Investment Rating - The report maintains a "Positive" investment rating for the home appliance industry, indicating an expectation of performance that is stronger than the market benchmark by over 5% [6][12]. Core Viewpoints - The leading companies in the clean appliance sector have recently reported better-than-expected operational results, with Ecovacs anticipating a nearly 40% revenue growth in Q2, surpassing market expectations. The significant growth of over 60% in Ecovacs' brand business is a key factor for this outperformance [4][8]. - The recent Prime Day sales event showed remarkable growth for Stone Technology and Chasing in Europe, with sales growth exceeding 100%, indicating a robust demand in both domestic and international markets. The report suggests that the clean appliance sector is experiencing a dual growth phase [4][8]. - The report expresses optimism for continued domestic growth in clean appliances, supported by ongoing national subsidies, increasing category penetration, and active new consumer trends. The overseas performance is also expected to be promising [4][8]. Summary by Sections Investment Recommendations and Targets - The report recommends focusing on Stone Technology (688169, Buy) and Ecovacs (603486, Buy) due to their strong growth prospects and operational improvements [4][8]. Market Dynamics - The clean appliance market is currently witnessing a favorable environment with improved competition, innovation premiums, and internal management optimizations, which are expected to support profit margin recovery [4][8]. - The anticipated recovery in profit margins is attributed to a better competitive landscape and the potential for technology-driven price premiums in high-demand products like robotic vacuum cleaners [4][8].

Report Industry Investment Rating No relevant information provided. Core Views - The convertible bond index may face pressure to rise significantly, but there is no systematic risk, and there are structural opportunities. Convertible bonds are still valuable assets. Although the current premium rate is not low and the median absolute price is high, considering the decline in yields of various fixed - income assets, the demand for fixed - income + allocation is strong, supporting the price of convertible bonds. Short - term callbacks may occur, but the amplitude is controllable, and opportunities outweigh risks [4]. - The current market is dominated by bulls. The improvement of grass - roots governance capacity has increased public confidence, leading to a rise in market risk appetite. The market is oscillating horizontally and strengthening step by step, with the financial and technology sectors being the focus [4][8]. - The year - on - year increase of CPI in June provides emotional support to the market. Anti - involution sectors are still under attention, and the real estate sector is expected to improve due to favorable policies [8]. Summary by Directory 1. Convertible Bond Views: Bullish on Convertible Bonds After Continuous Surges - The convertible bond market followed the equity market and rose significantly under the low - position condition, but this week it was relatively restrained with a slight valuation correction. There may be pressure for the convertible bond index to rise further, but there are still structural opportunities. Short - term callbacks are possible, but the amplitude is controllable [4]. - The current emotional source is the growth of public confidence due to the improvement of grass - roots governance capacity. The market is oscillating horizontally and strengthening step by step, and the financial and technology sectors will be the focus. The year - on - year increase of CPI in June provides emotional support to the market, and the real estate sector is expected to improve [8]. 2. Convertible Bond Review: Convertible Bonds Continue to Follow the Rise of Equities 2.1 Market Overall Performance: The Stock Market Continues to Rise, and Convertible Bonds Follow More Restrainedly - From July 7th to July 11th, the Shanghai Composite Index, Shenzhen Component Index, and other major stock indices all rose. The real estate, steel, and non - bank finance sectors led the rise, while the coal, banking, and automobile sectors declined. The leading convertible bonds performed weaker than the underlying stocks, and the momentum weakened slightly, but the upward trend of popular individual bonds continued [11]. 2.2 Trading Volume Increases, and Medium - High - Rated and Low - Priced Convertible Bonds Perform Well - This week, convertible bonds continued to rise, and the trading volume increased significantly to 6.8115 billion yuan. The CSI Convertible Bond Index rose 0.76%, the parity center rose 1.5% to 102.1 yuan, and the conversion premium rate center fell 2.2% to 23.1%. In terms of style, medium - high - rated and low - priced convertible bonds performed well, while large - cap and high - priced convertible bonds were relatively weak [4][17].

