1. Report Industry Investment Rating - Not explicitly mentioned in the report 2. Core Views of the Report - In July 2025, the national economy showed steady progress with new driving forces growing. Industrial production increased rapidly, consumption grew steadily, and investment maintained potential despite a slight slowdown [2][14] - The combined policies of anti - involution and expanding domestic demand continued to boost high - quality economic growth. Anti - involution policies aimed to optimize supply, and policies like consumer credit subsidies expanded domestic demand [4][15] - Humanoid robots moved towards scenario - based applications with improved autonomy. The first humanoid robot games and the World Robot Conference demonstrated their development [4][16] - In the context of increasing anti - involution efforts on the supply side, it's necessary to focus on whether the demand side can resonate with the supply side. Industries such as photovoltaics, lithium batteries, and new energy vehicles, as well as the AI industry, are recommended for attention [4][16] 3. Summary by Relevant Catalogs 3.1 Core Views - In July 2025, the national economy had positive performance. Industrial added value increased by 5.7% year - on - year, equipment and high - tech manufacturing grew significantly, and the output of 3D printing equipment, industrial robots, and new energy vehicles increased by 24.2%, 24.0%, and 17.1% respectively. Social consumer goods retail总额 was 387.8 billion yuan, with some categories showing strong growth. 1 - 7 months' fixed - asset investment increased by 1.6% year - on - year, and investment in some industries grew rapidly [2][14] - Anti - involution policies included industry associations' resistance to malicious competition and the central bank's focus on price stability. The consumer credit subsidy policy covered a wide range of consumption areas, promoting economic growth [4][15] - Humanoid robots achieved improvements in flexibility and scenario - based applications, and the high国产化率 at the World Robot Conference indicated enhanced autonomy [4][16] - Investment suggestions included focusing on emerging industries' anti - involution progress and the development of the AI industry, especially domestic AI's performance and application scenarios [4][16] 3.2 North Exchange Market Performance - The North Exchange 50 Index rose 2.40% from August 11th to 15th. Its annual increase was 42.25%, second only to the Wind Micro - cap Stock Index. The index had high volatility. Electronics and computers led the gains this week, while beauty care and national defense and military industries declined. GEBICA and Haineng Technology led the individual stock gains [17][21][28] 3.3 North Exchange 50 Activity Increase - The trading volume of the North Exchange 50 in the week of August 11th - 15th was 128 billion yuan, an increase from the previous week. However, due to a larger increase in the trading volume of the Wind All - A Index, its trading volume ratio decreased to 1.22% [33] 3.4 North Exchange 50 P/E Ratio Valuation at a Relatively High Level - On August 15th, the median P/E ratio (TTM) of the North Exchange 50 was 64 times, higher than the 29 - times median of the Wind All - A Index [34]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company is expected to maintain stable operations by compensating for price declines with increased volume, supported by new projects that will drive growth [1] - Despite a decline in revenue and net profit in the first half of 2025, the company has shown resilience in production and sales volume, with significant capacity expansions completed [5] - The company has a strong capital expenditure plan, with investments exceeding 100 billion yuan annually since 2018, ensuring long-term growth potential [5] Financial Performance Summary - Revenue for 2025 is projected at 1,988.63 billion yuan, with a growth rate of 9.2% [2] - Net profit for 2025 is estimated at 135.19 billion yuan, reflecting a growth rate of 3.7% [2] - Earnings per share (EPS) is expected to be 4.31 yuan for 2025, with a price-to-earnings (PE) ratio of 15 [2] - The company reported a total revenue of 909.01 billion yuan in the first half of 2025, down 6.35% year-on-year, with a net profit of 61.23 billion yuan, down 25.10% year-on-year [5] - The overall gross margin for the first half of 2025 was 13.84%, a decrease of 2.57 percentage points year-on-year [5] Capacity Expansion and New Projects - The company has completed significant capacity expansions, including the MDI facility in Fujian, which increased capacity from 400,000 tons/year to 800,000 tons/year, and the new ethylene project in Yantai with a capacity of 1.2 million tons/year [5] - New projects in high-performance materials and other segments are expected to contribute to future growth [5] Financial Ratios and Projections - The company’s debt-to-asset ratio is projected to be 61.7% in 2025, indicating a stable financial structure [6] - Return on equity (ROE) is expected to be 11.8% in 2025, reflecting the company's ability to generate profit from shareholders' equity [6] - The net profit margin is projected to be 7.2% in 2025, indicating profitability despite market challenges [6]

