Group 1 - The simulated portfolio's returns have declined this week, with credit style portfolios experiencing smaller drawdowns compared to interest rate style portfolios. The weekly returns for the industrial ultra-long and municipal short-end sinking strategies were -0.1% and -0.13% respectively [2][14] - In the credit style portfolio, the industrial ultra-long and broker debt sinking strategies were among the few that still had positive returns, recording 0.1% and 0.03% respectively [2][15] - The average weekly return for the credit style time deposit heavy combination fell to -0.01%, with a controllable decline compared to the previous week. The short-duration combinations demonstrated strong volatility resistance [2][17] Group 2 - The coupon income from municipal heavy strategies has dropped to a low point, making it difficult to cover weekly capital gains losses. Most municipal heavy combinations have seen their annualized coupon income fall below 1.9% [3][24] - The coupon contributions from the credit style combinations have generally turned negative, particularly for the municipal dumbbell and secondary debt duration strategies, which fell into the -35% to -30% range [3][24] Group 3 - In the past four weeks, broker debt strategies have gained favor, with cumulative excess returns for broker debt duration, municipal dumbbell, and broker debt sinking strategies at 18.5bp, 15.6bp, and 12.4bp respectively [4][28] - The broker debt duration strategy has achieved a cumulative return of 1.92% since the second quarter, ranking just below the municipal dumbbell strategy, which is around 1.98% [4][28] - Short-duration strategies have outperformed the mid-to-long-term benchmarks, with the municipal short-end sinking strategy exceeding the mid-to-long-term benchmark by the largest margin since May [4][30]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The AI-driven demand for high-performance chips is a key growth driver for TSMC, with FY25Q2 revenue reaching NT$933.8 billion (approximately USD 31.9 billion), exceeding market expectations and previous guidance [14][19] - The global PC device sales are projected to increase by 6.5% year-on-year in Q2 2025, reaching approximately 68 million units, with Apple showing the strongest performance [21] - MediaTek reported a June revenue of NT$56.4 billion, a year-on-year increase of 31%, indicating strong growth potential in the AI PC market [27][30] Summary by Sections AI Developments - Moonshot AI launched and open-sourced the Kimi K2 model, which features 32 billion active parameters and aims to enhance agent applications in China [12][7] - Google's Veo AI has integrated a new image-to-video feature into its Gemini application, available in over 150 countries [13] TSMC Performance - TSMC's strong Q2 performance reflects ongoing high demand for advanced processes and packaging capacity driven by AI [14] - Key topics for TSMC's upcoming earnings call include AI demand sustainability, non-AI customer demand changes, and the impact of currency fluctuations on profit margins [19][20] PC Market Dynamics - According to IDC, global PC sales are expected to continue their upward trend, with Apple leading in growth [21][23] - The report highlights the competitive landscape in the AI chip market, particularly between MediaTek and Qualcomm [27][30]

Investment Rating - The report maintains an optimistic outlook on the Hong Kong stock market, particularly regarding new IPOs and sectors such as new consumption and innovative pharmaceuticals [3][10]. Core Insights - The asset trading platform remains a clear direction for investment, with a focus on the expansion of various asset transactions and liquidity [3][10]. - The report highlights the positive trend in virtual assets, including stablecoins, with traditional financial institutions increasingly entering this space [3][10]. - Recent upgrades in subsidies for e-commerce and food delivery platforms are expected to benefit sectors like coffee and tea drinks, as well as advertising channels [3][10]. Industry Situation Tracking 1. Education - The Chinese education index increased by 2.47% from July 7 to July 11, outperforming major indices [11][20]. - Notable stock performances include New High Education Group rising by 24.18% and Fenbi increasing by 13.44% [11][20]. 2. Luxury Goods - The luxury goods sector faced slight pressure due to macroeconomic impacts, with notable stock movements including Samsonite up by 3.76% and Prada down by 0.99% [22][24]. 3. Coffee and Tea Drinks - The coffee sector remains highly prosperous, with significant benefits from platform subsidies, while tea drinks also see substantial gains [26][27]. - Luckin Coffee opened 373 new stores, with a focus on both first and second-tier markets [32]. 4. E-commerce and Internet - The Hang Seng Internet Technology Index saw a slight increase of 0.18%, with stocks like Beike and Dingdong rising by 6.34% and 3.85% respectively [31][36]. - The competition in the e-commerce sector remains fierce, with significant subsidy initiatives impacting profitability [31][38]. 5. Streaming Platforms - The Hang Seng Media Index rose by 2.2%, with stocks like NetEase Cloud Music and iQIYI showing positive performance [37][42]. 6. Virtual Assets & Internet Brokers - The global cryptocurrency market capitalization reached $374.04 billion, with Bitcoin and Ethereum prices increasing by 8.8% and 17.9% respectively [41][43]. - The report emphasizes the ongoing development of regulatory frameworks for virtual assets in both the US and Hong Kong [48].

