1. Report Industry Investment Rating No information provided regarding the industry investment rating in the report. 2. Core Viewpoints of the Report - In July, the equity market rose significantly, but convertible bonds underperformed underlying stocks. The CSI Convertible Bond Index rose 3.83% from July 1 - 30, while the CSI All - Share Index rose 5.8%. Year - to - date, the CSI Convertible Bond Index and the CSI All - Share Index increased by 11.11% and 10.33% respectively [4]. - The healthcare sector was strong, and convertible bonds followed the upward trend but still underperformed underlying stocks. The healthcare and information technology convertible bond indices had the best performance in July, with increases of 7.82% and 7.13% respectively. The financial convertible bond index only rose 0.47% this month, while the underlying stocks rose 3.69% [5]. - Due to the significant rise of underlying stocks, the double - low strategy significantly underperformed the high - price and low - premium strategy in July. The double - low strategy index only rose 2.36% in July and 9.12% year - to - date, while the high - price and low - premium strategy rose 7.29% in July and 13.75% year - to - date [41]. 3. Summary by Relevant Catalogs 3.1 Convertible Bond Monthly Market Tracking - **Overall Market Performance**: In July, the convertible bond market underperformed underlying stocks. The CSI Convertible Bond Index rose 3.83%, and the CSI All - Share Index rose 5.8%. The convertible bond market lagged behind the CSI 500 Index by 2.92 percentage points [4]. - **By Price Classification**: In July, the Wande high - price convertible bond index rose 5.84%, significantly outperforming the low - price (+4.27%) and medium - price (+2.72%) indices. Year - to - date, the low - price (+11.78%) and high - price (+11.76%) convertible bonds had similar cumulative increases, both higher than the medium - price convertible bonds (+9.07%) [4]. - **By Convertible Bond Stock Volume**: In July, the Wande small - cap (+4.47%) and mid - cap (+4.02%) convertible bond indices were strong, outperforming the large - cap convertible bond index (+3.11%). Year - to - date, the small - cap index (+15.97%) led the large - cap (+9.02%) and mid - cap (+9.81%) indices [23]. - **By Credit Rating**: In July, the AA+ (+5.13%) and AA (+5.44%) convertible bond indices had relatively large increases. The AA - and below convertible bond index rose 4.54%, while the AAA high - rating convertible bonds still underperformed. Year - to - date, low - rating convertible bonds significantly outperformed high - rating ones, with the AA - and below convertible bonds rising 17.53%, and AA and AA+ rising 11.62% and 10.36% respectively [26]. - **By Industry**: In July, the healthcare and information technology convertible bond indices performed best, with increases of 7.82% and 7.13% respectively. The financial convertible bond index only rose 0.47%, while the underlying stocks rose 3.69%. The performance of the public utilities convertible bond index was also better than that of the underlying stocks [5]. 3.2 Convertible Bond Monthly Investment Recommendations 3.2.1 Strategy Recommendation: The Double - Low Strategy Should Focus on the Valuation Elasticity of Underlying Stocks - **July Double - Low Portfolio Performance**: The double - low portfolio constructed in July consisted of 22 bonds ranked in the bottom 5% by the double - low value. From July 1 - 30, the portfolio's return was 1.78% (equal - weighted allocation, without active screening), underperforming the CSI Convertible Bond Index by 2 percentage points [44]. - **August Double - Low Portfolio Recommendation**: After screening out bonds with high delisting/redemption risks and weak underlying stock performance and valuation expectations, 15 bonds were selected. The industries with the most bonds were light manufacturing (3), machinery and equipment (2), and non - ferrous metals (2). The average convertible bond price, conversion value, and conversion premium rate of the portfolio were 124 yuan, 117 yuan, and 7% respectively [6][48]. 3.2.2 Allocation Recommendation: Focus on the More Growth - Oriented AI and Robotics Sectors As the market risk appetite has significantly recovered, high - price and low - premium convertible bonds can be used to replace underlying stocks to better capture the upside potential of underlying stocks. It is recommended to focus on the technology sector, especially AI and robotics, which have both thematic concepts and rapid performance growth [52].

