Group 1: Market Strategy and Outlook - The core driver behind the recent A-share market rally is the optimistic expectation of a rebound in corporate ROE, rather than mere speculation around policy themes [4][9] - The current valuation of A-shares, while having outpaced the recovery of fundamentals, is not extreme, indicating that the recovery in sectors like food and beverage, coal, and oil and petrochemicals is still in its early stages [4][9] - The "anti-involution" and demand-side policies are expected to show quicker effects compared to the comprehensive policies of 2024, with companies having undergone three quarters of self-purging [10][11] Group 2: Sector Recommendations - **Machinery**: Companies like Xugong Machinery and Yingliu Shares are recommended due to domestic demand stabilization and overseas market recovery [14][15] - **Non-ferrous Metals**: China Rare Earth is favored as export controls may lead to price increases in rare earths, supported by moderate quota growth [16] - **Non-bank Financials**: China Galaxy is highlighted for its strengthening brokerage business and potential for international expansion [17] - **Media and Internet**: Yao Cai Securities is positioned to benefit from increased trading volumes in Hong Kong and potential synergies from Ant Group's acquisition [18] - **Agriculture**: Muyuan Foods is recognized as a leading pig farming enterprise with expected stable profits amid rising pork prices [19] - **Defense and Military**: North Navigation is anticipated to benefit from a rising demand cycle for its products [20] - **Computing**: Kingsoft Office is seen as a leader in AI applications, with significant growth potential from its innovative products [21][22] - **Electronics**: Lante Optics is expected to see strong demand from various sectors, including automotive and AI [23] - **Pharmaceuticals**: Kelun-Botai is noted for its leading ADC technology and potential for international sales growth [24][25]

Investment Rating - The industry is rated as "Buy" based on the expectation of an increase exceeding 15% in the next 3-6 months [6] Core Insights - The new tobacco industry continues to show strong growth trends, with PMI reporting a revenue increase of 7.1% and adjusted operating profit growth of 16.1% in Q2 2025 [1] - The HNB (Heated Not Burned) market is expected to grow significantly, particularly in the U.S., as the FDA's approval of JUUL products indicates a clear trend towards market expansion [2][3] - The overall HNB global market is on a continuous growth trajectory, with the U.S. market poised to contribute significantly to this growth [4] Summary by Sections Financial Performance - In Q2 2025, PMI achieved revenues of $10.1 billion and adjusted operating profits of $4.3 billion, reflecting year-on-year increases of 7.1% and 16.1% respectively [1] - New tobacco revenue in Q2 2025 reached $4.2 billion, a 15.2% increase year-on-year, with HNB sales volume also increasing by 9.2% to 38.8 billion sticks [1] Regulatory Environment - The FDA has approved JUUL's products for sale in the U.S., increasing the total number of approved vaping products from 34 to 39, indicating a more favorable regulatory environment for compliant products [2] - The FDA's focus on combating illegal products while facilitating the approval of compliant products suggests a dual approach to market regulation [3] Market Outlook - The HNB market in Europe is recovering from flavor bans, with PMI reporting double-digit growth in Q2 2025, indicating resilience in consumer demand [3] - The legal market for HNB products is expected to expand significantly, driven by regulatory changes and increasing consumer acceptance [4]

Group 1: Macro Liquidity - The US dollar index has declined again, and the degree of "inversion" in the China-US interest rate spread has narrowed [1][11] - The nominal and real interest rates of 10Y US Treasury bonds have both decreased, indicating a rise in inflation expectations [1][11] - Offshore dollar liquidity has marginally eased, while the domestic interbank funding situation has shown a pattern of first easing and then tightening [1][16] Group 2: Market Trading Activity - Overall market trading activity has continued to rise, with most industry trading heat above the 80th percentile [2][21] - The volatility of major indices has increased, with most industry volatilities remaining below the 40th historical percentile [2][27] - Market liquidity indicators have slightly declined, with liquidity metrics across various sectors remaining below the 40th historical percentile [2][32] Group 3: Institutional Research and Analyst Predictions - Research heat is high in sectors such as electronics, computers, retail, telecommunications, and pharmaceuticals, while real estate and non-bank sectors have seen a rise in research heat [3][39] - Analysts have simultaneously lowered the net profit forecasts for the entire A-share market for 2025/2026, with an increase in the proportion of stocks with upward revisions in net profit forecasts [4][46] - Specific sectors such as non-ferrous metals, light industry, steel, and utilities have seen upward adjustments in their 2025/2026 net profit forecasts [4][4][21] Group 4: Northbound Trading Activity - Northbound trading activity has rebounded, with overall net purchases of A-shares [5][31] - Based on the top 10 active stocks, the ratio of buying and selling amounts in sectors like non-ferrous metals, pharmaceuticals, and