Quantitative Models and Construction Methods 1. Model Name: A-Share Industry Rotation Model - **Model Construction Idea**: The model uses six factors—funds, valuation, sentiment, momentum, overbought/oversold, and profitability—to build a scoring system for evaluating industry performance[16] - **Model Construction Process**: - **Funds**: Uses the net inflow rate of main funds in the industry as the primary data - **Valuation**: Based on the valuation percentile of the industry over the past year - **Sentiment**: Proportion of rising constituent stocks as the main data source - **Momentum**: Uses the MACD indicator as the primary data source - **Overbought/Oversold**: Relies on the RSI indicator - **Profitability**: Based on the consensus forecast EPS percentile of the industry over the past year[16] - **Model Evaluation**: The model provides a comprehensive scoring mechanism to identify high-performing and low-performing industries, aiding in sector rotation decisions[16] 2. Model Name: Consensus Stock Selection Model - **Model Construction Idea**: Combines momentum, valuation, and price factors with high-frequency fund flow data to identify stocks with high similarity between fund flow trends and price trends[21] - **Model Construction Process**: - Selects high-performing secondary industries over the past 30 days - Calculates momentum, valuation, and frequency of price increases for stocks within these industries - Uses high-frequency minute-level fund flow data to compute fund inflow/outflow changes for each stock - Selects stocks with the highest similarity between fund flow trends and price trends within the top three secondary industries[21] --- Model Backtesting Results 1. A-Share Industry Rotation Model - **Top-Scoring Industries**: - Agriculture, Forestry, Animal Husbandry, and Fishery: Score 10 - Non-Ferrous Metals: Score 9 - Home Appliances: Score 6 - **Low-Scoring Industries**: - Media: Score -9 - Social Services: Score -8 - Computers: Score -8[18][19] 2. Consensus Stock Selection Model - **Selected Industries**: - Steel (e.g., Baosteel, Bengang Steel Plates) - Components (e.g., Huilun Crystal, GaoHua Technology) - Minor Metals (e.g., Jinduicheng Molybdenum, Xiyang Shares)[22] --- Quantitative Factors and Construction Methods 1. Factor Name: Funds - **Construction Idea**: Measures the net inflow of main funds in the industry - **Construction Process**: Aggregates daily transactions of ≥10,000 shares or ≥200,000 RMB to calculate net fund inflow for each industry[11] 2. Factor Name: Valuation - **Construction Idea**: Evaluates the relative valuation percentile of the industry over the past year - **Construction Process**: Uses historical valuation data to determine the percentile ranking of the current valuation[16] 3. Factor Name: Sentiment - **Construction Idea**: Reflects market sentiment through the proportion of rising stocks in the industry - **Construction Process**: Calculates the percentage of stocks with positive price changes within the industry[16] 4. Factor Name: Momentum - **Construction Idea**: Captures the trend strength of the industry - **Construction Process**: Utilizes the MACD indicator to measure momentum[16] 5. Factor Name: Overbought/Oversold - **Construction Idea**: Identifies overbought or oversold conditions in the industry - **Construction Process**: Applies the RSI indicator to assess these conditions[16] 6. Factor Name: Profitability - **Construction Idea**: Measures the earnings potential of the industry - **Construction Process**: Uses the consensus forecast EPS percentile over the past year as the primary metric[16] --- Factor Backtesting Results 1. Funds Factor - **Top Industries (5-day net inflow)**: - Banking: 39.08 billion RMB - Textiles and Apparel: 0.61 billion RMB - Non-Ferrous Metals: -0.97 billion RMB[12] - **Top Industries (30-day net inflow)**: - Comprehensive: -9.49 billion RMB - Banking: -13.75 billion RMB - Beauty and Personal Care: -26.15 billion RMB[13][14] 2. Valuation Factor - **Top-Scoring Industries**: - Non-Ferrous Metals: +++ - Comprehensive: +++ - Beauty and Personal Care: +++[18][19] 3. Sentiment Factor - **Top-Scoring Industries**: - Non-Ferrous Metals: +++ - Agriculture, Forestry, Animal Husbandry, and Fishery: ++ - Textiles and Apparel: ++[18][19] 4. Momentum Factor - **Top-Scoring Industries**: - Non-Ferrous Metals: +++ - Transportation: +++ - Comprehensive: +++[18][19] 5. Overbought/Oversold Factor - **Top-Scoring Industries**: - Agriculture, Forestry, Animal Husbandry, and Fishery: Neutral - Non-Ferrous Metals: Neutral - Home Appliances: Neutral[18][19] 6. Profitability Factor - **Top-Scoring Industries**: - Non-Ferrous Metals: +++ - Comprehensive: +++ - Home Appliances: +[18][19]

