Group 1 - The report anticipates that the July Politburo meeting will focus on promoting consumption, strengthening technology, and preventing risks, with new policies on "anti-involution" and detailed "urban renewal" initiatives [1][2][3] - The emphasis on consumption is expected to continue, with policies aimed at increasing residents' income and reducing burdens, as well as promoting service consumption [2][3] - The focus on technology will highlight new productive forces and "AI+" as key development directions, with significant events like the 2025 World Artificial Intelligence Conference indicating government support [2][3] Group 2 - The "anti-involution" policy is likely to address low-price disorderly competition among enterprises and promote the orderly exit of outdated production capacity, particularly in sectors like new energy and traditional industries such as steel and petrochemicals [4][20] - The report suggests that the "anti-involution" direction has already seen strong market performance since the announcement of related policies, particularly in the steel industry [6][21] - The report indicates that after a period of adjustment, a new market trend may emerge, with "AI+" sectors expected to perform well due to industry catalysts [6][21] Group 3 - The A-share market has shown an upward trend, driven by cyclical sectors and "AI+" themes, with significant gains in industries like construction materials, coal, and steel [8][40] - The report notes that the current A-share equity risk premium (ERP) is at 3.09%, reflecting an increase in market risk appetite [8][31] - The report highlights that the valuation levels of various indices have risen, with the PE valuation percentiles for sectors like real estate and technology reaching high levels [43][44]

Investment Rating - The report provides a cautious outlook on the C-REITs sector, indicating a rating of "C" due to underperformance in the second quarter and market volatility [1][5]. Core Insights - The C-REITs market has experienced a significant downturn, with the CSI REITs total return index declining by 1.56% this week and 1.79% for the closing index, reflecting broader market challenges [1][10]. - Year-to-date, the CSI REITs total return index has increased by 12.34%, indicating some resilience despite recent fluctuations [2][10]. - The report highlights that the municipal water conservancy and energy infrastructure sectors have faced the most substantial declines in the secondary market, with average market capitalization for listed REITs around 204.75 billion [3][12]. Summary by Sections REITs Index Performance - The CSI REITs total return index closed at 1087.4 points, down 1.56% this week, while the closing index was at 860.1 points, down 1.79% [1][10]. - Comparatively, the Shanghai and Shenzhen 300 indices rose by 1.69% and 2.27% respectively, indicating a relative underperformance of the REITs sector [1][10]. REITs Secondary Market Performance - The secondary market for C-REITs has seen a significant pullback, with 9 out of 68 listed REITs rising and 59 declining, resulting in an average weekly decline of 2.09% [3][12]. - The report notes that the municipal water conservancy and energy infrastructure sectors have been particularly hard hit, with declines of 4.2% and 4.39% respectively [3][12]. REITs Valuation Performance - The internal rate of return (IRR) for listed REITs shows significant differentiation, with top performers including Huaxia China Communications REIT at 11.2% and Ping An Guangzhou Guanghe REIT at 10.9% [5][12]. - The price-to-net asset value (P/NAV) ratio for REITs ranges from 0.7 to 1.8, with Huaxia China Communications REIT being noted for its lower P/NAV of 0.7 [5][12]. Industry Trends - The report indicates a potential for recovery in the REITs market in 2025, driven by a low interest rate environment and macroeconomic improvements, suggesting that timing will be crucial for secondary market investments [5][12].

