Market Overview - The A-share market showed resilience with major indices mostly rising in the past five trading days, with the Shanghai Composite Index up by 0.20% and the ChiNext Index up by 3.64% [2] - The average daily trading volume increased to 1.55 trillion yuan, up by 134.77 billion yuan compared to the previous five trading days [2] - The performance of various sectors was mixed, with telecommunications, pharmaceuticals, and computer industries leading in gains, while banking, real estate, and coal industries faced declines [2] Economic Data - Fixed asset investment in the first half of the year grew by 2.8% year-on-year, a decline compared to the previous year [3] - Infrastructure investment (excluding electricity, heat, gas, and water production and supply) increased by 4.6%, while manufacturing investment rose by 7.5% [3] - Real estate investment decreased by 11.2%, further widening the decline compared to the previous year [3] - Social retail sales increased by 5.0% year-on-year, benefiting from policies like trade-in incentives [3] - The GDP growth rate for the first half of the year reached 5.3%, solidifying the economic growth foundation [3] Policy Insights - The State Council meeting on July 16 emphasized strengthening domestic circulation and regulating competition in the new energy vehicle sector, indicating a focus on expanding domestic demand and countering excessive competition [3] Investment Strategy - The market is expected to continue its high-level fluctuations, with future performance influenced by liquidity and policy direction [3] - Potential investment opportunities include the banking sector due to regulatory support for insurance capital entering the market, and recovery opportunities in power equipment and building materials sectors driven by anti-competitive measures [4] - The TMT sector, pharmaceuticals, and defense industries present thematic investment opportunities due to AI trends and international expansion [4] Financing and Margin Trading - All major indices in the A-share market rose last week, with the ChiNext Index showing the highest increase of 2.47% [6] - As of July 15, the margin trading balance reached 1.884 trillion yuan, an increase of 25.49 billion yuan from the previous week [6] - The non-bank financial, telecommunications, and metals sectors saw significant net buying in margin trading, while textiles and retail sectors experienced lower net buying [7]

Macro and Strategy Research - In June, social financing increased by over 90 billion yuan year-on-year, with government bond financing contributing over 50 billion yuan, indicating a strong support for social financing growth [2] - The short-term loans for enterprises increased significantly, with a year-on-year increase of 110 billion yuan in June, reflecting a cautious approach towards long-term loans due to external uncertainties and profit pressures [2][3] - M1 growth rate rebounded significantly by 2.3 percentage points to 4.6% in June, driven by accelerated fiscal spending and a reduction in seasonal government deposits [3] Economic Data Review - The actual GDP growth rate for Q2 2025 was 5.2%, slightly below expectations, while the industrial added value in June grew by 6.8%, exceeding expectations [5] - The contribution rates of final consumption expenditure, gross capital formation, and net exports to GDP growth were 52.3%, 24.7%, and 23.0% respectively, indicating consumption as the main driver of GDP growth [5] - The industrial production index showed a significant rebound in June, supported by increased working days and the release of policies [6] Investment Trends - Fixed asset investment growth has declined for three consecutive months, with manufacturing investment decreasing by 2.7 percentage points to 5.1% in June, reflecting cautious corporate investment sentiment [7] - Real estate investment growth rate fell to -12.9%, indicating ongoing demand-side pressures in the real estate sector [8] Industry Research - The mechanical equipment industry saw a 1.56% increase in the index from July 9 to July 15, outperforming the broader market [10] - Excavator sales in June reached 18,800 units, a year-on-year increase of 13.3%, indicating a strong domestic market for construction machinery [10] - The easing of tariff uncertainties in Southeast Asia is expected to positively impact export dynamics in the mechanical equipment sector [10]

