Group 1 - The report highlights the significant progress in technology and supportive policies that are shaping a bullish market trend, particularly in the technology sector [11][14][19] - The AI revolution is expected to enhance future growth prospects, with Chinese technology companies like DeepSeek leading innovations that are reshaping market valuations [5][12][16] - The report notes that the Hang Seng Technology Index has outperformed the broader Hang Seng Index, with a year-on-year increase of approximately 49.19% compared to 35.86% for the Hang Seng Index [20][22] Group 2 - The report emphasizes the strong recovery of the Hong Kong stock market, driven by technology, which has attracted global investment [20][24] - Leading technology companies in Hong Kong, such as Tencent and Alibaba, have established significant competitive advantages, contributing to the sector's long-term investment value [22][24] - The report indicates that the current valuation of the Hong Kong technology sector is at a historical low, with a price-to-earnings ratio (PE) around 20 times, suggesting substantial room for valuation recovery [24][35] Group 3 - The report discusses the characteristics of the Hang Seng Hong Kong Stock Connect Technology Theme Index, noting its high concentration of leading technology firms, which enhances its defensive attributes [27][28] - The index has shown strong growth potential, with a one-year increase of 57.26%, outperforming both the Hang Seng Index and the Hang Seng Technology Index [35] - The report highlights that the index's current valuation is relatively low at around 22 times, indicating potential for significant valuation recovery if market confidence in the technology sector continues to improve [35][36] Group 4 - The report introduces the Huaan Hang Seng Hong Kong Stock Connect Technology Theme ETF, which aims to closely track the performance of the Hang Seng Hong Kong Stock Connect Technology Theme Index [4][37] - The ETF is designed to provide investors with a tool for easy exposure to leading technology companies in the Hong Kong market, with a focus on minimizing tracking error [37][38] - The fund manager, Wang Chao, has extensive experience in the fund industry, which adds credibility to the management of the ETF [39][40]

Group 1 - The report highlights a significant recovery in the Hong Kong stock market, driven by the technology sector, which continues to boost market confidence [4][15]. - The technology sector is characterized by breakthrough innovations and supportive policies, marking a bullish market trend [4][11]. - The Hang Seng Technology Index has outperformed the broader Hang Seng Index, with a year-on-year increase of approximately 49.19%, compared to 35.86% for the Hang Seng Index [19][20]. Group 2 - The report emphasizes the long-term investment value of the Hong Kong technology sector, noting that leading technology companies possess strong competitive advantages and deep moats [20]. - The current valuation of the Hong Kong technology sector is at a historical low, with a price-to-earnings (PE) ratio around 20 times, indicating significant potential for valuation recovery [20][29]. - The report identifies the Hang Seng Hong Kong Stock Connect Technology Theme Index as a concentrated index with over 75% of its weight in the top ten constituents, enhancing its ability to capture core industry benefits [22][26]. Group 3 - The report introduces the Huaan Hang Seng Hong Kong Stock Connect Technology Theme ETF, which aims to closely track the performance of the Hang Seng Hong Kong Stock Connect Technology Theme Index [30]. - The ETF is managed by Huaan Fund Management, which has a strong track record in managing a variety of funds, including ETFs [32]. - The proposed fund manager, Wang Chao, has over 11 years of experience in the fund industry, enhancing the credibility of the fund management [33].