Group 1: Report Industry Investment Rating No relevant content Group 2: Core Viewpoints of the Report - The bond market adjusted significantly this week, but the short - term impact factors are temporary, and the bond market is expected to enter a repair phase. The short - term interest rate adjustment ceiling is clear, and the 10 - year and 30 - year Treasury bond yields may return to around 1.65% and 1.85% respectively. The bond interest rate is expected to hit a new low in the second half of the year [1][5][19] Group 3: Summary by Related Contents Bond Market Adjustment This Week - The bond market adjusted significantly this week, with long - term bonds adjusting more notably. The yields of 10 - year and 30 - year Treasury bonds rose by 6.7bps and 8.4bps to 1.73% and 1.97% respectively. The yields of Tier 2 capital bonds of 3 - year and 5 - year AAA - also increased significantly, and the 1 - year AAA certificate of deposit rate rose by 5.8bps to 1.675% [1][9] - The sharp decline in the bond market this week is due to multiple factors: the expectation of anti - involution policies pushed up commodity prices and the stock market; the central bank withdrew funds in the first four days of this week, and seasonal factors tightened the funds; the bond market adjustment may have led to the net value retracement of some asset management products, resulting in a negative feedback effect of redemptions [1][9] Short - term Nature of Impact Factors - Commodity prices tumbled on the night of Friday after a continuous rise last week. With strengthened regulatory control, the subsequent commodity price rally is expected to cool down, reducing the pressure on the bond market. The current price increase is more based on expectations, and its sustainability is to be observed [2][12] - The central bank's operation on Friday strengthened the protection of liquidity, and funds will not tighten in a trending manner. The central bank's net injection of 8018 billion yuan on Friday and the statement of the deputy governor indicate that the central bank will maintain liquidity stability, which helps to form an adjustment ceiling for the bond market, limiting the continuous adjustment space of the bond market [3][13] Unchanged Bond Market Trend - The bond market is still in an asset shortage pattern, and broad - spectrum interest rates are declining. The supply of assets will decrease in the next five months, while the allocation power is steadily increasing. The reduction of insurance reservation interest rates will further increase the allocation demand for long - term bonds [4][14] - The demand side is not strong, and the export demand may slow down in the second half of the year. The real estate market is weak, and investment and consumption growth rates have slowed down. The impact of anti - involution policies on supply also needs attention. Fundamental changes are the key to determining the interest rate trend [5][19] Bond Market Outlook - After the short - term shock, the bond market will enter a repair phase. The interest rate is expected to return to the previous level in the first stage, and whether it can break through the previous low later depends on the fundamentals and the pressure of asset shortage. The bond interest rate is expected to hit a new low in the second half of the year [5][19]

Investment Rating - The report maintains an "Increase" rating for the industry [4] Core Insights - The military applications of AI are reshaping modern warfare, with significant growth expected in the military AI market, projected to increase from $4.53 billion in 2023 to $6.38 billion in 2024, representing a compound annual growth rate (CAGR) of 40.8% [8][9] - Palantir and Anduril exemplify two distinct paradigms in military AI development, focusing on intelligence analysis systems and autonomous sensing and command control platforms, respectively [15][41] Summary by Sections Palantir - Founded in 2003, Palantir started with a mission to develop a platform for integrating and analyzing complex datasets to assist intelligence agencies in counter-terrorism efforts [16] - The Gotham platform, Palantir's initial product, significantly enhances decision-making efficiency by integrating various data sources, including satellite images and surveillance videos, and has been utilized by agencies like the CIA and FBI [17][34] - Palantir's revenue has shown strong growth, with a 39.3% year-over-year increase, and its market capitalization has surpassed $370 billion [34] Anduril - Established in 2017, Anduril focuses on a software-first approach, with its core product, the Lattice platform, designed to integrate data from various sensors and systems for military and public safety applications [36][40] - Anduril has secured substantial defense contracts, including a $642 million contract with the U.S. Marine Corps for drone systems and an $86 million contract with USSOCOM for autonomous software development [40] - The collaboration between Anduril and Palantir aims to enhance national security data management and AI application in defense [37][39] Related Companies - The report suggests monitoring domestic companies in the military AI sector, including Tuolsi, Nengke Technology, Pingtai Technology, and others, which are expected to follow similar paths as Palantir and Anduril [41]