Group 1: Trade Negotiations and Tariffs - The U.S. will impose a 50% tariff on copper and a potential 200% tariff on pharmaceuticals starting August 1, 2023, as part of ongoing trade negotiations[2] - The 232 investigation allows the U.S. to impose tariffs under the guise of national security, with a high certainty of implementation compared to other tariff measures[3] - Current 232 tariffs include 25% on steel and aluminum, which were raised to 50% in June 2023, and 25% on automobiles and parts[3] Group 2: Upcoming Tariff Developments - The copper tariff will take effect on August 1, while the pharmaceutical tariff will be delayed by one to one and a half years[4] - The semiconductor 232 investigation is expected to conclude by the end of July 2023, with tariffs likely to be announced shortly thereafter[4] - Investigations into critical minerals, wood, and aircraft are ongoing, with results expected in October 2023, December 2023, and February 2026, respectively[4] Group 3: Implications of Tariff Policies - The 232 tariffs are designed to increase government revenue, with rates ranging from 25% to 200% on key products, potentially alleviating fiscal pressures[19] - The U.S. tariff system will consist of a global baseline tariff of 10%, reciprocal tariffs of 30%-50%, and 50% tariffs on critical industries[19] - The tariffs aim to encourage the return of key industries to the U.S. and reduce reliance on foreign supply chains[19]

Group 1 - The report highlights that both Chinese and US stock markets are experiencing a strong upward trend, driven by optimistic investor expectations regarding future corporate capital returns. A-shares are pricing in a stabilization of ROE at historical lows, while US stocks are anticipating continued growth in ROE from already high levels [3][12][14] - Since Q4 2021, A-shares have faced declining capital returns due to intense competition amid trends of "de-financialization" and "de-real estate," while US stocks have benefited from government debt expansion stimulating demand, resulting in higher ROE [3][14][17] - The report anticipates a shift in trends, with US capital returns potentially facing downward pressure due to tax policies encouraging manufacturing investment and capital repatriation, while A-shares may see a recovery in capital returns driven by anti-involution policies, stronger overseas manufacturing activity, and a halt in debt contraction [3][4][17] Group 2 - Three key catalysts for the stabilization and recovery of A-share capital returns are identified: anti-involution policies, overseas manufacturing activity surpassing service sector growth, and the end of the debt repayment cycle [4][23][31] - The report provides an example from the cement industry, where current operational rates are at their lowest since 2019, and a rebound in price indices is expected by late 2024, indicating a potential recovery in ROE [4][23][25] - The report notes that the demand for domestic capital goods and intermediate products is expected to rise due to stronger overseas manufacturing activity compared to services, with significant rebounds in excavator sales and steel exports observed [4][27][29] Group 3 - The current market pricing indicates that short-term stock prices have outpaced ROE, necessitating a buffer for uncertainty in recovery rhythms. The report emphasizes that the internal industry structure is more critical than the overall market [5][36] - The report discusses the historical context of PB (Price-to-Book) ratios, noting that the current PB levels are not extreme compared to historical standards, but the low absolute level of ROE may affect the pace of PB recovery [5][36][38] - A significant reduction in the proportion of stocks with low PB ratios has been observed, particularly in sectors like TMT (Technology, Media, and Telecommunications), high-end manufacturing, and banking, while traditional industries still show a high percentage of low PB stocks [5][38][40] Group 4 - The report suggests that the dynamics of capital returns are shifting, with domestic capital returns expected to stabilize and rise, while overseas capital returns may decline. This shift positions A-shares as more attractive compared to other markets [6][46] - Recommendations for asset allocation include focusing on upstream resource products benefiting from increased overseas demand and domestic anti-involution policies, as well as emphasizing equity over debt investments [6][46]

