Report Industry Investment Rating No relevant content provided. Core Viewpoints - The convertible bond market experienced a volume - shrinking correction today, with compressed valuations. The large - cap value style was relatively dominant, and the trading sentiment in the convertible bond market weakened [1]. Summary by Relevant Catalogs Market Overview - Index performance: The CSI Convertible Bond Index decreased by 0.41% compared to the previous day. The Shanghai Composite Index decreased by 0.46%, the Shenzhen Component Index decreased by 0.87%, the ChiNext Index decreased by 1.08%, the SSE 50 Index increased by 0.59%, and the CSI 1000 Index decreased by 1.24% [1]. - Market style: The large - cap value was relatively dominant. The large - cap growth decreased by 0.06%, the large - cap value increased by 0.26%, the mid - cap growth decreased by 1.10%, the mid - cap value decreased by 1.05%, the small - cap growth decreased by 1.06%, and the small - cap value decreased by 0.78% [1]. - Fund performance: The trading sentiment in the convertible bond market weakened. The trading volume of the convertible bond market was 98.402 billion yuan, a 1.64% decrease compared to the previous day. The total trading volume of the Wind All - A Index was 2.306283 trillion yuan, a 6.03% increase compared to the previous day. The net outflow of the main funds in the Shanghai and Shenzhen stock markets was 54.342 billion yuan, and the yield of the 10 - year treasury bond increased by 0.79bp to 1.73% [1]. Convertible Bond Price - The central price of convertible bonds decreased, and the proportion of high - price bonds decreased. The weighted average closing price of convertible bonds was 129.36 yuan, a 0.46% decrease compared to the previous day. Among them, the closing price of equity - biased convertible bonds was 176.24 yuan, a 3.27% increase; the closing price of debt - biased convertible bonds was 118.34 yuan, a 0.01% decrease; the closing price of balanced convertible bonds was 126.84 yuan, a 0.07% increase [2]. - From the distribution of convertible bond closing prices, the proportion of high - price bonds above 130 yuan was 51.76%, a 3.74 - percentage - point decrease compared to the previous day. The interval with the largest change in proportion was 120 - 130 (including 130), with a proportion of 30.62%, a 2.42 - percentage - point increase compared to the previous day. There were 2 bonds with a closing price below 100 yuan. The median price was 130.53 yuan, a 1.06% decrease compared to the previous day [2]. Convertible Bond Valuation - Valuations were compressed. The fitted conversion premium rate of 100 - yuan par value was 30.05%, a 0.14 - percentage - point decrease compared to the previous day. The overall weighted par value was 97.57 yuan, a 1.35% decrease compared to the previous day. The premium rate of equity - biased convertible bonds was 9.66%, a 0.94 - percentage - point increase; the premium rate of debt - biased convertible bonds was 91.78%, a 1.71 - percentage - point decrease; the premium rate of balanced convertible bonds was 23.74%, a 0.51 - percentage - point decrease [2]. Industry Performance - In the A - share market, most industries fell, with 29 industries experiencing declines. The top three industries with the largest declines were national defense and military industry (-2.15%), communication (-2.12%), and steel (-1.97%). The only industry that rose against the trend was non - bank finance (+0.59%) [3]. - In the convertible bond market, 26 industries fell. The top three industries with the largest declines were automobile (-2.52%), national defense and military industry (-2.17%), and building decoration (-1.62%). Only two industries rose against the trend, namely environmental protection (+2.62%) and building materials (+2.30%) [3]. - Closing price: The large - cycle sector increased by 0.25%, the manufacturing sector decreased by 1.04%, the technology sector decreased by 1.16%, the large - consumption sector decreased by 0.66%, and the large - finance sector decreased by 0.25% [3]. - Conversion premium rate: The large - cycle sector increased by 1.4 percentage points, the manufacturing sector increased by 1.8 percentage points, the technology sector increased by 1.3 percentage points, the large - consumption sector increased by 2.0 percentage points, and the large - finance sector increased by 1.5 percentage points [3]. - Conversion value: The large - cycle sector decreased by 0.58%, the manufacturing sector decreased by 1.86%, the technology sector decreased by 2.05%, the large - consumption sector decreased by 2.03%, and the large - finance sector decreased by 0.02% [3]. - Pure - bond premium rate: The large - cycle sector increased by 0.33 percentage points, the manufacturing sector decreased by 1.8 percentage points, the technology sector decreased by 1.8 percentage points, the large - consumption sector decreased by 0.87 percentage points, and the large - finance sector decreased by 0.3 percentage points [3]. Industry Rotation - Only the non - bank finance industry rose. Among them, the daily increase rate of the non - bank finance industry's stocks was 0.59%, while the convertible bonds in this industry decreased by 0.30%. Many other industries showed different degrees of decline in both stocks and convertible bonds [58].

