Investment Rating - Industry rating: Outperforming the market [1] Core Insights - Aircraft manufacturers are slowly recovering capacity, but the number of grounded aircraft remains high. Supply chain and labor shortages continue to impact production, leading to delivery delays. From January to July 2025, Boeing and Airbus delivered only 701 aircraft, with a monthly average of about 100 aircraft, which is 74.6% of the peak monthly delivery of 134 aircraft in 2018. Meanwhile, aircraft order demand remains strong, with backlogged orders at historical highs [2][4][6]. - Global aviation market demand continues to grow, with the global passenger load factor reaching a new high for the year. The global air passenger volume is on the rise, with all regions showing growth in revenue passenger kilometers (RPK). The Latin America region leads with a 7.2% year-on-year increase, followed by Asia-Pacific and the Middle East with increases of 5.5% and 5.4%, respectively. International routes are performing strongly, particularly in the Asia-Pacific and Latin America regions [2][13][17]. - Overall, while aircraft manufacturers' capacity is recovering, it still struggles to meet the ongoing expansion in aircraft demand. Aircraft leasing companies are seeing high demand for orders, with limited available slots in the coming two years. The Asia-Pacific aviation market has significant growth potential, providing broader development space for Chinese aircraft leasing companies. Compared to global leasing leader AerCap, Chinese leasing companies are currently undervalued and have higher order elasticity, making them worthy of attention [2][6][38]. Summary by Sections 1. Aircraft Supply Continues to Tighten - Boeing's average monthly delivery has significantly improved compared to last year, while Airbus's monthly delivery is slightly below last year's level. As of the end of July 2025, Boeing delivered 328 aircraft and Airbus delivered 373 aircraft, with average monthly deliveries of approximately 47 and 53 aircraft, respectively [5]. - The backlog of aircraft orders remains at historical highs, with Boeing and Airbus accumulating new orders of 699 and 501 aircraft, respectively, this year. As of July 2025, the total backlog was 15,262 aircraft [6]. 2. Civil Aviation Passenger Demand Update - Global air passenger volume (RPK) increased by 4.0% year-on-year in July 2025, with global capacity (ASK) increasing by 4.4%. The global passenger load factor reached 85.5% [13][17]. - All regions experienced growth in air passenger volume, with the domestic market in China showing steady performance, with a year-on-year increase of 3.8% in passenger volume [23][24]. 3. Aircraft Leasing Company Dynamics - The average remaining lease term for China’s leasing companies is relatively long, with China Aircraft Leasing Company showing significant improvement in fleet age to 6.3 years. The average remaining lease term for China’s leasing companies is 7.9 years, ensuring long-term stability for their contracts [38][43]. - Aircraft rental prices are rising, leading to improved rental yield for leasing companies. China’s leasing companies maintain rental yields above 10%, with financing costs relatively low for China’s leasing companies at 4.5% [44].

