies identified include: - Optical interconnection: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, Yuanjie Technology, Changguang Huaxin, Changxin Bochuang, Shijia Photon, Zhizhi Technology, Taicheng Light. - Copper interconnection: Zhaolong Interconnection, Zhongji Xuchuang, Hongteng Precision. - PCB: Shenghong Technology, Jingwang Electronics, Hudian Co., Shengyi Technology [4][90].

Group 1 - The balance of margin financing and securities lending has increased to 1.93 trillion yuan, with a month-on-month growth of 153.54 billion yuan, marking two consecutive days of growth exceeding 150 billion yuan [1] - The financing balance has risen to 1.92 trillion yuan, with a month-on-month increase of 150.48 billion yuan, while the securities lending balance has reached 136.59 billion yuan, increasing by 3.07 billion yuan [1] - The A-share market closed up 0.62% at 3581.86 points, with the trading volume in the Shanghai, Shenzhen, and Beijing markets rising to 1.93 trillion yuan, a month-on-month increase of 201.5 billion yuan [1] Group 2 - The top ten stocks with net financing purchases include Zhengjin Bond (1.304 billion yuan), Shenghong Technology (526 million yuan), Short-term Bond ETF (503 million yuan), Sany Heavy Industry (431 million yuan), and TBEA (357 million yuan) [1] - The stocks favored by leveraged funds are concentrated in sectors such as engineering machinery, state-owned capital holdings, new energy vehicles, the Belt and Road Initiative, and 5G concepts [2] Group 3 - The top ten stocks with net financing sales include Zhongyou Capital (-422 million yuan), Shenghe Resources (-178 million yuan), and Ningde Times (-118 million yuan) [3]