Investment Rating - The industry investment rating is "Positive" and maintained [7] Core Viewpoints - The current decline in silicon material prices is primarily due to the reduction in industrial silicon prices and lower electricity costs during the abundant water period, leading to expectations of increased operating rates among some companies. However, demand remains uncertain due to the end of domestic rush installations and the summer holiday in Europe. It is believed that silicon material prices are nearing the bottom cash cost, and further declines are limited. Recent policies such as green electricity direct connection and photovoltaic sand control have been introduced, which may accelerate industry recovery [2][4][5] Summary by Sections Silicon Material Price Trends - As of April 2025, silicon material prices have been continuously declining, with the latest average prices for N-type and dense materials at 34,000 and 32,000 yuan/ton respectively. The industry faces significant profit pressure [4][17] - The decline in silicon material prices is attributed to the drop in industrial silicon prices, which currently stand at 8,750 yuan/ton in Xinjiang, down 300 yuan/ton since the beginning of the year. The average price for industrial silicon in Q2 2025 decreased by 170 yuan/ton compared to Q1 2025 [19][21] Future Outlook - It is anticipated that silicon material prices are close to the cash cost of leading enterprises, indicating limited further decline potential. The cash cost for leading enterprises in Q1 2025 was 27,000 yuan/ton, and even with the recent drop in industrial silicon prices, the optimal cash cost for non-Southwest region capacities remains around 25,000 yuan/ton. The strong willingness to maintain prices is evident as companies face significant losses [5][33] - The second half of the year is expected to see favorable policies, with leading enterprises beginning to form a coalition. Recent policies aimed at supporting the photovoltaic industry, such as the green electricity direct connection and photovoltaic sand control, are likely to promote healthy industry development [5][37] Market Dynamics - The photovoltaic industry is experiencing a dual bottom in terms of fundamentals and market sentiment, with policy support and technological iterations expected to accelerate industry clearing. The demand is expected to become clearer in June and July, and if supply and prices do not improve by December, the likelihood of policy interventions to provide relief is expected to increase [40]

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [3]. Core Insights - The report emphasizes the innovation in new combat forces and the importance of system integration in the defense sector, highlighting the growth potential in various sub-sectors such as aerospace electronics, unmanned systems, underwater defense, and data link technologies [8][10][37]. Summary by Sections Aerospace Electronics - The company, Aerospace Electric, is backed by the Aerospace Jiangnan Group and focuses on high-tech products in the aerospace and defense electronics sector. It has become a significant player in the industry, with over 70% of its products sold to high-end clients in aerospace and military sectors [12][21]. - The company has established a cross-regional, group-based structure to enhance its R&D, production, and sales capabilities, ensuring high-quality development [16][21]. Unmanned Systems - Unmanned systems have transitioned from the periphery to the center of modern warfare, with drones playing a crucial role in military operations. The report outlines the evolution of drones and their increasing complexity and autonomy [40][41]. - The modern drone ecosystem includes various types, from consumer drones to advanced stealth combat drones, reflecting significant technological advancements [42][43]. Underwater Defense - Unmanned Underwater Vehicles (UUVs) are highlighted as a new class of equipment with diverse applications and high autonomy. The report notes that the U.S. military's UUV market could exceed $50 billion over the next decade [74][81]. - UUVs are characterized by their stealth, cost-effectiveness, and support for distributed operations, making them a vital component of modern naval strategies [81][86]. Data Link Technologies - The report discusses the importance of data link technologies in enhancing operational connectivity and efficiency in military operations, emphasizing the need for continuous technological upgrades [8][37]. Market Potential - The report estimates that the Chinese military drone market could exceed 40 billion yuan by 2028, driven by increasing demand for various types of drones, including medium and large military drones [64][66].

