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].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 67.24 CNY [2][5] Core Insights - The company is expected to see a sales recovery in Q2 2025, supported by the implementation of departure tax refunds and the opening of new city stores [1][8] - The earnings per share (EPS) forecasts for 2025, 2026, and 2027 are adjusted to 2.24 CNY, 2.60 CNY, and 3.10 CNY respectively, reflecting a downward revision due to slower recovery in duty-free sales and lower-than-expected customer traffic [2] - The company is expanding its channels with new stores opening in Tianjin and enhancing customer engagement through innovative retail experiences [8] Financial Summary - Revenue projections for 2025, 2026, and 2027 are 61,865 million CNY, 67,993 million CNY, and 74,120 million CNY respectively, with growth rates of 9.5%, 9.9%, and 9.0% [4] - The company's gross margin is expected to improve slightly from 32.0% in 2024 to 32.8% in 2027, while net profit margin is projected to increase from 7.6% in 2024 to 8.7% in 2027 [4] - The return on equity (ROE) is forecasted to rise from 7.8% in 2024 to 10.3% in 2027, indicating improved profitability [4]

Group 1: Short-term Impact of the "Great Beauty Act" - The "Great Beauty Act" is expected to have limited short-term market impact due to prior market adjustments over the past two months, with bond yields already reflecting the anticipated changes[6] - The act was passed with a narrow margin of 218 votes in favor and 214 against, and signed into law on July 4, 2025[9] - Concerns about a large-scale fiscal expansion causing market turmoil are mitigated by the expectation that upcoming debt issuance will primarily rely on short-term bonds, stabilizing long-term bond supply[6] Group 2: Long-term Implications of the "Great Beauty Act" - The act is projected to increase the deficit by approximately $4.1 trillion over the next decade, with tax cuts estimated at $4.5 trillion and spending cuts at $1.4 trillion[12] - The Congressional Budget Office (CBO) predicts that the act will raise the deficit rate to between 6.4% and 7.1% over the next five years, reflecting a structural shift in fiscal policy[30] - The act's long-term significance lies in its potential to reshape market perceptions of the U.S. fiscal cycle, establishing a "new normal" for deficit levels rather than reverting to historical averages[30] Group 3: Economic Growth Projections - Neutral institutions forecast that the act will contribute an additional economic growth of between -0.1% and 1.1% over the next decade, indicating a modest impact on overall economic performance[23] - The act's primary policies are extensions of existing measures, suggesting minimal marginal changes to the economic landscape[27] - Historical data shows that previous tax reforms had limited effects on corporate investment, indicating skepticism about the act's ability to drive significant economic growth[29]

Group 1: Legislative Overview - The "Great Beauty Act" was passed by the U.S. House of Representatives with a narrow margin of 218 votes in favor and 214 against, and was signed into law by Trump on July 4, 2025[6] - The act is expected to increase the deficit by approximately $4.1 trillion over the next ten years, with tax cuts of about $4.5 trillion and spending cuts of around $1.4 trillion[12][13] Group 2: Market Impact - The market impact of the "Great Beauty Act" is expected to be limited in the short term, as the bond market has already priced in the information over the past two months[6] - The upcoming debt issuance is likely to be managed through short-term bonds, which will not significantly affect long-term bond supply and demand[6][18] Group 3: Economic Projections - The Congressional Budget Office (CBO) and the Committee for a Responsible Federal Budget (CRFB) predict that the deficit rate will rise to between 6.4% and 7.1% over the next five fiscal years due to the act[29][28] - Neutral institutions expect the act to contribute an additional economic growth of between -0.1% and 1.1% over the next ten years, indicating a very mild upward impact on the economy[22][23] Group 4: Long-term Implications - The act is likely to force the market to reassess the "new normal" of the U.S. fiscal cycle, leading to a higher central pricing for long-term U.S. Treasury yields[27] - The current 10-year Treasury yield is estimated to be around 4.1%, which is above its fair value, suggesting that the yield may continue to rise in the short term[38][41]