Financing Data - In August 2025, the social financing scale increased by 25,668 billion yuan, a decrease of 4,655 billion yuan compared to the same period last year[2] - Cumulative social financing for the first eight months of 2025 reached 265,575 billion yuan, an increase of 46,567 billion yuan year-on-year, indicating strong overall performance supported by government bond issuance[2] - New bills increased by 1,973 billion yuan in August, reflecting a year-on-year increase of 1,322 billion yuan and a month-on-month increase of 3,611 billion yuan, suggesting a recovery in short-term financing demand from the real economy[2] Credit and Loan Data - New RMB loans in August amounted to 5,900 billion yuan, an increase of 6,400 billion yuan month-on-month, but a decrease of 3,100 billion yuan year-on-year[3] - Short-term loans for enterprises showed significant improvement, with a month-on-month increase of 2,600 billion yuan and a year-on-year increase of 6,200 billion yuan, indicating heightened business activity[3] - Resident short-term loans increased by 3932 billion yuan month-on-month, driven by seasonal consumption demand and supportive consumption policies[3] Monetary Supply - M2 growth rate remained stable at 8.8% in August, supported by fiscal policy and reasonable growth in social financing and loans[3] - M1 growth rate increased to 6.0% year-on-year, reflecting improved business activity and increased liquidity for enterprises[3] - The M2-M1 gap narrowed to 2.8%, indicating enhanced liquidity and operational efficiency among enterprises[3] Deposit Trends - Household deposits decreased by 600 billion yuan year-on-year in August, while deposits in non-bank financial institutions increased by 5,500 billion yuan, indicating a trend of "deposit migration" towards non-bank sectors[5] - The trend of deposit migration is expected to continue due to declining deposit interest rates and attractive returns in the capital market, with A-share new account openings reaching 2.65 million in August, a 35% month-on-month increase[5][17]

Report Industry Investment Rating - No relevant content provided Core Viewpoints - The report analyzes the secondary market and ETF product situation from August 9th to September 12th, 2025, including index trends, ETF market performance, fund flows, trading volume, margin trading, and new fund launches [1][20] Summary by Directory 1. Secondary Market Overview - In the sample period, the weekly returns of the Science and Technology Innovation 50, Nikkei 225, and Hang Seng Index ranked among the top, at 5.48%, 4.07%, and 3.82% respectively. The PE valuation quantile of the CSI 500 was the highest at 100.00%, and that of the Nikkei 225 was the lowest at 85.25% [10] - Among the Shenwan primary industries, electronics, real estate, and agriculture, forestry, animal husbandry, and fishery had the highest returns, at 6.15%, 5.98%, and 4.81% respectively. The industries with relatively low returns were comprehensive, banking, and petroleum and petrochemicals, at -1.43%, -0.66%, and -0.41% respectively. The industries with the highest valuation quantiles were non-ferrous metals, real estate, and automobiles, at 100.00%, 100.00%, and 99.59% respectively. The industries with relatively low valuation quantiles were non-bank finance, household appliances, and agriculture, forestry, animal husbandry, and fishery, at 32.23%, 42.56%, and 46.69% respectively [16] 2. ETF Product Overview 2.1 ETF Market Performance - QDII ETFs had the best average performance, with a weighted average return of 2.92%. Bond ETFs had the worst average performance, with a weighted average return of -0.25% [20] - Among the ETFs classified by the listing sectors of the underlying indices and their constituent stocks, the ETFs related to the Science and Technology Innovation Board and Japanese stocks had better market performance, with weighted average returns of 5.46% and 3.92% respectively. The ETFs related to US stocks and the CSI 2000 had relatively poor performance, with weighted average returns of 0.73% and 1.46% respectively [20] - Among the industry sectors, technology sector ETFs had the best average performance, with a weighted average return of 6.08%. Biomedical sector ETFs had the worst average performance, with a weighted average return of -1.08% [21] - Among the themes, chip semiconductor and artificial intelligence ETFs had better performance, with weighted average returns of 7.68% and 6.13% respectively. Innovative drug and bank ETFs had relatively poor performance, with weighted average returns of -2.95% and -0.70% respectively [21] 2.2 ETF Fund Inflows and Outflows - From the perspective of different types of ETFs, industry-themed ETFs had the largest net inflow of funds, at 