Investment Rating - The report maintains an "Overweight" rating for the oil and petrochemical industry [6] Core Viewpoints - The oil price experienced significant fluctuations in H1 2025 due to a combination of geopolitical disturbances and OPEC+ production increases, leading to a downward trend in oil prices [1][11] - Geopolitical risks, particularly the prolonged Russia-Ukraine conflict and uncertainties surrounding the Iran nuclear issue, are expected to continue impacting oil prices [2][15] - OPEC+ plans to increase production by 548,000 barrels per day in August 2025, with a projected global oil supply increase of 1.8 million barrels per day in 2025 [3][17] - Oil demand growth expectations have been revised downward, with IEA predicting an increase of 720,000 barrels per day in 2025, primarily due to weak demand from the US and China [4][24] - The "Big Three" oil companies in China are focusing on high capital expenditure and strategic production increases to mitigate external uncertainties [4][27] Summary by Sections Oil Price Trends - In H1 2025, oil prices showed a downward trend, with Brent and WTI prices at $66.63 and $64.97 per barrel respectively, down 11.0% and 9.6% from the beginning of the year [1][11] Geopolitical Risks - The Russia-Ukraine conflict is expected to persist, with slow progress in peace talks affecting market sentiment [2][12] - The Iran nuclear issue remains a significant geopolitical risk, with potential for escalation impacting oil prices [15] Supply Dynamics - OPEC+ is accelerating production increases, with a total increase of 1.918 million barrels per day since April 2025 [3][17] - The US shale oil production is expected to slow down, providing some support against the global supply increase [19] Demand Expectations - The IEA has lowered its oil demand growth forecast for 2025 by approximately 300,000 barrels per day, citing weak demand from major economies [4][24] - The "Big Three" oil companies are adapting to these changes by increasing their production plans [4][27] Investment Recommendations - The report suggests a continued positive outlook for the "Big Three" oil companies and the oil service sector, emphasizing the importance of macroeconomic recovery for chemical demand [5]

Investment Rating - The report maintains an "Accumulate" rating for the non-ferrous metals sector [6]. Core Viewpoints - The report indicates that copper prices are expected to rise in 2025 due to tightening supply and improving demand [4]. - The report highlights a continued weakening in demand, particularly in the cable sector, with risks of further declines in production rates for air conditioning units [1][3]. - The report notes that the short-term risk of warehouse squeezing remains, suggesting that copper prices may continue to show strength before returning to a more volatile state [1]. Supply and Demand Summary - **Production**: In June 2025, China's electrolytic copper production was 1.1349 million tons, a decrease of 0.3% month-on-month but an increase of 12.9% year-on-year [3][65]. - **Demand**: The cable industry's operating rate decreased by 2.4 percentage points, with the operating rate for cable enterprises at 67.81% as of July 3, 2025 [3][75]. - **Inventory**: Domestic copper social inventory increased by 1.3%, while LME copper inventory rose by 5.1% [2][24]. Raw Material Insights - **Copper Concentrate**: Domestic copper concentrate inventory at major ports was 666,000 tons, up 6.8% week-on-week as of July 4, 2025 [2][49]. - **Scrap Copper**: The price difference between refined copper and scrap copper decreased by 260 RMB/ton, indicating a tighter supply of scrap copper [2][54]. Futures Market Overview - The active contract position for SHFE copper increased by 1.3% week-on-week, with a total position of 216,000 lots as of July 4, 2025 [4][33]. Company Profit Forecasts and Valuations - **Western Mining**: Stock price at 17.10 RMB, with EPS forecasts of 1.67 RMB for 2025, and a PE ratio of 10 [5]. - **Zijin Mining**: Stock price at 20.05 RMB, with EPS forecasts of 1.60 RMB for 2025, and a PE ratio of 13 [5]. - **Luoyang Molybdenum**: Stock price at 8.54 RMB, with EPS forecasts of 0.62 RMB for 2025, and a PE ratio of 14 [5]. - **Jincheng Mining**: Stock price at 45.42 RMB, with EPS forecasts of 3.61 RMB for 2025, and a PE ratio of 13 [5].

