Investment Rating - Industry Rating: Outperform the Market (maintained rating) [6] Core Viewpoints - The special electronic fabric industry is experiencing high demand driven by the global increase in computing power expectations, with continued upward revisions in the outlook for low dielectric and low expansion electronic fabrics [1][13] - Low dielectric electronic fabric is a high-performance material that reduces energy loss during signal transmission, enhancing signal integrity and speed, primarily used in communication infrastructure and semiconductor packaging [2][14] - Low expansion electronic fabric is mainly applied in high-end mobile phone chip packaging, significantly improving substrate reliability by reducing the expansion coefficient by 35% compared to traditional E-glass [3][24] Summary by Sections Special Electronic Fabric - High-performance special glass fiber fabrics include low dielectric (LowDK) and low expansion (LowCTE) electronic fabrics, with applications in communication infrastructure and semiconductor packaging [13] - Low dielectric fabric is essential for AI servers and switches, with major customers including Nvidia and Arista, showing a revenue growth rate of over 70% for leading companies [14][21] - Low expansion fabric is crucial for high-end chip packaging, with a thermal expansion coefficient close to silicon chips, enhancing reliability [24] Key Companies - **China National Materials Technology**: Focused on low dielectric electronic fabric, with production capacity expected to increase from 26 million meters to 35 million meters by April 2025, driven by rising demand in AI and communication sectors [29][30] - **Macro Technology**: Engaged in high-end electronic fabric production, with a recent project expected to enhance capacity and performance, achieving a revenue increase of 29.52% year-on-year in Q1 2025 [32] - **International Composite Materials**: Early research in special fabrics, capable of elastic production of low dielectric products, with significant advancements in production technology [33] - **Fihua**: A leading producer of quartz glass materials, with products used in various high-tech fields including optical and semiconductor applications [36] - **JianTao Group**: Set to launch a low dielectric production line in late 2025, aiming to capture new growth opportunities in AI computing [37] - **China Jushi**: As a leading player in the glass fiber industry, actively developing low dielectric products to overcome technical challenges [38]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - US economic data improved, but tariff risks are approaching. Optimism about the US economic outlook increased, driving up the US stock market, while European stocks fell due to China's anti - dumping duties on EU brandy. Market expectations for interest rate cuts decreased, and there were various developments in trade negotiations and fiscal policies [1][10]. Summary by Directory 1. Overseas Market One - Week Review - **Equity Markets**: US stocks rose, with the S&P 500, Dow, and Nasdaq up 1.72%, 2.30%, and 1.62% respectively. European, Japanese, and South Korean stocks fell. The decline of European stocks was due to China's anti - dumping duties on EU brandy [1][10]. - **Foreign Exchange**: The US dollar fluctuated and slightly declined, with the dollar index down 0.28%. The euro, yen, and RMB appreciated against the US dollar [10]. - **Interest Rates**: US Treasury yields rose. The 2Y and 10Y US Treasuries rose 15BP and 6BP respectively, as market expectations for interest rate cuts cooled [11]. - **Commodities**: Oil prices rose, with WTI crude up 3.0%. Gold slightly declined, with COMEX gold down 0.3% [11]. 2. Overseas Policies and Key News 2.1 Overseas Central Bank Dynamics - Fed Chairman Powell remained neutral, while other officials were hawkish. Market expectations for interest rate cuts cooled significantly, with the expected number of cuts this year dropping from 3 to 2 [2][27]. 2.2 Trump Policy Tracking - **Trade Negotiations**: The US and Vietnam reached an agreement. Vietnam will pay a 20% tariff to the US and a 40% tariff on transshipment goods. The US hopes to open the Vietnamese market [3][32]. - **"Big and Beautiful" Act**: Trump signed the "Big and Beautiful" tax and spending bill, raising the US debt ceiling by $5 trillion. It is expected to increase the US deficit by nearly $3.4 trillion in the next decade [3][32]. 3. Overseas Economic Fundamental High - Frequency Tracking 3.1 Overall Prosperity - Bloomberg's median forecast shows that the US recession probability is 37.5% (40% a month ago), and the eurozone recession probability is 30%. The economic activities in the US and Germany cooled [39][41]. 3.2 Employment - The number of initial jobless claims decreased to 233,000, lower than expected and lower than the same period in 2024. The number of continuous unemployment benefit recipients remained flat [46]. 3.3 Demand - US retail sales rebounded, airport security checks decreased, and railway transportation increased. Mortgage rates slightly decreased, and real - estate market activities slightly picked up [51]. 3.4 Production - The US production side remained more prosperous than the same period last year, with high utilization rates of crude steel and refinery capacities [55]. 3.5 Shipping - International freight rates continued to decline. The export demand from Chinese ports in Ningbo and Shanghai also decreased [57][59]. 3.6 Price - US retail gasoline prices fell, but inflation expectations in the swap market rose [61]. 3.7 Financial Conditions - US financial pressure decreased, and credit spreads narrowed [64]. 4. Next Week's Overseas Important Event Reminders - The suspension period of "reciprocal tariffs" expires, and the Fed will release the minutes of the June FOMC meeting [6].

