Domestic Economic Overview - In June, fiscal revenue showed a slight decline, with total revenue year-on-year remaining flat at -0.31%, compared to a previous value of 0.13%. Tax revenue increased by 1.04% year-on-year, while non-tax revenue continued to decline by -3.7% [8][9] - Government fund revenue saw a significant recovery, with a year-on-year increase of 20.81% in June, compared to a previous decline of -8.15%. The land transaction revenue also rebounded, reporting a year-on-year increase of 21.89% [15][16] - The industrial production index showed a decline, with specific sectors like methanol and Shandong's independent refineries recovering, while others like pure alkali and polyester filament saw a downturn [20][21] International Conflict Tracking - The third round of negotiations between Russia and Ukraine took place in Turkey, with both sides discussing humanitarian agreements and potential future meetings [24] - In the Middle East, Israel confirmed that ceasefire negotiations with Hamas have not collapsed, while Hamas officials expressed readiness to resume talks [26][27] Industry Allocation Recommendations - The report emphasizes the importance of the "赛点 2.0" phase, indicating that the market is experiencing overheating and increased volatility. It suggests focusing on three main investment directions: 1) Technology AI+ breakthroughs, 2) Valuation recovery in consumer stocks, and 3) Continued rise of undervalued dividends [33] - The report highlights that the core factor for investment in the consumer sector is valuation, especially in the context of low valuations, declining interest rates, and policy catalysts [33]

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [5] Core Viewpoints - The company is focusing on enhancing its competitive edge by leveraging its domestic and international production capabilities to seize opportunities in the pet hygiene and care products market [1][2] - The Chinese pet products market is experiencing robust growth, with a projected penetration rate of 80.2% for pet supplies by 2024, indicating a strong consumer shift towards pet care [2] - The company has adjusted its profit forecasts, expecting net profits of 267.35 million, 322.58 million, and 382 million yuan for the years 2025 to 2027, respectively, with corresponding P/E ratios of 17, 14, and 12 [4] Summary by Sections Company Strategy - The company is advancing a dual strategy of "overseas + domestic" and "ODM/OEM + proprietary brands" to strengthen its market position [1] - It is investing in various pet-related sectors, including cat litter, pet food, smart pet products, and veterinary vaccines, to prepare for future expansion [1] Market Analysis - The report highlights that the global production capacity for pet hygiene products is primarily concentrated in China, which provides a competitive advantage due to lower costs compared to other regions [3] - The company is actively expanding its market presence in non-US regions such as Europe and Southeast Asia to mitigate risks associated with tariffs [3] Financial Projections - The company anticipates significant revenue growth, with projected revenues of 1.34 billion, 1.80 billion, and 2.18 billion yuan for 2023, 2024, and 2025, respectively, reflecting growth rates of -11.80%, 34.41%, and 21.48% [10] - The EBITDA is expected to increase from 190.94 million yuan in 2023 to 392.38 million yuan in 2025, indicating a positive trend in operational efficiency [10]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The adjustment of the bond market may be nearing its end in the short term. The central bank's supportive attitude remains beneficial to the bond market. In the long term, the continuous transformation of pricing logic and macro - narrative requires further deepening of supply - side policies and marginal changes in demand to clarify market risk preferences and the direction of the bond market [35]. Summary by Directory 1. Stock and Commodity Rise, Tightening of Funds, Bear - Steep Curve - From July 21 - 25, the bond market continued its head - wind situation. The "anti - involution" sentiment supported the strength of the equity and commodity markets, diverting funds from the bond market. The 1.2 - trillion - yuan Yajiang investment strengthened the broad - credit expectation, suppressing the long - end performance. In the second half of the week, the unexpected tightening of the funds led to partial redemptions and bond - selling by funds and wealth management products, causing concerns about "negative feedback." However, on Friday, with the central bank's timely support, the bond market sentiment improved [1][7]. - On a daily basis, the bond market was weak throughout the week. By July 25, the yields of 1Y, 5Y, 10Y, and 30Y treasury bonds increased by 3.5, 7.9, 6.7, and 8.4 BP respectively compared to July 18, with a steeper bear - steep curve [7]. 