1. Report Industry Investment Rating There is no information provided regarding the report's industry investment rating. 2. Core Viewpoints of the Report - In Q2 2025, the bond market environment was more favorable than in Q1. After the relaxation of funds, some bond varieties returned to a "positive carry" state, leading to an increased willingness among bond funds to add leverage, actively extend durations, and explore credit spreads, resulting in a rise in bond market congestion. The scale of money market funds reached a new high, and after the funds were relaxed, the risk of negative deviation significantly decreased. The product allocation preference shifted from fund lending to bank deposits [3][5]. - Looking ahead, due to factors such as the upcoming approval of policy - based financial instruments, continuous risk - preference disturbances, and insufficient expectations of interest rate cuts, bond market trading will enter a "hard mode". The 10 - year Treasury bond yield may rise slightly to a core fluctuation range of 1.65 - 1.75%. It is advisable to conduct bond swaps and take profits when market sentiment improves. In addition, although the market is relatively friendly in early August, there are still disturbances from factors such as expectations of broad - credit policies and risk preferences. During bond market adjustments, a fund redemption wave may be triggered, further amplifying market volatility. Institutions should maintain account liquidity and seize small - band trading opportunities [4][166]. 3. Summary by Relevant Catalogs 3.1 Bond Funds: Risk - Aversion Sentiment Drives Bond Market Recovery, Bond Fund Scale Resumes Expansion, and Performance Turns Positive 3.1.1 Asset Scale - In Q2 2025, the overall bond fund scale increased by 861.5 billion yuan. As of the end of Q2, there were 3,862 bond funds, accounting for 29.92% of all funds. The net issuance was 54 funds, and the asset net value increased to 10.93 trillion yuan. The share of bond funds mainly increased in pure - bond funds, while the share of convertible bond funds decreased slightly. Among them, passive index bond funds had the most significant scale increase, supported by the expansion of market - making credit bond ETFs [11][15][17]. 3.1.2 Subscription and Redemption - The redemption pressure on pure - bond funds in Q2 was significantly relieved compared to Q1. The net subscription ratio of short - term bond funds rebounded to 56.52%, the highest among all bond funds. The subscription sentiment of "fixed - income +" bond funds was weaker than that of pure - bond funds. The net subscription ratios of mixed first - tier and second - tier bond funds decreased, and the median net subscription - redemption rates also declined [31][35]. 3.1.3 Performance - The annualized return of bond funds in Q2 2025 increased to 4.10%. "Fixed - income +" bond funds performed better than pure - bond funds. The performance ranking was second - tier bond funds (5.21%) > first - tier bond funds (4.63%) > medium - and long - term pure - bond funds (3.82%) > passive index bond funds (3.63%) > short - term pure - bond funds (2.55%) [36]. 3.1.4 Leverage Ratio - In Q2 2025, due to the central bank's reserve requirement ratio and interest rate cuts, the funds' price center decreased, and some varieties returned to a "positive carry" state. The overall leverage ratio of bond funds increased by 1.29 percentage points to around 119.94%, and the leverage ratios of various types of bond funds also increased [43]. 3.1.5 Weighted Average Duration of Top - 5 Heavy - Position Bonds - In Q2 2025, after the rapid decline in bond market yields, institutions generally extended durations to seek returns. The weighted average duration of the top - 5 heavy - position bonds of existing bond funds increased by 0.69 years to 3.44 years. The durations of all types of funds increased [46][47]. 