Group 1: Utility Industry - China Resources Power has high-quality thermal power assets and is accelerating its renewable energy development [3] - The company reported a revenue of HKD 105.28 billion in 2024, a year-on-year increase of 1.9%, and a net profit of HKD 14.39 billion, up 30.8% [4] - The company has strategically located its thermal power assets in economically growing provinces and resource-rich areas, with 78.15% of its installed capacity in central, eastern, southern, and northern China [6] Group 2: Renewable Energy Development - The company is actively expanding its renewable energy business, with wind and solar installed capacities of 24,313 MW and 9,433 MW respectively by the end of 2024 [7] - Planned capital expenditures for renewable energy are significant, with HKD 534.33 billion in 2024 and HKD 568 billion in 2025, aiming to add 10,000 MW of new renewable capacity [7] - The successful listing of China Resources New Energy is expected to alleviate capital expenditure pressures and support rapid growth in renewable energy [7] Group 3: Cost and Profitability - The company's operating costs decreased by 1.9% in 2024, with fuel costs down by 4.2%, contributing to performance recovery [8] - The average utilization hours for coal-fired power plants were 4,625 hours in 2024, slightly down from 2023 but exceeding the national average by 225 hours [6] - Profit forecasts for 2025, 2026, and 2027 are projected at HKD 15.11 billion, HKD 15.83 billion, and HKD 16.57 billion respectively, with growth rates of 5.00%, 4.77%, and 4.67% [9] Group 4: Chemical Industry - TDI prices have surged due to ongoing supply disruptions, with a reported price of CNY 15,925 per ton as of July 21, 2025, reflecting a 27% increase from the previous week [14] - The global TDI supply is expected to contract significantly due to production halts from major manufacturers, leading to a 16% reduction in global TDI capacity [14] - China's TDI production capacity is increasing, with a notable 83% year-on-year growth in TDI exports in the first half of 2025 [14]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - In July, the equity market rose significantly, but convertible bonds underperformed the underlying stocks. The CSI Convertible Bond Index rose 3.83%, while the CSI All-Share Index rose 5.8%. Year-to-date, the CSI Convertible Bond Index and the CSI All-Share Index rose 11.11% and 10.33% respectively [2][11]. - The healthcare sector was strong, and convertible bonds followed the upward trend but still underperformed the underlying stocks. The healthcare and information technology convertible bond indices had the best performance in July, with increases of 7.82% and 7.13% respectively [3][21]. - The double-low strategy should pay more attention to the valuation elasticity of the underlying stocks. It is recommended to focus on the more growth-oriented AI and robotics sectors [4]. Group 3: Summary According to the Directory 1. Convertible Bond Monthly Market Tracking - In terms of price classification, in July, the Wande High-Price Convertible Bond Index rose 5.84%, significantly leading the low-price (+4.27%) and medium-price indices (+2.72%). Year-to-date, the cumulative increases of low-price and high-price convertible bonds were basically the same, both higher than that of medium-price convertible bonds [2][13]. - By convertible bond issue size, in July, the small-cap and mid-cap convertible bond indices performed strongly, with increases of 4.47% and 4.02% respectively, higher than the large-cap convertible bond index (+3.11%). Year-to-date, the small-cap index had a significant lead [16]. - By credit rating, in July, the AA+ and AA convertible bond indices had relatively large increases. Throughout the year, low-rated convertible bonds still significantly outperformed high-rated ones [17]. - In terms of sectors, in July, the healthcare and information technology convertible bond indices performed best. The financial convertible bond index only rose 0.47% this month, while the underlying stocks rose 3.69% [3][21]. - Driven by the sharp rise of the underlying stocks, in July, the double-low strategy significantly underperformed the high-price low-premium strategy. The double-low strategy index rose only 2.36% in July, while the high-price low-premium strategy rose 7.29% [26]. 2. Convertible Bond Monthly Investment Recommendations 2.1 Strategy Recommendation: The Double-Low Strategy Should Focus on the Valuation Elasticity of the Underlying Stocks - The double-low portfolio constructed in July had 22 targets. From July 1st to 30th, the portfolio return was 1.78%, underperforming the CSI Convertible Bond Index by 2 pct [29]. - In August, 15 individual bonds were selected. The average convertible bond price, conversion value, and conversion premium rate of the portfolio were 124 yuan, 117 yuan, and 7% respectively [32]. 2.2 Allocation Recommendation: Focus on the More Growth-Oriented AI and Robotics Sectors - The current market risk appetite has significantly recovered. Using high-price low-premium convertible bonds to replace the underlying stocks can better obtain the returns from the rise of the underlying stocks. It is recommended to focus on the technology sector, especially AI and robotics [34].