328.62 billion yuan, while broad-based ETFs had the smallest net inflow, at -231.98 billion yuan [25] - From the perspective of the listing sectors of the underlying indices and their constituent stocks, Hong Kong stock ETFs had the largest net inflow of funds, at 232.46 billion yuan, while ETFs related to the Science and Technology Innovation Board had the smallest net inflow, at -117.21 billion yuan [25] - From the perspective of industry sectors, financial and real estate sector ETFs had the largest net inflow of funds, at 115.88 billion yuan, while technology sector ETFs had the smallest net inflow, at -62.35 billion yuan [26] - From the perspective of themes, non-bank and new energy ETFs had the largest net inflow of funds, at 101.71 billion yuan and 78.60 billion yuan respectively. Chip semiconductor and artificial intelligence ETFs had the smallest net inflow, at -84.66 billion yuan and -28.26 billion yuan respectively [26] 2.3 ETF Trading Volume - From the perspective of different types of ETFs, commodity ETFs had the largest increase in the average daily trading volume change rate, at 22.52%, while broad-based ETFs had the largest decrease, at -13.77% [31] - From the perspective of the listing sectors of the underlying indices and their constituent stocks, Japanese stock ETFs had the largest increase in the average daily trading volume change rate, at 15.15%, while the CSI 500 had the largest decrease, at -27.66% [34] - From the perspective of industry sectors, biomedical sector ETFs had the largest increase in the average daily trading volume change rate, at 8.64%, while financial and real estate sector ETFs had the largest decrease, at -14.80% [37] - From the perspective of themes, non-bank and innovative drug ETFs had the largest average daily trading volume in the past five days, at 258.16 billion yuan and 141.33 billion yuan respectively. New energy and innovative drug ETFs had the largest increase in the average daily trading volume change rate, at 65.65% and 12.15% respectively. Military and chip semiconductor ETFs had the largest decrease in the average daily trading volume change rate, at -43.10% and -22.85% respectively [40] 2.4 ETF Margin Trading - In the sample period, the net margin purchase of all equity ETFs was -1.629 billion yuan, and the net short sale was 398 million yuan. Among all equity ETFs, the Huatai-PineBridge CSI Hong Kong Stock Connect Innovative Drug ETF had the largest net margin purchase, and the Southern CSI 1000 ETF had the largest net short sale [2][46] 2.5 ETF New Launches and Listings - In the sample period, a total of 8 funds were established and 4 funds were listed [3][48]

Investment Rating - The industry is rated as outperforming the market, with a projected increase of over 5% relative to the benchmark index in the next six months [1][118]. Core Insights - The macroeconomic indicators are showing marginal recovery, leading to an overall rebound in engineering machinery sales [1]. - In the first seven months of 2025, excavator sales reached 137,658 units, representing a year-on-year increase of 17.8% [19][26]. - The report highlights a structural divergence in the sales of various types of cranes, with tower cranes and truck cranes experiencing declines due to the ongoing downturn in the real estate market, while crawler cranes are benefiting from strong demand in large-scale energy projects [54]. Summary by Sections 1. Macroeconomic Tracking - As of July 2025, China's manufacturing PMI recorded at 49.3%, indicating a contraction, while the production PMI was at 50.5%, signaling expansion [2][6]. - The Producer Price Index (PPI) decreased by 3.6% year-on-year, while the Consumer Price Index (CPI) showed a slight increase of 0.4% month-on-month [11][12]. - Fixed asset investment in China reached 288,229 billion yuan in the first seven months of 2025, growing by 1.6% year-on-year, with infrastructure investment up by 7.3% [14]. 2. Sales Overview of Chinese Engineering Machinery - In the first seven months of 2025, various machinery sales showed mixed results: - Excavators: 137,658 units (+17.8%) - Concrete machinery: 183,700 units (-2.14%) - Tower cranes: 3,181 units (-36.8%) - Crawler cranes: +13.1% - Truck cranes: +3.3% [19][27][30][38][48]. - The report indicates that the sales of forklifts reached 857,939 units, marking a 12% increase year-on-year [104][111]. 3. Investment Opportunities - The report emphasizes that domestic infrastructure investment remains resilient, with machinery related to construction, such as road rollers and pavers, expected to benefit in the long term [102]. - The government has increased the issuance of special bonds for local governments, which is anticipated to drive demand for engineering equipment [102].

