Investment Rating - The industry investment rating is Neutral, maintained [7] Core Viewpoints - The long-term investment value of the steel sector remains promising under the "anti-involution" theme, similar to the supply-side reform period from 2016 to 2018, where the sector's performance was volatile until the exit of outdated capacities in late 2016 [2][6] - In the short term, the market lacks clear anchors for trading, leading to expectations that the equity market will follow steel prices, which are influenced by upstream and downstream trading [2][6] - The valuation position of steel stocks is a key focus for the market, with companies like Hualing Steel, New Steel, and Fangda Special Steel appearing relatively undervalued [6][5] Summary by Sections Market Performance - Recent tracking indicates insufficient downstream support, leading to a decline in steel prices. The apparent consumption of five major steel products decreased by 0.69% year-on-year and 2.47% month-on-month [4] - The average daily pig iron output of sample steel companies fell to 2.4071 million tons, down 1.52 million tons per day month-on-month [4] - Total steel inventory increased by 1.17% month-on-month, while year-on-year it decreased by 23.42% [4] Price Trends - Shanghai rebar prices dropped to 3,350 CNY/ton, down 100 CNY/ton month-on-month, while hot-rolled steel prices rose to 3,390 CNY/ton, down 130 CNY/ton month-on-month [5] - The estimated profit for rebar is 148 CNY/ton, with a lagging cost profit of 399 CNY/ton [5] Policy and Market Outlook - The "anti-involution" policy is expected to continue, with recent government meetings emphasizing the need to rectify disorderly competition and optimize capacity in key industries [6] - The report suggests that despite short-term volatility, the long-term outlook for the steel sector remains positive due to cost optimization and sustained policy support [6][2] - The report identifies four main investment lines: cost reduction due to new capacity, recovery of performance and valuation for low PB stocks, mergers and acquisitions under state-owned enterprise reforms, and focusing on quality processing and resource leaders [26][27][29]

Investment Rating - The report maintains a "Positive" investment rating for the communication industry [12]. Core Insights - The communication sector saw a 2.94% increase in the 31st week of 2025, ranking first among major industries in the Yangtze River region. Year-to-date, the sector has risen by 20.52%, ranking third [2][7]. - Strong financial performance and order growth from the four major North American cloud service providers indicate a robust capital expenditure trend, driven by the acceleration of AI commercial applications and sustained demand in the overseas computing power chain [8]. - The adoption of liquid cooling technology is accelerating, with significant opportunities identified in the liquid cooling supply chain [9][10]. Summary by Sections Market Performance - In the 31st week of 2025, the communication sector increased by 2.94%, leading the Yangtze River industry rankings. Since the beginning of the year, the sector has grown by 20.52%, placing it third overall. Notable stock performances include: - Top gainers: Invech (+29.6%), Changfei Fiber (+25.8%), Tianfu Communication (+25.2%) - Top losers: Dawi Technology (-7.2%), Runze Technology (-6.5%), Aofei Data (-6.4%) [2][7]. North American Cloud Providers - The financial results of the four major North American cloud providers exceeded expectations: - Microsoft reported revenues of 764 billion and net profits of 272 billion, with a year-on-year growth of 18% and 24% respectively. Azure services saw a 39% increase [8]. - Meta's revenue reached 475 billion with a net profit of 183 billion, marking a 22% and 36% increase year-on-year [8]. - AWS reported revenues of 309 billion, up 18% year-on-year, with a backlog of 1950 billion, a 25% increase [8]. - Google's cloud business revenue was 136 billion, a 32% increase, with a backlog of 1060 billion, up 38% [8]. Liquid Cooling Technology - Vertiv's Q2 2025 results showed net sales of 2.64 billion, a 35% increase, and net profits of 490 million, up 28%. The company raised its full-year guidance, expecting net sales to reach 10 billion, a 25% increase [9]. - Microsoft announced that all Azure data center regions now support liquid cooling deployment, indicating a significant shift in infrastructure [9]. - The report highlights the growing importance of liquid cooling technology in the industry, with several companies making advancements in this area [10]. Investment Recommendations - The report recommends focusing on the following companies: - Telecom Operators: China Mobile, China Telecom, China Unicom - Optical Modules: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication - Domestic Computing: Fenghuo Communication, Huafeng Technology, Invech - AI Applications: Heertai, Tuobang Technology, Yiyuan Communication - Satellite Applications: Haige Communication, Huace Navigation [10].