Metal Sector - China Hongqiao's net profit forecast for 2024 is CNY 223.72 billion, with a PE ratio of 6.78[12] - Luoyang Molybdenum's net profit forecast for 2025 is CNY 167.43 billion, with a PE ratio of 10.42[12] Building Materials Sector - China National Materials' net profit forecast for 2025 is CNY 18.54 billion, with a PE ratio of 16.65[12] - Keda Manufacturing's net profit forecast for 2025 is CNY 17.24 billion, with a PE ratio of 10.82[12] - Three Trees' revenue compound growth rate from 2015 to 2018 was approximately 33%[40] Transportation Sector - SF Holding's net profit forecast for 2025 is CNY 117.44 billion, with a PE ratio of 20.58[12] - The company has seen a significant increase in daily package handling, reaching an average of 166 packages per courier in 2024[56] Chemical Sector - Yara International's net profit forecast for 2025 is CNY 22.52 billion, with a PE ratio of 12.30[12] - Ba Tian's net profit forecast for 2025 is CNY 12.84 billion, with a PE ratio of 7.59[12] Financial Performance - The overall net profit for Keda Manufacturing is projected to reach CNY 19.0 billion by 2026, with a significant increase in overseas revenue contributing to growth[31]

Investment Rating - The report maintains a "Positive" investment rating for the industry [5] Core Viewpoints - The report emphasizes the expected acceleration in the approval of ultra-high voltage (UHV) projects in the second half of 2025, with several key transmission corridors likely to be approved [10][15] - The current pace of construction for UHV direct current projects is increasing, with several projects nearing completion and others in the early stages of construction [15][16] - The report highlights a significant potential for equipment bidding in the second half of 2025, estimating a total bidding volume of approximately 55 billion yuan, with a substantial portion allocated for UHV converter valve equipment [28][30] Summary by Sections UHV Project Approvals - The 2025 National Energy Work Conference proposed the active promotion of several UHV transmission corridors, indicating a likely increase in project approvals in the latter half of 2025 [10] - Currently, only two projects have received approval, but expectations are high for a surge in approvals later in the year [10][15] UHV Direct Current Projects - Several UHV direct current projects are nearing completion, with the Jinshang-Hubei and Longdong-Shandong projects already operational [15] - Projects such as the Ningxia-Hunan and Shaanxi-Anhui are in advanced stages of construction, with expectations for operational readiness by 2026 [15][16] UHV Alternating Current Projects - The report notes that UHV alternating current projects are also in a peak construction phase, with several projects expected to commence in 2025 [16][18] Equipment Bidding Trends - In the first half of 2025, equipment bidding has been relatively low, totaling 2.48 billion yuan, while material bidding reached 17.87 billion yuan [25] - The report anticipates a rapid increase in bidding activity in the second half of 2025, driven by the approval of multiple UHV projects [28][30] Market Dynamics - The report indicates that the UHV equipment market remains concentrated, with leading companies expected to benefit from increased order volumes as the market expands [35]

Investment Rating - The report maintains a "Positive" investment rating for the real estate industry [12]. Core Insights - The report indicates that while the conventional policy space is relatively limited, there is still significant potential for extraordinary policy measures. This includes structural monetary or fiscal tools aimed at easing the burden on homebuyers, such as deep interest rate cuts on housing provident funds and increasing loan limits. The necessity for policy easing is increasing, and the timing is approaching, suggesting a favorable environment for selective investments in development stocks and stable cash flow companies [2][5][9]. Market Performance - The Yangtze River Real Estate Index increased by 3.42% this week, outperforming the CSI 300 by 1.47%. However, year-to-date, the index is down 4.94%, underperforming the CSI 300 by 4.61% [6][16]. - The report notes that the performance of development and property management stocks has been primarily upward, while rental companies have generally declined [6]. Policy Developments - Several cities have adjusted their housing provident fund policies to facilitate home purchases. For instance, Hangzhou allows the use of provident funds for down payments on new homes, while Jinan has clarified that individuals can withdraw funds for purchasing affordable housing with a minimum down payment of 15% [7][20]. Sales Data - New home registrations in 37 cities showed a significant year-on-year decline of 18.3%, while second-hand home registrations remained negative. Year-to-date, new home sales are down 2.0%, while second-hand home sales are up 19.8% [8][22]. Sector Outlook - The report emphasizes the importance of leading real estate companies with regional and product advantages, as well as those with stable cash flows, such as leading brokerage firms and commercial real estate companies, for medium to long-term investment opportunities [5][9].