Market Liquidity Overview - R007 increased from 1.4566% to 1.4651%, a rise of 0.85 basis points, while DR007 rose from 1.4372% to 1.4575%, an increase of 2.03 basis points. The spread between R007 and DR007 narrowed by 1.18 basis points [1][9] - The net inflow of funds this week was 2.997 billion, a decrease of 64.904 billion from the previous week. Fund supply was 110.177 billion, and fund demand was 107.180 billion. Fund supply increased by 15.540 billion, with net financing purchases rising by 37.822 billion [1][13] Industry Sector Liquidity Tracking - Most sectors in the CITIC first-level industry index rose this week, with the real estate sector showing the most significant increase at 6.99%. Other sectors like electronics and agriculture also saw slight gains. Conversely, the banking and comprehensive finance sectors led the declines, falling by 0.64% and 0.58%, respectively [2][18] - The electronic industry received the highest net inflow of leveraged funds, totaling 16.839 billion, while the transportation sector experienced a net outflow of 1.031 billion, marking the most significant reduction [21][22] Style Sector Liquidity Tracking - Growth and cyclical styles led the performance this week, with increases of 3.56% and 1.87%, respectively. The growth style accounted for 58.61% of the average daily trading volume, indicating it was the most active sector [3][19] - The average turnover rate for the growth style was the highest at 3.45%, while financial and stable styles had relatively low turnover rates [3][19]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - A-share market continued to rebound this week with an oscillating upward trend. The growth style performed well, driving up TMT-themed funds. However, many quantitative index-enhanced products still had mediocre excess returns. The weekly average daily trading volume of the two markets decreased by 10.63% week-on-week. If the trading volume continues to shrink, the chips in high-position sectors will loosen and differentiate, and the market will shift from a unilateral rise to a range-bound pattern. It is recommended to focus on the supplementary rise opportunities of low-position sectors. The basis of four types of stock index futures contracts showed differentiation, with the IM contract having a large discount and the IF contract having a large premium. In the upcoming week with a dense schedule of important macroeconomic events, the A-share market is likely to maintain a volatile and relatively strong market. It is recommended to focus on technology frontier tracks such as robotics and AI computing power, and also seize the rotation and supplementary rise opportunities of sectors such as securities, pig cycles, and games. After a deep adjustment, the national debt market has shown rare allocation value, and investors are advised to moderately increase the allocation ratio [1][11][16]. 3. Summary According to Relevant Catalogs 3.1 This Week's Market Review 3.1.1 Industry Index - The A-share market continued to rebound this week, with the growth style performing well and driving up TMT-themed funds. The weekly average daily trading volume of the two markets was 2.3 trillion yuan, a week-on-week decrease of 10.63%. The basis of four types of stock index futures contracts showed differentiation, and the average and median returns of neutral hedge funds this week were -0.06% and -0.08% respectively. This week, the electronics, real estate, agriculture, forestry, animal husbandry, and fishery, media, and computer sectors led the gains. The real estate and agriculture, forestry, animal husbandry, and fishery sectors had a relatively large increase in the weekly trading volume ratio compared with last week, while the trading activity of the comprehensive finance and national defense and military industry sectors decreased significantly. The real estate sector rose 5.82% this week, and the weekly trading volume ratio increased to a new high in the past four weeks at 1.50%. The power equipment and new energy sector only rose 0.50% this week, and the weekly trading volume ratio was a new high in the past four weeks at 9.04%, and the sector may face short-term adjustment pressure [11]. 