electric new energy has increased [5][32] - Northbound funds primarily net bought sectors such as chemicals, non-ferrous metals, and pharmaceuticals, while net selling occurred in computers and telecommunications [5][33] Group 5: Margin Financing Activity - Margin financing activity has continued to rise, reaching a year-to-date high, with net purchases mainly in machinery, non-ferrous metals, and pharmaceuticals [6][35] - The proportion of financing purchases in real estate, consumer services, and utilities has increased [6][38] - Margin financing has net bought across various styles of stocks [6][39] Group 6: Fund Activity - Active equity funds have slightly reduced their positions, while ETFs have seen overall net subscriptions [8][45] - Active equity funds have mainly increased positions in sectors like computers, electronics, and banks, while reducing in pharmaceuticals and retail [8][46] - New equity fund establishment has significantly increased, with a notable rise in the scale of passive funds [8][50]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of 285.77 RMB per ADS, corresponding to 40.01 USD per ADS based on a FY2026 PE of 18X [4]. Core Views - The company has a strong market position with over 24,097 stores as of Q1 2025, focusing on a self-pickup model at an affordable price range of 10-15 RMB [2]. - The company is expected to see significant growth in non-GAAP net profit, projected at 43.42 billion RMB for FY2025, 56.05 billion RMB for FY2026, and 73.12 billion RMB for FY2027, reflecting year-on-year growth rates of +32.1%, +29.1%, and +30.5% respectively [4]. - The coffee market in China is anticipated to grow at a CAGR of 21.6% from 2023 to 2027, indicating substantial potential for the company [49]. Summary by Sections Company Overview - The company operates a self-pickup model and has established itself as a leading player in the coffee market with strong capabilities across products, channels, brands, and supply chains [2]. Investment Logic - The company is positioned to benefit from the growing coffee consumption trend in China, with significant room for growth compared to more mature markets like the US and Japan [49]. Profit Forecast, Valuation, and Rating - The company’s revenue is projected to grow from 24.9 billion RMB in 2023 to 67.9 billion RMB by 2027, with a compound annual growth rate (CAGR) of 20.1% [8]. - The report highlights a healthy growth trajectory in both direct and franchise operations, with direct store numbers expected to increase significantly [70]. Strategic Store Opening - The company has entered a positive same-store sales growth cycle with a Q1 2025 same-store sales growth (SSSG) of +8.1% [15]. - The company has maintained a rapid store opening pace, with a net increase of 1,757 stores in Q1 2025 [32]. Competitive Positioning - The company leads the industry in terms of store count and market share, with a GMV market share of 21.8% as of 2023 [29]. - The company has a robust supply chain and digital capabilities, enhancing operational efficiency and product innovation [46]. Market Potential - The coffee market in China is still in a growth phase, with significant potential for increased per capita consumption [49]. - The company is exploring international markets, having entered regions like Singapore, Malaysia, and the US, with a focus on competitive pricing [56]. Financial Projections - The company expects to achieve substantial revenue growth driven by both direct and franchise operations, with total revenue projected to reach 46.95 billion RMB in FY2025 [70]. - The report anticipates a decrease in fulfillment costs as the number of stores increases, contributing to improved profitability [73].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance with expected price increases of over 15% in the next 6-12 months [4][20]. Core Insights - The chairman of the company, Li Ning, has significantly increased his stake, acquiring approximately 51.79 million shares for about 809 million HKD, raising his ownership from 10.57% to 13.08%, marking the largest increase since 2006, reflecting strong confidence in the company's future [2][14]. - The partnership with the Chinese Olympic Committee (COC) for the 2025-2028 period is expected to enhance the company's core product lines, providing professional equipment for major international events, which is anticipated to drive significant growth in key categories such as basketball and running [2][15]. - The company is optimizing its channel strategy by closing underperforming stores, resulting in a net reduction of 18 stores in the past year, which has improved overall store efficiency [3]. - A multi-faceted brand marketing strategy has been implemented, including collaborations with cultural institutions and sponsorship of major events, aimed at enhancing brand strength [3][16]. - The company is expected to increase its expenditure in 2025, which may pressure short-term profit margins but is projected to yield positive results in the medium to long term [3][16]. Financial Projections - The company is forecasted to achieve net profits of 2.43 billion, 2.83 billion, and 3.13 billion RMB for the years 2025, 2026, and 2027 respectively, with a corresponding price-to-earnings (P/E) ratio of 15, 13, and 12 times [4][20]. - Revenue is projected to grow from 27.6 billion RMB in 2023 to 33.9 billion RMB by 2027, with a compound annual growth rate (CAGR) of approximately 7.68% [9][20].

