Core Insights - The report highlights the establishment of the international standard for supercapacitors in energy storage, proposed by China and supported by countries like Germany and Japan, which is expected to promote global standardization in this field [2] - The report discusses the Chinese government's initiatives to boost domestic consumption and optimize policies for replacing old consumer goods, aiming to enhance the internal circulation of the economy [2] - The report notes the historical peak in national electricity load, surpassing 1.5 billion kilowatts, indicating a strong demand for energy during the summer peak season [2] - The report mentions the ongoing efforts to regulate the competition in the new energy vehicle industry, emphasizing the need for rational competition and adherence to payment commitments by major companies [2] Company Insights - The report details the performance of Shaanxi Coal Industry Co., Ltd., which is the largest listed coal enterprise in Shaanxi, focusing on its coal mining, washing, transportation, and sales operations [15][16] - The company achieved a revenue of 184.145 billion yuan in 2024, a year-on-year increase of 7.77%, and a net profit of 22.36 billion yuan, reflecting stable performance despite declining coal prices [16] - The company has a significant coal resource base of 17.931 billion tons, with a mining life of over 70 years, primarily located in the Shaanxi region [17] - The report indicates that the company is implementing a "coal-electricity integration" strategy following its acquisition of Shaanxi Coal Power Group, which is expected to enhance profitability and stability [19][21] - The company has maintained a high cash dividend policy, with total cash dividends reaching 13.07 billion yuan in 2024, representing 58.45% of the net profit attributable to shareholders [20][21] Industry Insights - The report analyzes the domestic airline industry, noting a cautious increase in capacity during the low season, with a 1.1% year-on-year rise in domestic flight capacity in June [11] - The report highlights that the overall passenger load factor for listed airlines decreased by 0.4 percentage points month-on-month but increased by approximately 1.7 percentage points year-on-year [11] - The international airline capacity saw a year-on-year increase of about 17.4%, but the growth rate has slowed down, indicating a challenging demand environment [12] - The report suggests that the coal market may experience a rebound in prices due to seasonal demand and regulatory measures aimed at curbing low-price competition [20]

Investment Rating - The report maintains a "Buy" rating for Pop Mart International Group Limited [2][5] Core Views - The company is expected to achieve over 200% year-on-year revenue growth in the first half of 2025, exceeding 13.67 billion RMB, with net profit growth of over 350%, reaching at least 4.34 billion RMB [3] - The company's profit margin reached a historical high of 31.7%, an increase of 10.6 percentage points year-on-year, driven by strong sales, new product launches, and overseas expansion [3][4] - The company has established a competitive advantage through a diverse IP matrix, strong IP operation capabilities, and extensive online and offline channels [5] Summary by Sections Financial Performance - Revenue for 2023 is projected at 6.30 billion RMB, with a growth rate of 36.46% - By 2025, revenue is expected to reach 31.80 billion RMB, with a growth rate of 143.93% - Net profit for 2023 is estimated at 1.08 billion RMB, with a growth rate of 127.55%, and is projected to reach 10.05 billion RMB by 2025, with a growth rate of 221.41% [6][10] Market Expansion - The company has seen strong domestic growth, particularly with the Labubu 3.0 series, which has generated high demand and maintained premium pricing in the secondary market [4] - Internationally, Pop Mart is expanding rapidly in Asia and making significant inroads in Europe and the Americas, with overseas revenue share increasing in the first half of 2025 [4][5] Future Outlook - The company is expected to continue its high growth trajectory in overseas markets, particularly in high-consumption regions like Europe and the Americas [5] - The financial forecasts for 2025-2027 indicate a steady increase in net profit, with projections of 10.05 billion RMB in 2025, 13.11 billion RMB in 2026, and 17.02 billion RMB in 2027 [6][10]