3.1.2 Market Style - This week, the growth style index rose 3.56%, and the weekly trading volume ratio slightly decreased to 58.73%. The consumption style index rose 0.88%, and the weekly trading volume ratio increased to 11.85%. The financial style index performed weakly in the past month, rising only 0.24% this week, and the weekly trading volume ratio decreased significantly to a new low in the past four weeks at 5.59%. The cyclical style index rose 1.87%, and the weekly trading volume ratio increased to a new high in the past four weeks at 20.69%. The stable style index rose 1.14%, and the weekly trading volume ratio increased significantly to a new high in the past four weeks at 3.13%. Based on the CSI A-share index, the CSI 500 index led the gains this week, rising 3.38%, and the weekly trading volume ratio was a new high in the past four weeks at 19.03%, while the Shanghai and Shenzhen 300 index only rose 1.38%, and the weekly trading volume ratio decreased to 27.65%. In the past three months, the market has shown highly structured characteristics, and the CSI 500 index has performed strongly. In an environment with abundant liquidity, funds clearly prefer opportunities with certainty, driving the collective supplementary rise of high-quality leading stocks in various industries [15]. 3.2 Active Equity Funds 3.2.1 Funds with Excellent Performance in Different Thematic Tracks This Week - The report screened single-track and double-track funds based on six sectors: TMT, financial real estate, consumption, medicine, manufacturing, and cycle. Single-track funds are those with a position in a certain sector greater than 70% for multiple consecutive periods, and double-track funds are those with positions in two sectors both greater than 30% for multiple consecutive periods. The report listed the top five funds in each sector in terms of performance this week [20][21]. 3.2.2 Funds with Excellent Performance in Different Strategy Classifications - The report improved the growth, BP, and profit factors to obtain growth, valuation, and quality factors, and divided the funds into different types such as deep undervaluation, high growth, high quality, quality growth, quality undervaluation, GARP, and balanced cost-effectiveness. It also listed the funds with relatively excellent performance in different types of funds this week [22]. 3.3 Index-Enhanced Funds 3.3.1 Distribution of Excess Returns of Index-Enhanced Funds This Week - This week, the Shanghai Composite Index rose 1.52%, the Shenzhen Component Index rose 2.65%, the ChiNext Index rose 2.10%, the STAR 50 rose 5.48%, and the Beijing Stock Exchange 50 fell 1.07%. The representative indexes of the value style sector, such as the Shanghai 50, CSI 100, and Shanghai and Shenzhen 300, rose 0.89%, 1.54%, and 1.38% respectively, while the representative indexes of the growth style sector, such as the Small and Medium 100, CSI 500, CSI 1000, and CSI 2000, rose 3.66%, 3.38%, 2.45%, and 2.16% respectively. The report also listed the average and median excess returns of different index-enhanced funds and the top three funds in terms of excess returns in each category this week [25][26][30]. 3.4 This Week's Fund High-Frequency Position Detection - After excluding funds with high positions in Hong Kong stocks and Beijing Stock Exchange stocks, funds with a scale of less than 200 million yuan, industry-themed funds, and quantitative funds, the results showed that active equity funds significantly increased their positions in the basic chemical (0.61%), machinery (0.24%), and power equipment and new energy (0.19%) industries this week, and significantly reduced their positions in the electronics (0.55%), computer (0.41%), and national defense and military industry (0.19%) industries. From a one-month perspective, the positions in the electronics (2.12%) and communication (0.97%) industries increased significantly, while the positions in the banking (1.11%) and automobile (1.04%) industries decreased significantly [3][43].