Group 1: Market Performance - The A-share market indices showed positive recovery last week, with rapid sector rotation observed[13] - The total margin financing balance exceeded 2 trillion yuan, indicating high market sentiment[37] - The 10-year government bond yield decreased by 5.1 basis points, reflecting a warming bond market[13] Group 2: Economic Indicators - July export data exceeded expectations, with rare earth exports reaching 5,994.3 tons, a year-on-year increase of 21.4%[13] - The Consumer Price Index (CPI) for July recorded a year-on-year change of 0%, while the Producer Price Index (PPI) fell by 3.6%[23] - Exports to the EU and Africa increased by 9.2% and 42.4% year-on-year, respectively, indicating a recovery in overseas demand[18] Group 3: External Factors - The MSCI developed markets index rose by 2.38%, while the MSCI emerging markets index increased by 1.78% last week[31] - The upcoming meeting between Trump and Putin on August 15 regarding the Russia-Ukraine conflict is a key event to watch[37] - The U.S. imposed a 25% additional tariff on goods from India, which may impact market volatility[31]

Core Insights - The AI and robotics industry is entering a high prosperity window due to supportive policies and technological advancements, such as the launch of OpenAI's new flagship AI model GPT-5 [2][4][16] - The RWA registration platform has been officially launched in Hong Kong, which is expected to facilitate scene expansion and large-scale applications, particularly in green bonds and carbon credits [4][17] Economic Data - Recent economic data indicates a stable improvement in China's macroeconomic environment, with July's CPI remaining flat year-on-year and PPI decreasing by 3.6% year-on-year, reflecting the effects of demand expansion and improved market competition [4][14] - China's total goods trade value in July reached 3.91 trillion yuan, a year-on-year increase of 6.7%, indicating a positive trend in trade [4][14] Policy Developments - The People's Bank of China and other departments have released guidelines to support new industrialization, emphasizing the need for a financial system that aligns with industrial advancement and prevents "involution" competition [4][15] - The 2025 World Robot Conference highlighted key trends in the robotics industry, including the shift of humanoid robots from laboratory settings to industrial applications, and the focus on embodied intelligence [4][16] Investment Recommendations - In the context of ongoing supply-side reforms, attention should be paid to the demand-side dynamics to escape the "involution" dilemma, particularly in emerging industries like photovoltaics, lithium batteries, and new energy vehicles [4][17] - The AI industry is expected to thrive with continued support for domestic alternatives and technological advancements, particularly in computing power and energy efficiency [4][17]

Group 1: Domestic Economic Analysis - The Politburo meeting in July emphasized the implementation of existing policies rather than introducing new stimulus measures, leading to a "hold but not lift" approach[6] - China's GDP grew by 5.3% year-on-year in the first half of 2025, indicating strong economic resilience[14] - In July, the transaction area of commercial housing in 30 major cities decreased by 18.6% year-on-year to 6.49 million square meters, marking the largest monthly decline of the year[17] - Passenger car sales in July increased by 6.1% year-on-year to 1.834 million units, supported by a 138 billion yuan subsidy for vehicle trade-ins to be distributed in the third and fourth quarters[20] Group 2: International Economic Context - The U.S. non-farm payrolls added only 73,000 jobs in July, with revisions showing a cumulative downward adjustment of 253,000 jobs for May and June, indicating weakening economic momentum[28] - The U.S. manufacturing PMI showed marginal contraction in July, while the unemployment rate remained stable at 4.2%, suggesting that the Fed may wait for further data before making decisions on interest rates[31] - China's July exports increased by 7.2% year-on-year to $321.78 billion, reflecting ongoing demand despite potential tariff impacts[22] - The correlation between A-shares and global indices is expected to remain strong, with the MSCI global and MSCI China indices showing a stable yield gap within a 40% range since 2024[33] Group 3: Market Implications - If U.S. inflation and employment data in August reinforce expectations for a rate cut in September, it could benefit A-share growth sectors[4] - Conversely, if tariffs are shown to have a greater impact on inflation than recession risks, the Fed may delay rate cuts, favoring defensive assets in the short term[4] - The upcoming October Fourth Plenary Session is anticipated to introduce more systematic policies aimed at expanding domestic demand and stabilizing growth[23]