Investment Rating - The industry is rated as "Positive" for the next 12 months, expecting a growth rate exceeding 10% compared to the CSI 300 index [45]. Core Viewpoints - In June 2025, excavator sales reached 18,800 units, a year-on-year increase of 13.3%. Cumulatively, sales for the first half of the year reached 120,500 units, up 16.8% year-on-year, with domestic sales at 65,600 units, reflecting a 22.9% increase year-on-year. The domestic engineering machinery market remains in a renewal cycle, and recent government emphasis on urban renewal is expected to boost domestic sales steadily [10][37]. - The gradual implementation of tariffs in major Southeast Asian countries has alleviated short-term uncertainties regarding exports, warranting continued monitoring of export changes [10][37]. Summary by Sections Industry News - The State Council issued a notice to enhance employment support policies, expanding the coverage of work-for-relief programs [4][19]. - Zhiyuan Robotics and Yushu Technology won a humanoid robot order worth 124 million yuan [4][19]. Key Product Recommendations - Companies recommended for "Increase" rating include SANY Heavy Industry, Zoomlion Heavy Industry, Hengli Hydraulic, and CRRC Corporation [5][10]. Market Review - From July 9 to July 15, 2025, the CSI 300 index rose by 0.52%, while the Shenwan Machinery Equipment Industry increased by 1.56%, outperforming the CSI 300 by 1.04 percentage points, ranking 6th among all primary industries [28][29]. Industry Data - As of July 11, 2025, the steel composite price index (CSPI) stood at 90.83 [20]. - As of July 15, 2025, WTI and Brent crude oil prices were $66.98 per barrel and $69.21 per barrel, respectively [21]. Company Announcements - Juxing Technology plans to acquire an 18.47% stake in Weina Technology to enhance its competitiveness in the chip sector [26]. - Yijiahe intends to extend the construction period of its Yangzhou Intelligent Manufacturing Center project by 2 years [27].

Macroeconomic and Strategic Research - In June 2025, China's exports in USD terms increased by 5.8% year-on-year, up from 4.8% in May, while imports rose by 1.1%, recovering from a 3.4% decline in the previous month [2] - The trade surplus reached USD 114.77 billion, compared to USD 103.22 billion in May [2] - The rebound in export growth is attributed to the delayed effects of the US-China tariff suspension and ongoing demand from ASEAN countries, although future costs may rise due to new US-Vietnam tariff agreements [2] - The global manufacturing PMI returned above the neutral line, providing support for Chinese exports, with significant improvements noted in South Korea's export growth [2] - Import growth was driven by strong demand for high-end manufacturing products, particularly semiconductors, contributing approximately 1.8 percentage points to the overall import growth [3] - Export pressures are expected to emerge by the end of Q3 2025, influenced by US tariff policies and potential demand shifts [4] Fixed Income Research - The issuance guidance rates for credit bonds mostly declined, with an overall change of -9 basis points to 0 basis points [4] - The net financing amount for credit bonds increased, with corporate bonds seeing zero issuance while other types experienced growth [5] - The secondary market saw a decrease in transaction volume, with corporate bonds and company bonds increasing while medium-term notes and short-term financing bonds decreased [5] - Credit spreads for short-term and corporate bonds narrowed, indicating a generally low historical spread level, particularly for AAA-rated five-year bonds [5] - The report suggests a cautious approach to investing in credit bonds, emphasizing the importance of monitoring interest rate trends and individual bond coupon values [5] Industry Research - The metal industry faces increased uncertainty due to tariffs, with notable developments including Trump's proposed 30% tariffs on Mexico and the EU, and a 17% year-on-year increase in copper production from Codelco [7] - The steel sector shows manageable inventory levels and limited supply-demand conflicts, with raw material prices rebounding, supporting price stability [8] - Copper prices are under pressure due to tight supply and low inventory, compounded by US tariff policies creating trade uncertainties [8] - Aluminum prices are expected to fluctuate due to macroeconomic uncertainties and subdued downstream demand during the off-season [8] - Gold prices are supported by tariff and trade uncertainties, with future movements dependent on economic data and geopolitical developments [8] - The lithium market is experiencing downward pressure from oversupply, despite some support from "anti-involution" sentiments [8] - The report maintains a "neutral" rating for the steel industry and a "positive" rating for non-ferrous metals, recommending increased holdings in specific companies [9]