Group 1: CPI Analysis - In August, the CPI recorded a year-on-year decrease of -0.4%, influenced by a high comparison base from the previous year and lower food price increases than seasonal levels[1] - The core CPI, excluding food and energy, rose by 0.9%, marking a two-and-a-half-year high, indicating structural inflation despite overall CPI decline[1][15] - Food prices significantly dragged down the CPI, with an annual decline of 4.3%, contributing approximately 0.51 percentage points to the overall CPI drop[1][14] Group 2: PPI Insights - The PPI fell by 2.9% year-on-year in August, an improvement from July's -3.6%, signaling a potential easing of industrial deflation pressures[2][18] - Month-on-month, the PPI remained flat, ending an eight-month downward trend, with some industrial prices showing signs of recovery due to improved supply-demand dynamics[2][18] - The coal processing price increased by 9.7%, while domestic oil extraction prices decreased by 1.4%, reflecting mixed trends across different sectors[2][21] Group 3: Economic Outlook - Future PPI declines are expected to narrow due to low base effects and ongoing "anti-involution" policies aimed at optimizing market competition[2][22] - The recovery of the real estate market remains slow, posing risks to demand for industrial products and potentially affecting PPI recovery[2][22] - Overall, PPI recovery will depend on domestic demand restoration and changes in the international economic environment[2][22]

Investment Rating - The industry investment rating is "Outperform" [1][54]. Core Insights - The report highlights a steady growth in domestic travel and sustained interest in inbound tourism, with significant increases in passenger numbers and spending [1][15]. - The recovery of civil aviation passenger traffic is ongoing, with domestic and international routes showing positive trends compared to previous years [5][11]. - The service sector continues to show signs of improvement, with rising consumer spending and service production indices [25][28]. Summary by Sections Civil Aviation Recovery - Civil aviation passenger volume in July 2025 reached approximately 71.82 million, a 3.9% increase year-on-year and a 21.1% increase compared to 2019 [8]. - Domestic passenger volume was about 64.73 million, up 2.7% from 2024 and 22.8% from 2019, while international passenger volume was around 7.09 million, up 15.7% from 2024 and 7.6% from 2019 [11]. Domestic Travel Growth - In the first half of 2025, domestic travel by residents reached 3.285 billion trips, a 20.6% increase year-on-year, with urban residents accounting for 2.452 billion trips (up 17.5%) and rural residents 833 million trips (up 30.6%) [16][20]. - Total spending on domestic travel in the first half of 2025 was 3.15 trillion yuan, a 15.2% increase year-on-year, although per capita spending decreased by 4.3% to 958.9 yuan [20]. Inbound Tourism - Inbound tourism in Shanghai saw a significant increase, with 680,700 visitors in July 2025, a 33.8% increase from 2024, recovering to 96.35% of 2019 levels [24]. - The total number of inbound tourists in the first half of 2025 reached 4.158 million, a 37.73% increase year-on-year, with overnight stays increasing by 47.09% [24]. Service Sector Performance - In July 2025, restaurant revenue grew by 1.1% year-on-year, while retail sales increased by 4.0%, indicating a continued recovery in the service sector [28]. - The service industry production index rose by 5.8% year-on-year, with a cumulative revenue increase of 7.5% for large service enterprises in the first half of 2025 [28]. Company Tracking - Ctrip reported strong growth in international business, with Q2 2025 net revenue of 14.8 billion yuan, a 16% year-on-year increase, and net profit of 4.9 billion yuan, up 26% [47]. - The international OTA platform saw over 60% growth in total bookings, driven by demand from the Asia-Pacific region, with outbound travel bookings exceeding 120% of 2019 levels [47][48].

Group 1: Report Investment Rating - No information provided on the industry investment rating in the report Group 2: Core Views - The A-share market rebounded on Friday after a mid - week adjustment. Growth style faced a correction, while pharmaceutical and manufacturing theme funds performed well, and the excess returns of quantitative index - enhanced products recovered. With the rising expectation of Fed rate cuts, COMEX gold and US Treasury bonds rose, highlighting the allocation value of pro - cyclical assets. The basis of four types of stock index futures contracts showed differentiation [1][10]. - It is recommended to maintain a cautiously optimistic attitude, focus on technology - frontiers like robotics and AI computing power, high - quality pro - cyclical sectors such as chemicals and non - ferrous metals, and pay attention to the elastic opportunities in the securities sector and sub - investment opportunities in the consumer sector. Also, increase the allocation