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [5] Core Viewpoints - The report highlights a significant recovery in the performance of upstream electronic components, with a positive outlook for sustained equipment orders [11][12] - The shipbuilding sector is experiencing notable recovery, with deep-sea technology expected to further drive future demand [12][14] - The current market conditions continue to favor the military industry, with military trade anticipated to become a second growth driver [15] Summary by Sections Investment Recommendations and Targets - The report suggests focusing on the following segments: - **Military Electronics**: Recommended stocks include Zhenhua Technology (000733, Overweight), Aerospace Electronics (002025, Buy), and Torch Electronics (603678, Not Rated) [16] - **Key Materials and Parts**: Recommended stocks include Western Superconducting (688122, Buy) and Chujian New Materials (002171, Buy) [16] - **Aero Engine Chain**: Recommended stocks include Aero Engine Power (600893, Not Rated) and Western Superconducting (688122, Buy) [16] - **Military Trade**: Suggested stocks include AVIC Shenyang Aircraft (600760, Not Rated) and Guorui Technology (600562, Not Rated) [16] Performance Insights - Torch Electronics expects a net profit of 247 million to 280 million yuan for the first half of 2025, representing a year-on-year growth of approximately 50.36% to 70.45% [11][31] - Major shipbuilding companies, including China Shipbuilding and China Heavy Industry, reported over 60% growth in net profit for the first half of 2025, with China Heavy Industry potentially doubling its profit [12][13] Market Trends - The defense and military industry index increased by 0.88%, outperforming the Shanghai Composite Index, which rose by 1.09% [17][18] - The report notes that the military industry is ranked 25th out of 31 in terms of performance among the primary industry indices [20] Weekly News Highlights - The report includes significant domestic and international news related to the military industry, emphasizing ongoing developments and strategic activities [25][26]

Investment Rating - The report maintains a "Positive" investment rating for the non-ferrous and steel industry [5] Core Viewpoints - The current market performance of the non-ferrous steel sector is driven by political policy risk premiums rather than fundamental earnings or growth adjustments [8][14] - There is a significant concern regarding the supply chain security in the context of long-term US-China competition, particularly with strategic metals like copper [15] - The imposition of high tariffs on copper is seen as a market manifestation of political policy risk premiums, influencing inventory behaviors [16] - Non-market strategies, such as US government investments in rare earths, highlight the strategic importance of these materials beyond mere economic considerations [17] Summary by Sections Non-Ferrous and Steel Industry Overview - The report discusses the political policy risk premium affecting the non-ferrous steel sector, suggesting that current valuations may exceed fundamental support [8][14] - It emphasizes the need to consider long-term supply chain and national defense requirements when evaluating market premiums [14] Steel Industry Dynamics - Steel demand and production have both decreased, with a slight week-on-week decline in rebar consumption by 1.50% and a year-on-year drop of 5.85% [18][23] - Total steel inventory is expected to decline further, with social inventory down by 0.23% and year-on-year down by 29.02% [25] - The report anticipates a rebound in steel prices due to industry restructuring and reduced competition, with the overall steel price index rising by 1.14% [38][39] New Energy Metals - In May 2025, China's lithium carbonate production surged by 31.37% year-on-year, indicating strong supply growth [43] - The demand for new energy vehicles remains robust, with production and sales of electric vehicles increasing significantly [47] - Lithium and cobalt prices are on the rise, while nickel prices have shown a downward trend [52][53]

Investment Rating - The report maintains a "Positive" investment rating for the computer industry, specifically focusing on Real World Assets (RWA) [4] Core Insights - RWA represents a transformative innovation in financial technology by converting real-world assets into digital assets on the blockchain, potentially leading to exponential growth in the sector [2][6] - The global RWA asset market reached $24.5 billion as of June 2025, with projections to exceed $16 trillion by 2030, indicating a significant opportunity for investment [6][18] - The report emphasizes the importance of regulatory frameworks being established globally to support the growth of RWA, with regions like Hong Kong and the EU leading the way [26][30] Summary by Sections RWA: Connecting