Investment Rating - The investment rating for WuXi AppTec is maintained as "Buy" [2][10]. Core Views - The TIDES business segment has shown remarkable performance, leading to an upward revision of the full-year revenue guidance [10]. - For the first half of 2025, the company reported a revenue of 20.799 billion RMB, a year-on-year increase of 20.64%, and a net profit attributable to shareholders of 8.561 billion RMB, a year-on-year increase of 101.92% [4]. - The company expects revenue growth for its continuing operations to return to double digits, with the growth rate revised from 10-15% to 13-17% [8]. Financial Performance - In H1 2025, the gross margin improved significantly to 44.45%, an increase of 5.08 percentage points year-on-year, while the net profit margin rose to 41.64%, up 16.81 percentage points year-on-year [5]. - The revenue from the chemical business reached 16.3 billion RMB, a growth of 33.5%, while the TIDES business revenue surged to 5.03 billion RMB, a staggering increase of 141.6% [6]. - The company’s total orders on hand reached 56.69 billion RMB, reflecting a year-on-year growth of 37.2% [8]. Revenue and Profit Forecast - The revenue forecast for 2025-2027 has been adjusted to 43.299 billion RMB, 49.656 billion RMB, and 56.472 billion RMB respectively, with net profit forecasts revised to 14.406 billion RMB, 13.249 billion RMB, and 15.249 billion RMB [10][12]. - The expected earnings per share (EPS) for 2025, 2026, and 2027 are 5.02 RMB, 4.61 RMB, and 5.31 RMB respectively [10].

Group 1: Macro Perspective - The Chinese government has initiated actions to combat "involution" in various industries, focusing on enhancing product quality and regulating low-price competition[3] - The recent meetings of the Central Economic Work Conference and the Central Finance Committee emphasize the need for a unified national market and the elimination of chaotic competition[9][14] - The "anti-involution" campaign is expected to reshape and invigorate the Chinese economy over the long term, addressing key economic bottlenecks[15] Group 2: Lithium Industry Insights - The lithium industry, as the upstream of the new energy vehicle supply chain, has seen intensified competition and a decline in lithium prices since 2023 due to excess capacity[4][16] - In 2024, China's lithium carbonate production capacity is projected to reach 1.3 million tons, with an output of 701,000 tons, reflecting a year-on-year increase of 35.4%[16] - Recent regulatory actions, including the rectification of Yichun lithium mines and the suspension of operations at Zangge Lithium, signal a government effort to stabilize lithium prices and restore order in the industry[19][20] Group 3: Investment Opportunities - The anti-involution movement is expected to create investment opportunities across emerging industries such as new energy vehicles, lithium batteries, and photovoltaics, as well as traditional industries facing overcapacity issues[6][21] - The restructuring of various industries in response to the anti-involution campaign is anticipated to yield a series of investment prospects[5]

Industry Overview - In June 2025, China's newly installed photovoltaic capacity was approximately 14.4GW, a year-on-year decrease of 38.4% [2] - Cumulative newly installed photovoltaic capacity from January to June 2025 reached about 212.2GW, representing a year-on-year growth of 107.1% [2] - The decline in June's installation was attributed to the uncertainty in project profitability following the new pricing mechanism introduced in February 2025 [2] - Despite the June decline, the overall annual growth in photovoltaic installations is expected to remain robust, supported by new technologies and a recovery in upstream equipment demand [2] Mechanical Industry - In the first half of 2025, China's industrial enterprises saw a revenue growth of 2.5% year-on-year, with manufacturing revenue growing by 3.5% [4] - Industrial profits decreased by 1.8% year-on-year, but the decline was less severe than in previous months, indicating a gradual policy effect [4] - The manufacturing sector's profit growth was 4.5% year-on-year, suggesting potential for continued recovery in equipment demand as policies take effect [4] Investment Recommendations - The mechanical industry is rated as "buy," with a focus on photovoltaic processing equipment and general equipment sectors benefiting from manufacturing recovery [5] - Companies to watch include Jing Sheng Mechanical and Aotai Wei in the photovoltaic sector, and Haomai Technology in the general equipment