Strategy - The report constructs a macroeconomic state-based dividend rotation portfolio, achieving an annualized return of 15%. The rotation focuses on four categories: cyclical, consumer, stable, and manufacturing dividends, using indicators such as M1 year-on-year growth, PPI index, and 10Y government bond yield to define macro states [15][35][39]. Financial Sector - In June, the banking sector rose by 5.37%, with valuations continuing to recover. The report suggests a diversified investment strategy focusing on state-owned banks and quality regional banks, highlighting the long-term investment value of major banks like China Merchants Bank and CITIC Bank [13][39]. Transportation and Utilities - H-shares outperformed A-shares, emphasizing investment opportunities in Hong Kong dividend assets. Recommendations include Sichuan Chengyu and Anhui Expressway for highways, and China Merchants Port for ports, which are expected to benefit from long-term value and dividend increases [13][39]. Energy and Chemicals - With the arrival of the driving season in Europe and the US, the report highlights investment opportunities in the energy sector. It recommends focusing on major oil and gas companies like China National Petroleum and China Petroleum & Chemical, as well as coal companies like China Shenhua Energy [13][39]. Food and Beverage - The sector is entering a performance verification period, with a focus on improving dividend quality. Recommendations include leading liquor brands like Kweichow Moutai and Wuliangye, as well as dairy companies like Yili [13][39]. Home Appliances - The report emphasizes investment opportunities in leading companies within the home appliance sector, particularly those benefiting from government policies and improving domestic sales. Key recommendations include Midea Group and Haier Smart Home [13][39]. Real Estate - With a decline in residential property sales, the report suggests focusing on commercial real estate. Recommended companies include Swire Properties and China Resources Land, which are expected to maintain stable cash flows and dividends [13][39]. Publishing - The education publishing sector is highlighted for its stability and potential for high dividends. Recommendations include Southern Publishing and Media Group, which is expected to maintain strong performance and dividend payouts [13][39]. Selected Dividend Assets - The report identifies a selection of stable and quality dividend assets, including Shanghai Rural Commercial Bank, Sichuan Chengyu, Kweichow Moutai, and Gree Electric Appliances, among others [12][39].

Group 1: Audit Report Overview - The audit report highlights significant disciplinary violations and audit rectification situations, with the number of cases, individuals, and amounts involved being at a median level over the past five years[6] - The report covers eight key areas, including audit rectification, central financial management, and major project audits[17] - As of March 2025, over 6,540 billion yuan has been rectified in response to issues identified in the 2023 audit, with 1,710 regulations improved and over 4,120 individuals held accountable[17] Group 2: Key Findings - Since May 2024, 430 major disciplinary violations have been discovered, involving over 1,400 individuals and exceeding 630 billion yuan, which is lower than the figures from 2020 and 2021[24] - The central department budget execution audit revealed that 42 departments received 619.96 billion yuan in fiscal allocations for 2024, with identified issues amounting to 28.15 billion yuan[7] - The audit of pension funds across 25 provinces found issues totaling 60.16 billion yuan, with 41.41 billion yuan being misappropriated or fraudulently claimed[28] Group 3: Specific Issues Identified - The audit uncovered 1,325.97 billion yuan in issues related to local government special bonds, highlighting risks associated with hidden debts[27] - Violations of the central eight regulations were noted, with expenditures amounting to 18.19 million yuan on extravagant activities[29] - The report identified ongoing issues with zero-based budgeting, including 53.09 million yuan allocated for outdated subsidies[29]

Group 1: Audit Report Overview - The audit report highlights significant disciplinary violations and audit rectification situations, with the number of cases, individuals, and amounts being in the middle range over the past five years[2] - The audit report is presented annually, with the work report released in June and the rectification report in December[3] - As of March 2025, over 6,540 billion yuan has been rectified in response to issues identified in the 2023 audit, with 1,710 regulations improved and 4,120 individuals held accountable[4] Group 2: Key Findings from the 2024 Audit Report - The central government budget execution audit involved 42 departments and 244 units, with a total budget allocation of 619.957 billion yuan for 2024, uncovering issues amounting to 28.146 billion yuan[4] - The