Group 1 - The core viewpoint of the report indicates that the defense and military industry sector performed well during the period, with QDII funds showing relatively leading average returns [1][6] - The Shanghai Composite Index rose by 2.11% and the Shenzhen Component Index increased by 1.25% during the reporting period [1] - Various types of funds experienced gains, with actively managed stock funds increasing by 1.31%, mixed funds by 1.47%, and bond funds by 0.14% [1] Group 2 - The defense and military sector, along with non-ferrous metals, showed strong performance among the Shenwan first-level industry indices [6] - Over the last 12 periods, the comprehensive and defense military indices have demonstrated favorable performance [6] Group 3 - In the bond market, the convertible bond index rose by 2.31%, leading to an average return of 2.59% for convertible bond funds during the reporting period [12] - The average return for convertible bond funds this year stands at 13.96%, indicating strong performance compared to other bond categories [12] Group 4 - Among QDII funds, the Greater China equity funds led with a return of 2.43% during the reporting period, while the year-to-date return is 34.21% [14][16] - The report highlights that various QDII fund categories experienced different levels of performance, with global equity funds returning 2.33% and emerging market equity funds returning 2.21% [14][16]

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The report emphasizes that the brain-computer interface (BCI) industry is experiencing continuous innovation and rapid growth, becoming a crucial area for the integration of technological and industrial innovation [8] - The report highlights the government's recent policy initiatives aimed at enhancing the innovation capabilities of the BCI industry, which are expected to drive high-quality development and create new industrial pathways [8] Summary by Sections Industry Overview - The report focuses on the pharmaceutical and biotechnology industry, particularly the advancements in brain-computer interface technology [1] Recent Developments - A joint document from seven government departments outlines plans to boost the BCI industry, aiming for breakthroughs in key technologies by 2027 and establishing a robust industrial ecosystem by 2030 [3][4] Investment Recommendations - The report suggests monitoring companies such as Aipeng Medical, Innovation Medical, and Xiangyu Medical, which are positioned to benefit from the growth in the BCI sector [8]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - A-shares are expected to maintain a high-risk preference, and investment opportunities in innovative drugs, artificial intelligence, and rare earths are favored [12]. - Bond market yields may continue to fluctuate within a narrow range at a low level [12]. - In the context of the Fed's dovish stance, gold has the possibility to break through its previous high [12]. 3. Summary by Related Catalogs Stock Market Performance - U.S. stocks rose, with the Nasdaq, S&P 500, and Dow Jones Industrial Average changing by 3.87%, 2.43%, and 1.35% respectively. The Nasdaq China Technology Index changed by 4.25%, and the Hang Seng Index changed by 1.43% [2]. - A-shares generally rose, with the Wind All A Index rising 1.94%. Most major indices showed positive changes, and most sectors and industries also rose, with non-ferrous metals, machinery, and national defense and military industry leading the gains [3][4]. Bond Market Performance - Interest rate bond prices rose, and the yield curve steepened. The 10-year Treasury bond futures contract rose 0.19%, and the yield of the 10-year Treasury bond active bond decreased by 1.68 BP [5]. - Bond market leverage increased, and the central bank's open market operations had a net withdrawal of 536.5 billion yuan [6][8]. - U.S. Treasury yields increased, and the curve shifted upward as a whole [9]. Foreign Exchange and Commodity Markets - The U.S. dollar depreciated, and the U.S. dollar index decreased by 0.43%. Gold prices rose, with London gold spot prices rising 1.49% and COMEX gold futures prices rising 1.29% [10]. Fed's Stance - The Fed's regulatory vice-chairman's remarks were more dovish than the market's mainstream expectations, and the market's mainstream expectation for the number of Fed rate cuts in 2025 remains 2 times [11].