Real World Assets to Blockchain - RWA involves the tokenization of tangible and intangible assets through blockchain technology, enhancing liquidity and reducing transaction costs [11][12] - The RWA market is rapidly expanding, with a diverse range of assets including real estate, bonds, and commodities being tokenized [15][16] RWA Issuance Process and Regulatory Framework - The RWA issuance process consists of five key steps: asset selection, legal and compliance framework establishment, technology implementation, token issuance, and ongoing management [21][23] - Various countries are developing regulatory frameworks for RWA, with Hong Kong adopting a sandbox approach to foster innovation while ensuring compliance [26][30] Expansion of Asset Classes and RWA Market - RWA assets can be categorized into cash flow, equity, and non-cash flow assets, with credit and bonds currently leading the market [35][36] - The report highlights the significant growth potential in the RWA sector, particularly in tokenized real estate and securities, which are becoming increasingly popular [46][53] RWA Industry Ecosystem - The RWA ecosystem is forming a collaborative industry chain involving asset providers, technology firms, platforms, compliance custodians, and investors [4][6] - Key players in the blockchain and fintech sectors are recommended for investment, including companies like 恒生电子 and 新国都 [2][6]

Group 1 - The index is expected to consolidate and gather strength before reaching new highs, with the recent tariff delay being fully priced in by the market, leading to a rise in major indices, including the Shanghai Composite Index reaching a high of 3555.22 points [3][14] - The market's optimistic sentiment is currently prevailing, but there is insufficient risk pricing for potential negative surprises regarding tariffs, which may hinder further declines in risk evaluation [3][14] - The market's recent rise is primarily driven by an increase in risk appetite, with the ChiNext Index, CSI 1000 Index, and All A Index outperforming the Shanghai Composite Index [4][15] Group 2 - Short-term themes are expected to rotate between policy expectations and industrial trends, with a focus on the "anti-involution" sector and real estate, which has seen a 6.1% increase this week due to anticipated policy developments [6][16] - The "anti-involution" sector, particularly in steel, pork, and certain segments of new energy, is highlighted as a potential area of focus due to high policy expectations following recent government meetings [6][16] - The trading of industrial trends is expected to continue, with short-term attention on sectors such as stablecoins, rare earths, nuclear fusion, military industry, deep-sea economy, artificial intelligence, and innovative pharmaceuticals [7][17]

Report Industry Investment Rating - The document does not mention the industry investment rating. Core Viewpoints of the Report - In the second week of July, the bond market sentiment was affected by the "stock - bond seesaw" but the fluctuations were controllable due to strong post - quarter bond allocation demand. In Q3, for coupon - bearing bonds, it is recommended to maintain duration, do more credit - quality sinking within 3Y, extend duration to 5Y in regions with stronger credit quality, and participate in ultra - long - term credit bonds with a trading mindset (it's time to take profit in a timely manner) [2][9]. - Short - term urban investment bonds are the preferred choice for the bottom - position portfolio. Provinces with thick 3Y - 1Y term spreads include Henan, Tianjin, Shaanxi, and Yunnan, where investors can find individual bonds with higher yields around 3Y for 10 - 20bp additional returns. Jiangsu and Zhejiang are the first choices for mainstream institutions to extend duration to 5Y, and Henan also has large potential [6][21]. Summary by Relevant Catalogs 1. Credit Bond Weekly Viewpoint: Finding the "Convex Point" of the Yield Curve - **3Y - 1Y Term Spread Analysis**: - In high - quality regions, Jiangsu's 3Y valuation is relatively high, suitable for low - risk - preference institutions. - In central provinces, only Henan has large historical fluctuations and thick current spreads; core entities like Yu Airport Harbor can be appropriately allocated. - In provinces with some "internet - famous" regions, Yunnan, Shaanxi, and Tianjin have high spreads, but mining may face resistance. - In other niche provinces, Xining Urban Construction Investment, Yinchuan Tonglian, and Gansu Communications Construction have slightly high 3Y valuations [6][9]. - **5Y - 3Y Term Spread Analysis**: - In high - quality regions, Jiangsu and Zhejiang have larger fluctuations, about 5bp lower than Beijing and Shanghai, suitable for low - risk - preference institutions to enhance returns slightly. - In central provinces, Henan and Hunan have large historical fluctuations. Henan's 5Y urban investment bonds (e.g., Luoyang Guosheng, Sanmenxia Investment) still have potential. - In regions with more negative information, Yunnan's 5Y yields are significantly high (mainly Yunnan Construction and Investment). - In niche provinces, 5Y - 3Y term spreads are mostly around 20 - 30bp, with few opportunities [6][15][17]. 