3.1.6 Asset Allocation - **Large - scale Asset Allocation**: In Q2 2025, bond funds mainly increased their bond holdings by 1.14 trillion yuan, with the proportion of bonds increasing to 96.51%. The proportions of stocks, bank deposits, and other assets decreased [62]. - **Bond Category Asset Allocation**: The proportion of credit bonds held by bond funds increased by 0.97 percentage points to 49.13%, while the proportion of interest - rate bonds decreased by 0.84 percentage points to 44.04% [88]. - **Rating Changes of Heavy - Position Bonds**: Overall, the bond funds' holdings of urban investment bonds and industrial bonds showed an obvious trend of concentration towards AAA - rated bonds. Pure - bond funds focused more on liquidity management, with both urban investment bonds and industrial bonds concentrating on AAA - rated bonds. "Fixed - income +" funds had more obvious credit - sinking, with an increased proportion of AA - rated and below bonds [106][107]. 3.2 Money Market Funds: "Deposit Migration" Drives Scale to a New High, and Allocation Demand Shifts to Deposits and Certificates of Deposit 3.2.1 Traditional Money Market Funds - **Asset Scale**: At the end of Q2 2025, the number of traditional money market funds remained at 364, and the scale exceeded 14 trillion yuan, an increase of 904.6 billion yuan from the previous quarter, a 6.8% increase [121]. - **Subscription and Redemption**: In Q2 2025, 52.47% of money market funds had net subscriptions. Both the retail and institutional ends had net subscriptions [127][130]. - **Performance**: The average 7 - day annualized yield of money market funds in Q2 was 1.26%, a decrease of 0.09 percentage points from Q1. The yields of Yu'E Bao and WeChat Licaitong fluctuated at a low level of 1.2 - 1.4% [136]. - **Leverage Ratio and Duration**: In Q2 2025, the average leverage ratio of money market funds increased by 1.82 percentage points to 105.78%, and the average remaining maturity increased by 7.05 days to 82.72 days [137]. - **Deviation**: In Q2 2025, the absolute - value average of money market fund deviations was basically the same as in Q1, but the number of funds with a minimum negative deviation decreased significantly [141]. - **Asset Allocation**: In terms of large - scale asset allocation, money market funds reduced fund lending and mainly increased bank deposit holdings. In terms of bond category asset allocation, they mainly increased their holdings of certificates of deposit [144][148]. 3.2.2 Floating - Net - Value Money Market Funds - In Q2 2025, the scale of floating - net - value money market funds decreased slightly. The average leverage ratio decreased to 101.54%, and the average remaining maturity decreased to 39.33 days. In terms of asset allocation, they mainly reduced bond and fund - lending holdings and increased bank deposit holdings. In terms of bond asset allocation, they mainly reduced their holdings of certificates of deposit. The yield performance was better than that of traditional money market funds [153][156]. 3.3 Main Conclusions - In Q2 2025, bond funds actively added leverage, extended durations, and explored credit varieties. Money market funds also added leverage, extended durations, and shifted their asset - allocation preferences from fund lending to bank deposits [164][165].

Investment Rating - The report maintains a "Recommend" rating for the automotive industry, with an optimistic outlook for the second half of the year [1]. Core Insights - Traditional automakers are expected to ramp up marketing activities in August, leading to a positive sales outlook for the second half of the year. The market is still digesting weak investment sentiment, and patience is advised while waiting for the release of semi-annual reports [1]. Data Tracking - In July, new energy vehicle deliveries showed significant growth for Xpeng, with a year-on-year increase of 2.3 times, while Li Auto saw a decline of 39.7% year-on-year. BYD delivered 344,296 vehicles, a slight increase of 0.6% year-on-year, but a decrease of 10.0% month-on-month [2][18]. - Traditional automakers also saw notable sales growth, with Geely's sales reaching 238,000 units, up 57.6% year-on-year. SAIC Group led the sales with 338,000 units, a 34.2% increase year-on-year [20]. Discount Rates and Amounts - The average discount rate in late July was 10.0%, a slight increase of 0.1 percentage points from early July, and the average discount amount was 22,311 yuan, up 126 yuan from early July [3][22]. Industry News - The report highlights significant developments in the automotive sector, including the launch of new models by various manufacturers, such as the new Audi A5L and Q6L e-tron, and the introduction of the third-generation UNI-V by Changan [28][29]. - The penetration rate of new energy vehicles reached 