Investment Rating - The report maintains an "Overweight" rating for the electronic industry [1] Core Insights - The rapid development of AI drives the demand for high-end electronic-grade materials, particularly in functional fillers [4][9] - High-performance ball silicon and low-alpha ball aluminum are critical materials for semiconductor packaging, with significant growth expected in the HBM market [5][49] - The increasing performance requirements of AI servers necessitate upgrades in PCB and CCL materials, leading to a rise in the use of high-performance fillers [16][29] Section Summaries AI Fillers: Driven by AI for High-End Electronic Applications - Semiconductor powder materials are essential for the development of integrated circuits, with silicon and aluminum oxides being core components [12] - The performance of ball silicon powder significantly enhances the reliability of electronic products, while high thermal conductivity ball aluminum is becoming mainstream in thermal interface materials [12][48] High-Speed Copper Clad Laminate (CCL): Accelerated Penetration of High-End CCL and Rising Prices of High-Performance Ball Silicon - The demand for high-performance ball silicon powder is increasing due to the rising number of PCB layers and the need for high-frequency, low-loss materials [37][44] - The market share of high-performance ball silicon powder in the CCL market exceeded 44% in 2021 and is expected to grow further [44] HBM: Low-Alpha Ball Aluminum as a Key Material for HBM Packaging - The HBM market is projected to grow from $2.7 billion in 2022 to $37.7 billion by 2029, with a compound annual growth rate (CAGR) of 38% [50] - Low-alpha ball aluminum is crucial for preventing operational failures in HBM packaging due to its ability to mitigate alpha particle interference [48][51] Recommended Focus: Lianrui New Materials - Lianrui New Materials is a leading domestic producer of electronic-grade silicon powder, focusing on high-end applications and expanding its production capacity [56][59] - The company reported a revenue of 960 million yuan in 2024, a year-on-year increase of 34.94%, driven by AI technology [59]

Macro Data Commentary - The report highlights the outstanding performance of small and mid-cap funds, with the average return of fund heavyweights at 8.94%, significantly outperforming the average return of the CSI 800 component stocks at 1.66% [1][15] - In the second quarter, 30 out of 31 industries saw fund heavyweights outperform their benchmark industry indices, with an excess return of 5.91% over the industry average [1][16] Timing Selection Ability - The report indicates that the asset allocation effects of various funds were not ideal, with equity funds reducing their average stock positions by 0.24 percentage points and mixed funds by 1.21 percentage points compared to the previous period [2][20] - The overall performance of the bond market was also subpar, with the total wealth index of bonds rising by only 1.53% while bond funds reduced their holdings by 0.12% [2][20] Risk Management Ability - The risk exchange efficiency of bond funds remained stable, with slight declines in both returns and volatility for equity and mixed funds [2][22] - The report notes that despite a recovery in the market since September, equity assets are still in a downward trend over a longer time frame [2][22] Comprehensive Management Ability - The report states that the Shanghai Securities comprehensive management ability index integrates performance across security selection, timing selection, and risk management [5][23] - Notable fund managers with outstanding performance include Jin Xin, Da Cheng, and Yuan Xin Yong Feng in the active management of equity funds, and Yi Fang Da, Tian Hong, and Bo Shi in pure bond funds [5][23] Fund Rating Performance Tracking - The report tracks the performance of rated funds, indicating that five-star funds maintain a 60% probability of being in the top 40% of their peers within 6 months to 1 year after rating [3][29] - Since 2015, the three-year return of five-star ordinary stock fund portfolios reached 216.93%, compared to only 38.82% for the CSI All Index [3][29]