Report Title - Fund Selling, Rural Commercial Banks Buying - Tracking of Liquidity and Institutional Behavior [1] Report Date - July 28, 2025 [1] Report Industry Investment Rating - Not provided Core Viewpoints - This week (July 21 - July 25), the money market rates generally increased, the average daily net lending of large banks increased, and funds reduced leverage. The maturity of certificates of deposit increased, and the yields of certificates of deposit at all tenors decreased. In the cash bond market, rural commercial banks were the main buyers, mainly increasing their holdings of 7 - 10Y interest - rate bonds; funds were the main sellers, mainly reducing their holdings of 7 - 10Y interest - rate bonds; insurance companies increased their holdings of ultra - long - term interest - rate bonds, and large banks bought 1 - 3Y interest - rate bonds [3] Summary by Directory 1. Money and Funding Situation - **Open Market Operations**: A total of 1726.8 billion yuan of reverse repurchases matured this week. The central bank conducted reverse repurchase operations of 170.7 billion, 214.8 billion, 150.5 billion, 331 billion, and 789.3 billion yuan from Monday to Friday, respectively, with a total investment of 1656.3 billion yuan. On Friday, 200 billion yuan of MLF matured and 400 billion yuan was invested, resulting in a net liquidity injection of 129.5 billion yuan for the whole week [7][10] - **Funding Rates**: As of July 25, R001, R007, DR001, and DR007 were 1.55%, 1.69%, 1.52%, and 1.65% respectively, with changes of 6.41BP, 18.65BP, 6.08BP, and 14.56BP compared to July 18, and were at the 24%, 13%, 22%, and 9% historical percentiles respectively [7][13] - **Net Funding Flows of Main Institutions**: The net borrowing of the main funding providers (large commercial/policy banks and joint - stock banks) was 448.6 billion yuan for the whole week, an increase of 61.8 billion yuan compared to the previous week. The net borrowing of fund companies and securities companies was - 270.5 billion and - 162.7 billion yuan respectively, with the net borrowing of fund companies decreasing by 309.6 billion yuan and that of securities companies decreasing by 155.1 billion yuan compared to the previous week [7][17] - **Repo Market**: The trading volume of pledged repurchase increased, with an average daily trading volume of 7.7 trillion yuan and a maximum single - day trading volume of 8.04 trillion yuan, a 6.27% increase compared to the previous week's average. The proportion of overnight repurchase transactions decreased, with an average daily proportion of 88.5% and a maximum single - day proportion of 90.3%, a decrease of 0.04 percentage points compared to the previous week's average [7] - **Leverage Ratio**: As of July 25, the leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 103.3%, 186.5%, 127.4%, and 104.9% respectively, with changes of - 0.12BP, - 15.49BP, 1.12BP, and - 0.53BP compared to July 18, and were at the 16%, 0%, 62%, and 23% historical percentiles respectively [7][26] 2. Certificates of Deposit and Bills - **Issuance and Financing of Certificates of Deposit**: The issuance scale of certificates of deposit decreased this week, with a total issuance of 515.69 billion yuan, a decrease of 429.19 billion yuan compared to the previous week. The net financing was - 560.79 billion yuan, a decrease of 702.86 billion yuan compared to the previous week [7][30] - **Maturity of Certificates of Deposit**: The maturity volume of certificates of deposit increased this week, with a total maturity of 1076.48 billion yuan, an increase of 273.67 billion yuan compared to the previous week. Next week (July 28 - August 1), 376.74 billion yuan of certificates of deposit will mature [7][30][36] - **Interest Rates of Certificates of Deposit**: The issuance interest rates of certificates of deposit of all banks and at all tenors increased. As of July 25, the one - year issuance interest rates of joint - stock banks, state - owned banks, city commercial banks, and rural commercial banks increased by 4.17BP, 1BP, 0.17BP, and 1BP respectively compared to July 18. The issuance interest rates of 1M, 3M, and 6M certificates of deposit increased by 0.59BP, 2.15BP, and 4.86BP respectively compared to July 18 [39] - **Shibor Rates**: The Shibor rates increased this week. As of July 25, the overnight, 1 - week, 2 - week, 1M, and 3M Shibor rates increased by 5.8BP, 12.6BP, 16.8BP, 0.9BP, and 0.4BP respectively compared to July 18 [42] - **Yields of Certificates of Deposit at Maturity**: The yields of certificates of deposit at maturity generally increased. As of July 25, the 1M, 3M, 6M, 9M, and 1Y yields of AAA - rated ChinaBond commercial bank certificates of deposit increased by 4.01BP, 4.69BP, 6.16BP, 5.06BP, and 5.75BP respectively compared to July 18 [44] - **Bill Interest Rates**: The bill interest rates decreased. As of July 25, the 3M direct discount rate, 3M transfer discount rate, 6M direct discount rate, and 6M transfer discount rate of national - owned shares decreased by 5BP, 13BP, 8BP, and 9BP respectively compared to July 18 [7][47] 3. Tracking of Institutional Behavior - **Cash Bond Trading**: Rural commercial banks were