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core Viewpoints - The central bank's tolerance of the current 10Y Treasury yield means it's unlikely to significantly raise DR rates if the (ultra) long - end of the yield curve stays at current levels or declines slightly and slowly [3][14]. - Before the next OMO rate cut, the room for further decline in the DR007 and DR001 central rates is limited [1][2][11]. - The 1Y CD rate is currently slightly overvalued, and the central bank will consider its impact on bank net interest margins, loan issuance, yield curve long - end, and future Treasury trading when supplying medium - term base money [15]. 3. Summary by Section 7 - month Funding Situation - Since July, the money market interest rates have been falling. As of July 4, DR001 and DR007 have dropped to 1.31% and 1.42% respectively, but the room for further decline is limited before the next OMO rate cut [1][9]. - OMO reverse repurchase operations have "tool mode" and "non - tool mode". In the "non - tool mode", the DR007 central rate is slightly higher than the 7D OMO rate, and DR001 is slightly lower. Currently, the spreads between DR007, DR001 and 7D OMO are lower than the 2024 average, approaching the 1/4 quantile [2][11]. - In the "non - tool mode", DR007 is not an indication of monetary policy attitude and is unlikely to decline ahead of the 7D OMO rate. In 2024, the 7D OMO rate changed first, and then DR007 adjusted accordingly [2][11]. Treasury Yield Analysis - The 10Y Treasury yield has been stable around 1.65% recently, and the central bank tolerates its current trend [3][14]. - Since June, the decline of the 50Y Treasury yield has been greater than that of the 10Y variety. As of July 4, the spread between the 50Y and 10Y Treasuries has compressed by 11.1bp compared to the end of May. If the (ultra) long - term interest rate yields decline significantly or rapidly, OMO may switch from "non - tool mode" to "tool mode", and the DR007 central rate may rise significantly [4][14]. CD Rate Analysis - The 1Y CD rate is currently slightly overvalued. On July 4, the spread between the 1Y AAA - rated CD and 7D OMO was 19.3bp, lower than 83% of trading days in 2024 [15]. - The central bank will consider the impact of CD rates on bank net interest margins, loan issuance, yield curve long - end, and future Treasury trading when supplying medium - term base money [15].

Investment Rating - The report maintains a "Buy" rating for the automotive and auto parts industry, indicating an expected investment return exceeding 15% over the next 6-12 months [22]. Core Insights - In Q2 2025, Tesla's global delivery volume showed a quarter-on-quarter recovery, with a total of 384,000 vehicles delivered, reflecting a 14.1% increase from the previous quarter, despite a year-on-year decline of 13.5% [1]. - The report highlights the competitive landscape, noting that new entrants like Xiaomi are gaining traction, with the YU7 model receiving over 289,000 pre-orders within an hour of its launch [1]. - The introduction of Tesla's Robotaxi service and the potential impact of the U.S. electric vehicle tax credit termination are significant developments that could influence demand dynamics [2]. Summary by Sections Tesla's Performance - Tesla's Model 3 and Model Y deliveries increased by 15.4% quarter-on-quarter, totaling 374,000 units, despite a year-on-year decline of 11.5% [1]. - The delivery timelines for various Tesla models have been adjusted, with the Model 3 and Model Y long-range versions seeing a delivery period of 1-3 weeks [1]. New Entrants and Market Dynamics - New players like Li Auto and NIO are stabilizing their delivery volumes, with Li Auto delivering 36,279 units, down 24.1% year-on-year but down only 11.2% quarter-on-quarter [1]. - Xiaopeng Motors reported a significant year-on-year increase of 224.4% in deliveries, totaling 34,611 units [1]. Market Trends and Consumer Behavior - The report notes that consumer sentiment may be affected by the increasing purchase incentives from new entrants, potentially leading to a wait-and-see attitude among buyers [2]. - The introduction of various financing options and promotional offers by new entrants is expected to intensify competition in the market [1][2].