2. Roller - Coaster of Funds and Timely Support from the Central Bank - This week, the funds situation fluctuated, tightening in the second half. The large liquidity demand (such as MLF redemption, large - scale reverse - repurchase maturity, over - trillion - yuan certificate - of - deposit maturity, and treasury bond issuance) and the central bank's net redemption in the first half of the week increased the funds demand. The overnight funds rate rose to a relatively high level since June, and the secondary prices of certificates of deposit increased slightly in the second half of the week [2][10][12]. - On July 25, the central bank's large - scale reverse - repurchase injection supported the cross - month liquidity. The weekly average of funds rates fluctuated with a relatively stable mean. The funds stratification remained at a low level, with mixed weekly average changes. The secondary yields of certificates of deposit increased across the board [12]. 3. Are the "Three Concerns" Temporarily Resolved? 3.1. From Stock - Bond to Commodity - Bond: Is the Market on "Pause"? - The recent rise in the market is mainly based on policy expectations. This week, the "commodity - bond" linkage was strengthened, with the commodity futures market rising due to infrastructure expectations and supply - side contraction expectations. However, the callback of "double - coke" and other varieties at the end of the week indicates that policy pricing may be nearing its end. The sustainability of the "commodity - bond" linkage depends on policy implementation and improvement in physical supply - demand [20][23]. - Whether policies can improve the fundamentals will be a key factor affecting the direction of risk assets. Additional policies may support the performance of risk assets [23]. 3.2. Liquidity: "Tightness" and "Stability" before Crossing the Month - The unexpected tightening of funds may be due to the central bank's net redemption in the first half of the week, the diversion of bond - market funds by the rise of the stock and commodity markets, and the increased redemption pressure in the bond market [3][24]. - With the central bank's large - scale reverse - repurchase injection on Friday and the approaching Politburo meeting, the central bank is likely to maintain neutral operations, and the cross - month funds may be stable but not overly loose [24]. 3.3. Institutional Behavior: Redemption Pressure Temporarily Eased - Recently, the redemption pressure has increased due to the large fluctuations in fund net values since July, the inflow of funds into the equity and commodity markets, and the deepening of the adjustment in the bond market [25]. - However, the possibility of the bond - market redemption evolving into a "negative feedback" is low. The increase in redemption pressure is mainly reflected in the significant increase in fund selling, while the scale and yield of wealth management products remain relatively stable. With the central bank's support on Friday, the bond market showed signs of stabilization [26]. 4. Future Focus of the Bond Market - Monetary policy: The central bank will maintain a supportive attitude, and there is no need to worry too much about liquidity. In the short term, the urgency for interest - rate cuts is reduced, and the downward space for the short - end is limited if the central bank's injection remains moderate [36]. - Fundamental aspects: The upward trend needs to be continuously consolidated. In the short term, focus on whether the linkage effect of the stock, bond, and commodity markets weakens, and the progress of Sino - US tariff negotiations [36]. - Pay attention to the policy signals from the July Politburo meeting, which is important for guiding the macro - policy adjustment [36]. 5. Next Week's Key Data to Watch - Next week, important data include Germany's and the EU's Q2 GDP, the US's July ADP employment, Q2 GDP, PCE price index, federal funds target rate, and China's July official manufacturing PMI, among others [37].