sector [5] Banking Sector - By the end of Q2 2025, the total balance of RMB loans from financial institutions reached 268.56 trillion yuan, a year-on-year increase of 7.1% [7] - Corporate loans were the main driver of credit growth, with a balance of 182.47 trillion yuan, up 8.6% year-on-year [7] - The growth in loans for small and micro enterprises and the real estate sector showed signs of recovery, indicating a stable credit environment [8] Investment Recommendations for Banking - The banking sector is rated as "overweight," with recommendations to focus on high-dividend and regionally growing banks, including major state-owned banks and select regional banks [9] Food and Beverage Sector - The food and beverage industry saw a slight increase of 0.74% from July 21 to July 25, 2025, underperforming compared to broader market indices [19] - White liquor exports surged, with a 30.9% increase in export value in the first half of 2025, indicating strong international demand [20] - The industry is adapting to changing consumer behaviors, with a focus on instant retail channels and digital integration [21] Investment Recommendations for Food and Beverage - The food and beverage sector is rated as "buy," with a focus on stable demand leaders and companies innovating in new products and channels [22] Real Estate Sector - Recent policy changes in Chengdu aim to stimulate the real estate market by optimizing loan policies and reducing restrictions on property sales [24][25] - New housing transaction volumes are under pressure, with significant declines in both new and second-hand home sales reported [26][27] - The outlook for the real estate market remains cautious, with expectations for further policy support to stabilize demand [28] Investment Recommendations for Real Estate - The real estate sector is rated as "buy," with a focus on leading developers with strong land acquisition capabilities and active real estate agencies [28] Pharmaceutical Industry - The pharmaceutical sector saw a 1.9% increase in market performance, with significant gains in drug manufacturing and raw materials [29][30] - Recent policy optimizations in drug procurement are expected to improve competitive dynamics in the market [30] - The industry is entering a new growth cycle driven by innovation and improved market conditions [31] Investment Recommendations for Pharmaceuticals - The pharmaceutical sector is rated as "buy," with a focus on innovative drug companies and those benefiting from policy improvements in generic and raw material drugs [32]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [5][6]. Core Insights - The company, IFBH, is positioned in the rapidly growing coconut water market, focusing on health-conscious consumers and leveraging its Thai origins to expand in Greater China and beyond [2][4]. - The coconut water beverage industry is experiencing robust growth, particularly in Greater China, with a projected compound annual growth rate (CAGR) of 60.8% from 2019 to 2024, and an expected CAGR of 19.4% from 2024 to 2029 [2][68]. - IFBH has maintained a leading market share in both mainland China and Hong Kong, with a 34% share in mainland China and 60% in Hong Kong as of 2024, significantly outpacing competitors [3][17]. Company Overview - IFBH was founded in Thailand in 2013 and has successfully introduced its brands, if and Innococo, to various Asian markets, with a strong focus on mainland China [2][14]. - The company operates under a light-asset model, outsourcing production to third-party manufacturers while concentrating on brand management and marketing [4][99]. - The revenue structure shows that the if brand contributes the majority of sales, while the Innococo brand is gradually increasing its share [36][58]. Industry Analysis - The global coconut water market is projected to grow from $2.5 billion in 2019 to $5 billion in 2024, with a CAGR of 14.7% [67][68]. - In China, the coconut water market is expected to reach $1.09 billion in 2024, with a CAGR of 19.4% anticipated through 2029 [68][86]. - The company benefits from a stable supply chain and lower raw material costs, with coconut water production costs being 18% lower than competitors [4][96]. Financial Performance - The company reported revenues of $212.07 million in 2025, with a year-on-year growth of 34.52% [6][8]. - Net profit for 2024 was $33.32 million, reflecting a significant increase of 98.90% compared to the previous year [52][58]. - The overall gross margin for 2024 was 36.7%, with the if brand at 36.6% and the Innococo brand at 37.4% [58][59].