ratio of high - dividend assets and seize the strategic allocation window of the Treasury bond and gold markets [16]. Group 3: Summary of Each Section 1. This Week's Market Review 1.1 Industry Index - The A - share market showed a pattern of first decline and then rise. The daily average turnover of the two markets decreased to 2603.2 billion yuan, a 12.74% MoM decline. Overseas, COMEX gold and US Treasury bonds rose. The basis of IC and IM contracts converged, while that of IH and IF contracts weakened. The average and median returns of neutral hedge funds were 0.33% and 0.21% respectively [10]. - Sectors such as power equipment and new energy, non - ferrous metals, and pharmaceuticals led the gains. The trading volume of sectors like power equipment and new energy, and banks increased, while that of comprehensive finance, steel, and computers decreased. The defense industry sector had a significant decline of 11.61% [11]. 1.2 Market Style - The growth style index fell 2.49%, the consumer style index rose 0.16%, the financial style index fell 2.74%, the cyclical style index rose 0.14%, and the stable style index fell 0.47%. Large - cap stocks performed better, with the CSI 300 index having a smaller decline [15]. 2. Active Equity Funds 2.1 Excellent Funds in Different Theme Tracks - Funds are classified into single - track and double - track based on their positions in different sectors. The report lists the top - performing funds in cycle, finance, TMT, pharmaceutical, manufacturing, and other theme tracks [20][21]. 2.2 Excellent Funds in Different Strategy Categories - Funds are divided into types such as deep - value, high - growth, high - quality, etc. The report shows the top - performing funds in each strategy type this week [22][23]. 3. Index - Enhanced Funds 3.1 Excess Return Distribution of Index - Enhanced Funds This Week - The average and median excess returns of CSI 300, CSI 500, CSI 1000, CSI 2000, CSI A500, ChiNext, and Science and Technology Innovation 50 index - enhanced funds are presented. The average and median absolute returns of neutral hedge funds and quantitative long - only funds are also given [25][26]. - The report lists the top - performing index - enhanced funds in each category in terms of weekly excess returns [29][30][31][34][36][37][38][39]. 4. This Week's High - Frequency Fund Position Detection - Active equity funds significantly increased positions in electronics, communication, non - ferrous metals, and basic chemicals industries this week, and significantly reduced positions in computer, bank, and automobile industries [3]. 5. Bond Fund Selection This Issue - The report mentions the medium - and long - term bond fund pool and the short - term bond fund pool, but no specific details are provided [6]. 6. Weekly Tracking of US Dollar Bond Funds This Week - No specific content is provided in the given text about the weekly tracking of US dollar bond funds.

Investment Rating - The investment rating for the company is "Buy" with a target price of 12.11 HKD, maintaining the rating from previous assessments [4]. Core Insights - The company's revenue from imaging and design business continues to grow, with a year-on-year increase of 45.2% to 1.351 billion RMB in the first half of 2025. Advertising revenue also saw a growth of 5.1% to 434 million RMB, together accounting for 98% of total revenue [1][10]. - The overall gross margin improved by 4.9 percentage points to 73.6%, and the adjusted net profit attributable to shareholders increased by 71.34% to 470 million RMB, aligning with voluntary announcement expectations [1][12]. - The company is focusing on AI-enabled applications in imaging and design, enhancing its product matrix to meet diverse creator needs, and has launched the AI design agent "RoboNeo" to innovate productivity tools [3][10]. Summary by Sections 1. Imaging and Design Core Business Optimization - The imaging and design product revenue is on a continuous rise, with a strategic adjustment in the beauty and other business sectors. The revenue from imaging and design reached 1.351 billion RMB, while advertising revenue was 434 million RMB, making up 98% of total revenue [1][10]. - The company is leveraging AI capabilities to enhance product offerings, focusing on both consumer and business segments, including KOLs and small enterprises [10]. 2. Overseas Strategy and Productivity Tool Layout - The company has seen a significant increase in Monthly Active Users (MAU), with an 8.6% year-on-year growth, reaching 280 million. The number of subscription users rose by 42.5% to 15.4 million, with a subscription penetration rate of 5.5% [2][15]. - The MAU in the domestic market grew by 5.2% to 182 million, while overseas MAU increased by 15.7% to 98 million, driven by localized strategies and collaborations with local KOLs [16]. - The productivity tools are entering a growth phase, with a 90% year-on-year increase in MAU and even faster growth in paid users [16].