Quantitative Models and Construction 1. Model Name: Timing System Model - **Model Construction Idea**: This model uses the distance between the short-term moving average (20-day) and the long-term moving average (120-day) of the WIND All A Index to determine the market trend. If the short-term moving average is above the long-term moving average and the absolute distance exceeds 3%, the market is considered to be in an upward trend[2][10][16] - **Model Construction Process**: 1. Calculate the 20-day moving average (short-term) and the 120-day moving average (long-term) of the WIND All A Index 2. Compute the percentage difference between the two moving averages: $ \text{Distance} = \frac{\text{20-day MA} - \text{120-day MA}}{\text{120-day MA}} \times 100\% $ - 20-day MA: Short-term moving average - 120-day MA: Long-term moving average 3. If the distance is greater than 3% and the short-term moving average is above the long-term moving average, the market is in an upward trend[2][10][16] - **Model Evaluation**: The model effectively identifies upward market trends and provides a clear signal for timing decisions[2][10][16] 2. Model Name: Industry Allocation Model - **Model Construction Idea**: This model identifies sectors with potential for outperformance based on medium-term trends and specific themes, such as "distressed reversal" and "high elasticity" sectors[3][11][16] - **Model Construction Process**: 1. Analyze sector performance and valuation metrics 2. Identify sectors with medium-term growth potential, such as distressed reversal sectors (e.g., Hong Kong innovative drugs, Hong Kong securities, and Hang Seng consumption) 3. Highlight high-elasticity sectors like technology, military, AI applications, and solid-state batteries based on the TWO BETA model[3][11][16] - **Model Evaluation**: The model provides actionable insights for sector allocation during upward market trends, focusing on high-growth and high-elasticity sectors[3][11][16] 3. Model Name: Position Management Model - **Model Construction Idea**: This model determines the optimal stock allocation ratio based on valuation levels and short-term market trends[3][11] - **Model Construction Process**: 1. Assess the valuation levels of the WIND All A Index using PE and PB metrics 2. Combine valuation levels with short-term market trends to recommend stock allocation ratios 3. Current recommendation: Allocate 80% of absolute return products to stocks based on the WIND All A Index[3][11] - **Model Evaluation**: The model provides a systematic approach to managing stock positions, balancing valuation levels and market trends[3][11] --- Model Backtesting Results 1. Timing System Model - **Distance between Moving Averages**: 5.21% (greater than the 3% threshold, indicating an upward trend)[2][10][16] 2. Industry Allocation Model - **Recommended Sectors**: - Distressed reversal sectors: Hong Kong innovative drugs, Hong Kong securities, Hang Seng consumption - High-elasticity sectors: Technology, military, AI applications, solid-state batteries[3][11][16] 3. Position Management Model - **Stock Allocation Recommendation**: 80% allocation to stocks based on the WIND All A Index[3][11]

Investment Rating - Industry rating: Outperform the market (maintained rating) [13] Core Views - The report emphasizes the importance of reducing production in the pig sector, highlighting the expectation gap in the industry [1][2] - The dairy sector is experiencing a bottoming out of raw milk prices, with a potential new cycle for beef cattle starting [3][19] - The pet food sector is witnessing the rise of domestic brands and a positive trend in exports [4][21] - The poultry sector is focusing on the shortage of breeding stock and improving consumer demand for yellow chickens [5][23] - The planting sector is prioritizing food security and the strategic importance of biological breeding [8][29] - The feed sector is recommended for companies with increasing market share and consistent performance, particularly Haida Group [10][31] Summary by Sections Pig Sector - As of July 26, the average price of pigs is 14.81 CNY/kg, stable compared to the previous week, with a notable high average weight of 128.48 kg for market pigs [1][17] - The Ministry of Agriculture emphasizes strict capacity control measures to reduce the number of breeding sows and control the weight of pigs being sold [1][18] - The sector is currently undervalued, with leading companies like Muyuan Foods and Wens Foodstuffs showing low average market values [2][18] Cattle Sector - As of the third week of July, live cattle prices are 26.53 CNY/kg, down 0.2% week-on-week, while raw milk prices remain at 3.04 CNY/kg [3][19] - The dairy industry has faced significant losses, with an estimated cumulative income loss of 70 billion CNY from 2023 to 2025 [3][20] - Companies that can withstand the current downturn and have mother cow resources are expected to have strong profit potential [3][20] Pet Sector - Domestic brands in the pet food market are growing rapidly, with significant sales figures reported [4][21] - Pet food exports have increased, with 167,900 tons exported in the first half of 2025, reflecting a year-on-year growth of 5.7% [4][21] - Recommended companies include Guibao Pet Food and Zhongchong Co., with a focus on high-growth domestic companies [4][22] Poultry Sector - The report highlights the uncertainty in breeding stock imports due to avian influenza outbreaks, leading to a 33.46% year-on-year decline in breeding stock updates [5][23] - As of