Investment Rating - The report maintains an "Overweight" rating for the communication industry [4] Core Insights - The U.S. non-farm payrolls fell short of expectations, with only 73,000 jobs added in July, leading to a downward revision of previous months' data by a total of 258,000 jobs, marking the worst performance since the pandemic [8] - The overall market sentiment may be affected in the short term due to the new tariffs that took effect on August 1, raising the average tariff rate to approximately 18% [8] - The expectation of a Federal Reserve rate cut in September is nearing 90%, indicating that risks are relatively controllable [8] - The performance of U.S. tech stocks has been driven by strong earnings, with over 85% of S&P 500 companies exceeding earnings expectations [9] - Major tech companies like Alphabet, Microsoft, and Meta have announced increased investments in AI, citing a continued shortage of AI computing power [9] - The capital expenditure plans for these companies have been significantly raised, with Google increasing its 2025 capital expenditure by $10 billion to $85 billion, Microsoft planning to exceed $30 billion in Q1 2026, and Meta adjusting its annual capital expenditure to between $66 billion and $72 billion [9] Summary by Sections Industry Overview - The communication industry is expected to benefit from the ongoing trends in AI and technology investments, with a focus on emerging AI applications and products [10] - Companies like Figma and Out of the Box are introducing innovative AI-driven products, with Figma's revenue projected to grow by 48% to $749 million in 2024 and 46% to $228 million in Q1 2025 [10] - The report suggests monitoring specific companies in the light module, domestic computing, PCB, and AI application sectors for potential investment opportunities [10]

Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [1][10]. Core Insights - The basic chemical index experienced a decline of 1.46% over the past week, outperforming the CSI 300 index, which fell by 1.75%, resulting in a relative outperformance of 0.29 percentage points [14]. - Key sub-industries that performed well include synthetic resin (4.60%), food and feed additives (2.99%), adhesives and tapes (2.95%), carbon black (2.03%), and non-metallic materials III (0.69%) [15]. - The report highlights a significant price increase in several chemical products, with liquid chlorine rising by 28.57%, epoxy chloropropane by 9.81%, and TDI by 8.81% [22][23]. - Conversely, lithium carbonate (industrial grade) and lithium carbonate (battery grade) saw declines of 10.53% and 10.39%, respectively [22][23]. Market Trends - The basic chemical sector is currently benefiting from a favorable market environment, with the "anti-involution" policy being reiterated by the Central Political Bureau, aiming to optimize market competition and regulate disorderly competition among enterprises [6][7]. - The report notes that the air conditioning production data for August indicates a year-on-year decline of 2.8% in household air conditioning production, with domestic sales down by 11.9% [8][9]. Chemical Price Trends - The report provides a detailed analysis of chemical price movements, indicating that the top five products with the highest weekly price increases include liquid chlorine, epoxy chloropropane, soft foam polyether, TDI, and concentrated nitric acid [22][23]. - The report also highlights significant price drops in lithium carbonate and natural latex, indicating volatility in the chemical market [22][23]. Investment Recommendations - The report suggests focusing on several key sectors: 1. Refrigerant sector, with companies like Jinshi Resources and Juhua Co. recommended for their potential price increases [10]. 2. Chemical fiber sector, with recommendations for Huafeng Chemical and Xin Fengming [10]. 3. High-quality stocks such as Wanhua Chemical and Hualu Hengsheng are also highlighted [10]. 4. Tire sector recommendations include Sailun Tire and Linglong Tire [10]. 5. Agricultural chemicals sector with a focus on Yara International and Salt Lake Potash [10]. 6. Growth stocks like Bluestar Technology and Shengquan Group are also recommended [10].