Group 1: Financial Data Overview - In July 2025, new social financing (社融) amounted to 1.16 trillion yuan, a decrease from 4.20 trillion yuan in the previous period[2] - The total social financing stock grew by 9.0% year-on-year, compared to 8.9% previously[2] - M2 money supply increased by 8.8% year-on-year, up from 8.3% in the prior period[2] - New M1 money supply rose by 5.6% year-on-year, compared to 4.6% previously[2] Group 2: Corporate Loan Trends - Corporate loans turned negative, with a decrease of 2.6 billion yuan in medium to long-term loans, reflecting a year-on-year decline of 3.9 billion yuan[47] - The contraction in corporate loans may benefit the Producer Price Index (PPI) by raising it year-on-year[3] - Despite weak loan performance, overall corporate financing is still growing, with improvements in equity and bond financing compared to the same period last year[3] Group 3: Economic Indicators and Market Sentiment - The ongoing recovery of the corporate-resident deposit gap indicates continuous improvement in the economic cycle, supporting the view that the worst phase is passing[7] - The ratio of resident deposits to the total stock market value remains high, suggesting significant potential for market growth as the economic cycle improves[38] - The current high growth of non-bank deposits (2.1 trillion yuan added in July) indicates ample liquidity in financial institutions[38]

Investment Rating - The report assigns a "Recommended" rating to the company with a target price of 25.7 yuan [1]. Core Views - The report highlights that the company is focusing on the central nervous system and cardiovascular fields, with increased investment in research and development [1][6]. - The report indicates that the company has cleared risks in its finished drug business and is expected to achieve stable growth moving forward [7][8]. - The company is accelerating its innovation transformation, particularly in the fields of central nervous system and cardiovascular drugs [8][58]. Financial Summary - The company is projected to achieve total revenue of 41.59 billion yuan in 2024, with a year-on-year growth of 4.0% [2][16]. - The net profit attributable to shareholders is expected to be 7.12 billion yuan in 2024, reflecting a year-on-year increase of 15.0% [2][16]. - Earnings per share are forecasted to be 0.83 yuan in 2024, with a price-to-earnings ratio of 24 times [2][10]. Business Overview - The company has a comprehensive layout in the pharmaceutical industry, including both finished drugs and medical devices, and has established a strong presence in the domestic market [14][16]. - The finished drug business primarily focuses on cardiovascular, central nervous system, and digestive health, with a significant increase in sales in the outpatient market [21][34]. - The raw material drug and medical device businesses are also performing well, with the raw material drug revenue expected to be 8.76 billion yuan in 2024, despite a slight decline [9][21]. Innovation and R&D - The company has made significant strides in innovation, with a focus on developing new drugs for the treatment of insomnia and other conditions [58][60]. - The first innovative drug, Dazisni, has been approved and is expected to rapidly gain market share [60]. - The company is actively pursuing new drug development, with several products in various stages of clinical trials [58][59]. Investment Recommendations - The report forecasts net profits for 2025, 2026, and 2027 to be 7.8 billion, 8.8 billion, and 10.1 billion yuan respectively, with corresponding growth rates of 9.5%, 12.9%, and 15.0% [10][16]. - The current stock price corresponds to price-to-earnings ratios of 22, 20, and 17 for the years 2025, 2026, and 2027 [10].