July 26, the price of broiler chicks has increased to 2.6 CNY/chick, driven by reduced supply and increased stocking enthusiasm [5][24] - Investment suggestions include focusing on self-breeding opportunities and companies with alternative breeding resources [5][26] Planting Sector - The report stresses the need for a focus on increasing grain production through improved yield and the integration of various agricultural practices [8][29] - The importance of financial support for seed industry revitalization is highlighted, with a push for the commercialization of genetically modified crops [8][29] - Recommended companies include Longping High-Tech and Dabeinong [8][30] Feed Sector - Haida Group is highlighted as a key player in the feed sector, with expectations of market recovery following a prolonged downturn [10][31] - The report notes significant price fluctuations in raw materials, which could benefit companies with strong hedging and feed formulation capabilities [10][31]

Group 1: Davis Double-Click Strategy - The Davis Double-Click strategy involves buying stocks with growth potential at lower price-to-earnings (PE) ratios, selling them once growth is realized and PE increases, thus achieving a "double-click" effect on earnings per share (EPS) and PE [1][7][10] - The strategy achieved an annualized return of 26.45% during the backtest period from 2010 to 2017, outperforming the benchmark by 21.08% [9] - Year-to-date, the strategy has generated a cumulative absolute return of 26.78%, exceeding the CSI 500 index by 16.76% [10] Group 2: Net Profit Discontinuity Strategy - The Net Profit Discontinuity strategy focuses on selecting stocks based on fundamental and technical resonance, where "net profit" refers to earnings surprises and "discontinuity" indicates a significant upward price gap on the first trading day after earnings announcements [12] - Since 2010, this strategy has achieved an annualized return of 29.85%, with an annualized excess return of 27.60% over the benchmark [13] - The cumulative absolute return for the current year is 35.72%, outperforming the benchmark index by 25.70% [14] Group 3: Enhanced CSI 300 Portfolio - The Enhanced CSI 300 portfolio is constructed based on investor preferences, including GARP (Growth at a Reasonable Price), growth, and value investing styles, utilizing factors like PBROE and PEG to identify undervalued stocks with strong profitability and growth potential [15][17] - The portfolio has shown stable excess returns in historical backtesting, with a year-to-date excess return of 16.82% relative to the CSI 300 index [17][19] - The portfolio's performance this week yielded an excess return of 0.31% [17]

Group 1 - The report highlights the successful listing of the Chuangjin Hexin Shounong REIT on July 25, with a total issuance scale of 3.685 billion yuan and a duration of 16 years, marking it as the first REIT project in China focused on "headquarters economy" [1][7] - The underlying asset, Shounong Yuan Center, has been transformed into a LEED Platinum certified technology innovation industrial park, covering an area of 203,600 square meters, with an average occupancy rate exceeding 94% over the past three years [1][7] - During the issuance phase, the REIT received significant investor interest, with total subscription amounts reaching 231.6 billion yuan, setting a new record for subscription amounts for Beijing state-owned enterprise REITs [1][7] Group 2 - In the market performance segment, the report notes that the overall REITs market declined, with the Chuangjin Hexin Shounong REIT leading gains at +28.47%, while the CSI REITs total return index fell by 1.56% [2][15] - The report indicates that the REITs total index underperformed compared to the CSI 300 index by 3.98 percentage points and the CSI All Bond index by 1.79 percentage points [2][15] - Individual REITs such as Chuangjin Hexin Shounong REIT, Bosera Tianjin Kai Industrial Park REIT, and China Merchants Science and Technology Innovation REIT showed notable gains, while others like CITIC Construction Investment Mingyang Intelligent New Energy REIT experienced significant declines [2][15] Group 3 - The liquidity section of the report reveals an increase in overall trading activity for REITs, with a total trading volume of 670 million yuan, up 35.1% from the previous week [3][36] - The report details that the largest category by trading volume was park infrastructure REITs, accounting for 31.1% of the total trading volume, with significant increases in trading volumes across various REIT categories [3][36] - Specific categories such as energy infrastructure and warehouse logistics also saw notable increases in trading activity, indicating a positive trend in market engagement [3][36] Group 4 - The report provides insights into the correlation of REITs with major asset classes, indicating a strong positive correlation with bond indices, particularly the CSI All Bond index [27][28] - The internal correlation among different REIT categories, such as industrial park REITs and energy facility REITs, shows significant interdependencies, suggesting that movements in one category may influence others [29] - The report emphasizes the importance of understanding these correlations for strategic investment decisions in the REIT market [27][28]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report Under the resonance of multiple negative factors such as the rise in risk preference, the sharp rise in the equity and commodity markets, and the central bank's net withdrawal in the open - market operations disturbing the capital price, the bond market fluctuated violently this week. The selling behavior of funds is particularly worthy of attention. The scale of funds' net selling on Thursday and Friday was second only to the redemption tides in late August and early October last year. The performance of bond funds was poor, with over 40% of pure interest - rate bond funds recording negative returns in the past three months. Continued attention should be paid to changes in market risk preference and fund redemption situations [10]. 