Investment Rating - The report maintains a "Positive" investment rating for the industry [9] Core Viewpoints - The report suggests focusing on gold stocks for a potential second wave of market opportunities within the year, driven by three dimensions: gold prices, valuations, and investment style [2][4] - Gold prices are expected to rise due to a pure driving force this year, breaking away from traditional interest rate frameworks, with a 90% probability of a rate cut in September [2][4] - Valuations of nearly all A-share gold stocks have adjusted to levels seen before the Q1 rally, indicating a high risk-reward ratio for investors [2][4] - The relative performance of gold stocks has diverged significantly from gold prices, reaching a new high in this cycle [2][4] Summary by Sections Precious Metals - The report emphasizes the importance of gold stocks and suggests increasing allocation to them, highlighting companies such as Zhaojin Mining, Chifeng Jilong Gold Mining, Shandong Gold, and Shengda Resources [4] - Strategic metals like rare earths and tungsten are also highlighted for their potential value reassessment, driven by national policies and international market dynamics [5] - The report notes that the prices of rare earths have shown a significant increase, with Baotou Steel's rare earth concentrate price rising to 19,100 yuan/ton, a 1.5% increase [5] Industrial Metals - Industrial metals are experiencing downward pressure due to domestic demand concerns and a stronger US dollar, with copper and aluminum prices declining by 1.7% and 2.3% respectively [6][24] - The report indicates that the overall industrial metal market is in a state of fluctuation, with expectations of a rebound if the Federal Reserve implements rate cuts or if domestic stimulus measures are intensified [7] Lithium and Cobalt - The report highlights the short-term price fluctuations in lithium and cobalt, with battery-grade lithium carbonate prices dropping by 9.9% to 68.5 yuan/kg, while cobalt prices have shown an upward trend [25][29] - The report suggests monitoring supply disruptions in Jiangxi and emphasizes the potential for price increases in cobalt due to supply constraints [5][29]

Investment Rating - The report maintains a "Positive" investment rating for the express delivery industry [11] Core Insights - The express delivery industry, although not listed among the top ten "anti-involution" sectors, has shown strong stock performance and exceeded expectations in July, reflecting a "latecomer advantage" [2][6] - The industry's characteristics of "stabilizing employment," "stabilizing growth," and "price increase acceptance" drive its performance [2][6] Summary by Sections Stabilizing Employment - The express delivery sector is a significant reservoir for employment, with over 4 million direct workers in 2024, highlighting its role in the flexible employment market [19][21] - The low social security coverage for delivery workers emphasizes the importance of the sector in stabilizing employment [22] Stabilizing Growth - The profitability of express delivery headquarters is under pressure, with average monthly prices dropping to around 2 yuan, leading to intensified price competition [25][26] - The report notes that the pressure on franchise operators is at historical highs, with some facing cash flow issues, necessitating a stable operational environment [26] Price Increase Acceptance - The average cost rate for online shopping express delivery is approximately 5.2%, indicating a relatively high acceptance of price increases among e-commerce customers [34][39] - The report suggests that the "anti-involution" measures could positively impact the quality of service and operational stability in the express delivery industry [34]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6] Core Views - The company has shown strong growth in its optical chip and MPO business, with significant revenue increases driven by AWG components and MPO jumpers [3][9] - The overseas market has seen notable breakthroughs, particularly with the production ramp-up of the Thailand factory, which has accelerated shipments [3][9] - The company focuses on high-end data communication products, leading to improved profitability and increased R&D investment [3][9] Financial Performance - In the first half of 2025, the company achieved revenue of 990 million yuan, a year-on-year increase of 121%, and a net profit of 220 million yuan, up 1712% [3][9] - For Q2 2025, revenue reached 560 million yuan, reflecting a 122% year-on-year growth and a 28% quarter-on-quarter increase [3][9] - The gross profit margin for Q2 2025 was approximately 36.0%, an increase of 12.5 percentage points year-on-year, indicating improved cost efficiency [9] Business Segmentation - The optical chip and device business generated 700 million yuan in revenue in H1 2025, a 191% increase year-on-year, accounting for about 71% of total revenue [9] - The AWG series products generated 310 million yuan in revenue, a year-on-year increase of approximately 206%, while MPO jumpers saw revenue of 300 million yuan, reflecting over fourfold growth [9] - Domestic revenue was 520 million yuan, up 57% year-on-year, while overseas revenue reached 450 million yuan, a 324% increase, making up 45% of total revenue [9] Future Outlook - The company is expected to maintain high growth in overseas revenue as production capacity ramps up in its Thailand facility [9] - The projected net profits for 2025-2027 are 447 million yuan, 628 million yuan, and 868 million yuan, with corresponding year-on-year growth rates of 588%, 40%, and 38% [9]