the main buyers in the cash bond market this week, with a net purchase of 261.7 billion yuan, an increase compared to the previous week. Funds were the main sellers, with a net sale of 358.7 billion yuan, also an increase compared to the previous week. Wealth management products had a net purchase of 107.6 billion yuan [7][49] - **Portfolio Adjustments of Funds**: Funds reduced their holdings of cash bonds by 358.7 billion yuan, including a reduction of 236.1 billion yuan in interest - rate bonds, 22.6 billion yuan in credit bonds, 61.2 billion yuan in other (including Tier - 2 and perpetual bonds), and 39.1 billion yuan in certificates of deposit. In terms of tenor, they mainly reduced their holdings of 7 - 10 - year interest - rate bonds and 1 - 5 - year credit bonds [7][49] - **Portfolio Adjustments of Wealth Management Products**: Wealth management products increased their holdings of cash bonds by 107.6 billion yuan, including an increase of 26.6 billion yuan in interest - rate bonds, 15.3 billion yuan in credit bonds, 15.3 billion yuan in other (including Tier - 2 and perpetual bonds), and 50.5 billion yuan in certificates of deposit. In terms of tenor, they mainly increased their holdings of interest - rate bonds and credit bonds with a tenor of less than 1 year [49] - **Portfolio Adjustments of Rural Financial Institutions**: Rural financial institutions increased their holdings of cash bonds by 261.7 billion yuan, including an increase of 271.1 billion yuan in interest - rate bonds, 4.5 billion yuan in credit bonds, 36.6 billion yuan in other (including Tier - 2 and perpetual bonds), and a reduction of 50.8 billion yuan in certificates of deposit. In terms of tenor, they mainly increased their holdings of 7 - 10 - year interest - rate bonds and 3 - 5 - year credit bonds [49] - **Portfolio Adjustments of Insurance Companies**: Insurance companies increased their holdings of cash bonds by 115.9 billion yuan, including an increase of 66.3 billion yuan in interest - rate bonds, 12.6 billion yuan in credit bonds, 8 billion yuan in other (including Tier - 2 and perpetual bonds), and 29.1 billion yuan in certificates of deposit. In terms of tenor, they mainly increased their holdings of 20 - 30 - year interest - rate bonds and 7 - 10 - year credit bonds [50]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The bond market adjustment may have some short - term repair due to emerging positives, but in the long run, the probability of interest rates breaking through the lows is small, and the interest rate center is expected to fluctuate and rise [2][8]. - The bond market short - term adjustment is in place, with possible over - decline repair, but the downward amplitude may be limited, and heavy - position participation is not recommended. Strategies suggest being cautious in duration, reducing annual return expectations, and seizing short - term trading opportunities [2][30]. Summary by Related Catalogs Bond Market Adjustment Situation - This week, the bond market sentiment was suppressed by the strong performance of equities and commodities, and the yield of each maturity generally increased. As of July 25, the 10Y Treasury yield rose 6.72BP to 1.73% compared with July 18, and the 30Y Treasury yield reached 1.97%, with the 10Y - 1Y spread widening [5]. Factors Affecting the Bond Market Funding Aspect - The central bank began large - scale injections at the end of the month, showing an obvious attitude of care. On Thursday, the suddenly tightened funding became the "last straw" for the bond market, but on Friday, the central bank's operations led to a rapid shift to a loose funding situation, with a net injection of 8018 billion yuan [2][8]. Asset - Liability Aspect - The reduction of the insurance预定利率 is a short - term positive for the bond market, but it also has two - sided effects. It may lead to a reduction in the adjustment range of the bond market, but it may also cause a loss of insurance liability - side funds [2][10]. Institutional Behavior Aspect - Insurance has changed from a stable configuration strategy to a trading mindset. The weekly average net purchase scale in July decreased to 44.8 billion yuan, lower than that from February to March [2][15]. - During the bond market's weak adjustment this week, the main selling forces were funds and securities companies, while rural commercial banks increased their positions. Funds further reduced their duration, and the 10 - day average of the net purchase duration of funds has dropped to a relatively low historical quantile level [16]. Key Psychological Point and Technical Analysis - 1.75% is a key psychological point in the market, and the probability of a short - term rapid break to 1.80% is low [22]. - Technically, the bearish force has increased marginally, but short - term technical indicators show over - decline rebound signals. There may be over - decline trading opportunities next week, and attention should be paid to the effectiveness of the support level [23]. Long - Term Impact of Re - inflation Trading - The re - inflation trading caused by anti - involution is still in the initial stage, so its impact on the bond market is limited [24][27].