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of HKD 79.258 billion for the fiscal year 2024/25, a decrease of 2.6% year-on-year, while the net profit attributable to shareholders was HKD 3.252 billion, an increase of 2.1% year-on-year. The free cash flow for the year reached HKD 4.66 billion, up 8.7% year-on-year. The annual dividend per share remained unchanged at HKD 0.50, resulting in a current dividend yield of approximately 6.8% [2][6] Summary by Sections Revenue and Profitability - The company's revenue for the fiscal year 2024/25 was HKD 79.258 billion, down 2.6% year-on-year, while the net profit attributable to shareholders was HKD 3.252 billion, up 2.1% year-on-year. The free cash flow increased to HKD 4.66 billion, reflecting an 8.7% year-on-year growth [2][6] Dividend Policy - The company maintained its annual dividend at HKD 0.50 per share, consistent with the previous year, resulting in a payout ratio of 83.3% and a current dividend yield of approximately 6.8% [2][6] Business Segments Performance - Natural gas sales revenue was HKD 49.05 billion, down 6.5% year-on-year. Gas connection revenue was HKD 3.63 billion, down 9.6%. Engineering design and construction revenue increased by 14.7% to HKD 1.76 billion. Liquefied petroleum gas sales revenue rose by 8.9% to HKD 19.58 billion, while value-added services revenue increased by 2.1% to HKD 3.73 billion [9] Sales Volume and Pricing - The sales volume of town gas showed a slight increase of 0.02% year-on-year, with residential gas usage down 2.1% and industrial gas usage up 1.0%. The average residential gas price increased from HKD 2.71 per cubic meter in 2022 to HKD 3.00 per cubic meter in 2024, with a potential for further increases in the 2025/26 fiscal year [9] Margin Recovery - The company's gross margin improved from HKD 0.50 per cubic meter in the 2023/24 fiscal year to HKD 0.537 per cubic meter in the 2024/25 fiscal year, with expectations for further improvement to HKD 0.55 per cubic meter in the 2025/26 fiscal year [9] Connection Projects - The company added approximately 1.4 million new residential connections in the 2024/25 fiscal year, with guidance for 1.0 to 1.2 million new connections in the 2025/26 fiscal year [9] Value-Added Services - The value-added services segment achieved a pre-tax profit of HKD 1.75 billion, accounting for 26.2% of total profits, with a year-on-year growth of 10.6% [9] Financing Costs - The company optimized its debt structure, reducing the proportion of foreign currency loans to 0.5%, with the average financing cost decreasing from 4.83% to 3.84% year-on-year [9] Cash Flow - The free cash flow for the fiscal year reached HKD 4.66 billion, with expectations for further improvement due to a slowdown in capital expenditures related to connection projects [9]

Core Insights - The capital market is entering a new quality development cycle, with deepening transformation in the brokerage industry and increasing business differentiation, leading to a potential rise in industry concentration and new advantages for leading brokerages [3][6] - The report suggests focusing on changes in the market structure, particularly on undervalued leading firms, merger and acquisition themes, and high-dividend H-shares as key investment lines [3][9] Market Review Q1 2025 - The brokerage sector experienced an overall decline of 8.0% since the beginning of 2025, underperforming the CSI 300 by 6.2 percentage points [6][18] - In Q1 2025, total revenue and net profit for brokerages reached 1260.35 billion and 519.92 billion respectively, showing year-on-year growth of 24.6% and 84.1% [6][24] - The average return on equity (ROE) increased by 0.63 percentage points to 1.6%, with leading brokerages significantly outperforming the average [6][30] Outlook for 2025 - The brokerage industry is expected to continue its transformation, with a focus on the following areas: 1. **Brokerage Business**: The performance is closely tied to market trading activity, with Q1 2025 showing a high market heat contributing to revenue growth. However, the declining commission rates are expected to reduce trading volume elasticity [6][7] 2. **Proprietary Investment**: This segment has become a major revenue driver, contributing 40.5% to total revenue in Q1 2025. Leading brokerages are increasing their allocation to OCI equity investments [8][30] 3. **International Business**: Leading brokerages are accelerating their international expansion, with a competitive landscape emerging among top firms [8][9] Investment Recommendations - The report recommends focusing on three main investment themes: 1. Undervalued leading brokerages with high ROE and low PB ratios, specifically Huatai Securities and Guotai Junan [9] 2. Stocks related to merger and acquisition themes, particularly quality central enterprise leaders like Galaxy Securities [9] 3. High-dividend H-share brokerages as part of a high-yield strategy [9]