Investment Rating - The report assigns a "Buy" rating for several coal companies, including China Shenhua, Shaanxi Coal and Chemical Industry, and Xinji Energy, among others [10][11]. Core Viewpoints - The coal mining industry is experiencing a price rebound due to policy interventions aimed at regulating production and stabilizing supply [2][12]. - The recent "overproduction" inspection by the National Energy Administration has catalyzed a positive market sentiment, leading to a slight increase in coal prices [14][33]. - The overall supply recovery in coal-producing regions remains limited, with some mines resuming normal production while others are temporarily halting operations due to monthly production targets and adverse weather conditions [14][33]. Summary by Sections Market Overview - The CITIC Coal Index rose by 8.00%, outperforming the CSI 300 Index by 6.31 percentage points, marking it as the top performer among CITIC sectors [2][75]. - As of July 25, the price of Qinhuangdao port Q5500 thermal coal reached approximately 650 CNY/ton, reflecting an increase of 11 CNY/ton week-on-week [33]. Supply and Demand Dynamics - The supply side is constrained due to inspections and production regulations, which have led to a cautious optimism among market participants regarding price stability [14][33]. - Downstream demand remains stable, particularly from the metallurgical and chemical sectors, contributing to a positive outlook for coal prices [14][33]. Focus on Key Companies - The report highlights several companies with strong performance potential, including China Shenhua, Shaanxi Coal, and Xinji Energy, recommending them for investment due to their robust earnings forecasts [10][11]. - The report also emphasizes the importance of monitoring domestic supply conditions and the recovery of imported coal from Mongolia [7][11]. Price Trends - The report notes that the price of coking coal has seen significant increases, with some varieties rising by 300 to 400 CNY/ton since July [6][39]. - The price of main coking coal at the port reached 1,680 CNY/ton, up 240 CNY/ton week-on-week, driven by strong demand and limited supply [39][51]. Inventory and Production Insights - Inventory levels for coking coal are decreasing, with port inventories reported at 292,000 tons, down 29,000 tons week-on-week [48][63]. - The average profit per ton of coke has decreased, indicating ongoing challenges for coking companies despite rising prices [70][74].

Investment Rating - The report assigns a "Buy" rating for several key stocks in the chemical industry, indicating a positive outlook for their performance in the near future [8]. Core Insights - The chemical industry is experiencing a trend of "anti-involution," with regulatory measures aimed at curbing low-price competition and promoting the orderly exit of outdated production capacity [1]. - The construction of the Yarlung Tsangpo River hydropower project is expected to generate significant demand for engineering and materials, with a total investment of approximately 1.2 trillion yuan [3]. - The chemical sector is witnessing a recovery in prices for certain products due to improved supply dynamics, particularly in TDI, organic silicon, and butanone, driven by production shutdowns and maintenance [2]. Summary by Sections Industry Investment Rating - The report highlights a bullish sentiment towards the chemical sector, with specific stocks recommended for purchase based on their expected performance [8]. Regulatory Environment - The Central Financial Committee's recent meeting emphasized the need for legal governance of low-price competition and the orderly exit of outdated capacity, reinforcing the "anti-involution" trend in the chemical industry [1]. Market Performance - From September 2021 to February 2024, the basic chemical sector index fell by 59.5%, but recent trends show a recovery with a 5.3% increase in the basic chemical index from July 11 to July 25, 2025 [2]. Key Product Insights - TDI prices have surged from 11,000 yuan/ton in early May to 20,000 yuan/ton by July 24, 2025, due to supply constraints from global production issues [2]. - Organic silicon prices increased to 12,500 yuan/ton by July 25, 2025, following a fire incident that affected supply [2]. - Butanone prices rose from 7,900 yuan/ton to 8,400 yuan/ton in early July 2025, reflecting improved market conditions [2]. Investment Opportunities - The report identifies potential investment opportunities in AI applications and hardware materials, particularly in companies that are positioned to benefit from advancements in AI technology [3].