54.0% in July, marking a 2.7 percentage point increase year-on-year, with new energy vehicles accounting for 21.4% of the market share [28]. Market Performance - The automotive sector saw a weekly increase of 2.35%, ranking 9th among 29 sectors. The overall market indices also showed positive growth, with the Shanghai Composite Index rising by 2.11% [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - Maintains the view that August - October is a headwind period for the bond market. Currently, it has entered the starting point of the second stage of the bond market's three - step process in the second half of the year. August is regarded as an oscillatory adjustment period after redemption, but the market has not shown a trend improvement in the quarterly dimension [26]. - In the short term, there may be a small - band long - trading window in the first half of August. New bond issuance pressure is low, the VAT policy still benefits old bonds, large banks' bond - allocation power is strong, funds are loose, upcoming weak financial data may provide a profit - taking window, and historically, policy windows usually occur in the second half of August [28]. - For trading portfolios, seize the sentiment - repair period in the first half of August for small - band trading. Take profit at around 1.65% and pay attention to spread opportunities brought by the VAT policy [45]. - For allocation portfolios, wait for new bonds to adjust to more suitable positions, and consider old bonds at curve convex points, such as 6y CDB, 7y ADBC, 10y CDB, and 15y treasury bonds [48]. 3. Summary by Relevant Catalogs 3.1 Value - added Tax New Rule: One - week Market Conditions - **Emotional Impact Stage (August 1st, 4th)**: The "old - new cut - off" of the VAT policy led to tax - exemption advantages for old bonds. Institutions rushed to buy old bonds, with the yield of the 10y treasury active bond dropping from 1.715% to 1.68%, then rising back to around 1.7% due to profit - taking and a strong stock market [13]. - **Bank Bond - buying Stage (August 5th - 7th)**: Banks continued to buy bonds, with the intensity weakening. On August 6th, the Agricultural Development Bank and the Export - Import Bank rushed to issue tax - exempt bonds. The auction results started to price in negative factors as investors awaited higher - yielding new bonds [16][19]. - **New Bond Issuance Stage (August 8th)**: The first batch of local bonds in Hebei and Hubei were auctioned. The adjustment of Hebei bonds was large, attracting more investors to Hubei bonds. The overall impact of VAT on new bonds was controllable, with the adjustment range mostly within the 3 - 6% tax rate [22][24]. 3.2 Bond Market Strategy - **Quarterly Dimension**: Maintains that August - October is a headwind period for the bond market. The bond market is in a difficult trading situation, and accounts need to gradually increase liquidity [26]. - **Short - term (First Half of August)**: There may be a small - band long - trading window. New bond issuance pressure is low, funds are loose, weak financial data may provide a profit - taking window, and policy windows usually occur in the second half of August [28]. - **Trading Portfolios**: Seize the sentiment - repair period in the first half of August. Take profit at around 1.65% and pay attention to spread opportunities [45]. - **Allocation Portfolios**: Wait for new bonds to adjust and consider old bonds at curve convex points [48]. 3.3 Interest - rate Bond Market Review - **Overall Situation**: The central bank's support and the VAT new policy had limited impact. Long - term bonds fluctuated within a narrow range. The yield curve steepened, with the 1y treasury active bond yield down 1.5BP, the 10y down 0.4BP, and the 30y up 1.8BP [9]. - **Funding**: The central bank's OMO had a large - scale net withdrawal, but the funding was balanced and loose. DR001 and DR007 were at low levels, and the central bank's front - loaded 3M term repurchase operations showed a supportive attitude [10]. - **Primary Issuance**: Net financing of treasury bonds, policy - financial bonds, and inter - bank certificates of deposit increased, while that of local bonds decreased [69]. - **Benchmark Changes**: The term spreads of treasury bonds and CDB bonds widened. Short - term bond yields performed better than long - term ones [63].