Group 1: Economic Indicators - In July 2025, new social financing was 1.16 trillion yuan, down from 4.20 trillion yuan in the previous period[1] - The year-on-year growth of social financing stock was 9.0%, compared to 8.9% previously[1] - M2 increased by 8.8% year-on-year, up from 8.3% in the previous period[1] Group 2: Corporate Loan Trends - Corporate loans turned negative with a decrease of 2.6 billion yuan in medium to long-term loans and 5.5 billion yuan in short-term loans[11] - The contraction in corporate loans may benefit the year-on-year increase in PPI[2] - Despite weak loan performance, overall corporate financing is still growing, with improvements in equity and bond financing compared to the same period last year[2] Group 3: Market Outlook - The current market sentiment remains strong, with non-bank deposits increasing by 2.1 trillion yuan, marking the third highest value for the year[5] - The ratio of household deposits to the market capitalization of the Shanghai and Shenzhen stock markets remains at a historical high of 1.7 times, indicating potential for further market growth[5] - The Sharpe ratio for stocks continues to rise compared to bonds, suggesting that stocks still offer better risk-adjusted returns[7] Group 4: Policy Implications - The narrative of "watching stocks and doing bonds" remains unchanged despite the negative corporate loan trend, as the worst phase of the economic cycle is believed to be passing[4] - The increase in non-bank deposits may lead to central bank concerns about fund idling, potentially impacting the bond market[3]

Investment Rating - The report maintains a "Recommendation" rating for the securities industry, indicating an expected increase in the industry index by more than 5% over the next 3-6 months compared to the benchmark index [18]. Core Insights - On August 13, the A-share trading volume surpassed 2 trillion yuan, marking the sixth occurrence in history and the first in nearly a decade where both trading volume and margin financing exceeded 2 trillion yuan on the same trading day [4][5]. - The report highlights a transition in the market from a high-leverage driven environment to a more mature market driven by policy collaboration and fundamental improvements. The current market sentiment is reflected in the active trading volumes and margin financing balances [5]. - The report notes that 27 listed brokerages have released mid-year performance forecasts, with a collective net profit growth of 63.0% to 77.2% year-on-year for the first half of 2025, and a quarter-on-quarter growth of 3.8% to 21.5% for Q2 2025 [7]. Summary by Sections Market Performance - Historical data shows that A-share trading volumes have exceeded 2 trillion yuan on 27 trading days across three periods: May-June 2015, September-December 2024, and February-August 2025. The latest occurrence on August 13, 2025, is significant as it reflects a shift towards a more stable market environment [5][6]. Profitability and Valuation - The report indicates that the current price-to-book (PB) ratio for the securities sector is 1.56x, which is at a historical low compared to the past five and ten years, suggesting potential for valuation recovery [7]. - Notably, some smaller brokerages have shown remarkable profit growth, with China United Securities reporting a year-on-year increase of 1183% and Huaxi Securities between 1025% and 1354% [7]. Investment Recommendations - The report recommends focusing on stocks with strong alpha characteristics in the medium to long term, while short-term strategies should capitalize on increased market risk appetite. Specific stocks recommended include Guotai Junan A+H, GF Securities A+H, and CITIC Securities [7].