audit identified 430 major disciplinary violations since May 2024, involving over 1,400 individuals and 63 billion yuan, which is lower than the amounts reported in 2020 and 2021[6] - Specific issues included 1,325.97 billion yuan related to local government bond management and risks, and 601.61 billion yuan in pension fund misappropriations across 25 provinces[19][20]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - On July 1, 2025, the convertible bond market showed incremental growth with rising valuations. The trading sentiment in the convertible bond market heated up, while the total trading volume of the A-share market decreased slightly. The median price and overall weighted average parity of convertible bonds increased, and the proportion of high-priced bonds rose. In the industry, more than half of the underlying stock industry indices rose, with different performance trends among different industries [2][3]. Summary by Directory 1. Market Overview - **Index Performance**: The CSI Convertible Bond Index rose 0.48% compared to the previous day, the Shanghai Composite Index rose 0.39%, the Shenzhen Component Index rose 0.11%, the ChiNext Index fell 0.24%, the SSE 50 Index rose 0.21%, and the CSI 1000 Index rose 0.28% [2]. - **Market Style**: Mid-cap value stocks outperformed. Large-cap growth stocks rose 0.10%, large-cap value stocks rose 0.63%, mid-cap growth stocks fell 0.04%, mid-cap value stocks rose 0.88%, small-cap growth stocks rose 0.37%, and small-cap value stocks rose 0.39% [2]. - **Fund Performance**: The trading sentiment in the convertible bond market heated up. The trading volume of the convertible bond market was 62.777 billion yuan, a 15.43% increase compared to the previous day. The total trading volume of the Wind All-A Index was 1.496531 trillion yuan, a 1.37% decrease compared to the previous day. The net outflow of main funds from the Shanghai and Shenzhen stock markets was 23.112 billion yuan, and the yield of the 10-year treasury bond decreased 0.36bp to 1.64% [2]. 2. Convertible Bond Price and Valuation - **Convertible Bond Price**: The weighted average closing price of convertible bonds was 122.81 yuan, a 0.47% increase compared to the previous day. The closing price of equity-biased convertible bonds was 166.37 yuan, a 2.00% decrease; the closing price of bond-biased convertible bonds was 113.54 yuan, a 0.23% increase; the closing price of balanced convertible bonds was 123.61 yuan, a 0.48% increase. The proportion of high-priced bonds above 130 yuan was 32.62%, a 2.13 percentage point increase compared to the previous day. There were 2 bonds with a closing price below 100 yuan. The median price was 124.80 yuan, a 0.48% increase compared to the previous day [3]. - **Convertible Bond Valuation**: The conversion premium rate of the 100-yuan parity fitting was 25.02%, a 0.30 percentage point increase compared to the previous day. The overall weighted parity was 92.22 yuan, a 0.61% increase compared to the previous day. The premium rate of equity-biased convertible bonds was 6.68%, a 0.35 percentage point decrease; the premium rate of bond-biased convertible bonds was 94.76%, a 1.21 percentage point increase; the premium rate of balanced convertible bonds was 19.45%, a 0.03 percentage point increase [3]. 3. Industry Performance - **Underlying Stock Industry Index**: In the A-share market, the top three rising industries were Medicine and Biology (+1.80%), Banks (+1.53%), and Non-ferrous Metals (+1.49%); the top three falling industries were Computer (-1.18%), Commerce and Retail (-0.79%), and Communications (-0.45%). In the convertible bond market, 22 industries rose, with the top three rising industries being Non-ferrous Metals (+2.04%), National Defense and Military Industry (+1.52%), and Banks (+1.23%); the top three falling industries were Communications (-1.15%), Computer (-0.62%), and Steel (-0.26%) [4]. - **Industry Indicators**: In terms of closing price, the large-cycle sector rose 0.73%, the manufacturing sector rose 0.18%, the technology sector fell -0.02%, the large-consumption sector rose 0.39%, and the large-finance sector rose 0.70%. In terms of conversion premium rate, the large-cycle sector fell -0.53 percentage points, the manufacturing sector rose 0.67 percentage points, the technology sector rose 0.83 percentage points, the large-consumption sector fell -0.19 percentage points, and the large-finance sector fell -0.99 percentage points. In terms of conversion value, the large-cycle sector rose 1.00%, the manufacturing sector fell -0.14%, the technology sector fell -0.67%, the large-consumption sector rose 0.46%, and the large-finance sector rose 0.68%. In terms of pure bond premium rate, the large-cycle sector rose 0.91 percentage points, the manufacturing sector rose 0.21 percentage points, the technology sector fell -0.083 percentage points, the large-consumption sector rose 0.45 percentage points, and the large-finance sector rose 0.83 percentage points [4][5].