Investment Rating - The industry investment rating is maintained at "Overweight" [2][26] Core Views - The medical consumables sector saw a weekly increase of 5.04%, outperforming the CSI 300 index by 0.21 percentage points [4][12] - The current PE (ttm) for the medical consumables sector is 35.7X, with a PB (lf) of 2.59X, indicating a slight increase in valuation metrics [5][19][20] - The National Healthcare Security Administration held a meeting to support the development of innovative drugs and medical devices, emphasizing the importance of integrating healthcare data with innovation [6][23] Summary by Sections Industry Performance - The medical consumables sector reported a weekly increase of 5.04%, with the overall medical sector trending upwards [4][12] - The sector's PE has risen by 1.82 percentage points compared to the previous week, with a one-year range of 28.42X to 41.66X [5][19] Industry Dynamics and Key Announcements - The National Healthcare Security Administration's meeting aimed to enhance the quality of innovative drug development and address diverse healthcare needs [6][23] - The meeting highlighted the potential of healthcare data in supporting innovation and improving the efficiency of the pharmaceutical industry [6][23] Investment Recommendations - The report suggests closely monitoring the performance forecasts of companies in the medical consumables sector, particularly those recovering from the impact of centralized procurement [7][24] - Two main investment themes are identified: recovery opportunities post-centralized procurement and increased penetration of innovative products [7][26]

Macro Strategy - Public fiscal expenditure in June showed a year-on-year growth rate of 0.38%, with a cumulative growth rate of 3.4% for the first half of the year, maintaining around 4% overall. However, the fiscal revenue and expenditure gap for the first half of the year was -25,705 billion, higher than the -20,658 billion in the same period of 2024, indicating no improvement in fiscal conditions [2][3] - The LPR remained unchanged in July, with the one-year LPR at 3.00% and the five-year LPR at 3.50%. This stability aligns with market expectations, reflecting the positive effects of the LPR adjustment made in May [2][3] Stock Market Overview - A-share indices showed a fluctuating upward trend from July 21 to July 25, with the Shanghai Composite Index rising by 1.67%, the Shenzhen Component Index by 2.33%, and the ChiNext Index by 2.76%. The STAR Market Index saw the highest weekly fluctuation at 4.36% [3][5] - The market's upward momentum is primarily driven by the commencement of the Yarlung Tsangpo River downstream hydropower project, boosting infrastructure-related sectors, and the continued strength of the technology sector. The GDP growth for the first half of the year was 5.3% year-on-year, laying a foundation for the market's upward trend [5][6] Investment Recommendations - The A-share market is expected to operate in a "slow bull" manner in 2025, supported by policies aimed at stabilizing the stock market and overlapping trends from the new "National Nine Articles" and similar to the "Four Trillion" investment [7] - Key sectors to focus on in 2025 include technology, green energy, consumption, and infrastructure, as highlighted in the government work report [7] - In the short term, the market may experience downward adjustments in August due to uncertainties surrounding US-China tariff negotiations, despite the overall positive economic performance in the first half of the year [7] North Exchange Overview - As of July 25, 2025, the North Exchange had 268 listed stocks, with an average total market value of 8,520.87 billion, an increase of 2.36% from the previous week [9][10] - The liquidity of the North Exchange improved significantly, with an average trading volume of 