Investment Rating - The industry investment rating is maintained at "Overweight" [2] Core Insights - The current predetermined interest rate for ordinary life insurance products is assessed at 1.99%, down from 2.13%, reflecting a year-on-year decrease of 14 basis points [5] - The adjustment mechanism for predetermined interest rates has been triggered, leading to a non-symmetrical reduction in the maximum predetermined interest rates for traditional, participating, and universal insurance by 50, 25, and 50 basis points respectively [5] - The adjustment is primarily influenced by a significant drop in the yield of 10-year government bonds in Q4 2024, which has been anticipated by the market [5] - The report indicates that the maximum predetermined interest rate for ordinary insurance products is now 2.0%, down from 2.5%, while the maximum for participating insurance is now 1.75%, down from 2.0% [5] - The report suggests that the adjustment of 50 basis points may not align with the expected 25 basis points based on the notification requirements, but anticipates further declines in the predetermined interest rates in the second half of 2025 [5] Summary by Sections Basic Conditions - The research value has been adjusted as expected, with the current rates reflecting a downward trend due to market conditions [5] - As of the end of Q2 2025, the 5-year LPR is at 3.5%, the 5-year fixed deposit benchmark rate is at 1.3%, and the 10-year government bond yield is at 1.65% [5] Industry-Market Comparison - Major life insurance companies are expected to gradually lower their product predetermined interest rates following the release of the research value [5] - The report highlights that the sensitivity of gross premium growth to interest rate changes is lower for participating insurance compared to traditional insurance [5] Investment Recommendations - The non-symmetrical reduction in predetermined interest rates is expected to benefit high-quality life insurance companies with strong sales capabilities in participating insurance [5] - The report recommends focusing on companies such as Xinhua Insurance, China Ping An, AIA, China Life, China Pacific Insurance, and China People’s Insurance [5]

Investment Rating - The report does not provide a specific investment rating for the REITs industry [2] Core Insights - The REITs index experienced a decline of 1.56% this week, while the Shanghai Composite Index rose by 1.69% and the CSI 500 Index increased by 3.28% [5][16] - The newly listed Chuangjin Shounong REIT saw a first-day increase of 28.48% [7][10] - The total market capitalization of the REITs industry is approximately 204.75 billion [2] Market Performance - This week, 9 REITs increased in value, while 60 declined, resulting in an overall drop of 1.56% in the REITs market [20] - The trading volume for the week was 32.8 billion, reflecting a 36.2% increase, with an average turnover rate of 0.7% [43] - The trading amounts for various sectors included: - Highways: 5.9 billion (+13.4%) - Ecological Environment: 1.8 billion (+11.8%) - Clean Energy: 3.6 billion (+22.0%) - Industrial Parks: 10.4 billion (+94.7%) - Warehousing and Logistics: 3.5 billion (+60.4%) - Rental Housing: 3.7 billion (-2.4%) - Consumer: 4.6 billion (+68.0%) [43] Key Events - The listing date for the Zhongyin Zhongwaiyun Warehousing Logistics REIT is set for July 29, 2025 [10][12] - The Zhonghang Tianhong Consumer REIT project has been submitted for approval [10][12] - The E-Fonda Shen High-Speed REIT announced a dividend distribution of 58.11 million, accounting for 99.97% of the distributable amount [10][11] Market Trends - The report indicates that the REITs market has a strong correlation with the consumer sector, with a correlation coefficient of 0.51 [24] - The REITs have shown varying degrees of correlation with other asset classes, with the REITs showing a negative correlation with 10-year government bonds at -0.08 [18]