Investment Rating - The report maintains a "Neutral" rating for the steel industry and a "Positive" rating for the non-ferrous metals industry, with "Buy" ratings for specific companies including Luoyang Molybdenum, Zhongjin Gold, Shandong Gold, Zijin Mining, and China Aluminum [4]. Core Views - The report highlights that the steel industry is experiencing manageable inventory pressure, indicating limited supply-demand conflicts. The recovery in raw material prices provides support for prices, and the "anti-involution" sentiment boosts market confidence, leading to expectations of a strong fluctuation in steel prices in the short term [3][16]. - For copper, tight supply and low inventory are supporting prices, but U.S. tariff policies increase trade uncertainty, which may put pressure on copper prices in the short term [3][39]. - The aluminum market faces macro uncertainties, but low domestic inventory supports prices. However, weak downstream demand during the off-season is expected to lead to price fluctuations [3][46]. - Gold prices are supported by tariff and trade uncertainties, with future attention needed on overseas economic data and geopolitical situations [3][4][49]. - The lithium market is under pressure from potential oversupply, despite the "anti-involution" sentiment providing some support for prices [3][52]. Summary by Sections Steel Industry - The report notes that the steel industry is facing limited supply-demand conflicts, with inventory pressure being manageable. The raw material price recovery is expected to support prices, and the "anti-involution" sentiment is boosting market confidence, leading to expectations of strong fluctuations in steel prices [3][16]. - As of July 11, the total steel inventory was 13.33 million tons, down 0.03% from the previous week and down 23.26% year-on-year [25]. - The average price index for steel on July 11 was 3,428.49 CNY/ton, reflecting a 1.14% increase from the previous week [37]. Copper Industry - The report indicates that the copper market is experiencing tight supply and low inventory, which supports prices. However, the U.S. tariff policy adds trade uncertainty, potentially putting pressure on copper prices in the short term [3][39]. - On July 11, the LME copper price was 9,600 USD/ton, down 3.34% from the previous week [44]. Aluminum Industry - The aluminum market is characterized by macro uncertainties, but low domestic inventory is providing price support. The report anticipates price fluctuations due to weak downstream demand during the off-season [3][46]. - On July 11, the LME aluminum price was 2,600 USD/ton, reflecting a slight increase from the previous week [47]. Precious Metals - The report highlights that gold prices are supported by tariff and trade uncertainties, with future attention needed on overseas economic data and geopolitical situations [3][4][49]. - On July 11, the COMEX gold price was 3,370.30 USD/ounce, showing a 1.03% increase from the previous week [49]. Rare Earth and Minor Metals - The report notes that rare earth prices are currently at a cyclical low, with domestic policies promoting supply optimization. The demand from humanoid robots and new energy sectors provides new momentum for the industry [4][63]. - On July 11, the price of light rare earth oxide neodymium was 456,000 CNY/ton, up 2.24% from the previous week [63].

Export Data - In June 2025, China's exports increased by 5.8% year-on-year, up from 4.8% in May, surpassing market expectations of 5.0%[2] - The trade surplus reached $114.77 billion, compared to $103.22 billion in the previous month[2] Import Data - Imports rose by 1.1% year-on-year in June, recovering from a decline of 3.4% in May, exceeding market expectations of 0.3%[2] - The increase in imports was supported by a low base effect and resilient export performance, with the import volume showing significant growth[4] Export Drivers - The recovery in export growth was partly due to the delayed impact of the US-China tariff suspension, with the year-on-year decline in exports to the US narrowing by 18.4 percentage points to -16.1%[3] - Demand for re-export from ASEAN countries continued to rise, although future costs may increase due to the US-Vietnam tariff agreement[3] Import Trends - Strong demand for high-end manufacturing imports, such as semiconductors and integrated circuits, contributed approximately 1.8 percentage points to import growth[4] - The import growth of most energy and mineral products was affected by price factors, particularly for copper[4] Future Outlook - Export growth is expected to benefit from the tariff suspension in the short term, but pressure may emerge by the end of Q3 2025 due to elevated base effects and potential shifts in US demand[5] - Risks include geopolitical uncertainties and unexpected changes in economic policies that could impact market sentiment[5]

Group 1: Fund Market Overview - The real estate sector leads the industry, with 27 out of 31 Shenwan first-level industries experiencing an increase this week, particularly in real estate, steel, non-bank financials, comprehensive, and building materials [2][3] - The overall net inflow of funds in the ETF market reached 15.4 billion yuan, with bond ETFs seeing the highest inflow of 8.4 billion yuan, while stock ETFs experienced a net outflow of 5.5 billion yuan [3] - A total of 44 new funds were issued this week, raising 27.5 billion yuan, indicating a significant increase in fundraising activities compared to the previous week [4] Group 2: Industry Insights - The electric two-wheeler sales in China reached 32.3 million units in the first half of 2025, marking a year-on-year increase of 29.5%, driven by the government's old-for-new policy [5][6] - The light industry manufacturing sector outperformed the CSI 300 index by 1.21 percentage points, while the textile and apparel sector outperformed by 0.80 percentage points during the week of July 7 to July 11 [6] - The introduction of tariffs by the U.S. on goods from Southeast Asian countries is lower than those imposed on Chinese exports, providing a competitive advantage for light manufacturing and textile companies with production capabilities in Southeast Asia [7]