Investment Rating - The investment rating for the company is "Neutral" with a target price of 13.5 CNY [1][7]. Core Views - The company's revenue decline has narrowed, and cost control has improved performance. In the first half of 2025, the company achieved operating revenue of 3.532 billion CNY, a year-on-year decrease of 23.43%, and a net profit attributable to the parent company of 737 million CNY, down 17.34% year-on-year. The second quarter saw a revenue of 1.741 billion CNY, a year-on-year decline of 11.51%, but a significant increase in net profit by 71.44% year-on-year [1][7]. Financial Performance Summary - **2025 Half-Year Report**: - Operating revenue: 3.532 billion CNY, down 23.43% YoY - Net profit: 737 million CNY, down 17.34% YoY - Q2 revenue: 1.741 billion CNY, down 11.51% YoY - Q2 net profit: 282 million CNY, up 71.44% YoY [1][7] - **Financial Projections**: - 2025E total revenue: 6.271 billion CNY, down 8.3% YoY - 2025E net profit: 811 million CNY, up 24.3% YoY - EPS for 2025E: 0.48 CNY [2][7]. Sales and Cost Management - The company has seen a significant reduction in sales expense ratio, which decreased by 11 percentage points to 39.6% in Q2 2025. This improvement is attributed to efficient spending and a shift towards higher-margin products [7][8]. - Gross margin for Q2 2025 was 68.4%, an increase of 1.7 percentage points year-on-year, driven by a higher proportion of premium products and improved online sales channel performance [7][8]. Market Outlook - The company plans to increase investment in the second half of 2025, with expectations for revenue to gradually improve. The strategy includes launching new products in key categories and focusing resources on profitable online channels [7][8]. - Despite a challenging external consumption environment, the company is expected to maintain a rational approach to spending, leading to a modest decline in annual revenue [7][8].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 90 CNY [1][10]. Core Views - The company is entering a high growth phase in its neurosurgery business, driven by new product launches and centralized procurement [1][8]. - The acquisition of Yijie Medical is a strategic move to expand into the high-potential neurointervention market, despite some short-term concerns regarding profit dilution [2][8]. Summary by Sections Neurosurgery Business Development - Before 2023, the company experienced a period of low revenue growth, heavily reliant on a single product, artificial dura mater, with revenues growing from 54 million CNY in 2017 to 195 million CNY in 2022, achieving a CAGR of 29% [16][22]. - After 2023, the impact of centralized procurement on the dura mater business is expected to stabilize, while new products like PEEK craniofacial repair products and hemostatic gauze are anticipated to drive revenue growth [1][32]. Strategic Acquisition of Yijie Medical - Yijie Medical focuses on the neurointervention sector, which has low penetration and localization rates, presenting significant growth potential [2][52]. - Concerns regarding the acquisition include potential short-term profit dilution and pricing issues related to related-party transactions, but regulatory scrutiny reduces the risk of unreasonable pricing [2][8]. Financial Projections - The company forecasts total revenue of 372 million CNY in 2025, with a year-on-year growth rate of 33.8%, and net profit of 113 million CNY, reflecting a 43.8% increase [3][10]. - The earnings per share (EPS) are projected to grow from 1.70 CNY in 2025 to 3.32 CNY by 2027, with a corresponding price-to-earnings (PE) ratio decreasing from 66 in 2024 to 23 in 2027 [3][10].