1.427 billion shares, up 39.13%, and an average trading value of 31.082 billion, up 42.36% [10] Industry Insights Semiconductor Industry - The company Micron is leveraging an AI+SaaS strategy to enhance its platform and integrated development path, significantly improving its competitive advantage. In 2024, the AI+SaaS business revenue reached 842 million, accounting for 54% of total revenue [32][33] - The marketing SaaS market in China is projected to grow from 35.6 billion in 2024 to 74.5 billion by 2027, with a CAGR of 29.3%, indicating substantial growth potential [33] Pharmaceutical Industry - The ADC (Antibody-Drug Conjugate) market is experiencing explosive growth, with the global market size expected to rise from 7.9 billion in 2022 to 14.1 billion in 2024, and projected to exceed 68.5 billion by 2030, reflecting a CAGR of 30.1% [26][27] - The CDMO (Contract Development and Manufacturing Organization) sector is becoming increasingly essential due to the high technical barriers of ADC drugs, with the market size expected to grow from 0.1 billion in 2018 to 2.1 billion in 2022, and projected to reach 2.45 billion by 2030 [27][28] Investment Suggestions - The semiconductor sector is expected to benefit from the growth of KA clients and the rapid deployment of AI applications, leading to a high growth period for the company's SaaS business [36] - In the pharmaceutical sector, companies with ADC-related technology reserves, such as WuXi AppTec and Haoyuan Pharmaceutical, are recommended for investment due to their significant growth potential in the CDMO space [30][31]

Investment Rating - The report maintains a "Buy" rating for the food and beverage industry [1][6] Core Views - The white liquor industry is accelerating its overseas expansion, with a focus on valuation recovery opportunities [4][6] - The food and beverage sector saw a 0.74% increase from July 21 to July 25, 2025, underperforming the broader market indices [3][8] - The report highlights the importance of adapting to changing consumer behaviors and market dynamics, emphasizing the need for innovation in product categories, channels, and consumption scenarios [5][6] Summary by Sections Industry Performance - From July 21 to July 25, 2025, the food and beverage industry increased by 0.74%, ranking 26th out of 31 sectors, and underperformed the CSI 300 index by 0.95 percentage points [3][8] - The absolute returns over the past month, three months, and twelve months were 1.7%, -4.5%, and 6.5%, respectively [2] White Liquor Market Insights - In the first half of 2025, white liquor exports reached $530 million, a year-on-year increase of 30.9%, with export volume at 8.31 million liters, up 7.4% [4] - The average export price for white liquor was $63.7 per liter, reflecting a 21.9% increase year-on-year [4] - 63.9% of white liquor companies are either expanding or planning to enter overseas markets [4] Channel Transformation - White liquor companies are accelerating channel transformations to meet the fragmented demands of the Z generation, with the instant retail penetration rate expected to rise from 1% in 2023 to 6% by 2027 [5] - The overall instant retail market is projected to exceed 1 trillion yuan by 2025 [5] Investment Recommendations - The report suggests focusing on two main lines: stable demand leaders with strong risk resistance and companies actively developing new products, channels, and scenarios [6][49] - Recommended companies include Qingdao Beer, Chengde Lulux, Shanxi Fenjiu, Guizhou Moutai, Andeli, and Yanjinpuzi [6][49] Valuation Insights - As of July 25, 2025, the food and beverage industry had a price-to-earnings (PE) ratio of 21X, ranking 22nd among the primary sectors [16] - The white liquor sector has a lower PE ratio of 19X compared to other segments like other liquors (56X) and health products (49X) [16]