Macroeconomic and Strategy Research - The U.S. job market remains resilient, with initial jobless claims unexpectedly dropping to the lowest level since June, indicating a strong employment situation [2] - The U.S. government has postponed the deadline for "reciprocal tariffs" to August 1, imposing tariffs ranging from 25% to 40% on 14 countries, leading to a stalemate in tariff negotiations with major economies [2][3] - Domestic CPI growth turned positive in June, driven by rising energy prices, while PPI continues to face downward pressure due to weak demand [2][3] Fixed Income Research - The overall interest rates have slightly increased, with the yield curve flattening, influenced by expectations of new real estate policies and regulatory pressures on local banks [4][5] - The central bank has net withdrawn nearly 800 billion yuan in the open market, leading to a slight rise in funding prices, while maintaining a generally loose monetary environment [5][6] - The primary market saw limited supply pressure, with a total issuance of 62 bonds amounting to 621.7 billion yuan, indicating a stable funding environment [5][6] Industry Research - The pharmaceutical and biotechnology sector is experiencing a surge in performance forecasts, with significant announcements such as Merck's $10 billion acquisition of Verona and the approval of new drugs [8][9] - The Shanghai Composite Index rose by 1.40%, with the pharmaceutical sector increasing by 0.88%, indicating positive market sentiment towards the industry [10] - The report suggests focusing on investment opportunities related to innovative drugs and the supply chain, particularly in sectors benefiting from policy optimization and improving overseas demand [10]

Investment Rating - The industry is rated as "Positive" for the next 12 months, indicating an expected increase in performance relative to the CSI 300 index [7][71][82]. Core Insights - The report highlights a concentrated period of semi-annual performance forecasts, suggesting a focus on pipeline realization, performance growth, and business collaborations in innovative drugs and related industry chains [7][70]. - Recent policy adjustments by the National Medical Insurance Administration are expected to catalyze innovation and development within the industry [14]. - Notable acquisitions and drug approvals, such as Merck's $10 billion acquisition of Verona and the approval of new drugs like the Bcl-2 inhibitor by Ascentage Pharma, are significant developments [2][27][14]. Industry Data - As of July 10, 2025, the SW pharmaceutical industry has a TTM price-to-earnings ratio of 28.55, with a valuation premium of 144% compared to the CSI 300 index [5][61]. - The report notes a general upward trend in various sub-sectors, with the medical services sector leading at a 1.56% increase [5][54]. - The report also provides insights into the pricing trends of raw materials, such as vitamins and traditional Chinese medicine, indicating fluctuations and year-on-year changes [15][17]. Company Announcements - Ascentage Pharma's Bcl-2 inhibitor has received conditional approval from the NMPA for treating chronic lymphocytic leukemia [27]. - WuXi AppTec anticipates a revenue increase of approximately 20.64% for the first half of 2025, with a significant net profit growth of about 44.43% [28]. - Gan & Lee Pharmaceuticals expects a net profit increase of 100.73% to 114.12% for the same period [29].

Market Overview - In the past five trading days (July 4 - July 10), major indices mostly rose, with the Shanghai Composite Index increasing by 1.40% and the ChiNext Index rising by 1.18% [2] - The average daily trading volume decreased to 1.42 trillion yuan, down by 180.52 billion yuan compared to the previous five trading days [2] - Among industries, real estate, media, and comprehensive sectors saw the highest gains, while non-ferrous metals, defense, and home appliances experienced the largest declines [2] Inflation and Price Trends - On July 9, the National Bureau of Statistics released June inflation data, showing that the CPI year-on-year growth turned positive, with a marginal reduction in the month-on-month decline [2] - The PPI continued to decline both year-on-year and month-on-month in June, with expectations of ongoing negative growth due to global demand uncertainties and seasonal factors affecting domestic pricing [3] Policy Developments - The "anti-involution" initiative has expanded its scope, with preliminary effects observed. On July 7, 33 construction-related state-owned and private enterprises jointly called for resisting "involutionary" competition [3] - The solar industry has shown positive price signals, with polysilicon prices rising by 33.3% since the beginning of July, indicating a potential supply-side clearing [3] Investment Strategy - The decline in PPI indicates continued short-term profit pressures for companies, but the effectiveness of the "anti-involution" policy strengthens medium to long-term profit recovery expectations [4] - Future market trends will depend on the balance between weak short-term performance and strong long-term expectations, with potential for continued upward movement if economic data does not show significant decline [4] Industry Opportunities - Investment opportunities in the banking sector are driven by multiple measures to encourage insurance capital entry and a low interest rate environment [4] - The "anti-involution" policy is expected to drive supply-side clearing, presenting recovery opportunities in the power equipment and building materials sectors [4] - The TMT sector, pharmaceuticals, and defense industries may present thematic investment opportunities due to AI trends and international expansion [4]