1. Report Industry Investment Rating No information provided in the given content. 2. Core Views of the Report - The report comprehensively analyzes commercial banks' bond allocation, regulatory frameworks, asset - liability structures, and bond investment behaviors. Low - interest rates may lead to an increase in the proportion of OCI accounts, amplifying large banks' trading behaviors. Investors should pay attention to the "buy short, sell long" seasonal characteristics of large banks' bond investments and trading opportunities. Rural commercial banks' bond investment behaviors also show new features, and investors can make decisions based on their seasonal characteristics and key trading varieties [4][9][10]. 3. Summary According to the Table of Contents 3.1 Commercial Banks' Bond Allocation Overview - As of the end of 2024, commercial banks' bond allocation reached 89.70 trillion yuan, accounting for 50.70% of China's bond market custody balance. They prefer interest - rate bonds, with interest - rate bonds accounting for 82.7% (74.0 trillion yuan), followed by credit bonds (11.3%, 10.2 trillion yuan) and certificates of deposit (6.0%, 5.4 trillion yuan). Since 2024, the growth rate of commercial banks' bond allocation has first declined and then increased, which is highly correlated with the supply rhythm of government bonds [14][16]. 3.2 Bank Main Regulatory Frameworks: Macro - Prudential + Micro - Supervision, Multi - Dimensional and Multi - Level - **Central Bank Macro - Prudential Assessment**: Focuses on "broad credit" and interest - rate pricing. The assessment objects include various banking financial institutions, divided into three categories. It contains seven major indicators, and the assessment results are divided into A, B, and C grades, with different incentives and constraints for each grade [21][24]. - **Financial Regulatory Bureau Micro - Indicator Assessment** - **Capital Measures and Bank Ratings**: Centered on capital adequacy ratio, the 2023 "Commercial Bank Capital Management Measures" guide banks to form an interest - rate bond - based investment structure. Bank ratings have additional requirements for systemically important banks and global systemically important banks [28][29][34]. - **Liquidity Risk Assessment Indicators**: Aim to guide banks to increase stable liabilities and hold high - quality liquid assets. Mainly focus on LCR, NSFR, HQLAAR, and LMR, with different applicable scopes. The assessment pressure mainly lies in the quarter - end compliance pressure of NSFR [46][48]. - **Duration Indicators**: A "hard constraint" for large banks to extend bond investment duration. When the economic value change of state - owned large banks exceeds 15% of their primary capital, regulatory assessment is required [49]. 3.3 Bank Asset - Liability Structure - **Liability Structure** - **Deposit Structure**: Deposits account for about 70% of liabilities. Personal deposits exceed corporate deposits, and non - bank inter - bank deposits account for a relatively stable proportion. The weighted deposit term has been lengthening. Since 2024, large banks' dependence on inter - bank liabilities has increased, and the cost of liabilities has been declining rapidly [55][57][70]. - **Inter - bank Liabilities**: Since 2024, high - interest deposit - soliciting behaviors have been prohibited, and large banks' inter - bank liability ratio has increased to around 15%. After the optimization of non - bank inter - bank current deposit pricing in late 2024, large banks rely more on inter - bank certificates of deposit to supplement liabilities [63][65]. - **Asset Structure** - **Loan Structure**: Loans are the main asset, but the growth rate of household and corporate loans has been declining since 2023, and the loan term has been lengthening. The loan term has shown a trend of "first lengthening, then shortening, and then lengthening" since 2015 [73][77][84]. - **Inter - bank Assets**: The proportion of inter - bank assets has been declining, and the term has been lengthening since 2022. Among them, the proportion of lending funds has remained stable, while the proportions of placed - with - banks and reverse - repurchase assets have declined [87][91]. 3.4 Bank Bond Investment Behaviors - **Bond Allocation Varieties**: Mainly interest - rate bonds, with interest - rate bonds > certificates of deposit > credit bonds in terms of EVA comparison [4]. - **Financial Investment Account Structure**: The OCI account is both offensive and defensive and is more favored by banks in the low - interest rate stage. State - owned banks in the OCI account mainly trade government bonds, while small and medium - sized banks conduct credit down - grading. In the AC account, government bonds dominate. The TPL account has the strongest trading attribute, with a relatively high proportion of outsourced funds [4]. - **Large Banks' High - Frequency Duration of Holdings**: Since 2024, the duration pressure has gradually increased, and the characteristic of "buying short and selling long" at the end of the quarter has been strengthened. In 2025, the duration of large banks has continued to lengthen, and the duration pressure may ease after the peak of government bond issuance [4]. 3.5 New Developments: New Features of Large and Small Banks' Investment Behaviors - **Large Banks** - **Buying Bonds**: Driven by the central bank's bond - buying, large banks "buy short" and control the short - end pricing. Constrained by duration indicators, the "buy short, sell long" characteristic is strengthened. - **Selling Bonds**: To meet profit requirements, they sell old bonds to realize floating profits. Facing liquidity pressure, they reduce lending, redeem funds, and then increase bond sales [4]. - **Small Banks**: In 2025, "small banks' bond - buying" has returned, with a more flexible investment style. Rural commercial banks attach importance to trading in bond investment, with an overall increase in turnover rate. They have pricing power over certain bonds, and their bond - buying peaks usually occur in specific periods. Attention should be paid to the leading signals of rural commercial banks' early - bird actions at the end of the year [7].