Investment Rating - Industry Rating: Outperforming the market (maintained rating) [5] Core Views - The basic metals market is primarily driven by macro pricing, with copper and aluminum experiencing high-level fluctuations. Copper prices initially rose due to increased expectations of interest rate cuts but later fell due to better-than-expected U.S. non-farm payroll data and uncertainties in the foreign trade environment [1][12] - Aluminum prices increased, supported by positive manufacturing PMI data and optimistic automotive sales, despite a reduction in production of aluminum rods and plates [1][20] - Precious metals saw mixed performance, with gold prices declining slightly while silver prices increased, influenced by geopolitical factors and changing market risk preferences [2][25] Summary by Sections Basic Metals & Precious Metals - Copper: Prices fluctuated at high levels, with a current price of 79,830 CNY/ton. Domestic copper inventory increased slightly, indicating a complex supply-demand dynamic [1][12] - Aluminum: Prices rose to 20,555 CNY/ton, driven by improved manufacturing data and rising energy prices. The theoretical demand for electrolytic aluminum decreased due to reduced production of aluminum rods and plates [1][20] - Precious Metals: Gold averaged 766.71 CNY/gram, down 1.00% from the previous week, while silver averaged 8,738 CNY/kg, up 0.29% [2][25] Small Metals - Tungsten: Prices showed resilience with black tungsten concentrate averaging 173,000 CNY/ton, reflecting limited supply growth [3][55] - Rare Earths: Prices for light rare earths increased, indicating a recovery in the fundamentals of the sector, with expectations for significant improvements in the third quarter [3][3] Market Predictions - The report anticipates that copper prices will range between 79,500 and 81,000 CNY/ton in the coming week, while aluminum prices are expected to fluctuate between 20,300 and 21,000 CNY/ton [13][21] - For precious metals, gold is projected to trade between 750 and 800 CNY/gram, and silver between 8,200 and 9,200 CNY/kg [26][26]

Investment Rating - The report assigns a "Buy" rating for the company with a target price of 154 HKD, indicating an upside potential of over 80% from the current price of 85.8 HKD [8]. Core Insights - The report highlights a new cycle logic in the pig farming industry, driven by supply-demand dynamics and policy interventions, which may lead to a phase of capacity reduction and recovery challenges [6][45]. - The company is positioned as a leading integrated livestock farming enterprise in China, focusing on pig and poultry farming, with a strong emphasis on cost management and innovative farming models [17][30]. Industry Overview - The pig farming sector is experiencing a supply surplus and weak demand, leading to a potential decline in pig prices and reduced profitability for farmers [1][44]. - The chicken market is expected to see a marginal recovery in prices in the second half of the year, driven by improving consumer demand and seasonal consumption patterns [2][56]. Company Overview - The company has developed a unique farming model that integrates traditional farming with innovative practices, allowing for rapid expansion and improved farmer collaboration [3][57]. - The pig farming segment has shown significant growth, with a projected output of 11 million pigs by 2025, contributing to an estimated market value of 33 billion CNY [6][30]. - The poultry segment has also seen a doubling of market share from 1.3% in 2018 to 2.6% in 2024, driven by a diversified product matrix and improved breeding techniques [4][30]. Business Segments - The pig farming business leverages a dual farming model, enhancing resource sharing and operational efficiency, which has resulted in a competitive cost structure [3][57]. - The chicken business focuses on breeding and product diversification, responding to market trends and consumer preferences, which is expected to support future price elasticity [4][56]. - The company's slaughtering operations are expanding, aligning with industry trends towards vertical integration and enhanced food processing capabilities [5][30].