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The automotive sector has shown a mixed performance, with a recent decline of 2.36% in the automotive sector compared to a 1.75% decline in the CSI 300 index, ranking 21st among 31 first-level industries [4] - The report highlights the establishment of China Changan Automobile Group Co., Ltd., which aims to innovate in smart vehicles and expand globally, targeting an annual revenue of 355 billion yuan and a production goal of 3 million vehicles [6] - New vehicle launches, such as the Leidao L90 and Li Auto i8, are expected to enhance market competitiveness and consumer interest [7] Market Review - The automotive sector's performance has been underwhelming, with commercial vehicles performing the best among sub-sectors, while passenger vehicles and automotive services saw significant declines [4] - In July, heavy truck sales reached approximately 83,000 units, showing a year-on-year increase of about 42%, driven by trade-in policies [9] Investment Recommendations - The report suggests focusing on companies involved in smart vehicle technology, those with potential for overseas sales, and component manufacturers benefiting from domestic substitution effects [10] - Specific companies to watch include Beiqi Blue Valley, Great Wall Motors, and China National Heavy Duty Truck Group [12]

Report Summary 1. Report Industry Investment Rating The document does not provide the industry investment rating. 2. Core Viewpoints - Most global equity markets declined in the past week, with US stocks, A - shares, and the Hang Seng Index all falling. However, some sectors like communication and innovation - drugs showed positive performance [3][4][5]. - Interest rates on bonds decreased, with the price of interest - rate bonds rising and the yield curve shifting downwards. The central bank conducted net open - market operations [6][7]. - The US dollar appreciated, while the domestic gold price declined. The policy of resuming VAT on new bonds may lead to a divergence between new and existing bonds [11][12]. - The US non - farm payrolls were lower than expected, increasing the market's expectation of a Fed rate cut in September. There are also concerns about the reliability of employment data and the Fed's independence [13][14][15]. - In the future, A - shares are expected to have investment opportunities, the bond market will likely maintain a low - yield narrow - range oscillation, and gold may continue to rise [16]. 3. Summary by Related Content Stock Market Performance - **US Stocks**: In the past week (20250728 - 20250803), the Nasdaq, S&P 500, and Dow Jones Industrial Average declined by 2.17%, 2.36%, and 2.92% respectively. The Nasdaq China Technology Index fell 3.20% [3]. - **A - shares**: The Wind All - A Index dropped 1.09%. Most sectors and industries declined, with communication and innovation - drugs leading the gainers. Among the 30 Citic industries, 24 declined and 6 rose. The leading industries had a weekly gain of over 2% [4][5]. - **Hong Kong Stocks**: The Hang Seng Index declined 3.47% in the past week [3]. Bond Market Performance - **Interest - rate Bonds**: The 10 - year Treasury bond futures rose 0.24% compared to July 25, 2025. The yield of the 10 - year Treasury bond active bond decreased by 2.65 BP to 1.7059%. The yield curve shifted downwards [6]. - **Funding Costs**: As of August 1, 2025, R007 was 1.4864%, down 20.73 BP from July 25, 2025; DR007 was 1.4242%, down 22.81 BP. The central bank had a net open - market operation of 69 billion yuan [7]. - **US Treasury Bonds**: The yield of the 10 - year US Treasury bond decreased by 17 BP to 4.23% compared to July 25, 2025, and the yield curve shifted downwards [10]. Commodity Market Performance - **US Dollar and Gold**: The US dollar index rose 1.04%. The domestic gold price declined, with Shanghai gold spot down 0.89% to 767.29 yuan/gram and futures down 0.94% to 767.44 yuan/gram [11]. Policy Impact - **VAT on Bonds**: Newly issued Treasury bonds, local government bonds, and financial bonds will be subject to VAT starting from August 8, 2025, while existing bonds remain tax - exempt until maturity. This may lead to a divergence in the performance of new and existing bonds [12]. US Economic Data - **Non - farm Payrolls**: In July, the US non - farm payrolls increased by 73,000, significantly lower than the expected 106,000. The market's expectation of a 25 - BP Fed rate cut in September rose from 38.4% to 77.7% [13][14]. - **Employment Data Concerns**: The significant downward revision of May and June non - farm payrolls and the firing of the BLS director may have raised concerns about the reliability of employment data and the Fed's independence [13][15].