Investment Rating - The industry is rated as "Buy" [6] Core Viewpoints - The pig farming sector is expected to see a recovery in prices due to seasonal demand and a slight increase in the number of breeding sows, indicating a potential long-term profit cycle [5][70] - The recent increase in pig prices is attributed to supply constraints caused by seasonal weather conditions and reduced slaughtering activities [24] - The overall agricultural sector has shown resilience, outperforming the market indices in recent weeks [15] Summary by Sections 1. Industry Performance - The agricultural sector index rose by 2.55% in the week ending July 4, outperforming the Shanghai Composite Index by 1.15% [15] - The pig farming sub-sector saw a price increase of 4.28% for live pigs, while the average weight of pigs at slaughter reached 128.64 kg, up 0.50 kg week-on-week [24] 2. Key Data Tracking - As of the end of May, the number of breeding sows was 40.42 million, a slight increase of 0.1% month-on-month and 1.2% year-on-year [1] - The average price for live pigs decreased to 14.92 yuan/kg in May, down 0.9% month-on-month and 5.4% year-on-year [1] - The average profit per pig for large-scale farms dropped to 49 yuan per head in May, down from 86 yuan in April [1] 3. Investment Recommendations - The report recommends focusing on the pig farming sector, highlighting companies such as Muyuan Foods, Wens Foodstuff Group, and Juxing Agriculture as key investment opportunities [5][70] - The feed and veterinary sectors are also expected to benefit from the recovery in pig stocks, with companies like Haida Group and Ruipu Biological Products suggested for consideration [5][70] - In the planting chain, the upward trend in grain prices presents investment opportunities in companies like Suqian Agricultural Development and Beidahuang Group [5][70]

2025 年 7 月 5 日 行业研究 "反内卷"叠加旺季来临，煤价板块底部或已出现 ——煤炭开采行业周报（2025.6.30~2025.7.6） 要点 "反内卷"叠加旺季来临，煤价板块底部或已出现。（1）7 月 1 日，中共中央 总书记、国家主席、中央军委主席、中央财经委员会主任习近平主持召开中央 财经委员会第六次会议，会议提出，要依法依规治理企业低价无序竞争，引导 企业提升产品品质，推动落后产能有序退出；（2）本周 28 个主要城市平均气 温为 30.56 ℃，已进入季节性高温区间，夏季用煤旺季已经来临；（3）在基本 面、事件共同驱动下，近期焦煤期货价格、煤炭板块均止跌回升。 本周港口煤价小幅反弹，海外天然气价格回落。（1）本周（6.30-7.4）秦皇岛 港口动力煤平仓价（5500 大卡周度平均值）为 621 元/吨，环比+5 元/吨 （+0.88%）；（2）陕西榆林动力混煤坑口价格（5800 大卡）周度平均值为 475 元/吨，环比+1 元/吨（+0.21%）；（3）澳大利亚纽卡斯尔港动力煤 FOB 价格 （5500 大卡周度平均值）为 65 美元/吨，环比-1.89%；（4）欧洲天然气期货 结算价（D ...