Investment Rating - The report maintains a "Positive" investment rating for the coal industry [10]. Core Insights - The recent strong rebound in coking coal futures is attributed to a combination of supply contraction and improved demand fundamentals, although medium to long-term price pressures may persist if demand does not see significant positive changes [2][7]. - The coal index (Yangtze) increased by 1.68% this week, underperforming the CSI 300 index by 0.27 percentage points, ranking 25th out of 32 industries [19]. - Coking coal prices are supported by supply tightening due to safety inspections and environmental regulations, while demand remains stable due to steel production [6][20]. Summary by Sections Coking Coal Market - Coking coal futures saw a weekly increase of 6.34%, closing at 848 CNY/ton, significantly outperforming other commodities in the coal-steel-mining chain [7][14]. - Supply-side factors include reduced production from safety checks and environmental inspections, leading to a 0.53% week-on-week decrease in weekly refined coal output [7][20]. - Demand remains stable, with average daily pig iron production from 247 steel mills at 2.4229 million tons, showing a slight increase of 0.05% week-on-week [7][20]. Investment Recommendations - The report suggests marginal allocation to long-term stable profit leaders such as China Coal Energy (A+H), China Shenhua (A+H), and Shaanxi Coal and Chemical Industry [8]. - For growth-oriented investments, Electric Power Investment and New集 Energy are recommended, while coking coal companies like Shanxi Coking Coal, Huaibei Mining, and Pingdingshan Coal are highlighted for their potential [8]. Price Trends - As of June 27, the market price for Qinhuangdao 5500 kcal thermal coal is 620 CNY/ton, reflecting an increase of 11 CNY/ton week-on-week [19][42]. - The main coking coal price at Jingtang Port remains stable at 1230 CNY/ton, while the price for first-grade metallurgical coke is 1280 CNY/ton, unchanged from the previous week [19][20].

Investment Rating - The report provides a "Buy" recommendation for the technology sector, specifically highlighting key stocks in electronics, computing, communications, and media [4][7]. Core Insights - The report identifies key stocks in the technology sector for July 2025, including East Mountain Precision, Shenghong Technology, iFlytek, Dameng Data, Huafeng Technology, Wolong Nuclear Materials, Giant Network, and Shanghai Film [4][7]. - The report emphasizes the growth potential in various segments, driven by technological advancements and market demand, particularly in AI and renewable energy [9][10][11][12][14][15]. Summary by Category Electronics - **East Mountain Precision**: Focuses on FPC and renewable energy, with expected growth driven by Apple's new iPhone models and a strategic acquisition in optical communication [9]. - **Shenghong Technology**: Positioned to benefit from AI computing and data center upgrades, with significant advancements in PCB manufacturing technology [10]. Computing - **iFlytek**: A leading player in AI with strong growth in education, healthcare, and enterprise solutions, leveraging a comprehensive business model [11]. - **Dameng Data**: Positioned as a leader in the domestic database market, benefiting from the acceleration of the domestic software industry [12]. Communications - **Huafeng Technology**: Anticipates growth from AI applications and high-performance connectors, with projected net profits increasing from 278 million to 486 million yuan from 2025 to 2027 [12]. - **Wolong Nuclear Materials**: Maintains a strong position in traditional materials while expanding into new energy products [12]. Media - **Giant Network**: Expected to see growth from new game releases and AI integration in gaming, with positive performance indicators [14]. - **Shanghai Film**: Anticipates growth driven by successful IP management and film releases, with a focus on monetizing popular content [15].

Group 1: AH Premium Rate Overview - The AH premium index reached a five-year low on June 11, 2025, down over 10% compared to the end of 2024[4] - The AH premium rate measures the price difference between A-shares and H-shares of the same company, reflecting liquidity, investor structure, and tax policy differences[6] - Historical analysis shows that the AH premium rate has generally favored A-shares, but there have been periods where H-shares traded at a premium[9] Group 2: Historical Changes and Influencing Factors - The opening of the Shanghai-Hong Kong Stock Connect in late 2014 expanded foreign investment channels, impacting the flow of funds into Hong Kong stocks[7] - From 2019 to 2020, the AH premium rate increased due to changes in foreign investment preferences and a slowdown in capital inflows[8] - Specific sectors, such as financials and consumer staples, have seen varying premium rates, with some H-shares trading at a premium during certain periods[63] Group 3: Current Market Dynamics - Recent trends indicate that the Hong Kong market is experiencing a surge in liquidity, driven by a weaker US dollar and increased demand for Hong Kong dollars[19] - The influx of southbound funds has significantly increased since May 2025, contributing to the current market dynamics[23] - The report suggests that the current AH premium may not be a reliable timing indicator for investing in Hong Kong stocks due to its limited representation of the broader market[60]