Investment Rating - The industry investment rating is "Recommended," indicating an expected increase in the industry index by more than 5% over the next 3-6 months compared to the benchmark index [26]. Core Insights - The report highlights a diversified financing structure and increased liquidity in the banking sector, with July's new social financing scale reaching 1.16 trillion yuan, a year-on-year increase of 389.3 billion yuan, and a social financing stock growth rate of 9.0%, up 0.1 percentage points from the previous month [2][7]. - The report emphasizes the importance of direct financing as a key pillar of social financing, with government bonds remaining the main support, and corporate bonds and equity financing showing improvement [7]. - It notes a seasonal decline in credit growth, with July's RMB loans decreasing by 50 billion yuan, a year-on-year reduction of 310 billion yuan, reflecting a shift in banks' operational strategies towards reducing competition and enhancing non-interest income [7][8]. Summary by Sections Financial Data Overview - As of July, the total market value of the banking sector is approximately 156,819.33 billion yuan, with a circulating market value of about 106,228.05 billion yuan [4]. - The absolute performance of the banking sector over the past 12 months is reported at 37.4%, while the relative performance is at 12.1% [5]. Social Financing and Credit Analysis - The report details that direct financing has increased by 658.8 billion yuan year-on-year, with government bonds contributing significantly to this growth [7]. - It also highlights a decline in both corporate and household loan demands, with corporate loans decreasing by 60 billion yuan and household loans by 489.3 billion yuan in July [7][8]. Investment Recommendations - The report suggests a focus on long-term investment opportunities within the banking sector, particularly in state-owned banks and stable joint-stock banks, emphasizing their high dividend yields and asset quality [7]. - It recommends a diversified investment strategy, including attention to banks with solid fundamentals and excellent risk control, as the economic structure transitions [7].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The research on the regulatory framework, fund operation, bond - allocation behavior, and the latest characteristics of the fund industry is crucial for analyzing the bond market trends. In a low - interest - rate environment, the impact of fund trading behavior on bond market assets is increasing. [8][10] - By examining the pricing power, seasonality, product innovation, and new trends of funds, investment opportunities and risks in the bond market can be identified. [9][10] Summary According to the Directory 1. Overview of Public Fund Bond Allocation - As of the end of 2024, the bond - allocation scale of public funds was 18.87 trillion, ranking second in the market, accounting for 10.7% of the 177 - trillion custody balance of the Chinese bond market. Since Q4 2023, the bond - allocation scale of bond funds has grown rapidly, with the growth rate reaching over 20%. In H1 2025, the growth rate returned below 10%. Bond - type funds prefer policy - financial bonds and general credit bonds. [2][16][18] 2. Overview of the Public Fund Market: Variety Classification and Institutional Framework Defined by Supervision (1) Public Fund Variety Classification: Divided by Investment Assets and Ratios - Public funds can be divided into stock funds, bond funds, money - market funds, fund - of - funds (FOF), and hybrid funds according to the investment assets and ratios. As of the end of 2024, fixed - income funds such as money - market funds and bond - type funds dominated, accounting for 75% of the total. [23][25] (2) Public Fund Regulatory Framework: Institutional System, Operational Norms, and Tax Regulations - **Public Funds**: Subject to multiple regulatory requirements from the new asset - management regulations, fund systems, and institutional reforms. The regulatory framework has been continuously updated since 1998, covering aspects such as investment scope, credit rating, leverage, duration, valuation methods, liquidity requirements, and investment concentration. [32][38] - **Money - Market Funds**: Have stricter regulatory requirements than general public funds in terms of leverage, duration, and liquidity. There are also special regulations for controlling scale, investment scope, and other aspects. There are also special