Group 1: PMI Data Overview - The manufacturing PMI for June is 49.7%, up from 49.5% in May[2] - The production index is at 51.0%, an increase of 0.3 percentage points from the previous value of 50.7%[2] - The new orders index stands at 50.2%, rising from 49.8%[2] Group 2: Sector Performance - The equipment manufacturing PMI is the highest at 51.4%, up 1.8 percentage points from April's 49.6%[4] - The construction industry business activity index is at 52.8%, an increase of 1.8 percentage points from the previous month[14] - The service industry business activity index is slightly down at 50.1%, a decrease of 0.1 percentage points[14] Group 3: Price and Inventory Trends - The PMI factory price index is at 46.2%, remaining below the neutral line for 13 consecutive months[4] - The inventory index has improved, with the purchasing index at 50.2%, up from 47.6%[3] - The comprehensive PMI output index is at 50.7%, reflecting a 0.3 percentage point increase from the previous month[15] Group 4: External Trade and Expectations - New export orders index is at 47.7%, a slight increase from 47.5%[3] - The manufacturing production expectation index is at 52.0%, down from 52.5%[14] - The construction industry business activity expectation index is at 53.9%, up from 52.4%[14]

Group 1 - The "15th Five-Year Plan" positions artificial intelligence as a core focus of industrial policy, reflecting a clear progression in policy priorities over the past five plans, from heavy industry to digital economy and technological self-reliance [8][13][25] - The AI industry is experiencing rapid growth, with foundational infrastructure still in its early stages and a surge in general AI applications [8][5] - The report highlights the increasing importance of AI in various sectors, including office efficiency, marketing, and ERP systems, indicating a broad penetration of AI technologies across industries [8][5] Group 2 - In the electronics sector, AI infrastructure is expected to maintain high growth, with new players emerging in AI computing and significant advancements in AI hardware from leading companies like Qualcomm and Apple [8][5] - The media sector is anticipated to see accelerated application and commercialization of AI products, with a focus on AI agents, companionship, multimodal AI, and AI in education [8][5] - The communication sector is advised to monitor developments in AI and edge computing, particularly following positive guidance from Marvell and the launch of Xiaomi's AI glasses [8][5] Group 3 - The humanoid robotics sector is viewed positively for its commercialization pace, with a focus on three core areas: product development, customer engagement, and application scenarios [8][5] - In the automotive industry, there are opportunities for investment in new vehicle cycles and low-positioned components, despite current low enthusiasm for robotics and intelligent driving chains [8][5] - The report recommends a selection of companies across various sectors, including Shenghong Technology, Huidian Technology, and Alibaba, as part of a curated investment strategy in the AI landscape [8][9]

Investment Rating - The report maintains a "Recommendation" rating for the enterprise storage sector, indicating a positive outlook for investment opportunities in this industry [2]. Core Insights - The semiconductor storage industry is experiencing a price increase driven by supply contraction and high demand from AI applications, with a significant shift towards DDR5 and enterprise-level storage products [8][9]. - Domestic manufacturers are accelerating their entry into the enterprise storage market, with notable advancements in both flash and memory modules, positioning them to capture market share from established players [8][9]. Summary by Sections Supply Contraction and Price Strength - The supply contraction in DRAM due to the discontinuation of DDR4 is leading to rising prices for both spot and contract markets, with a projected price