Report Summary 1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints - As of July 25, the weighted average trading terms of urban investment bonds and industrial bonds were 2.19 years and 3.46 years respectively, both at over 90% of the historical quantiles since March 2021. Among commercial bank bonds, the weighted average trading terms of secondary capital bonds, bank perpetual bonds, and general commercial financial bonds were 4.45 years, 3.86 years, and 2.74 years respectively. The bank perpetual bonds were at a relatively low historical level. For other financial bonds, the durations of securities company bonds, securities subordinated bonds, insurance company bonds, and leasing company bonds were 1.50 years, 2.31 years, 3.65 years, and 1.22 years respectively. The securities company bonds and securities subordinated bonds were at lower historical quantiles, while the leasing company bonds were at a higher historical quantile [3][12]. - The coupon duration crowding index decreased and then slightly increased. After reaching its highest value in March 2024, it dropped and slightly rose this week compared to last week. Currently, it is at the 17.60% level since March 2021 [18]. 3. Summary by Directory 3.1 Full - variety Term Overview - Urban investment bonds: The weighted average trading term was around 2.19 years. Shaanxi provincial urban investment bonds' duration extended to nearly 8 years, while Guangdong prefecture - level city urban investment bonds' trading duration shortened to around 2.69 years. The historical quantiles of the durations of urban investment bonds in regions such as Henan provincial, Shandong prefecture - level city, Jiangsu district - county level, and Fujian district - county level had exceeded 90%, and the duration of Chongqing district - county level urban investment bonds was approaching the highest since 2021 [4][22]. - Industrial bonds: The weighted average trading term was around 3.46 years, slightly shorter than last week. The trading duration of the coal industry shortened to 1.85 years, and that of the building materials industry extended to 3.79 years. The real - estate industry's trading duration was at a relatively low historical level, while industries such as public utilities, transportation, commercial retail, and building materials were all at over 90% of the historical quantiles [4][30]. - Commercial bank bonds: The duration of general commercial financial bonds extended to 2.74 years, at the 98.6% historical quantile, higher than the same period last year. The duration of secondary capital bonds extended to 4.45 years, at the 99.1% historical quantile, higher than the same period last year. The duration of bank perpetual bonds extended to 3.86 years, at the 72.1% historical quantile, higher than the same period last year [4][35]. - Other financial bonds: In terms of the weighted average trading term, insurance company bonds > securities subordinated bonds > securities company bonds > leasing company bonds, at the 82.6%, 57%, 26.9%, and 69.4% historical quantiles respectively. The durations of insurance company bonds and securities subordinated bonds slightly extended compared to last week [4][38]. 3.2 Variety Microscope - Urban investment bonds: The weighted average trading term was around 2.19 years. There were significant regional differences. For example, Shaanxi provincial urban investment bonds had a long duration, while Guangdong prefecture - level city urban investment bonds had a short duration. Some regional urban investment bonds' durations were at high historical quantiles [4][22]. - Industrial bonds: The overall weighted average trading term was around 3.46 years, with different trends in different industries. The coal industry's duration shortened, and the building materials industry's duration extended. Different industries were at different historical quantiles [4][30]. - Commercial bank bonds: All three types of bonds (general commercial financial bonds, secondary capital bonds, and bank perpetual bonds) had their durations extended compared to last year, with different historical quantiles [4][35]. - Other financial bonds: There were differences in the durations and historical quantiles among different types of bonds, and the durations of insurance company bonds and securities subordinated bonds slightly increased [4][38].