Investment Rating - The report maintains an "Overweight" rating for the coal industry [2][5]. Core Insights - The expectation of supply contraction is rising, leading to a strong rebound in coal prices. This is primarily driven by policy changes on the supply side, which have intensified expectations of reduced supply. The "overproduction leads to shutdown" policy and a significant decrease in coal imports are key factors [7][8]. - The report highlights that the demand for electricity coal remains robust due to high temperatures, with power plants expected to maintain high daily consumption levels. The ongoing summer peak demand is anticipated to support coal prices [7][8]. Summary by Sections 1. Industry Overview - The coal industry consists of 37 listed companies with a total market capitalization of 181.62 billion yuan and a circulating market value of 177.44 billion yuan [2]. 2. Supply and Demand Dynamics - Recent policy changes have led to increased uncertainty in domestic coal supply. A national coal mine production inspection is set to take place, focusing on compliance with production limits [7]. - In June 2025, China's imports of thermal coal fell to 23.93 million tons, a year-on-year decrease of 31.11%, marking the lowest level in 28 months [7]. 3. Price Trends - As of July 25, 2025, the price of thermal coal at the Qinhuangdao port was 659 yuan per ton, reflecting a week-on-week increase of 11 yuan per ton, but a year-on-year decrease of 200 yuan per ton [8]. - The price of coking coal at the same port increased by 240 yuan per ton, with a week-on-week growth of 16.67% [8]. 4. Key Companies and Recommendations - The report recommends focusing on high-elasticity stocks such as Yanzhou Coal Mining, Shanxi Coal International, and Jin控煤业, which are expected to benefit from rising coal prices [7]. - Other companies like China Shenhua, Huaihe Energy, and Longyuan Power are also highlighted as potential beneficiaries of the favorable market conditions [7][8]. 5. Financial Performance and Dividends - The report tracks the dividend policies and growth prospects of key companies, indicating that several firms are expected to maintain or increase their dividend payouts in the coming years [13][14].

Investment Rating - The report maintains an "Accumulate" rating for the insurance sector [2]. Core Insights - The PCE-ROCE valuation system is introduced to better reflect the true value of insurance companies under new standards, addressing the limitations of the traditional P/EV system [6][47]. - The report identifies that companies like China Pacific Insurance and China Life Insurance are significantly undervalued in the A-share market, while in the H-share market, China Pacific, China Life, and Sunshine Insurance are also notably undervalued [6][6]. - The insurance sector is characterized by dual benefits: companies possess dividend advantages, and leading firms like Ping An have strategically invested in high-dividend assets, which positively impacts their performance [6]. Summary by Sections 1. Introduction - The P/EV valuation system is under scrutiny due to a prolonged low interest rate environment, leading to a decline in the valuation levels of listed insurance companies [16][16]. - As of July 23, 2025, major insurance companies are trading at historical low P/EV ratios, indicating a potential valuation trap [16][16]. 2. PCE-ROCE Valuation System - The PCE-ROCE system incorporates comprehensive equity (CE) and return on comprehensive equity (ROCE) to provide a more accurate valuation framework [47][48]. - The system aims to mitigate the volatility associated with traditional valuation methods by integrating net assets and contract service margins [6][47]. 3. Comparison with PIEV - The PCE-ROCE system is deemed more effective in reflecting the true value of insurance companies in a low interest rate environment compared to the PIEV system, which relies heavily on long-term investment return assumptions [8][8]. - The report highlights that the PCE-ROCE system offers a balanced valuation approach by considering both net assets and contract service margins [8][8]. 4. Profitability Analysis of Listed Insurance Companies - The report evaluates the profitability of insurance policies under the new standards, focusing on contract service margins (CSM) and new business contract service margins (NBCSM) [8][8]. - A scoring system is established to assess the performance of listed insurance companies based on various profitability indicators, with AIA, PICC, and CPIC scoring the highest [8][8]. 5. Main Conclusions and Investment Recommendations - The report concludes that the insurance sector presents significant investment opportunities, particularly in companies that are undervalued and have strong dividend policies [6][6]. - Recommended companies for investment include New China Life, Ping An, AIA, China Life, China Pacific, and China People’s Insurance [6][6].