Investment Rating - The investment rating for the industry is "Positive" and is maintained [6]. Core Insights - Corning's optical communication business has shown strong growth, driven by both enterprise and carrier networks, with enterprise network revenue increasing by 81% year-on-year due to AI data center construction [2][9]. - The commercialization of data center interconnect (DCI) solutions has begun, with expectations to grow into a $1 billion business in the coming years [2][9]. - The "scale-up" trend is advancing, with the OIO optical interconnect solution expected to unlock 2-3 times the growth potential in the enterprise network market [2][9]. - The demand for multimode fiber is robust, with profitability exceeding that of single-mode fiber [2][9]. Summary by Sections Financial Performance - In Q2 2025, Corning reported GAAP sales revenue of $3.86 billion, a year-on-year increase of 19%, and a net profit of $470 million, up 351% year-on-year. On a core (non-GAAP) basis, sales revenue was $4.05 billion, a 12% increase year-on-year, with a net profit of $520 million, up 29% year-on-year [4][9]. Business Segments - The optical communication business generated $1.57 billion in revenue, a 41% year-on-year increase, with a net profit of $250 million, reflecting a 73% year-on-year increase [9]. - The enterprise network segment achieved $769 million in revenue, marking an 81% year-on-year growth, while the carrier network segment generated $797 million, a 16% year-on-year increase [9]. Market Trends - The current growth in enterprise networks is primarily driven by "scale-out" deployments, while future growth opportunities are expected to arise from "scale-up" scenarios, which involve deploying more GPUs within a single node [9]. - The transition to OIO solutions is anticipated to significantly enhance data center interconnect architectures, potentially expanding the current $2 billion enterprise network market [9]. Investment Recommendations - The report suggests focusing on companies with a high proportion of data communication business, such as Longi Fiber, FiberHome, and others involved in fiber optic cables, connectors, and OIO optical engines [2][9].

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [4]. Core Insights - The report highlights the significant growth potential in the military trade equipment sector, particularly focusing on aircraft engines as high-value consumables, which are expected to see increased demand due to long-term maintenance and replacement needs [10][15]. - The potential for domestic aircraft, such as the C919, to penetrate Southeast Asian markets is emphasized, with countries like Malaysia and Pakistan showing interest in adopting these aircraft [38][41]. - The report discusses the strategic positioning of companies like Huayin Technology in stealth materials and the anticipated growth in the ceramic-based composite materials sector [84][86]. Summary by Sections Military Trade Equipment - Aircraft engines hold a primary position in military trade, with their export share decreasing from 3.6% (2014-2018) to 2.0% (2019-2023) [14]. - The demand for maintenance and replacement of aircraft engines is driven by the long service life of military aircraft, which often exceeds the lifespan of the engines themselves [15][18]. C919 Aircraft - The C919 is expected to gain traction in Southeast Asia, with significant interest from Malaysian and Pakistani airlines [41][47]. - The global demand for commercial aircraft remains robust, with Airbus and Boeing having backlogs that exceed their annual delivery rates, indicating a favorable market for the C919 [47][55]. - The C919's production capacity is projected to increase significantly, with plans to reach 200 aircraft per year by 2029 [54][76]. Stealth Materials - Stealth technology is becoming a standard feature in advanced military aircraft, significantly enhancing their operational capabilities [86]. - The report identifies Huayin Technology as a key player in the stealth materials market, focusing on the development of ceramic-based composites [84][86]. Maintenance and Aftermarket - The military aircraft engine aftermarket is projected to exceed 428.7 billion yuan over the next 20 years, with an average annual market value of 21.44 billion yuan [25][28]. - Companies involved in the maintenance and aftermarket services for aircraft engines are expected to see substantial revenue growth as the market expands [28][31]. Supply Chain and Domestic Production - The report outlines the potential for increased domestic production and supply chain development for the C919, with a focus on enhancing the localization rate of components [77][80]. - The growth of domestic suppliers is anticipated to benefit from the increasing demand for locally produced aircraft and components [80][82].

Investment Rating - The report maintains a "Positive" investment rating for the real estate industry [11] Core Insights - The policy goal of stabilizing the market has somewhat boosted market expectations, but since April, marginal downward pressure has increased, leading to a higher probability of policy easing. Future easing is merely a matter of timing [4][8] - The rapid decline in industry volume and price may have already passed, with structural highlights in core areas and quality properties. Current stock positions are not far from the bottom, providing room for a rebound in cyclical sectors [4] - Emphasis is placed on leading real estate companies with low inventory, good locations, and strong product capabilities, as well as leading brokerage firms, commercial real estate, and state-owned property management companies with stable cash flows [4] Market Performance - The Yangtze River Real Estate Index decreased by 2.76% this week, with an excess return of -1.01% relative to the CSI 300, ranking 24th out of 32 industries. Year-to-date, the index is down 0.45%, with an excess return of -3.50%, ranking 29th [5][14] - The real estate sector performed poorly this week, with declines primarily in development and property management stocks, while rental stocks showed mixed results [5] Policy Developments - The Central Political Bureau meeting emphasized the need to prevent and resolve risks in key areas and to conduct urban renewal with high quality. Local governments are encouraged to manage debt risks and enhance the attractiveness of domestic capital markets [6][18] - Shanghai is accelerating the renovation of "two old and one village," aiming to complete the renovation of approximately 380,000 square meters of old housing this year [6][18] Sales Data - New home and second-hand home registrations in sample cities remain at low levels. The new home transaction area in 37 cities decreased by 19.1% year-on-year, while second-hand home transactions decreased by 2.3% [7][20] - Year-to-date, the cumulative transaction area for new homes in 37 cities is down 4.9%, while second-hand homes are up 15.3% [7][20]