Group 1: Macro Liquidity - The US dollar index has declined again, and the degree of "inversion" in the China-US interest rate spread has narrowed, with inflation expectations continuing to rise [1][11][14] - Offshore dollar liquidity has marginally eased, while the domestic interbank funding situation has shown a pattern of first easing and then tightening [1][14] Group 2: Market Trading Activity - Overall market trading activity has continued to rise, with most industry trading heat above the 80th percentile [2][20] - The volatility of major indices has also increased, with most industry volatilities below the 40th historical percentile [2][26] Group 3: Institutional Research - The electronic, computer, retail, communication, and pharmaceutical sectors have seen high research activity, while real estate and non-bank sectors have also experienced a rise in research heat [3][36] Group 4: Analyst Forecasts - Analysts have simultaneously lowered the net profit forecasts for the entire A-share market for 2025/2026, while increasing forecasts for sectors such as non-ferrous metals, light industry, steel, and utilities [4][19] - The net profit forecasts for the CSI 500 index for 2025/2026 have been raised, while those for the CSI 300, SSE 50, and ChiNext have been lowered [4][23] Group 5: Northbound Trading Activity - Northbound trading activity has rebounded, with overall net purchases of A-shares, particularly in sectors like non-ferrous metals, pharmaceuticals, and chemicals [4][31] - The ratio of buy/sell amounts for the top 10 active stocks has increased in sectors such as non-ferrous metals and pharmaceuticals [4][32] Group 6: Margin Financing Activity - Margin financing activity has continued to rise, reaching a year-to-date high, with significant net purchases in sectors like machinery, non-ferrous metals, and pharmaceuticals [6][10] - The proportion of financing purchases in real estate, consumer services, and utilities has increased [6][38] Group 7: Fund Activity - Active equity funds have slightly reduced their positions, primarily increasing allocations in sectors like computers, electronics, and banks [5][45] - ETFs have seen overall net subscriptions, particularly in sectors such as construction, steel, and chemicals, while electronic, pharmaceutical, and banking sectors have experienced net redemptions [5][53]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - As of July 25, the weighted average trading durations of urban investment bonds and industrial bonds were 2.19 years and 3.46 years respectively, both at over 90% of the quantile levels since March 2021 [2][10]. - The ticket - duration congestion index declined and then slightly increased, currently at the 17.60% level since March 2021 [13]. Summary by Catalog 1. All - Variety Duration Overview - The weighted average trading durations of urban investment bonds, industrial bonds, secondary capital bonds, bank perpetual bonds, general commercial financial bonds, securities company bonds, securities sub - bonds, insurance company bonds, and leasing company bonds were 2.19 years, 3.46 years, 4.45 years, 3.86 years, 2.74 years, 1.50 years, 2.31 years, 3.65 years, and 1.22 years respectively [2][10]. - The ticket - duration congestion index reached its peak in March 2024 and then declined, rising slightly this week compared to last week, and is currently at 17.60% of the level since March 2021 [13]. 2. Variety Microscope Urban Investment Bonds - The weighted average trading duration hovered around 2.19 years. Shaanxi provincial urban investment bonds' duration extended to nearly 8 years, while Guangdong prefecture - level city urban investment bonds' duration shortened to around 2.69 years [3][17]. - The duration quantiles of urban investment bonds in regions such as Henan provincial, Shandong prefecture - level city, Jiangsu district - county level, and Fujian district - county level have exceeded 90%, and the duration of Chongqing district - county level urban investment bonds is approaching the highest since 2021 [3][17]. Industrial Bonds - The weighted average trading duration shortened slightly compared to last week, generally around 3.46 years. The trading duration of the coal industry shortened to 1.85 years, while that of the building materials industry extended to 3.79 years [3][22]. - The trading duration of the real estate industry is at a relatively low historical quantile, while industries such as public utilities, transportation, commerce and retail, and building materials are at over 90% of the historical quantiles [3][22]. Commercial Bank Bonds - The duration of general commercial financial bonds extended to 2.74 years, at the 98.6% historical quantile, higher than the same period last year [3][25]. - The duration of secondary capital bonds extended to 4.45 years, at the 99.1% historical quantile, higher than the same period last year [3][25]. - The duration of bank perpetual bonds extended to 3.86 years, at the 72.1% historical quantile, higher than the same period last year [3][25]. Other Financial Bonds - In terms of weighted average trading duration, insurance company bonds > securities sub - bonds > securities company bonds > leasing company bonds, at 82.6%, 57%, 26.9%, and 69.4% of the historical quantiles respectively. The durations of insurance company bonds and securities sub - bonds slightly extended compared to last week [4][28].