Group 1: Domestic Economic Trends - The Politburo meeting emphasized the implementation of existing policies rather than introducing strong stimulus measures, leading to a market expectation gap[7] - In July, the transaction area of commercial housing in 30 major cities decreased by 18.6% year-on-year to 6.49 million square meters, marking the largest monthly decline of the year[10] - In July, retail sales of passenger cars increased by 6.1% year-on-year to 1.834 million units, supported by a 138 billion yuan subsidy for vehicle trade-ins to be distributed in the third and fourth quarters[12] Group 2: Export and Manufacturing Insights - In July, China's export value increased by 7.2% year-on-year to 321.78 billion USD, indicating continued resilience in exports[15] - July PMI data showed a rise in prices but a decline in new orders, reflecting a "price increase with volume decrease" trend, suggesting reliance on supply-side adjustments may not sustain economic recovery[14] - The manufacturing PMI in July indicated marginal contraction, with the unemployment rate in the U.S. remaining stable at 4.2%, suggesting a weakening internal economic momentum[21] Group 3: Global Economic Context - The U.S. added only 73,000 non-farm jobs in July, with previous months' data revised down by 253,000, indicating a slowdown in job growth[19] - The correlation between A-shares and global indices is expected to strengthen, with the MSCI China and global indices showing a stable yield gap within 40% since early 2024[22] - If U.S. inflation and employment data in August reinforce expectations for a rate cut in September, it could positively impact A-share growth sectors[21]

Group 1: PMI and Economic Indicators - July manufacturing PMI recorded at 49.3%, remaining below the expansion threshold for four consecutive months, down 0.4 percentage points from the previous month[3] - Construction PMI decreased by 2.2 percentage points to 50.6%, still above the threshold, indicating a slowdown in expansion[3] - Service sector PMI fell by 0.1 percentage points to 50%, indicating stagnation[3] Group 2: Price Trends and Profit Margins - Prices of various commodities increased significantly in July, with coking coal up 32.2%, iron ore up 10.4%, glass up 16.0%, and soda ash up 8.6%[9] - The main raw material purchase price index rose above the threshold for the first time since March, reaching 51.5%, potentially supporting PPI in July[9] - The gap between the main raw material purchase price index and the factory price index widened from 2.2% to 3.2%, indicating potential pressure on corporate profits[9] Group 3: Demand and Inventory Trends - New orders, new export orders, and backlogged orders all declined in July, with new orders down 0.8 percentage points to 49.4%[10] - Raw material inventory index and finished goods inventory index fell to 47.7% and 47.4%, respectively, suggesting a slowdown in production replenishment and active destocking by companies[10] - The production index recorded at 50.5%, down 0.5 percentage points, reflecting a marginal slowdown in production activities[10] Group 4: Future Outlook and Risks - Ongoing external trade frictions and internal growth stabilization policies remain key focus areas, with upcoming negotiations on tariff agreements between China and the U.S.[25] - The political bureau meeting emphasized "orderly exit of backward production capacity," which may impact production progress in key industries[28] - Risks include potential unfavorable outcomes from U.S.-China tariff negotiations and slower-than-expected implementation of growth stabilization policies[29]

Group 1: Economic Growth - In Q2, China's actual GDP grew by 5.2% year-on-year, with a target of around 5% for the full year, indicating manageable pressure to meet this goal[3] - The GDP deflator index fell to -1.2% in Q2, marking the ninth consecutive quarter of negative growth, suggesting ongoing price pressures[9] - The contribution of consumption to GDP growth in Q2 was 2.7 percentage points, making it the primary driver of economic expansion[10] Group 2: Industrial Performance - In June, the industrial added value of large-scale enterprises increased by 6.8% year-on-year, exceeding expectations of 5.5%[15] - The export delivery value of large-scale industrial enterprises rose by 4% in June, a 3.4 percentage point increase from the previous value[15] - Key sectors such as automotive manufacturing and electronic equipment manufacturing saw year-on-year growth rates of 11.4% and 11.0%, respectively[15] Group 3: Investment Trends - From January to June, fixed asset investment growth slowed to 2.8%, down 0.9 percentage points, with significant declines in manufacturing and infrastructure investment[21] - Manufacturing investment growth decreased to 7.5%, while infrastructure investment fell to 8.9%, with real estate investment declining by 11.5%[21] - Water management sector investment growth dropped significantly, down 11.2 percentage points to 15.4% year-on-year[25] Group 4: Consumer Spending - In June, the total retail sales of consumer goods grew by 4.8% year-on-year, a decline of 1.6 percentage points from the previous month[29] - Restaurant revenue in June recorded a year-on-year increase of only 0.9%, a drop of 5 percentage points from the previous value[29] - The retail sales of household appliances and communication equipment fell by 20.6% and 19.1%, respectively, indicating weakening consumer demand[29] Group 5: Risk Factors - Potential risks include changes in the external environment and the possibility that the "old-for-new" policy may not meet expectations[34]