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In the first half of the year, fiscal expenditure was front - loaded, while fiscal revenue was weak. The general budget fiscal deficit increased year - on - year, and the broad fiscal deficit rate was at a relatively high level. In June, the growth rates of general public budget revenue and expenditure both declined, while those of government - funded revenue and expenditure increased significantly. In the second half of the year, the intensity of fiscal expenditure is expected to decline, and policy - based financial instruments are expected to be introduced in the third quarter, while other incremental fiscal policies may need to wait [1][3][4][5]. Summary by Directory 1. First - half Fiscal Operation - **Revenue and Expenditure Growth**: From January to June, the cumulative year - on - year growth rate of broad fiscal revenue was - 0.6%, remaining negative. The year - on - year growth rate of broad fiscal expenditure was 8.9%, indicating front - loaded expenditure. In June, the year - on - year growth rates of broad fiscal revenue and expenditure were 2.8% and 17.6% respectively, showing marginal improvement [9]. - **Budget Completion**: Compared with the annual budget, the revenue side fell short of expectations. The cumulative year - on - year growth rate of general public budget revenue was - 0.3% (the annual budget was + 0.1%), mainly due to the actual - 1.2% growth of tax revenue (the annual budget was + 3.7%) and the 3.7% growth of non - tax revenue (the annual budget was - 14.2%). The cumulative year - on - year growth rate of government bond fund revenue was - 2.4%, and it was still challenging to achieve the 0.7% annual budget growth. On the expenditure side, the growth rate of fiscal expenditure was 3.4%, slightly lower than the 4.4% annual budget growth. The growth rate of government - funded expenditure was 30%, slightly lower than the 23.1% annual budget growth, and its sustainability needs further observation [1][11]. - **Deficit and Debt**: The general budget fiscal deficit in the first half of the year was 2.57 trillion yuan, a year - on - year increase of about 0.5 trillion yuan. Assuming a 4% nominal GDP growth this year, the cumulative broad fiscal deficit rate from January to June was 3.7%, at a relatively high level compared with previous years, similar to 2022, indicating strong support from debt income for fiscal expenditure. The issuance of general treasury bonds, replacement special bonds, and special treasury bonds was front - loaded, and the issuance of special bonds was neutral with an accelerating trend since the end of June [1][2][15]. 2. June Fiscal Data Review - **Revenue Side**: In June, the year - on - year growth rate of general public budget revenue turned negative (- 0.3%), but the structure improved. Tax revenue increased by 1.0% year - on - year, and non - tax revenue decreased by 3.7% year - on - year. Among taxes, personal income tax, domestic VAT, and securities trading stamp duty had relatively high growth rates. The year - on - year growth rate of government - funded revenue was 20.8%, a significant improvement, but its sustainability may be weak due to the continued weak growth of real estate investment [3][22][27]. - **Expenditure Side**: The expenditure intensity of the general public budget decreased, with a year - on - year growth rate of 0.38%. The year - on - year growth rate of government - funded expenditure increased significantly to 79.2%, mainly due to the improvement of government - funded revenue in June and the impact of the issuance of special treasury bonds since April. Structurally, traditional infrastructure expenditure continued to contract, while expenditure on science and technology and social security had relatively high growth rates [3][30]. 3. Outlook for the Second - half Fiscal Situation - **Expenditure Intensity**: The intensity of fiscal expenditure is expected to decline in the second half of the year. The net financing scale of government bonds is expected to decrease. It is estimated that the net financing of local bonds in the third and fourth quarters will be 1.7 trillion yuan and 537.4 billion yuan respectively, and that of treasury bonds will be 1.6 trillion yuan and 1.7 trillion yuan respectively. The net financing of government bonds in the third and fourth quarters will be 3.3 trillion yuan and 2.2 trillion yuan respectively, with a significant year - on - year decrease, which may drag down the year - on - year growth of fiscal expenditure. In addition, the scale of special bonds for project expenditure is also expected to decline in the second half of the year [4][34]. - **Policy Expectations**: The third quarter may enter a policy observation period. Policy - based financial instruments are expected to be introduced, but the timing is uncertain. Other incremental fiscal policies may need to wait until after the introduction of policy - based financial instruments or when the domestic economy weakens [5][41].