Investment Rating - The report suggests a strong investment outlook for the automotive sector, particularly in the areas of intelligent driving and robotics, indicating a robust growth trajectory for these industries. Core Insights - Intelligent Driving: BYD has achieved a breakthrough in L4-level smart parking, promising comprehensive safety coverage for users in China. Additionally, Shenzhou Car Rental has launched the world's first public autonomous rental service in collaboration with Baidu Apollo, redefining rental freedom [1][10]. - Robotics: The robotics industry maintains a steady upward trend, with domestic robots expected to see small-batch mass production in the second half of the year. Notable advancements include the launch of the A2-W general-purpose robot by Zhiyuan Robotics, showcasing high operational efficiency [2][24]. Summary by Sections Intelligent Driving - BYD has become the first globally to achieve L4-level smart parking, ensuring safety and loss coverage for users [9]. - Shenzhou Car Rental and Baidu Apollo have introduced an autonomous rental service, integrating advanced technology with a nationwide rental network [10]. - Chery and Momenta have launched the Fengyun A9L, featuring a sophisticated driving assistance system [11]. - Zhixing Technology has secured contracts for 14 vehicle models in just 30 days, demonstrating strong market competitiveness [12]. - The supply chain is evolving, with multiple new models equipped with advanced lidar technology, enhancing the smart driving capabilities of various vehicles [13][14][16]. Robotics - The robotics sector is experiencing significant developments, including the establishment of a technology capital integration plan to foster innovation [17]. - Zhiyuan Robotics has completed a major acquisition and showcased its A2-W robot's capabilities in a live demonstration [24]. - Yuejiang Robotics has launched a six-legged bionic robot, enhancing adaptability and operational capabilities [26]. - New products from Xinsong Robotics have broken traditional limitations, integrating mobility and dexterity [28]. - Investment activities are robust, with several companies securing significant funding to advance their robotics technologies [32][33].

Investment Rating - The report suggests a focus on undervalued downstream brands or OEM industries with low expectations and dividend attributes, indicating a positive investment outlook for these sectors [2]. Core Insights - The report emphasizes the need to identify high-potential companies that can generate quality profits, particularly in the new consumption sector, as the market approaches the mid-year reporting season [2]. - It highlights the importance of focusing on companies with strong brand power and those that can benefit from the ongoing expansion of the overseas market, particularly in the context of the new consumption narrative [2][20]. - The report also notes that various sectors, such as light manufacturing, textiles, and home appliances, are showing signs of stabilization or growth, suggesting potential investment opportunities [3][5][25]. Summary by Relevant Sections Light Manufacturing - New tobacco products are expected to grow steadily, with a clear expansion trend in the overseas vaping market and a positive outlook for the HNB industry [3][20]. - The home furnishings sector is stabilizing, with a focus on companies that can demonstrate resilience and growth potential [3][20]. - The paper industry is entering a demand peak in Q3, with significant price recovery potential [3][21]. - The toy industry continues to expand, with strong performance from leading companies like Pop Mart [3][21]. Textiles and Apparel - The apparel sector is experiencing weak consumer demand, but there are opportunities in unique and differentiated brands, especially in new retail formats [3][23]. - The export market faces uncertainties due to potential tariffs, which could impact pricing and demand [3][23]. Beauty and Personal Care - The beauty sector is advised to focus on leading companies with strong mid-year performance and those with significant potential for price recovery [3][24]. Home Appliances - Skyworth's acquisition of Philips' North American business is expected to enhance its market presence and product offerings in high-end segments [3][25]. - The TV market is experiencing price declines, but demand is anticipated to recover in Q3 [3][25][26]. Retail and Social Services - The retail sector is under pressure, but there are signs of improvement in certain areas, such as instant retail and dining services [3][27][28]. - The report notes that the tourism and restaurant sectors are maintaining high levels of activity, indicating a positive trend [3][27]. Overall Market Trends - The report suggests that the new consumption narrative is gaining traction, with a focus on companies that can deliver high-quality profits and those that are well-positioned for growth in the evolving market landscape [2][8].

Investment Rating - The report maintains a positive outlook on the African building materials sector and local manufacturing leader Keda Manufacturing, particularly following the ignition of Keda's base in Côte d'Ivoire in June [1][13]. Core Insights - The Kenyan government has implemented a tiered tax on imported building materials, including a 3% export promotion tax on ceramic tiles and sanitary ware, aimed at reducing import dependency and fostering local manufacturing [1][13]. - The report emphasizes the importance of local production and consumption integration, highlighting Keda Manufacturing's efforts to establish local production in multiple African countries [1][13]. - The report identifies potential investment opportunities in the PCB upstream new materials sector, particularly in electronic cloth and copper foil, driven by high demand in AI applications [2][14]. - The waterproofing industry is experiencing frequent price increases, indicating a consensus among leading companies to curb malicious competition and stabilize prices [3][15]. - The cement sector is undergoing capacity reduction efforts, with the China Cement Association advocating for a unified approach to actual and registered production capacities [3][15]. Summary by Sections Weekly Discussion - Keda Manufacturing is recognized as a leader in local production within Africa, with recent developments in Côte d'Ivoire and supportive government policies in Kenya [1][13]. Cycle Interaction - Cement prices have shown a slight decline, with an average price of 347 RMB/t, down 46 RMB year-on-year, while glass prices have increased slightly to 1204.97 RMB/t [4][16]. - The report notes a stable demand for glass and fiberglass, with the latter maintaining a price of 3669 RMB/t [4][16][61]. National Subsidy Tracking - The report highlights government initiatives to boost consumption, including subsidies for building materials, which may benefit companies like Sangor and North New Materials [5][17]. Important Changes - Several companies, including Zhongcai Technology and China Jushi, have announced significant profit increases for the first half of 2025, indicating strong performance in the building materials sector [6][21].