3. Summary According to Relevant Catalogs 3.1 Overall Sentiment - The bond market vitality index increased, mainly due to the rise in the turnover rate of ultra - long bonds. As of July 25, the bond market vitality index rose 6 pcts to 37% compared with July 18, and the 5D - MA rose 5 pcts to 45% [11]. - Indicators of rising bond market vitality included the trading volume of the active 10Y CDB bond / the balance of 9 - 10Y CDB bonds (the rolling two - year quantile rose from 42% to 72%), the 30Y treasury bond turnover rate (the rolling two - year quantile rose from 16% to 71%), and the median duration of medium - and long - term pure bond funds (the rolling two - year quantile rose from 99.3% to 99.7%) [13]. - Indicators of falling bond market vitality included the excess level of the inter - bank bond market leverage ratio compared with the average of the past 4 years (the rolling two - year quantile dropped from 20% to 5%) and the implied tax rate of 1 - 10Y CDB bonds (the rolling two - year quantile dropped from 57% to 21%) [14]. 3.2 Institutional Behavior 3.2.1 Buying and Selling Strength and Bond Selection - In terms of overall buying and selling strength, the order of net buying strength in the cash bond market this week was large banks > insurance > wealth management > other products > money market funds > overseas institutions and others, and the order of net selling strength was funds > securities firms > joint - stock banks > city commercial banks. For ultra - long bonds, the order of net buying strength was insurance > rural commercial banks > city commercial banks > wealth management, and the order of net selling strength was funds > securities firms > large banks > joint - stock banks > other products [22]. - Different institutions had different main bond types. Large banks focused on 1 - 3Y interest - rate bonds and credit bonds; rural commercial banks focused on 5 - 10Y interest - rate bonds and 1 - 3Y other bonds; insurance focused on interest - rate bonds over 10Y and 7 - 10Y credit bonds; funds focused on interest - rate bonds within 1Y; wealth management focused on certificates of deposit and interest - rate bonds within 3Y; other products focused on certificates of deposit [26]. 3.2.2 Trading Portfolio - As of July 25, the median duration of the full - sample medium - and long - term pure bond funds increased by 0.21 years to 4.38 years compared with July 18. Among them, the median durations of pure interest - rate bond funds and interest - rate bond funds decreased by 0.22 years and 0.04 years respectively, while that of credit bond funds increased by 0.19 years. The median durations of high - performing interest - rate bond funds and credit bond funds changed more significantly, decreasing by 0.48 years and increasing by 0.32 years respectively [35]. 3.2.3 Allocation Portfolio - **Primary market**: The primary subscription demand for treasury bonds and policy - bank bonds decreased overall this week. The weighted average full - market multiples of treasury bonds and policy - bank bonds decreased from 3.25 times to 2.94 times and from 3.36 times to 3.16 times respectively [53]. - **Large banks**: As of July 25, the cumulative net purchase of 1 - 3Y treasury bonds this year reached 4032 billion yuan, higher than the same period last year [59]. - **Rural commercial banks**: This year, the cumulative net purchase of cash bonds was significantly weaker than in previous years, mainly due to the weak net purchase of short - term bonds within 1Y. However, the net purchase of 7 - 10Y and over 10Y cash bonds was higher than the same period in previous years [70]. - **Insurance**: This year, the net purchase of cash bonds and its ratio to premium income were significantly higher than in previous years, mainly due to the sufficient supply of ultra - long - term government bonds. As of July 25, the ratio of the cumulative net purchase of cash bonds to the cumulative issuance of government bonds over 10Y was 27.34%, lower than 35.14% at the end of July last year [81]. - **Wealth management**: From June to July, the cumulative net purchase of cash bonds continued to rise, especially for bonds over 10Y. This week, the duration of net - bought cash bonds in the secondary market increased to the highest level since February 23, 2024 [90]. 3.3 Asset Management Product Tracking - Since July, the increase in the scale of wealth management products was weaker than seasonal. The scale increased by 27.96 billion yuan, far lower than the same period from 2021 - 2024. The wealth management product break - even rate decreased [94]. - Since July, the scale of bond funds increased by 13.41 billion yuan, with a significant slowdown in growth rate, while the scale of equity funds increased by 20.99 billion yuan. This week, the net value of various types of bond funds fell sharply, and over 40% of pure interest - rate bond funds recorded negative returns in the past three months [101].