Investment Rating - The report maintains a rating of "Buy" for the MXD6 industry [5] Core Insights - MXD6, a type of crystalline polyamide, has high gas barrier properties and rigidity, making it suitable for various applications, particularly in food and beverage packaging [1][2] - The domestic MXD6 market is expected to grow significantly as local manufacturers ramp up production, breaking the previous monopolies held by foreign companies [4][29] Summary by Sections 1. MXD6 Characteristics - MXD6 is characterized by high gas barrier properties and rigidity, which are enhanced by its molecular structure that includes aromatic rings [1][20] - The production of MXD6 primarily utilizes direct melt polycondensation, which is more efficient and yields higher quality products compared to other methods [17][19] 2. Applications of MXD6 - In the food and beverage packaging sector, MXD6 can significantly extend shelf life and reduce packaging weight, with a projected market size for prepared dishes in China reaching approximately 697.2 billion yuan by 2024 [2][37] - MXD6 is also applicable in automotive, electronics, and aerospace industries due to its lightweight and high mechanical strength, with potential uses in engine components and structural parts [3][52] 3. Domestic Production and Market Potential - Domestic manufacturers like Qicai Chemical and Sinochem International are expanding their production capacities, with Qicai Chemical already achieving 5,000 tons/year and planning for further expansion [4][54] - The global MXD6 production is estimated to reach 30,000 to 40,000 tons by 2024, with significant contributions from domestic players [4] 4. Market Demand and Growth - The report highlights a substantial demand for MXD6 in the carbonated beverage and tea beverage markets, with the total market size for soft drinks in the Greater China region projected to be around 138.4 billion USD by 2024 [43][44] - The anticipated growth in the prepared dishes market and the beverage industry presents a considerable opportunity for MXD6 usage, with potential consumption in the prepared dishes sector alone estimated at 2.9 million tons under optimistic scenarios [42][50]

Quantitative Models and Construction Methods - **Model Name**: PB-ROE-50 **Model Construction Idea**: The model combines Price-to-Book ratio (PB) and Return on Equity (ROE) to select stocks with high profitability and reasonable valuation[3][25] **Model Construction Process**: The PB-ROE-50 portfolio is constructed by selecting 50 stocks with the highest combined scores of PB and ROE within specific stock pools (e.g., CSI 500, CSI 800, and the entire market). The portfolio is rebalanced periodically to maintain its composition[25][26] **Model Evaluation**: The model demonstrates consistent excess returns across different stock pools, indicating its effectiveness in capturing profitable investment opportunities[25][26] - **Model Name**: Institutional Research Portfolio **Model Construction Idea**: The model leverages public and private institutional research data to identify stocks with potential excess returns[28] **Model Construction Process**: The portfolio is constructed based on institutional research data, with public research focusing on CSI 800 stocks and private research tracking broader market stocks. Stocks are selected based on research frequency and sentiment, and the portfolio is rebalanced monthly[28][29] **Model Evaluation**: The model shows positive excess returns, particularly for private research tracking strategies, suggesting its ability to capture valuable insights from institutional activities[28][29] - **Model Name**: Block Trade Portfolio **Model Construction Idea**: The model identifies stocks with high block trade activity and low volatility to capture potential excess returns[31] **Model Construction Process**: Stocks are selected based on "block trade transaction ratio" and "6-day transaction volatility." The portfolio is rebalanced monthly to maintain its focus on high-transaction, low-volatility stocks[31][32] **Model Evaluation**: The model's performance varies, with occasional excess return drawdowns, highlighting the need for careful monitoring and adjustment[31][32] - **Model Name**: Directed Issuance Portfolio **Model Construction Idea**: The model focuses on stocks involved in directed issuance events to capture event-driven investment opportunities[37] **Model Construction Process**: Stocks are selected based on directed issuance announcements, considering factors like market capitalization, rebalancing frequency, and position control. The portfolio is rebalanced periodically to align with event-driven dynamics[37][38] **Model Evaluation**: The model shows mixed results, with occasional excess return drawdowns, indicating the need for further refinement in capturing event-driven effects[37][38] --- Model Backtesting Results - **PB-ROE-50 Model** - CSI 500: Weekly excess return 1.17%, absolute return 1.99%[25][26] - CSI 800: Weekly excess return 1.21%, absolute return 2.58%[25][26] - Entire Market: Weekly excess return 1.36%, absolute return 2.51%[25][26] - **Institutional Research Portfolio** - Public Research: Weekly excess return 0.02%, absolute return 1.37%[28][29] - Private Research: Weekly excess return 0.25%, absolute return 1.61%[28][29] - **Block Trade Portfolio** - Weekly excess return -0.24%, absolute return 0.88%[31][32] - **Directed Issuance Portfolio** - Weekly excess return -0.69%, absolute return 0.43%[37][38] --- Quantitative Factors and Construction Methods - **Factor Name**: BP Factor **Factor Construction Idea**: The factor uses the Book-to-Price ratio to identify undervalued stocks[20] **Factor Construction Process**: BP is calculated as the inverse of the Price-to-Book ratio. Stocks with higher BP values are considered undervalued and selected for portfolios[20] **Factor Evaluation**: BP demonstrates positive returns in multiple industries, indicating its effectiveness in identifying undervalued stocks[23][24] - **Factor Name**: ROE Factor **Factor Construction Idea**: The factor measures profitability using Return on Equity[20] **Factor Construction Process**: ROE is calculated as net income divided by shareholder equity. Stocks with higher ROE values are considered more profitable and selected for portfolios[20] **Factor Evaluation**: ROE shows positive returns across various industries, highlighting its ability to capture profitable investment opportunities[23][24] - **Factor Name**: Nonlinear Market Cap Factor **Factor Construction Idea**: The factor captures the impact of market capitalization on stock returns using a nonlinear approach[20] **Factor Construction Process**: Nonlinear transformations of market capitalization are applied to identify stocks with specific size-related characteristics[20] **Factor Evaluation**: The factor shows negative returns, indicating challenges in capturing size-related effects[20] --- Factor Backtesting Results - **BP Factor** - Weekly return 0.30%[20] - **ROE Factor** - Weekly return 0.27%[20] - **Nonlinear Market Cap Factor** - Weekly return -0.31%[20] - **Scale Factor** - Weekly return -0.29%[20]