Investment Rating - The report maintains an "Overweight" rating for the insurance sector [2]. Core Insights - The P/EV valuation system is facing challenges in a persistently low interest rate environment, leading to significant adjustments in risk discount rates and investment return assumptions, which have resulted in a decline in NBV and EV growth [5][9]. - The introduction of the PCE-ROCE valuation system aims to provide a more comprehensive reflection of the true value of insurance companies by incorporating comprehensive equity (CE) and return on comprehensive equity (ROCE) [31][43]. - The report identifies that A-share listed insurance companies, particularly China Pacific Insurance and China Life Insurance, are relatively undervalued according to the PCE-ROCE valuation system [5][29]. Summary by Sections 1. Introduction - The P/EV valuation system shows signs of "failure" as the valuation levels for A-share listed insurance companies continue to decline, with significant pressure on new business value growth due to macroeconomic factors [9][14]. 2. PCE-ROCE Valuation System Proposal - The PCE-ROCE system introduces comprehensive equity (CE) and ROCE to better reflect the value of insurance companies under new accounting standards [31][43]. - The system aims to address the limitations of the P/EV system by providing a more stable and predictable valuation framework [5][31]. 3. Comparison of Valuation Systems - The PCE-ROCE system is more effective in reflecting the true value of insurance companies in a low interest rate environment compared to the traditional P/EV system [5][31]. - The report highlights that the P/CE ratio provides a better fit and reflects the comprehensive value of insurance companies compared to P/B and P/EV ratios [5][31]. 4. Analysis of Insurance Companies' Policy Profitability - The report establishes a profitability evaluation system for listed insurance companies based on CSM and NBCSM, identifying key performance indicators to assess profitability [5][31]. - The scoring system ranks companies based on their CSM performance, with AIA, PICC, and CPIC scoring the highest [5][31]. 5. Main Conclusions and Investment Recommendations - The report concludes that several A-share and H-share listed insurance companies are undervalued, suggesting a focus on companies like New China Life, Ping An, AIA, China Life, CPIC, and PICC for potential investment opportunities [5][29].

Investment Rating - The report maintains an "Accumulate" rating for the industry [1] Core Insights - The North Exchange has shown fluctuating performance, with a total of 268 listed companies and an industry market capitalization of 858.43 billion [1][4] - The North Exchange 50 Index experienced a decline of 0.7% during the week of July 14-18, 2025, closing at 1418.61 points, while the Shanghai and Shenzhen 300 indices increased by 1.02% and 0.42%, respectively [4][13] - The average market capitalization of the North Exchange component stocks is 3.202 billion [4][13] - The average daily trading volume for the North Exchange component stocks reached 21.885 billion, reflecting a 1.55% increase from the previous week [4][16] Summary by Sections North Exchange Market Overview - As of July 18, 2025, the North Exchange comprises 268 component stocks, with an average market capitalization of 3.202 billion [4][13] - The North Exchange 50 Index saw a weekly decline of 0.7%, while the Shanghai and Shenzhen 300 indices posted gains of 1.02% and 0.42% respectively [4][13] - The daily average trading volume for the North Exchange component stocks was 21.885 billion, with a turnover rate of 25.26% [4][16] Industry Performance - The top five performing sectors in the A-share market during the week were pharmaceuticals and biotechnology, communications, national defense and military industry, computers, and banking, with respective gains of 21.25%, 20.08%, 19.06%, 17.35%, and 16.64% [4][21] Individual Stock Performance - Among the 268 stocks listed on the North Exchange, 100 stocks rose, 166 fell, and 2 remained flat, resulting in a rise ratio of 37.45% [4][24] New Stocks - No new stock issuances occurred during the week, but one company updated its review status to registration, while 30 companies moved to the inquiry stage [4][29] Key News - The North Exchange has strengthened its disclosure requirements and released the second-quarter ratings for securities firms, with 103 firms evaluated [4][32] Investment Strategy - The report expresses optimism for the North Exchange's performance in 2025, suggesting a focus on sectors such as data centers, robotics, semiconductors, consumer goods, and military information technology [4][33]