Investment Rating - The report maintains a "Recommended" rating for the insurance sector, indicating an expectation of the industry index outperforming the benchmark index by more than 5% in the next 3-6 months [20]. Core Insights - The total cash dividends for the five major listed insurance companies in 2024 reached CNY 90.789 billion, reflecting a year-on-year increase of 20.2% [2]. - The report highlights that the dividend growth for listed insurance companies in 2024 varies, with New China Life Insurance showing the highest growth rate at 197%, driven by a 201% increase in net profit attributable to shareholders [3]. - The report notes a general decline in the dividend payout ratio among listed insurance companies in 2024, attributed to the inclusion of significant unrealized gains in net profit, leading to a cautious adjustment of dividend ratios [3]. - The report emphasizes that the investment performance of the insurance sector in 2024 will largely depend on equity market performance and the expected adjustments in interest rates [4]. Summary by Sections Market Performance - The insurance index increased by 0.46% during the week, underperforming the broader market by 0.77 percentage points [1]. - Individual stock performances varied, with AIA up by 3.15% and ZhongAn down by 3.61% [1]. Dividend Policies - The report discusses the dividend policies of listed insurance companies, noting that Ping An and China Pacific Insurance base their dividends on operating profit, excluding short-term investment fluctuations [3]. - The estimated dividend payout ratios for Ping An and China Pacific Insurance are 41.6% and 33%, respectively, based on their operating profits [3]. Valuation Metrics - The report provides price-to-earnings (PE) and price-to-book (PB) ratios for major insurance companies, with China Ping An rated as "Strong Buy" and China Life Insurance, New China Life, and China Property & Casualty rated as "Recommended" [9]. - The report lists the highest dividend yields among A and H shares, with New China Life leading at over 5% [4]. Future Outlook - The report anticipates that the overall performance of the insurance sector in 2024 will be influenced by equity market trends and the growth of new business value (NBV) [4]. - The report suggests that investment strategies may favor Ping An, China Pacific Insurance, and China Property & Casualty due to their stable dividend policies [4].

- The report introduces a "Total Heat Index" as a proxy for market sentiment, which aggregates the browsing, watchlist, and click counts of individual stocks, normalized as a percentage of the total market activity and scaled by 10,000, with a range of [0,10000][7] - A "Broad-based Index Rotation Strategy" is constructed based on the weekly moving average (MA2) of the heat index change rate. The strategy involves buying the broad-based index with the highest MA2 heat change rate at the end of each week, or staying in cash if the "Other" group has the highest rate. The strategy achieved an annualized return of 8.74% since 2017, with a maximum drawdown of 23.5%, and a 2025 YTD return of 20.95%[12][15] - A "Concept Heat Strategy" is developed by selecting the top 5 concepts with the highest weekly heat change rates. Two portfolios are constructed: the "TOP" portfolio, which holds the top 10 stocks with the highest heat within these concepts, and the "BOTTOM" portfolio, which holds the bottom 10 stocks with the lowest heat. The BOTTOM portfolio historically achieved an annualized return of 15.71%, with a maximum drawdown of 28.89%, and a 2025 YTD return of 29%[29][31] - The heat change rate for the CSI 2000 index increased by 5.98% this week, making it the highest among broad-based indices, while the CSI 300 index saw the largest decrease, dropping by 14.81%[15] - Among Shenwan Level-1 industries, the "Defense and Military" sector experienced the highest positive heat change rate (43.6%), while the "Coal" sector had the largest negative change (-36.2%). The top 5 positively changing industries were Defense and Military, Media, Electronics, Pharmaceuticals, and Textiles[26] - The top 5 concepts with the highest heat change rates this week were "China Shipbuilding," "Brain-Computer Interface," "Hyperbaric Oxygen Chamber," "PEEK Materials," and "Smart Light Poles"[27][29]

Group 1 - The Hong Kong stock market has shown strong performance since the beginning of the year, with the Hang Seng Index rising 23.5%, reaching a nearly four-year high. Key sectors include Technology AI, New Consumption, Biomedicine, and High Dividend stocks [1][12][13] - The market is expected to benefit from the easing of monetary policies in both the US and China, with anticipated interest rate cuts by the Federal Reserve, which could enhance liquidity in the Hong Kong market [2][24] - The earnings forecast for Hong Kong stocks in 2025 has been slightly revised downwards, particularly for the Hang Seng Technology Index, which saw a significant reduction of 9.9% [3][30] Group 2 - In the past month, the Hong Kong stock market has generally risen, with small and mid-cap stocks outperforming large-cap stocks. The Hang Seng Index increased by 4.2%, while the Hang Seng Technology Index rose by 6.1% [4][35] - There has been a substantial inflow of southbound funds into the non-bank and pharmaceutical sectors, with a total net inflow of 135.6 billion HKD in July alone [5][39] - A selected portfolio of "golden stocks" for August includes companies such as 康耐特光学 (Kangnate Optical), 泡泡玛特 (Pop Mart), and 信达生物 (Sinopharm), reflecting a focus on growth potential in various sectors [7][50]