types such as floating money - market funds and important money - market funds. [42][50] - **Tax Policy**: Public funds have advantages in value - added tax and enterprise income tax compared with institutional investors such as bank self - operations, which is an important reason for bank self - operations to invest indirectly. [56] 3. Public Fund Operation: How Products Operate from the Fund End to the Asset End (1) Fund Sources - Since 2017, public funds have entered a stage of rapid expansion. As of the end of 2024, fixed - income funds represented by bond funds and money funds dominated, accounting for nearly 75%. Bond funds are mainly for institutional investors, while money funds are for individual investors. [5] (2) Bond - Type Funds - In asset allocation, bond investment is the main focus, with policy - financial bonds and credit bonds having a relatively high proportion. The duration is mostly between 2 - 4 years, and the leverage ratio is between 110% - 130%. The risk - return characteristics of different types of bond funds vary. [5] (3) Money - Market Funds - In asset allocation, liquidity is the primary consideration, with inter - bank certificates of deposit, bank deposits, and repurchase transactions accounting for over 90%. The average remaining term is 70 - 85 days, and the leverage ratio is 105% - 110%. The deviation is controlled within 0.1%, and the yield is highly correlated with the fund interest rate. [5] 4. Impact of Fund Institutional Behavior on the Bond Market: Focus on Pricing Power, Seasonality, Product Innovation, and New Trends - **Pricing Power**: Funds have pricing power over most maturities of policy - financial bonds, long - term new Treasury bonds, and 1 - 3 - year credit bonds. [5][10] - **Seasonality**: Although public funds do not have obvious seasonal characteristics in bond - allocation behavior, there have been significant peaks in bond allocation in Q2 and year - end front - running in the past two years. [6][10] - **Product Innovation**: New products in the fund industry can reshape market capital flows and investment structures, bringing structural market conditions. [9][10] - **New Trends**: In a low - interest - rate environment, funds tend to increase duration and focus on trading. With the trend of public fund fee reduction, low - fee index products may see accelerated development. [10]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - In July 2025, new RMB loans decreased by 50 billion yuan, with a year - on - year decrease of 310 billion yuan, and the credit balance growth rate dropped to 6.9%. New social financing scale reached 1.16 trillion yuan, with a year - on - year increase of 389.2 billion yuan, and the stock growth rate of social financing rose from 8.9% to 9%. The year - on - year growth rate of M2 increased from 8.3% to 8.8%, and the growth rate of the new - caliber M1 increased from 4.6% to 5.6%. Overall, July's credit performance was lower than market expectations, with bills being the main support. Among social financing sub - items, government bonds increased by 555.9 billion yuan year - on - year, supporting the social financing growth rate to remain high. In terms of deposits, under the low - base effect, the M1 growth rate continued to rise, and M2 was mainly driven by non - bank deposits [5][8]. 3. Summary by Related Catalogs 3.1 Credit: Both the household and corporate sectors performed mediocrely - **Household Sector**: In July, both short - term and medium - to - long - term loans were relatively weak, with a combined decrease of 489.3 billion yuan. Short - term loans decreased by 382.7 billion yuan, 167.1 billion yuan less than the same period last year, possibly due to the overdraft effect of the June shopping festival. Medium - to - long - term credit decreased by 110 billion yuan, 120 billion yuan less than the same period last year. The year - on - year growth rate of the trading area of commercial housing in 30 large - and medium - sized cities was - 18.6%, and the decline was larger than last month. The trading of second - hand houses was relatively weak, and medium - to - long - term household loans showed negative growth again since April [2][10]. - **Corporate Sector**: In July, corporate medium - to - long - term loans decreased by 260 billion yuan, 390 billion yuan more than the same period last year. The growth rate of the loan balance dropped slightly to 6.9%. Existing policy tools had limited driving effects on corporate loans, and subsequent policy - based financial tools might support corporate medium - to - long - term loans. Corporate short - term loans decreased by 550 billion yuan, basically the same as last year. Bill financing increased by 871.1 billion yuan, 312.5 billion yuan more than the same period last year. With the weak loan issuance, the demand for bills to "fill the gap" increased significantly [2][15][16]. 