Quantitative Models and Construction Methods 1. Model Name: Index Enhanced Portfolio (CSI 500 Enhanced Portfolio) - **Model Construction Idea**: The model aims to generate excess returns relative to the CSI 500 index by leveraging quantitative strategies and factor-based stock selection [48] - **Model Construction Process**: - The portfolio is constructed based on a strategy model that selects stocks with favorable factor exposures - The portfolio's holdings and weights are optimized to achieve the desired exposure to selected factors while managing risk and tracking error relative to the CSI 500 index [52] - **Model Evaluation**: The model has demonstrated significant excess returns over the CSI 500 index since 2020, though it experienced underperformance in the most recent week [48][50] 2. Model Name: Index Enhanced Portfolio (CSI 300 Enhanced Portfolio) - **Model Construction Idea**: Similar to the CSI 500 Enhanced Portfolio, this model seeks to outperform the CSI 300 index through quantitative strategies and factor-based optimization [55] - **Model Construction Process**: - The portfolio is constructed using a strategy model that emphasizes stocks with favorable factor exposures - Holdings and weights are optimized to balance factor exposure, risk, and tracking error relative to the CSI 300 index [58] - **Model Evaluation**: The model has achieved consistent excess returns over the CSI 300 index since 2020, despite underperforming in the most recent week [55][56] --- Model Backtesting Results 1. CSI 500 Enhanced Portfolio - **Weekly Return**: 3.04% [48] - **Excess Return (Relative to CSI 500 Index)**: -0.24% [48] - **Cumulative Excess Return (2020 to Present)**: 49.91% [48] - **Maximum Drawdown**: -4.99% [48] 2. CSI 300 Enhanced Portfolio - **Weekly Return**: 1.33% [55] - **Excess Return (Relative to CSI 300 Index)**: -0.36% [55] - **Cumulative Excess Return (2020 to Present)**: 33.78% [55] - **Maximum Drawdown**: -5.86% [55] --- Quantitative Factors and Construction Methods 1. Factor Name: Beta (BETA) - **Factor Construction Idea**: Measures the sensitivity of a stock's returns to market movements, capturing the systematic risk of the stock [60] - **Factor Construction Process**: - Beta is calculated using regression analysis of a stock's returns against the market index returns over a specified period - The formula is: $ \beta = \frac{\text{Cov}(R_i, R_m)}{\text{Var}(R_m)} $ where $R_i$ is the stock return, $R_m$ is the market return, Cov is covariance, and Var is variance [60] - **Factor Evaluation**: Beta factor exhibited high positive excess returns in the recent week, indicating strong market preference for high-beta stocks [61] 2. Factor Name: Residual Volatility (RESVOL) - **Factor Construction Idea**: Captures the idiosyncratic risk of a stock, representing the volatility of its returns unexplained by market movements [60] - **Factor Construction Process**: - Residual volatility is derived from the standard deviation of the residuals in a regression of stock returns on market returns - The formula is: $ \text{RESVOL} = \sqrt{\frac{\sum (R_i - \alpha - \beta R_m)^2}{n-2}} $ where $R_i$ is the stock return, $R_m$ is the market return, $\alpha$ and $\beta$ are regression coefficients, and $n$ is the number of observations [60] - **Factor Evaluation**: Residual volatility showed significant negative excess returns in the recent week, indicating a market preference for lower idiosyncratic risk [61] 3. Factor Name: Liquidity (LIQUIDITY) - **Factor Construction Idea**: Measures the ease of trading a stock, often associated with trading volume and bid-ask spreads [60] - **Factor Construction Process**: - Liquidity is typically quantified using metrics such as turnover ratio or Amihud illiquidity measure - The formula for Amihud illiquidity is: $ \text{ILLIQ} = \frac{|R_i|}{\text{Volume}_i} $ where $R_i$ is the stock return and Volume is the trading volume [60] - **Factor Evaluation**: Liquidity factor performed poorly in the recent week, reflecting weak market demand for highly liquid stocks [61] --- Factor Backtesting Results 1. Beta Factor - **Weekly Pure Factor Return**: Positive [61] 2. Residual Volatility Factor - **Weekly Pure Factor Return**: Negative [61] 3. Liquidity Factor - **Weekly Pure Factor Return**: Negative [61]