Investment Rating - The report maintains a "Positive" investment rating for the home appliance industry, indicating an expected return that is stronger than the market benchmark by more than 5% [5][20]. Core Insights - The report highlights that TV panel prices have shown signs of weakening, with expectations for continued decline in the second half of the year. Despite potential weakening in domestic demand for color TVs, the trend of price increases is expected to persist due to the rapid adoption of MiniLED technology, which will drive up the average industry price [3][7]. - Leading color TV manufacturers are anticipated to benefit from structural optimization and the price drop in panels, creating a "scissors effect" that will enhance profit margins in the second half of the year. The report specifically recommends focusing on Hisense Visual (600060, Buy) [3][7]. - The report suggests that the cyclical fluctuations in panel prices are likely to weaken, with mid-term prices expected to stabilize. This is attributed to a shift in manufacturing power from overseas to mainland China, where over 70% of panel shipments originate, and a decrease in the willingness of manufacturers to increase supply significantly [7][11]. Summary by Sections Panel Price Trends - TV panel prices have been declining for two consecutive months, with July prices expected to continue this trend. The average price for a 55-inch TV panel is $124 (down $2 from June), and for a 65-inch panel, it is $174 (also down $2). Year-on-year, the price drop for 55-inch panels has expanded to -4% [7][9]. - The report notes that the domestic subsidy policy is entering a new phase, with demand resilience but reduced momentum. Additionally, the end of the tariff buffer period in July-August may suppress overseas procurement demand [7][9]. MiniLED Technology Impact - The report anticipates that the penetration rate of MiniLED TVs will approach 20% in Q3 2024 and exceed 30% in Q4 2024. The online market share of MiniLED products during the 618 shopping festival reached 41%, a significant increase of 22.1 percentage points compared to the previous year [7][11]. - The concentration of MiniLED TV sales is expected to increase, with leading manufacturers projected to capture significant market shares, enhancing their competitive edge [7][11]. Market Dynamics - The report indicates that the global retail volume of color TVs is stabilizing around 200 million units, with a slight downward trend. The demand for larger screens is expected to maintain low-speed growth, contributing to a more stable supply-demand relationship in the panel market [7][11].

Group 1 - The report argues that the all-weather strategy does require timing, contrary to common belief, as it relies on accurately measuring and fully hedging all risk factors [7][8][22] - It highlights that risk is time-varying and difficult to measure, which significantly impacts the effectiveness of strategies [8][22] - The report suggests that a simple risk parity strategy combined with timing could serve as a practical alternative to the all-weather strategy, focusing on hedging the most common risk factors in the current market [3][4][22] Group 2 - The report emphasizes that bond risk changes with interest rate levels, indicating that different measurement methods yield varying results for bond risk [10][12] - It notes that equity risk is correlated with economic cycles, with fluctuations in equity markets reflecting changes in GDP growth rates [13][14] - The report discusses the importance of adjusting rebalancing frequency, suggesting that higher frequency rebalancing can lead to better performance during volatile market conditions [23][30] Group 3 - The report identifies that not all risks can be fully hedged, and it is not necessary to do so for effective risk management [33][43] - It points out that currency risk should be considered separately due to the increasing relevance of overseas investments and transactions [37] - The report also highlights the need to differentiate between credit risk and equity risk, as their behaviors can be inversely related in domestic markets [38][40]

Investment Rating - The industry investment rating is maintained as "Positive" [3] Core Viewpoints - Changxin Technology's planned IPO is expected to benefit the entire semiconductor industry chain, particularly the upstream semiconductor equipment materials and storage sectors [2][6] - The advanced storage and logic capacity expansion continues, with domestic storage leader Changxin Technology expected to increase its capacity by nearly 50% year-on-year in 2025 [6] - The demand for storage is recovering, and some storage price increases have been ongoing for several months, indicating a positive outlook for niche DRAM manufacturers in mainland China [6] Summary by Sections Industry Overview - Changxin Technology, a core enterprise in the DRAM industry chain in mainland China, is undergoing IPO preparations, which is expected to facilitate business expansion through financing [6] - The company's product range includes DDR4/DDR5 and LPDDR4/LPDDR5 series, with plans to deliver HBM3 samples by the end of 2025 and to start mass production in 2026 [6] Market Dynamics - Changxin's market share in terms of bit shipments is projected to increase from 6% in Q1 to 8% by the end of the year, with DDR5/LPDDR5 market shares expected to rise significantly [6] - The supply gap for DDR4 and LPDDR4 continues to exist, benefiting domestic storage manufacturers and niche storage design companies [6] Investment Recommendations - Recommended stocks in the semiconductor equipment and materials sector include Northern Huachuang, Shengmei Shanghai, and Zhongwei Company [6] - In the storage industry chain, recommended stocks include Zhaoyi Innovation and Beijing Junzheng [6]