increase of 13% to 18% for PC DRAM in Q2 2025 [19][12]. - In NAND Flash, the discontinuation of MLC and low-capacity TLC products is pushing up eMMC prices, with a significant increase in demand from cloud service providers [20][23]. AI and Domestic Market Trends - The global expansion of data center infrastructure is driving the demand for high-performance storage, with AI servers becoming a core growth engine for the storage market [28][32]. - The Chinese AI server market is projected to grow from $19 billion in 2024 to $25.9 billion in 2025, reflecting a year-on-year growth of 36.2% [28][29]. Relevant Companies - Key companies to watch include: - **Xiangnong Xinchuan**: Focused on enterprise storage development [38]. - **Zhaoyi Innovation**: Leading in domestic storage IC design [38]. - **Jiangbolong**: Achieving significant growth in enterprise-level products [38]. - **Demingli**: Beginning to sample enterprise-level products [38]. - **Baiwei Storage**: Building competitive advantages in AI storage [38]. - **Jucheng Co.**: Accelerating penetration of DDR5 technology [38]. - **Lianyun Technology**: Leading in domestic SSD controller chips [38]. - **Beijing Junzheng**: A leading player in automotive storage [38]. - **Purang Co.**: Emerging in the NOR Flash market [38]. - **Dongxin Co.**: A leading domestic SLC NAND manufacturer [38].

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 [18]. Core Insights - The "Policy Declaration 2.0" aims to establish Hong Kong as a global innovation center for digital assets, building on the initiatives from the first declaration in October 2022 [2]. - The declaration introduces the "LEAP" framework, focusing on optimizing legal and regulatory frameworks, expanding tokenized product varieties, promoting application scenarios and cross-sector collaboration, and developing talent and partnerships [2][3][4]. - The framework emphasizes the establishment of a comprehensive regulatory framework for digital asset service providers, including trading platforms and custodians, with the Hong Kong Securities and Futures Commission as the main regulatory body [2]. - The declaration encourages the tokenization of a wider range of assets and financial instruments, including government bonds and traditional financial products, to stimulate innovation [2][4]. - The report highlights the importance of linking financial tools with the real economy, suggesting that the development of the RWA (Real World Asset) market in Hong Kong is a key focus area [4]. Summary by Sections Legal and Regulatory Optimization - Establish a unified regulatory framework for digital asset service providers, including trading platforms and custodians [2]. - The Hong Kong Securities and Futures Commission will oversee the licensing mechanism for digital asset service providers [2]. Expansion of Tokenized Products - Promote the tokenization of various assets and financial instruments, including government bonds and traditional financial products [2][4]. - Encourage innovative applications through projects like the HKMA's Ensemble project [2]. Application Scenarios and Cross-Sector Collaboration - Support the development of digital asset infrastructure and provide funding for impactful projects through initiatives like the Digital Port's blockchain pilot funding scheme [3]. Talent and Partnership Development - Invest in professional talent development and infrastructure to enhance the financial system's service capabilities abroad [4]. - Address the mismatch between trade and financial status in the context of Chinese enterprises going global [4]. Investment Recommendations - The report suggests tracking the progress of Hong Kong's Web 3.0 development and the entry of significant financial institutions into the digital asset ecosystem [6]. - Recommended stocks include Nanhua Futures, Ruida Futures, Tianfeng Securities, and Guangfa Securities for A-shares, and ZhongAn Online, Lianyi Technology for Hong Kong stocks [6].