Investment Rating - The report provides a positive outlook on various sectors, indicating a stable recovery in the home furnishing and paper packaging sectors, while new tobacco and packaging sectors show robust growth [3][4]. Core Insights - The home furnishing sector is expected to see marginal improvement in domestic demand due to government support for consumption upgrades, with a focus on companies with high dividend yields and growth certainty for 2025 [5][10]. - The new tobacco sector is experiencing growth, particularly in heated tobacco products (HTP), with significant sales increases reported in Europe and a growing user base for IQOS [11]. - The paper packaging sector is facing a gradual recovery in pulp prices, with a focus on companies that maintain strong market positions and high dividends [12]. - The light consumer goods and pet food sectors are under pressure, but there are opportunities in innovative product launches and channel expansion [15]. - The two-wheeler sector is poised for a rebound with government subsidies and new standards expected to drive demand [16][17]. Summary by Sections Home Furnishing - Domestic sales are expected to improve due to government initiatives, with a focus on companies with strong growth prospects and high dividends [5][10]. - Export figures show a slight increase in June, but a cumulative decline for the first half of the year [10]. New Tobacco - HNB sales increased by 10.5% year-on-year, with a growing user base for IQOS [11]. - The regulatory environment in the U.S. is tightening, which may benefit compliant market players [11]. Paper Packaging - Pulp prices have shown slight increases, but overall market conditions remain challenging [12]. - Companies with strong market positions and dividend policies are recommended for investment [12]. Light Consumer Goods & Pet Food - The sector is facing challenges, but there are opportunities in new product launches and expanding distribution channels [15]. - Online sales data indicates mixed performance across different product categories [23]. Two-Wheeler - The sector is expected to benefit from government subsidies and new regulations, with a focus on companies that can leverage these changes for growth [16][17]. - Recent data shows a significant number of electric bikes being replaced under the subsidy program [26][27].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The copper market shows a stable upward trend, with domestic copper inventory accumulation ending and seasonal pressure testing completed [13] - The aluminum market is stabilizing at the bottom, facing significant declines in installation in August, with ongoing seasonal pressure [14] - The precious metals market is accelerating upward, supported by continuous expansion of US fiscal policy, maintaining high prices for gold [15] Summary by Sections 1. Overview of Bulk and Precious Metals Market - Copper prices increased slightly, with LME copper at $9,796.00 per ton and Shanghai copper at ¥79,300 per ton [13] - Aluminum prices showed a mixed trend, with LME aluminum down 0.27% to $2,631.00 per ton, while Shanghai aluminum rose 1.22% to ¥20,800 per ton [14] - Gold prices decreased by 2.11% to $3,338.50 per ounce, influenced by international tensions and US fiscal policies [15] 2. Updates on Bulk and Precious Metals Fundamentals 2.1 Copper - The processing fee for imported copper concentrate rose to -$42.63 per ton, indicating supply-side pressures [13] - The operating rate for brass rod enterprises decreased to 49.32%, primarily due to weak demand and high copper prices [13] 2.2 Aluminum - Domestic electrolytic aluminum ingot inventory increased to 510,000 tons, indicating a supply surplus [14] - The operating rate for downstream aluminum processing enterprises slightly declined to 58.7% [14] 2.3 Precious Metals - SPDR gold holdings increased by 10.03 tons to 957.09 tons, reflecting ongoing interest in gold as a safe-haven asset [15] 3. Overview of Minor Metals and Rare Earths Market - The rare earth sector is experiencing upward momentum, with prices for praseodymium-neodymium oxide rising to ¥513,200 per ton, up 7.23% [29] - Antimony prices are stabilizing, with expectations of recovery due to reduced domestic smelting capacity [33] - Molybdenum prices are increasing, supported by low inventory levels and robust demand from the steel sector [34] 4. Updates on Minor Metals and Rare Earths Fundamentals 4.1 Rare Earths - The price of praseodymium-neodymium oxide has shown a significant increase, indicating strong demand and supply tightening [29] - The implementation of new management regulations is expected to benefit leading state-owned enterprises in the sector [32] 4.2 Antimony - Antimony ingot prices have increased to ¥187,100 per ton, with expectations of a price rebound supported by improved export forecasts [33] 4.3 Molybdenum - Molybdenum prices are on the rise, with significant supply disruptions anticipated due to recent incidents at major mines [34] 4.4 Tin - Tin prices have increased to ¥271,400 per ton, supported by strong inventory levels and demand from the semiconductor sector [35]