Investment Rating - The report maintains an optimistic outlook on the pharmaceutical industry, particularly for 2025, suggesting a potential for diverse investment opportunities as the sector is currently undervalued [9]. Core Insights - The brain-computer interface (BCI) market is expected to grow significantly, with a projected global market size of $7.63 billion by 2029, reflecting a CAGR of 25.2% from 2023 to 2029 [21]. - The Chinese BCI market is anticipated to reach 10.5 billion yuan by 2029, with a CAGR of 35.5% from 2023 to 2029 [21]. - The report highlights the increasing support from national and local policies aimed at accelerating the development of the BCI industry, including funding for research and standardization efforts [20]. Summary by Sections Market Overview - The BCI technology is categorized into invasive, semi-invasive, and non-invasive types, with non-invasive BCI currently dominating the market, accounting for 78% of the global market share [17][14]. - The medical sector is identified as the primary application area for BCI technology, with over 60% of the market demand coming from healthcare applications [17]. Industry Events - The report outlines various supportive policies from the government, including the establishment of a standardization committee for BCI technology and specific pricing guidelines for BCI-related medical services [18][19]. Company Analysis - Several companies are highlighted for their advancements in the BCI field, including: - **Xiangyu Medical**: Focused on rehabilitation BCIs with a wide range of product configurations and a strong R&D pipeline [30]. - **Chengyi Tong**: Engaged in both invasive and non-invasive BCI technologies, with recent product launches aimed at the consumer market [30]. - **Weisi Medical**: Specializes in non-invasive BCIs and has a robust patent portfolio related to BCI technologies [31]. - **Milan De**: Develops brain-machine interface systems for rehabilitation, integrating advanced technologies for neurological disorders [32]. Investment Opportunities - The report suggests that the BCI industry is still in its early stages in China, with significant growth potential as competition remains limited [24]. - The pharmaceutical sector is advised to focus on innovative drugs and medical devices, with a recommendation to invest in companies with strong R&D capabilities and market positioning [9][33].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report highlights the transformation of China's manufacturing industry from a low-cost, low-value model to a high-value, innovation-driven model, driven by anti-involution policies [2][3][48] - Short-term effects of these policies include the exit of inefficient capacities, increased industry concentration, and a rebound in profit margins [2][3][53] - The long-term outlook suggests a structural shift in global competitiveness, with China aiming to ascend the value chain through technological innovation and sustainable practices [3][48] Summary by Sections 1. Transformation Journey of China's Manufacturing Industry - The manufacturing industry has evolved through several stages: from "world factory" to "intelligent manufacturing powerhouse," with significant advancements in technology and production capabilities [10][19] - Key challenges include low profit margins due to reliance on low-end manufacturing and excessive competition [8][9] 2. Impact of Anti-Involution Policies - Short-term: The policies are expected to lead to industry reshuffling, with inefficient firms exiting the market, thus enhancing market concentration and improving profit margins [2][3][53] - Mid-term: The focus will shift from price competition to value competition, with an emphasis on R&D and innovation leading to higher quality products [2][3] - Long-term: The policies aim to reshape global competitiveness, allowing China to build new barriers in supply chain stability and efficiency [3][48] 3. Current Challenges - The industry faces internal challenges such as low-price competition, overcapacity, and insufficient innovation motivation, alongside external pressures from global supply chain restructuring [37][45] - The report notes that many sectors are experiencing a decline in profitability, with companies caught in a cycle of increasing production without corresponding profit growth [38][40] 4. Future Outlook - The report anticipates that successful implementation of anti-involution policies will enable Chinese manufacturers to transition from being price takers to technology price setters, particularly in high-value sectors like new energy and AI [53][54] - The focus on sustainable development and innovation is expected to create a healthier industrial environment conducive to long-term growth [53][54]