Investment Rating - The report maintains a "Recommended" rating for the wind power industry, indicating an expected increase in the industry index exceeding the benchmark index by more than 5% in the next 3-6 months [32]. Core Insights - The report highlights that during the week, 7.4GW of onshore wind projects were awarded at an average price of 1485 CNY/kW. Year-to-date, a total of 52.7GW of wind projects have been awarded, with 6.8GW offshore and 45.9GW onshore [10][12]. - The report emphasizes the significant growth in offshore wind projects, with a total of 69GW in various stages including competitive allocation, approval, and construction as of June 29, 2025. Key provinces with substantial projects include Guangdong, Shandong, and Fujian [15][18]. - Investment suggestions focus on three main lines: high reserves of domestic offshore wind projects, robust onshore wind bidding in 2024, and regional growth in overseas installations. Companies to watch include Mingyang Smart Energy, Dongfang Cable, and Zhongtian Technology [16]. Summary by Sections Wind Turbine Data - In the week, 0.6GW of onshore wind was tendered, with a total of 43.8GW tendered year-to-date, split between 3.6GW offshore and 40.2GW onshore [10][12]. Offshore Wind Progress - As of June 29, 2025, the offshore wind project pipeline includes 69GW in competitive allocation, 16GW approved, 7GW tendered, 9GW in cable tendering, and 15GW under construction. The first batch of units from the Jiangsu Guoxin Dafeng 850,000 kW offshore wind project has successfully connected to the grid [15][18]. Investment Recommendations - The report suggests focusing on three investment themes: 1) High reserves of domestic offshore wind projects with supportive policies, 2) Increased bidding for onshore wind in 2024, and 3) Growth in overseas installations for domestic cable and component manufacturers. Recommended companies include Mingyang Smart Energy, Dongfang Cable, and Zhongtian Technology [16].

Investment Rating - The report gives a "Buy" rating for the company, Buke Co., Ltd. (步科股份) [1] Core Views - Buke Co., Ltd. is actively expanding its "Mobile + Collaboration" market and is a leader in the "frameless" torque motor sector, with significant growth potential in the humanoid robot market [1][6][10] - The company has a comprehensive product line in industrial automation, including human-machine interfaces, programmable logic controllers, servo systems, and low-voltage frequency converters, positioning it as a leading supplier in the automation control and robotics sector [6][14] - The report highlights the company's strong market position in mobile robot servo systems, with a significant increase in sales of its servo wheel products and a robust growth forecast for humanoid robot applications [8][9][10] Financial Summary - Projected total revenue (in million) for 2024A is 547, with a year-on-year growth rate of 8.1%, and expected to reach 1,080 by 2027E, with a growth rate of 25.1% [2] - Projected net profit attributable to shareholders (in million) for 2024A is 49, with a year-on-year decline of 19.4%, but expected to rebound to 123 by 2027E, with a growth rate of 19.7% [2] - Earnings per share (in yuan) are projected to increase from 0.58 in 2024A to 1.47 in 2027E [2] Market Position and Growth Drivers - The company has a leading market share in the mobile robot low-voltage servo sector, with cumulative shipments exceeding 1.2 million units, serving over 400,000 AGV/AMR units, making it the top player in the mobile robot industry [6][8][45] - The humanoid robot torque motor market is expected to reach 200 million yuan by 2025, with a compound annual growth rate (CAGR) of 91.7% from 2025 to 2030, indicating substantial growth opportunities [9][66] - The report emphasizes the increasing demand for automation driven by rising labor costs and an aging population, which is expected to boost the industrial automation rate [35][40] Product and Technology Development - Buke Co., Ltd. has developed an integrated servo wheel module that combines a driver, motor, reducer, and wheel, which has seen significant sales growth, with an expected 38,000 units sold in 2024, representing a year-on-year increase of 118.5% [6][50] - The company has received small batch orders for its frameless torque motors in the humanoid robot sector, indicating a strong foothold in this emerging market [9][67] - The report outlines the company's strategic focus on expanding its product offerings in the humanoid robot market, leveraging its existing technology and market position [10][66]