- The report monitors the current market status from three dimensions: past (funds), present (trading), and future (expectations) [1][11] - This week, the market's major broad-based indices showed a volatile upward trend, with the mid-cap style relatively strong. The CSI 500 index rose by 3.28%, while the SSE 50 index increased by 1.12% [2][12] - The average stock positions of equity public funds decreased week-on-week: this week, the stock positions of general equity funds and partial equity hybrid funds were 84.96% and 74.49%, respectively, down by 1.00% and 1.36% compared to last week [2][14] - The historical percentile of stock positions for general equity funds and partial equity hybrid funds decreased to 7.8% and 1.6% respectively [18][20] - The newly established equity public fund issuance scale increased significantly compared to last week: this week, the issuance scale of newly established equity funds was 166.9 billion yuan, and the issuance scale of hybrid funds was 27.8 billion yuan, totaling 194.7 billion yuan, an increase of 68.9 billion yuan compared to last week [21][23] - The financing balance increased by 392 billion yuan compared to last week, reaching 19,284 billion yuan; the securities lending balance was 136 billion yuan, an increase of 5 billion yuan compared to last week [22][24] - The net financing purchase amount for industries such as non-ferrous metals, machinery, and pharmaceuticals was relatively large, with amounts exceeding 40 billion yuan; the overall net sale amount for the petroleum and petrochemical industry exceeded 4 billion yuan [26][27] - The standard deviation of weekly turnover rates for various industries was 1.01%, up by 0.05% compared to last week [33][34] - The expected compound growth rate of net profit for major broad-based indices mostly increased week-on-week: the expected compound growth rate of the ChiNext index increased by 0.11%, while the CSI 1000 index decreased by 0.15% compared to last week [38][39] - The PE (TTM) percentile of the ChiNext index is relatively low, currently at the historical 44% percentile; the PE percentiles of the SSE 50, CSI 300, CSI 1000, and Wind All A indices are between the historical 75% and 90% percentiles; the PE percentile of the CSI 500 index is near the historical 95% percentile [40] - The expected compound growth rate of industries such as steel, computers, and electrical equipment and new energy is relatively high, while industries such as coal, real estate, banking, petroleum and petrochemicals, and construction are relatively low [41][43] - The PE (TTM) percentiles of industries such as light manufacturing, national defense and military industry, building materials, electrical equipment and new energy, and coal are relatively high, above the historical 98% percentile; the PE percentiles of industries such as real estate, steel, and food and beverages are relatively low, below the historical 12% percentile [42][44]

Investment Rating - The investment rating for the company is "Buy" [1][2] Core Views - The report emphasizes the potential growth in AI edge applications and the expected increase in niche DRAM penetration rates [2][5] - The company is positioned as the second-largest player in the Serial NOR Flash market and is actively expanding into the DRAM niche market [5] - The shift of major manufacturers towards DDR5 and HBM products is expected to enhance the company's market share in DDR4 [5] - The automotive sector is a key growth area, with the company collaborating with major domestic car manufacturers to expand its automotive NOR Flash offerings [5] - Emerging applications in AI and robotics are anticipated to drive future growth, with significant demand for storage products in these sectors [5] Financial Summary - Revenue projections for the company are as follows: - 2024: 73.56 billion yuan - 2025: 93.72 billion yuan - 2026: 116.21 billion yuan - 2027: 139.44 billion yuan - The expected revenue growth rates are 27.69% for 2024, 27.41% for 2025, 23.99% for 2026, and 19.99% for 2027 [3][6] - Net profit forecasts are: - 2024: 11.03 billion yuan - 2025: 14.59 billion yuan - 2026: 19.88 billion yuan - 2027: 25.72 billion yuan - The projected net profit growth rates are 584.21% for 2024, 32.35% for 2025, 36.23% for 2026, and 29.40% for 2027 [3][6] - The company's earnings per share (EPS) are expected to be 1.66 yuan in 2024, increasing to 3.87 yuan by 2027 [3][6] Company Overview - The company operates as an IC design firm focusing on memory chips and microcontrollers, utilizing a Fabless model [5] - In 2024, the revenue breakdown is projected as follows: - Memory chips: 51.94 billion yuan (70.61% of total revenue) - Microcontrollers: 17.06 billion yuan (23.19% of total revenue) - Sensors: 4.48 billion yuan (6.09% of total revenue) [5]