Investment Rating - The report suggests a focus on leading domestic generative large model companies such as iFLYTEK, and highlights potential in AI hardware applications with recommendations for companies like Yingshi Network, Hongsoft Technology, and Hesai [2] Core Insights - The report emphasizes that the AI industry is currently in a relatively chaotic fundamental period, with some high-frequency data showing resilience, while investor expectations remain low. The willingness to use AI products is increasing, but payment capabilities are still limited, necessitating further breakthroughs in large models [11][12] - It identifies high-growth sectors for 2025, including AI computing power and lidar, while noting that AI applications are accelerating upward. Stable growth is expected in software outsourcing, financial IT, quantum computing, data elements, EDA, and overseas expansion [11][12] Summary by Sections Industry Perspective - The report discusses the launch of Tencent's 3D generative model Hunyuan3D-PolyGen, which can generate complex geometric models with thousands of faces, and highlights the advancements of Musk's Grok 4 model, which has shown significant improvements in training efficiency [11] - It notes that the computer industry is expected to perform better in the second half of the year due to base effects, new technology/product launches, and policy implementations [11] Subsector Insights - The report categorizes the computer industry into various subsectors with their respective growth outlooks: - High growth maintained: AI computing power, lidar - Accelerating growth: AI applications - Stable growth: Software outsourcing, financial IT, quantum computing, data elements, EDA, overseas expansion, and domestic innovation [10][12] - Turning points: Education IT, cybersecurity, enterprise services - Stabilizing: Smart transportation, government IT, security, construction real estate IT - Slightly pressured: Industrial software, medical IT [10][12] Market Performance Review - From July 7 to July 11, 2025, the computer industry index (Shenwan) rose by 3.22%, outperforming the CSI 300 index by 2.40 percentage points, ranking 6th among 31 Shenwan first-level industry indices [13] Upcoming Key Events - The report highlights upcoming events such as the second AI glasses industry innovation application summit and the 2025 World Artificial Intelligence Conference, suggesting that investors pay attention to related industry chain opportunities [25][26]

Report Summary Core View - Among AA-rated urban investment bonds (subject rating) with a high discount margin, "24 Jinhua Rongsheng MTN005" has the largest valuation price deviation. Among the top 50 bonds with the largest net price decline, "24 CCCC MTN003B" has the largest valuation price deviation. Among the top 50 bonds with the largest net price increase, "24 CRCC K2" has the largest valuation price deviation. Among the top 50 Tier 2 and perpetual bonds with the largest net price increase, "25 China Minsheng Bank Tier 2 Capital Bond 01" has the largest valuation price deviation [2]. Summary by Directory Chart 1: AA-rated Urban Investment Bonds with High Discount Margin - The table lists information such as remaining term, valuation price, valuation net price, valuation yield, etc., for multiple AA-rated urban investment bonds. "24 Jinhua Rongsheng MTN005" has a remaining term of 2.41 years, a valuation price deviation of -0.22%, and a valuation net price of 100.58 yuan [4]. Chart 2: Top 50 Bonds with the Largest Net Price Decline - The table shows details of 50 bonds with large net price declines, including remaining term, valuation price deviation, valuation net price, etc. "24 CCCC MTN003B" has a remaining term of 13.95 years, a valuation price deviation of -0.30%, and a valuation net price of 105.41 yuan [6]. Chart 3: Top 50 Bonds with the Largest Net Price Increase - This table presents information on 50 bonds with large net price increases. "24 CRCC K2" has a remaining term of 29.05 years, a valuation price deviation of 0.76%, and a valuation net price of 109.35 yuan [9]. Chart 4: Top 50 Tier 2 and Perpetual Bonds with the Largest Net Price Increase - The table lists Tier 2 and perpetual bonds with large net price increases. "25 China Minsheng Bank Tier 2 Capital Bond 01" has a remaining term of 4.80 years, a valuation price deviation of 0.25%, and a valuation net price of 101.13 yuan [13].