2. Credit Bond Weekly Review: Fluctuations in the Second Half of the Week, but Strong Allocation Power 2.1 Negative Information Monitoring - **Bond Default and Overdue**: There were no bond defaults or overdue events this week [22]. - **Subject Rating or Outlook Downgrade**: Zhengzhou Coal Industry (Group) Co., Ltd.'s subject rating was downgraded from BB+ to BB by Dagong Global Credit Rating Co., Ltd. on July 9, 2025 [24]. - **Debt - Item Rating Downgrade**: On July 9, 2025, the debt - item ratings of "22 Shenshan Investment MTN001" and "15 Zhengmei MTN001" were downgraded [24]. - **Overseas Rating Downgrade**: There were no overseas rating downgrades this week [24]. - **Major Negative Events**: Many companies such as Fanhai Holdings, Zheng Rong Real Estate, and others had major negative events including debt defaults, lawsuits, and regulatory warnings [25]. 2.2 Primary Issuance - **Issuance and Net Financing**: From July 7 to July 13, the primary issuance of credit bonds increased by nearly 70 billion yuan compared with the previous period, and the total repayment amount also increased to 199.1 billion yuan. The net financing amount was 88.3 billion yuan, basically the same as the previous period [25]. - **Cancellation or Postponement of Issuance**: Only 3 credit bonds with a total scale of 4 billion yuan were cancelled or postponed this week, returning to the medium - level this year [26]. - **Issuance Cost**: Last week, the average coupon rates of AAA and AA+ were 2.07% and 2.21% respectively. Compared with the previous week, the AA+ level decreased by 29bp, while the AAA level increased by 8bp. The issuance frequency of new AA/AA - level bonds remained low [29]. 2.3 Secondary Trading - **Valuation and Spread**: The valuations of all - grade credit bonds fluctuated within ±3bp, with short - term yields decreasing and long - term yields increasing. Credit spreads narrowed comprehensively, with a central value of about 3bp. The term spreads of all grades widened, with medium - and high - grade spreads widening more (3 - 4bp), and the grade spreads of all terms compressed, with lower - grade spreads narrowing more [31][33]. - **Liquidity**: The liquidity of credit bonds continued to weaken slightly, with the turnover rate decreasing by 0.24 percentage points to 1.91%. The top - ten turnover bonds were mostly central and state - owned enterprises. There were 8 credit bonds with a discount of more than 10%, mainly concentrated in some real - estate enterprises and individual rural commercial banks [39]. - **Single - Subject Valuation Changes**: Among urban investment bonds, the distribution of entities with significant spread narrowing or widening was scattered. Among industrial bonds, the top five entities with widening spreads were all real - estate enterprises, including Country Garden, Rongqiao, etc. [41].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 17.01 CNY [5][2]. Core Views - The rapid growth in new energy vehicle sales and the anticipated separation of the military industry group are expected to enhance the company's operational efficiency [1]. - The company is projected to achieve a net profit attributable to shareholders of 8.03 billion CNY, 9.47 billion CNY, and 11.31 billion CNY for the years 2025, 2026, and 2027 respectively, with a maintained average PE valuation of 21 times for comparable companies [2]. Financial Performance Summary - **Revenue Forecast**: The company expects revenues of 151.30 billion CNY in 2023, growing to 219.51 billion CNY by 2027, with a compound annual growth rate (CAGR) of approximately 9.5% [4]. - **Net Profit**: The net profit attributable to shareholders is forecasted to decline to 7.32 billion CNY in 2024, before recovering to 8.03 billion CNY in 2025 and reaching 11.31 billion CNY by 2027 [4]. - **Earnings Per Share (EPS)**: EPS is projected to be 0.74 CNY in 2024, increasing to 1.14 CNY by 2027 [4]. - **Profitability Ratios**: The gross margin is expected to improve from 14.9% in 2024 to 18.2% in 2027, while the net margin is projected to rise from 4.6% to 5.2% over the same period [4]. Sales Performance Summary - In June, the company's overall sales reached 235,100 units, marking a year-on-year increase of 4.5% and a month-on-month increase of 4.8% [9]. - The sales of new energy vehicles in June were 100,800 units, reflecting a significant year-on-year growth of 57.1% [9]. - The company’s overseas sales also saw a notable increase, with June sales reaching 52,600 units, up 17.3% from the previous month [9].