Investment Rating - The report maintains an "Accumulate" rating for the media sector, indicating a positive outlook for the industry [7]. Core Insights - The media sector saw a 2.09% increase during the week of July 21-25, driven by market momentum and positive expectations for mid-year reports [11][18]. - The report highlights optimism for the gaming sector and AI applications, particularly focusing on new investment opportunities in AI companionship, education, and toys, as well as companies with strong IP advantages [1][2]. - The issuance of 134 game licenses in July, including 127 domestic and 7 imported games, is expected to invigorate the gaming industry and enhance market diversity [3][21]. Summary by Sections Market Overview - The media sector's performance is noted with a 2.09% increase, while other sectors like coal and steel performed even better [11][14]. - The top gainers in the media sector include companies like Happiness Blue Sea and Xinhua Media, with significant weekly increases [14]. Sub-sector Insights - **Gaming**: Key companies to watch include ST Huatuo, Jibite, and Kaixin Network, with additional focus on Perfect World and Iceberg Network [2][18]. - **AI**: Companies such as Dou Shen Education and Sheng Tian Network are highlighted for their potential in AI applications [2][18]. - **Resource Integration**: Companies like China Vision Media and Guangxi Broadcasting are noted for their resource integration expectations [2][18]. - **State-owned Enterprises**: Companies such as Ciwen Media and Anhui New Media are included in this category [2][18]. - **Education**: Focus on companies like Xueda Education and Fenbi [2][18]. - **Hong Kong Stocks**: Attention is drawn to Alibaba, Tencent, and Pop Mart, among others, indicating an imminent industry explosion [2][18]. Key Events Review - The report discusses the recent updates in AI models, including the Qwen3 upgrade, which shows significant improvements in various capabilities [4][21]. - The anticipated launch of OpenAI's GPT-5 model is also mentioned, which aims to unify multiple internal technologies [5][21]. Sub-sector Data Tracking - The gaming sector is tracking popular upcoming games, with titles like "Modern Warships" and "Dungeon Castle 4" gaining attention [22]. - The box office for the week of July 21-25 reached approximately 508 million yuan, with top films including "The Lychee of Chang'an" and "Nanjing Photo Studio" [25][26]. - TV series and variety shows are also tracked, with "Morning Snow Record" and "Speed Racer" leading in viewership [27][28].

Investment Rating - The report maintains a rating of "Buy" for the industry [3]. Core Viewpoints - The report indicates a significant drop in new installations of solar and wind power in June, suggesting that the supply-side pressure is easing, and green electricity is expected to experience a reversal [2][10]. - The increase in the proportion of renewable energy is expected to stimulate the demand for flexible power generation, benefiting coal-fired power plants and aiding in the absorption of renewable energy [2]. - The report emphasizes the importance of focusing on the power sector, particularly coal-fired power companies with resilient quarterly performance and leading firms in flexible coal-fired power transformation [2]. Summary by Sections Industry Overview - As of June 30, the total installed power generation capacity in the country reached 3.65 billion kilowatts, a year-on-year increase of 18.7%. Solar power capacity was 1.1 billion kilowatts, up 54.2%, and wind power capacity was 570 million kilowatts, up 22.7% [7][13]. - In June, new installations of solar and wind power dropped significantly, with solar power adding 14.36 GW and wind power adding 5.11 GW, down 78.56% and 21.21% respectively from May [7][13]. - The average utilization hours of power generation equipment decreased by 162 hours year-on-year to 1504 hours [7][13]. Electricity Demand - In June, the total electricity consumption increased by 5.4%, with the first, second, and third industries, as well as residential electricity consumption, showing growth rates of 8.7%, 2.4%, 7.1%, and 4.9% respectively [7][10]. - The third industry's electricity demand showed resilience, with internet and related services growing by 27.4% year-on-year [7][10]. Investment Recommendations - The report recommends focusing on coal-fired power companies such as Huaneng International, Huadian International, and Baoneng New Energy, as well as leading firms in flexible coal-fired power transformation like Qingda Environmental Protection [2]. - It also suggests prioritizing undervalued green electricity operators, particularly in the Hong Kong market, and companies with high stock project ratios and short-term revenue certainty [2]. Market Performance - The report notes that during the week of July 21-25, the Shanghai Composite Index rose by 1.67%, while the electricity and public utilities sector index fell by 0.03%, underperforming the broader market [55][56].