Investment Rating - The industry rating is maintained as "Outperform" [5] Core Viewpoints - The construction sector has seen a significant increase of 7.1% this week, outperforming the Shanghai and Shenzhen 300 index by 5.9 percentage points, driven by infrastructure projects and the rise in specialized engineering and civil explosives sectors [1][29] - The report emphasizes the ongoing trend of "anti-involution" in the industry, suggesting investment opportunities in construction blue chips and steel structure sectors, particularly in the central and western regions of China [1][2][36] Summary by Sections Investment Logic - Four angles to capture investment opportunities in the construction sector: 1. **Price Elasticity**: Companies involved in resource development or trade, such as Northern International and China Railway, are recommended due to expected price increases in resources [2][15] 2. **Supply-Demand Optimization**: Focus on construction blue chips as the anti-involution movement may alleviate price pressures in the industry, with recommendations for quality local state-owned enterprises like Sichuan Road and Bridge [2][17] 3. **Transformation and Upgrading**: Companies with stronger technological attributes are expected to benefit from structural high prosperity in technology-driven infrastructure demands, with recommendations for Tunnel Corporation and China State Construction International [2][21] 4. **Downstream Profit Improvement**: If anti-involution policies improve profitability in steel and cement industries, there will be a rebound in capital expenditure needs, recommending companies like China National Materials and China Steel International [2][23] Market Performance - The report notes a slight decline in the operating rates of petroleum asphalt and cement shipment rates, with the cement shipment rate at 43.07%, down by 2.8 percentage points [3][26] - Central state-owned enterprises showed a positive trend in order data for Q2, with notable growth in orders for companies like China Railway and China Nuclear Engineering [3][26] Key Recommendations - The report suggests focusing on high-growth local state-owned enterprises in regions with strong infrastructure investment, such as Sichuan, Zhejiang, and Anhui, as well as major central state-owned enterprises like China Communications Construction and China Railway [36][37] - Emphasis is placed on the potential of nuclear power and emerging business directions within the construction sector, highlighting the high prosperity of nuclear power investments [38]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [6][4]. Core Insights - In Q2 2025, the main brand of the company experienced low single-digit growth in retail sales year-on-year, while the Saucony brand saw over 20% growth in retail sales [1]. - For the first half of 2025, the main brand's retail sales grew in the mid-single digits year-on-year, and Saucony's retail sales exceeded 30% growth [1]. - The company is actively expanding its presence in the basketball sector while solidifying its leading position in the running category through sponsorships and successful athlete endorsements [2]. - The Saucony brand is focusing on professional runners and has launched new products, including the TRIUMPH 23 running shoes, which emphasize both performance and lifestyle [3]. Financial Projections - The company forecasts revenues of 14.7 billion RMB, 15.8 billion RMB, and 17 billion RMB for the years 2025 to 2027, respectively [4]. - Projected net profits for the same period are 1.36 billion RMB, 1.52 billion RMB, and 1.69 billion RMB, with corresponding EPS of 0.49 RMB, 0.55 RMB, and 0.61 RMB [4]. - The price-to-earnings ratios are expected to be 11x, 10x, and 9x for the years 2025 to 2027 [4].