Investment Rating - The industry rating is maintained as "Outperform" [6] Core Viewpoints - The construction sector has underperformed the broader market, with a weekly increase of 0.72% compared to the 1.78% rise in the CSI 300 index, resulting in a 1.06 percentage point lag [5][26] - There is an increasing market focus on low-valuation, high-dividend stocks within the construction sector, particularly among central state-owned enterprises (SOEs), local SOEs, international engineering firms, and private enterprises [14][34] - The construction sector's central SOEs, such as China Chemical, have significantly lower price-to-earnings (PE) ratios compared to their peers, with China Chemical's PE at 7.99, placing it in the 6.8% percentile since 2010 [15][14] - Local SOEs like Shandong Road and Anhui Construction show low PE ratios of 3.94 and 6.10, respectively, with dividend yields exceeding those of central SOEs [16][14] - Private enterprises such as Jianghe Group and Sanwei Chemical also demonstrate strong dividend capabilities, with yields of 8.90% and 4.83% respectively [19][14] Summary by Sections Low-Valuation Stocks Worth Attention - Central SOEs like China Chemical and China Railway Construction have low PB ratios, with China Railway at 0.41 and China Railway at 0.45 [14][15] - Local SOEs such as Shandong Road and Anhui Construction have PE ratios significantly below 10, indicating potential investment opportunities [16][14] - Private enterprises like Jianghe Group and Yaxiang Integration have returned to reasonable valuation levels, with PE ratios of 11.66 and 12.21 respectively [19][14] Market Performance Review - The construction index increased by 0.72% in the week from June 30 to July 4, lagging behind the CSI 300's 1.78% increase [5][26] - Notable individual stock performances included Chengbang Co. (+42.23%) and Hangzhou Garden (+31.16%) [5][26] Investment Recommendations - Focus on cyclical opportunities arising from improvements in construction activity, particularly in water conservancy, railways, and aviation sectors [34][35] - Highlight the potential of nuclear power investments and emerging business directions within the construction sector [36][34] - Emphasize investment opportunities in major hydropower projects and the deep-sea economy, with recommendations for companies involved in these sectors [37][34]

Quantitative Models and Construction Methods Model Name: Wind All A Index Timing System - **Model Construction Idea**: The model aims to distinguish the overall market environment by analyzing the distance between long-term and short-term moving averages of the Wind All A Index[1][10][16] - **Model Construction Process**: - Define the long-term moving average (120-day) and short-term moving average (20-day) of the Wind All A Index[1][10] - Calculate the distance between the two moving averages: $$ \text{Distance} = \frac{\text{Short-term MA} - \text{Long-term MA}}{\text{Long-term MA}} $$ where the short-term MA is the 20-day moving average and the long-term MA is the 120-day moving average[1][10] - Monitor the distance value to determine market conditions. If the distance exceeds 3%, it signals a change from a volatile to an upward trend[1][10][16] - **Model Evaluation**: The model is effective in identifying market trends and providing signals for adjusting positions[1][10][16] Model Name: Industry Allocation Model - **Model Construction Idea**: The model recommends industry sectors based on medium-term perspectives and current market trends[2][4][11] - **Model Construction Process**: - Analyze the performance and trends of various industry sectors[2][4][11] - Identify sectors with potential for reversal or growth, such as distressed reversal sectors, innovative drugs in Hong Kong stocks, and photovoltaic sectors benefiting from anti-involution[2][4][11] - Use the TWO BETA model to recommend technology sectors, focusing on military and communication industries[2][4][11] - **Model Evaluation**: The model provides targeted industry recommendations based on current market conditions and trends[2][4][11] Model Name: Position Management Model - **Model Construction Idea**: The model manages stock positions based on valuation indicators and short-term market trends[3][12] - **Model Construction Process**: - Evaluate the overall PE and PB ratios of the Wind All A Index[3][12] - Determine the stock position based on the valuation levels and short-term market trends. For example, with the Wind All A Index at a medium PE level (70th percentile) and a low PB level (30th percentile), the recommended position is 60%[3][12] - **Model Evaluation**: The model helps in managing stock positions effectively by considering valuation levels and market trends[3][12] Model Backtest Results Wind All A Index Timing System - **Distance between Moving Averages**: 2.52%[1][10][16] Industry Allocation Model - **Recommended Sectors**: Distressed reversal sectors, innovative drugs in Hong Kong stocks, photovoltaic sectors, technology sectors (military and communication), A-share banks, and gold stocks[2][4][11] Position Management Model - **Recommended Position**: 60%[3][12]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The bond market is still in a favorable environment with the central bank maintaining a moderately loose policy, but there are potential disturbances. The third quarter may still be a good window for long - positions, but the time may be later [4][5][37]. - Short - term central bank's total - volume easing policies are relatively limited, and whether the capital interest rate will be further relaxed is worth discussing. The pricing of funds and certificates of deposit in the new steady - state needs further observation [4][21][37]. 