Investment Rating - The report maintains a "Positive" investment rating for the banking sector [11]. Core Insights - The report highlights that Changcheng AMC has significantly increased its stake in China Construction Bank, holding 7.865 billion H shares, which represents 3.01% of the total share capital, with a corresponding market value of approximately HKD 62.1 billion [2][6][37]. - It is noted that the average price-to-book (PB) ratio for state-owned banks in Hong Kong is only 0.53x for 2025, with an expected dividend yield of 5.2%, indicating clear long-term investment value [6][37]. - The report discusses the overall increase in holdings of state-owned banks by southbound investors, with a net increase of 7.086 billion shares in China Construction Bank this year, particularly in the second quarter [2][6]. Summary by Sections AMC's Increased Holdings - Changcheng AMC's large-scale acquisition of China Construction Bank shares is part of a broader trend where AMCs are increasing their positions in undervalued large banks [6][37]. - Other AMCs, such as CITIC AMC and Xinda AMC, have also made significant investments in various banks, indicating a trend of long-term capital correcting the undervaluation of bank stocks [6][37]. Market Performance - The report notes that the Jiangsu Bank Index fell by 0.8% this week, outperforming the CSI 300 Index by 1.0% [20]. - Despite market adjustments, trading activity remains high, with an overall increase in turnover rates across the market, although bank stocks' turnover rates remain below the market average [29]. Tax Policy Impact - The report mentions that the Ministry of Finance and the State Administration of Taxation announced the resumption of VAT on interest income from newly issued government bonds and financial bonds starting August 8, 2025, but the overall impact is expected to be limited [7][38][39].

Investment Rating - The report maintains a "Positive" investment rating for the investment banking and brokerage industry [7] Core Insights - The brokerage sector is experiencing high growth in performance as indicated by preliminary reports, with increasing allocation value. The insurance sector is also expected to see a rise in new business value driven by an increase in value ratios. The equity market continues to rise, leading to favorable expectations for investment returns and profit growth. Current valuations imply a pessimistic long-term investment outlook, but the report considers current valuations to be safe, given the medium to long-term interest rate spread levels [2][4] - The report recommends companies with stable profit growth and dividend rates, including Jiangsu Jinzhong, China Ping An, and China Pacific Insurance, which have clear advantages in business models and market positions. Additionally, it suggests focusing on New China Life, China Life, Hong Kong Exchanges and Clearing, CITIC Securities, Dongfang Wealth, Tonghuashun, and Jiufang Zhitu Holdings based on performance elasticity and valuation levels [2][4] Summary by Sections Industry Overview - The non-bank financial index decreased by 2.4% this week, with a relative excess return of -0.6% compared to the CSI 300, ranking 22 out of 31 industries. Year-to-date, the non-bank financial index is up by 4.0%, with a relative excess return of +1.0%, also ranking 21 out of 31 [5] - The market has seen a decline in activity, with an average daily trading volume of 18,096.34 billion yuan, down 2.11% week-on-week, and an average turnover rate of 2.12%, down 2.50 basis points [5] Brokerage Sector - The brokerage sector's performance has been weak overall, with the securities sector down 3.1% this week. The report highlights that the average daily trading volume and turnover rate are above the 2024 averages, indicating a gradual recovery in brokerage business profitability [17][39] - Margin financing balances have increased to 1.98 trillion yuan, up 2.21% week-on-week, indicating a recovery in credit business [46] Investment Business - The equity market has seen an overall decline, with the CSI 300 index down 1.75% and the ChiNext index down 0.74%. The report notes that the proportion of equity investments in brokerage assets is approximately 10%-30%, while bond investments account for 70%-90% [43][44] Insurance Sector - The insurance industry reported a cumulative premium income of 37,350 billion yuan in June 2025, reflecting a year-on-year increase of 5.31%. The report indicates that the premium income from property insurance was 9,645 billion yuan, up 5.10%, while life insurance income was 27,705 billion yuan, up 5.38% [21][22] - The total assets of the insurance industry reached 39.22 trillion yuan as of June 2025, with a quarter-on-quarter increase of 2.08% [26][27]