Employment Data - In June 2025, the U.S. added 147,000 non-farm jobs, exceeding the expected 110,000 and the revised previous value of 144,000[11] - The unemployment rate fell to 4.1%, lower than the expected 4.3% and previous 4.2%[11] - Average hourly earnings increased by 3.7% year-on-year, below the expected 3.9% and revised previous increase of 3.8%[11] Government vs. Private Sector Employment - Government jobs contributed nearly half of the new employment, with 73,000 jobs added, significantly higher than the previous month's 7,000[15] - Private sector employment weakened, with service sector jobs dropping from 141,000 to 68,000, indicating potential economic pressure from tariff disruptions[18] - Retail sector employment rebounded slightly, adding 2,000 jobs compared to a loss of 7,000 in the previous month[24] Labor Market Dynamics - The labor force participation rate decreased to 62.3%, down from 62.4% in the previous month, with a notable decline in youth employment willingness[27] - The U6 unemployment rate, which includes those working part-time for economic reasons, fell to 7.7% from 7.8%[32] - Permanent unemployment decreased by 29,000, while temporary job losses also declined, suggesting stability in the job market[32] Federal Reserve Outlook - Given the unsustainable rise in government employment and the risk of weakening non-farm data, the probability of the Federal Reserve restarting rate cuts in the second half of 2025 is significant[20] - Market expectations indicate a 60% chance of a rate cut in September 2025, with only a 5.2% chance in July[22]

Group 1: Tax Reform Overview - The tax reform primarily extends existing tax cuts from the 2017 tax reform, with a limited incremental scale of approximately $4.5 trillion over the next ten years, while new tax relief measures amount to only $0.7 trillion[3] - The tax reform focuses on individual tax cuts, with an estimated reduction in tax revenue of about $4.2 trillion for individual taxes compared to $1.1 trillion for corporate taxes over the same period[4] - The U.S. government deficit is projected to increase by approximately $4 trillion over the next decade due to the tax reform, despite potential increases in tariff revenues[5] Group 2: Economic Impact - The tax reform is expected to partially offset the economic pressure from tariffs, potentially alleviating recession expectations in the U.S. economy[2] - The Congressional Budget Office (CBO) estimates that the tax reform could increase U.S. GDP growth by an average of 0.5 percentage points from 2025 to 2034, while tariffs are projected to decrease GDP growth by 0.6 to 0.8 percentage points[14] - The distributional effects of the tax reform indicate that the bottom 10% of low-income households may see a decrease in disposable income by about 2% by 2027, while the top 10% may benefit from an increase[15]