3. Summary by Related Catalogs 3.1 Bond Market Performance this Week - From June 30 to July 4, the bond market showed a volatile and strong pattern, with most yields of interest - rate bonds declining. After the cross - quarter period, the funds were loose, and the overnight interest rate dropped to 1.3%. The medium - and short - term bonds performed strongly, and the interest rate of 50 - year treasury bonds decreased significantly. As of July 4, the yields of 1Y, 2Y, 10Y, 30Y, and 50Y treasury bonds changed by - 0.9BP, - 0.7BP, - 0.3BP, + 0.2BP, - 3.4BP respectively from last week, reaching 1.34%, 1.35%, 1.64%, 1.85%, 1.94% [1][8]. 3.2 Understanding the Boundary of Central Bank's Easing - **July Liquidity Situation**: In July, the liquidity usually shows a seasonal loosening trend. The reasons include that July is a small month for credit lending, the maturity scale of certificates of deposit decreases, and the seasonal return of wealth - management funds. However, there are concerns such as the impact of fiscal and tax periods, the pressure of government bond supply, and the increase in the maturity scale of open - market operations. The central bank's monetary policy attitude is crucial, and the marginal pricing and phased steady - state of funds and certificates of deposit may become clearer in the middle of the quarter [16][20]. - **Central Bank's Policy Tools**: In the short term, the probability of the central bank cutting the reserve requirement ratio and interest rates is low. It may prefer to use tools such as MLF renewal and outright reverse repurchase to inject liquidity. The central bank may restart treasury bond purchases during the peak of government bond supply, especially in August - September [3][21]. 3.3 Potential Disturbances in the Bond Market - **Fundamental Changes under Tariff Deduction**: After the Sino - US tariff mitigation, the external demand and export pressure have eased, the economic pessimistic expectations have been revised, and the long - term interest rate may face upward pressure. However, there is still uncertainty in subsequent tariff policies [26]. - **Stock - Bond "Seesaw" Effect**: If the fundamentals stabilize and the economic recovery expectation strengthens, the risk preference may shift, and the stock - bond "seesaw" effect may be more prominent, which may suppress the bond market [29]. - **Incremental Policy Tools**: It is necessary to pay attention to the effectiveness of wide - credit restoration under the strengthening of fiscal policies and the impact of new policy - based financial tools on the bond market. The new policy - based financial tools may have a scale of 50 billion yuan, and if deployed in the third quarter, they may boost the economy in the third and fourth quarters [33][34]. 3.4 Next Week's Key Focus - July 7: China's foreign exchange reserves in June, Japan's international reserves in June [38]. - July 8: Japan's current account balance in May, Germany's export value in May [38]. - July 9: China's CPI year - on - year and PPI year - on - year in June, Japan's M2 year - on - year in June [38]. - July 10: China's social financing data and credit data in June [38]. - July 11: Germany's CPI year - on - year in June, UK's trade balance in May [38].

Investment Rating - Industry Rating: Outperform the market (maintained rating) [11] Core Insights - The pig price is expected to face challenges in sustaining its short-term strength due to seasonal consumption fatigue and high current prices, leading to increased operational losses for enterprises [1][15] - The report emphasizes the undervaluation and expectation gap in the pig sector, highlighting the profitability of leading companies amidst low prices and policy guidance [2][16] - The pet sector is witnessing a rise in domestic brands and a positive trend in pet food exports, indicating a robust growth in the pet economy [3][17] - The poultry sector is focusing on the breeding gap for white chickens and the marginal improvement in demand for yellow chickens, with investment recommendations for leading companies [4][18] - The planting sector is prioritizing food security and the strategic importance of biological breeding, with recommendations for key seed and agricultural companies [5][22] - The feed sector is recommended for companies with increasing market share and consistent performance, particularly highlighting Haida Group [6][24] Summary by Sections Pig Sector - Current average pig price is 15.29 CNY/kg, up 5.01% from last week, with self-breeding profits around 182 CNY/head [1][15] - The average weight of pigs at market is 128.64 kg, showing a slight increase after six weeks of decline [1][15] - The report suggests a seasonal decline in pig prices due to high current prices and weak demand [1][15] - Emphasis on the low valuation and expectation gap in the pig sector, with leading companies like Muyuan and Wens recommended for investment [2][16] Pet Sector - Domestic brands are rapidly growing, with significant sales increases in pet food on platforms like Taobao [3][17] - Pet food exports reached 13.91 million tons in the first five months of 2025, a year-on-year increase of 10.89% [3][17] - Recommended companies include Guibao Pet, Zhongchong Co., and Petty Co. [3][17] Poultry Sector - Focus on the uncertainty in breeding for white chickens due to avian influenza outbreaks affecting imports [4][18] - Investment recommendations include Shengnong Development and Yisheng Co. due to the expected recovery in the market [4][19] Planting Sector - The report highlights the importance of achieving higher yields to ensure food security, with a focus on the integration of good land, seeds, machinery, and methods [5][22] - Key companies recommended include Longping High-Tech and Dabeinong [5][22] Feed Sector - Haida Group is highlighted for its increasing market share and consistent performance in the feed sector [6][24] - The report notes a recovery in the aquaculture and feed industry after a prolonged downturn [6][24]