Quantitative Models and Construction Methods Model Name: MFE (Maximized Factor Exposure) Portfolio - **Model Construction Idea**: The MFE portfolio aims to maximize the exposure to a single factor while controlling for various constraints such as industry exposure, style exposure, and stock weight limits[75][76]. - **Model Construction Process**: - The optimization model is formulated as follows: $$ \begin{array}{ll} \text{max} & f^{T}w \\ \text{s.t.} & s_{l} \leq X(w-w_{b}) \leq s_{h} \\ & h_{l} \leq H(w-w_{b}) \leq h_{h} \\ & w_{l} \leq w-w_{b} \leq w_{h} \\ & b_{l} \leq B_{b}w \leq b_{h} \\ & 0 \leq w \leq l \\ & 1^{T}w = 1 \\ & \Sigma|w-w_{0}| \leq to_{h} \end{array} $$ - **Explanation**: - \( f \): Factor values - \( w \): Stock weight vector to be solved - Constraints include style exposure, industry exposure, stock weight deviation, component stock weight limits, and turnover rate[75][76][77]. - The model is solved using linear programming to efficiently determine the optimal weights[76]. - **Model Evaluation**: The MFE portfolio is evaluated based on its historical performance relative to the benchmark index, considering constraints such as industry and style exposures[78][79]. Quantitative Factors and Construction Methods Factor Name: Trend - **Factor Construction Idea**: The Trend factor captures the momentum of stock prices over different time horizons[12][17]. - **Factor Construction Process**: - **Trend_120**: $$ \text{EWMA}(\text{halflife}=20) / \text{EWMA}(\text{halflife}=120) $$ - **Trend_240**: $$ \text{EWMA}(\text{halflife}=20) / \text{EWMA}(\text{halflife}=240) $$ - **Factor Evaluation**: The Trend factor showed a positive return of 2.15% this week, indicating a strong market preference for trend-following strategies[12]. Factor Name: Single Quarter Net Profit YoY Growth - **Factor Construction Idea**: This factor measures the year-over-year growth in net profit for a single quarter[2][8]. - **Factor Construction Process**: - Calculation: $$ \text{Single Quarter Net Profit YoY Growth} = \frac{\text{Current Quarter Net Profit} - \text{Previous Year Same Quarter Net Profit}}{\text{Previous Year Same Quarter Net Profit}} $$ - **Factor Evaluation**: This factor performed the best among the CSI All Share Index components this week[2][8]. Factor Backtesting Results Trend Factor - **Recent Week**: 2.15%[12] - **Recent Month**: 5.62%[14] - **Year-to-Date**: -1.74%[14] - **Last Year**: 26.90%[14] - **Historical Annualized**: 14.22%[14] Single Quarter Net Profit YoY Growth Factor - **Recent Week**: 1.69%[57] - **Recent Month**: 3.19%[57] - **Year-to-Date**: 8.08%[57] - **Last Year**: 3.65%[57] - **Historical Annualized**: 3.20%[57]

Investment Rating - The report maintains a "Positive" outlook for the machinery equipment industry [6]. Core Insights - The humanoid robot industry is on the verge of mass production, driven by hardware optimization and breakthroughs in intelligent technology. Domestic leading robot companies are expected to accelerate their listing processes, creating investment opportunities [3][9]. - Key developments include the release of advanced AI models like Grok4, which enhance the capabilities of humanoid robots, improving task understanding and execution efficiency [9]. - The report highlights the positive signals from both domestic and international markets, with significant capital inflow expected to support technological innovation and market expansion [9]. Summary by Sections Investment Recommendations and Targets - The report suggests focusing on three categories of quality targets within the industry: 1. Companies with strong ties to leading domestic and international clients and strategic positioning 2. Companies with forward-looking layouts and guaranteed mass production capabilities 3. Companies with strong cost-reduction capabilities, which are likely to benefit first during the industry's growth phase - Recommended stocks include: Wuzhou New Spring (603667, Buy), Zhenyu Technology (300953, Buy), Saimo Intelligent (300466, Not Rated), Bozhong Precision (688097, Not Rated), and Lingyi Manufacturing (002600, Buy) [3]. Industry Dynamics - The humanoid robot industry is experiencing a significant shift towards mass production, with international leaders like Figure ramping up production capabilities and reducing costs by 90% for their latest models [9][11]. - The report notes that the domestic capital market is showing positive trends, with several leading robot companies planning to go public, which will inject strong growth momentum into the industry [9][11]. Recent Developments - Key events in the humanoid robot industry include significant financing rounds and product launches, such as the completion of a 500 million yuan A-round financing by Xingdong Jiyuan and the introduction of the MagicBot Z1 by Magic Atom [11][12]. - The report also highlights the upcoming Asia-Pacific International Smart Equipment Expo and other industry conferences, indicating a growing interest and investment in the humanoid robotics sector [12].