3.2 Social Financing: Government bonds still provided support, and the willingness to issue corporate bonds continued - **Government Bonds**: In July, the issuance scale of government bonds was large, with a new increase of 1.24 trillion yuan, 555.9 billion yuan more than the same period last year. According to the current issuance plan, government bonds would still support social financing in July, but from August to the end of the year, they might see a year - on - year decrease. If no additional bonds were issued at the end of the year, the peak of the annual social financing growth rate might appear in July [3][17]. - **Corporate Bonds**: In July, the willingness to issue corporate bonds was still strong, with a new increase of 27.91 billion yuan, 7.55 billion yuan more than the same period last year. With relatively low bond yields, the willingness to issue bonds increased seasonally, which might also "siphon" corporate loans. Un - discounted bills decreased by 16.39 billion yuan, close to the same period last year, and off - balance - sheet bills continued to be transferred to on - balance - sheet [3][21]. 3.3 Deposits: The growth rates of M1 and M2 continued to rise - **M1**: In July, the new - caliber M1 decreased by 2.9 trillion yuan, 832.4 billion yuan more than the same period in 2024, which was at a relatively high seasonal level. The wealth effect of the equity market supported the activation of funds to some extent, and the year - on - year reading of M1 increased significantly from 4.6% to 5.6%. - **M2**: Among the sub - items of M2, non - bank deposits were the main support. Driven by the recovery of the equity market, non - bank deposits increased by 2.14 trillion yuan in July, 1.39 trillion yuan more than the same period in 2024. After the cross - quarter in July, corporate deposits showed an outflow state, decreasing by 1.46 trillion yuan, but due to the low - base effect of the general deposit outflow after manual interest compensation in 2024, the decrease was 320.9 billion yuan less year - on - year [3][23][30].

Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [2][17]. Core Views - The company, Huace Navigation, reported steady growth in its 2025 H1 performance, with total revenue reaching 1.83 billion yuan, a year-on-year increase of 23.5%, and a net profit attributable to shareholders of 330 million yuan, up 29.9% [2]. - The company is positioned as a leader in high-precision satellite navigation and positioning services, benefiting from the expansion of both domestic and international markets [2]. Financial Performance Summary - **2025 H1 Financial Highlights**: - Total revenue: 1.83 billion yuan, up 23.5% year-on-year - Net profit attributable to shareholders: 330 million yuan, up 29.9% - Non-recurring net profit: 300 million yuan, up 41.8% [2] - **Future Financial Projections**: - Revenue projections for 2025-2027 are 4.23 billion yuan, 5.49 billion yuan, and 7.07 billion yuan, with corresponding growth rates of 30.1%, 29.7%, and 29.0% [2][8]. - Net profit projections for the same period are 760 million yuan, 990 million yuan, and 1.29 billion yuan, with growth rates of 30.4%, 30.7%, and 29.3% [2][8]. Business Segment Performance - **Geographical and Business Segment Growth**: - Resource and Public Utility: Revenue of 700 million yuan, up 3.1% - Construction and Infrastructure: Revenue of 660 million yuan, up 23.7% - Geospatial Information: Revenue of 360 million yuan, up 87.6% - Robotics and Autonomous Driving: Revenue of 110 million yuan, up 43.8% [2]. Market Position and Strategy - The company has a robust marketing system with both direct sales and a strong network of distributors, including branches in 12 countries/regions [2]. - As of 2025 H1, overseas revenue accounted for 32.8% of total revenue, reaching 600 million yuan, a year-on-year increase of 35.1% [2]. Investment Recommendation - The report suggests that the company is well-positioned to benefit from the increasing trend of high-precision satellite navigation services, with a target price of 43.8 yuan based on a 45x PE ratio for 2025 [2][3].