Investment Rating - The industry rating is "Outperform the Market" (first time) [7] Core Insights - British American Tobacco and Japan Tobacco International are actively capturing the heated tobacco market in Japan and South Korea, with British American Tobacco's new product Glo Hilo set for nationwide launch in Japan on September 1, 2025 [1] - Japan's market for smoke-free products has surpassed traditional cigarettes, with forecasts indicating that Philip Morris International will hold a 69.8% market share in heated tobacco by 2024, while British American Tobacco is expected to maintain a 16.3% share [1] - Japan Tobacco International plans to invest approximately 650 billion yen (about 4.4 billion USD) from 2025 to 2027, aiming for a 10% global market share in heated not burned (HNB) products by 2028 [2] - The market share of heated not burned products in South Korea has increased ninefold over seven years, from 2.2% in 2017 to 18.4% in 2024, indicating significant growth potential [3] - In the first five months of 2025, China's e-cigarette exports amounted to 4.054 billion USD, with May exports reaching 812 million USD, reflecting a year-on-year decline of 19.52% [4] Summary by Sections British American Tobacco - The Glo Hilo product utilizes infrared quartz heating technology, reaching 370 degrees Celsius in five seconds, and is priced at 3,980 yen (approximately 25 USD) [1] - The product's trial in Miyagi Prefecture was successful, leading to a nationwide rollout [1] Japan Tobacco International - The company is focusing on product innovation and channel expansion in South Korea, including the re-launch of Ploom X Advanced and the introduction of limited edition devices [2][3] - The strategy includes enhancing online and offline sales channels and responding to local consumer demands [3] E-Cigarette Market - The e-cigarette export value from China has been affected by US-China trade tensions, with a notable decline in exports to the US [4] - The Middle East market is experiencing rapid growth, with the UAE becoming a significant destination for e-cigarette exports [4] Investment Opportunities - Suggested companies to watch in the vaping supply chain include Smoore International, Jincheng Pharmaceutical, and others [5]

Investment Rating - Industry Rating: Outperform the market (maintained rating) [6] Core Insights - The overseas computing power industry chain remains highly prosperous and has not been impacted by DeepSeek and trade frictions, with a stronger resonance in the fundamentals of the related industry chain. The AI industry is viewed as the main investment theme for the year, with expectations for significant developments in AI infrastructure and applications in 2025 [3][23][24]. - The government work report has included "deep-sea technology" for the first time, indicating a clear trend of improvement starting in 2025, with a focus on leading companies in the offshore wind and submarine cable industry [3][23]. Summary by Sections 1. Artificial Intelligence and Digital Economy - Key recommendations for optical modules and optical devices include: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, and Yuanjie Technology. Suggested stocks to watch include: Guangxun Technology, Suosi, Dingtong Technology, and others [4][26]. - For switch server PCBs, recommended stocks are: Hudian Co., Zhongxing Communication, and Ziguang Co. Suggested stocks to watch include: Shengke Communication, Ruijie Network, and others [4][26]. - Low valuation and high dividends for cloud and computing IDC resources are highlighted for China Mobile, China Telecom, and China Unicom [4][26]. - In AIDC and cooling solutions, key recommendations include: Yingweike, Runze Technology, and others. Suggested stocks to watch include: Shenling Environment and others [4][26]. - For AIGC applications and edge computing, key recommendations include: Guanghe Communication, Meige Intelligent, and Yiyuan Communication [4][26]. 2. Offshore Wind and Submarine Cables & Intelligent Driving - Key recommendations for offshore wind and submarine cables include: Hengtong Optic-Electric, Zhongtian Technology, and Dongfang Cable [5][27]. - For overseas recovery and leading concentration, recommended stocks include: Huace Navigation, Weisheng Information, and others [5][27]. - In intelligent driving, suggested stocks to watch include: modules and terminals, sensors, connectors, and structural components [5][27]. 3. Satellite Internet & Low Altitude Economy - The acceleration of national defense informatization and low-orbit satellite development is emphasized, with key recommendations including: Huace Navigation and Haige Communication. Suggested stocks to watch include: Chengchang Technology and others [6][28].