Investment Rating - The industry investment rating is "Positive" [5] Core Viewpoints - The report highlights that the domestic airline industry is currently in a low season, with a modest increase in capacity deployment of 1.1% year-on-year in June, but a decrease of approximately 2.9% compared to May. Demand remains weak, leading airlines to adopt a more restrained approach to capacity deployment [2][10][14] - Eastern Airlines has shown a notable increase in passenger load factor, rising against the trend of other major airlines, indicating a strategic focus on improving load factors [2][30] - The report anticipates that as the peak summer travel season approaches, operational pressures on the industry are expected to improve, with potential for higher ticket prices due to increased load factors [3][11][38] Summary by Sections 1. Domestic Route Capacity Deployment - In June, listed companies increased domestic route capacity by 1.1% year-on-year, but saw a decrease of about 2.9% month-on-month. Major airlines like Eastern Airlines and Air China reduced capacity by 5.1% and 4.3% respectively compared to May [2][14][16] - The overall passenger load factor for listed companies decreased by 0.4 percentage points month-on-month but increased by approximately 1.7 percentage points year-on-year. Eastern Airlines' load factor continued to rise, reflecting its prioritization of this metric in sales strategies [30][38] 2. International Route Capacity Deployment - International route capacity for listed airlines increased by about 17.4% year-on-year in June, but decreased by 1.5% compared to May. The demand growth for international routes appears to be slowing [3][55] - The passenger load factor for international routes improved by 0.9 percentage points month-on-month and by 1.0 percentage point year-on-year, indicating a slight recovery despite ongoing demand pressures [3][55] 3. Airport Throughput - Major airports such as Shanghai and Shenzhen reported year-on-year growth in international passenger throughput of 17% and 19% respectively. However, there has been a recent slowdown in growth, with some airports experiencing a decline in international passenger numbers over the past two months [68][70]

Investment Rating - The report gives a "Strong Buy" rating for Shaanxi Coal Industry [2][69] Core Views - Shaanxi Coal Industry focuses on building a "coal-electricity integration" development model, enhancing operational stability and profitability through strategic acquisitions and investments [3][11][69] - The company has shown resilience in performance despite declining coal prices, with stable revenue and profit growth [27][28][69] - The upcoming summer coal demand and regulatory changes are expected to support a rebound in coal prices, positively impacting the company's performance [12][59] Summary by Sections Company Overview - Shaanxi Coal Industry is the only large-scale listed coal enterprise in Shaanxi, primarily engaged in coal mining, washing, transportation, and sales [3][24] - The company is backed by Shaanxi Coal Group, which holds 65.25% of its shares [3][24] Financial Performance - In 2024, the company achieved a revenue of CNY 1841.45 billion, a year-on-year increase of 7.77%, and a net profit of CNY 223.60 billion, up 5.28% [27][28] - In Q1 2025, despite a 0.71% decline in revenue to CNY 401.62 billion, net profit rose by 3.29% to CNY 48.05 billion [28][69] Resource and Production - The company has abundant coal resources, with a total resource volume of 17.931 billion tons and a mining life of over 70 years [4][38] - In 2024, coal production reached a historical high of 170.4846 million tons, a 4.13% increase year-on-year [43][44] Railway Infrastructure - The company has developed a self-operated railway network to support its coal business, enhancing logistics and market reach [5][52] - In 2023, railway transport volume was 167.1896 million tons, a 35.21% increase, while in 2024, it slightly decreased to 166.2825 million tons [5][52] Electricity Business - The acquisition of Shaanxi Coal Power in 2024 has enabled the company to implement a "coal-electricity integration" model, enhancing profitability [11][54] - In 2024, total electricity generation was 37.615 billion kWh, a 4.41% increase, with electricity revenue of CNY 16.176 billion [11][54] Investment and Dividends - The company plans to significantly increase capital expenditure in 2025 to CNY 135.59 billion, with a focus on electricity projects [61][69] - The company maintains a high dividend payout, with total cash dividends reaching CNY 13.070 billion in 2024, representing 58.45% of net profit [12][64]

Macro Insights - June CPI data shows a year-on-year increase of 0.1%, marking the first positive reading since February 2023, while core inflation rose to 0.7%[4] - Manufacturing PMI stands at 49.7, indicating continued contraction, despite a recovery in export orders PMI to 47.7 in May-June[4] - Exports in June saw a year-on-year increase of 5.9%, maintaining a relatively high level despite a slight decline[4] Market Strategy - The 3400-point level is identified as a new starting point for a slow bull market, driven by the revaluation of Chinese assets and increasing institutional demand for high-dividend sectors[4] - The financial sector, particularly banks and brokerages, is expected to lead the market, with institutional funds gradually gaining pricing power[4] - The market is anticipated to maintain an upward trend, supported by active themes such as stablecoins and a shift towards value growth stocks[5] Investment Recommendations - Investors are advised to increase positions and actively participate in the bull market, focusing on value growth as a core strategy[6] - Short-term recommendations include non-bank financial sectors like insurance and brokerages, alongside technology sectors with strong growth potential[6] - The bond market is viewed as neutral to slightly bullish, with expectations of continued liquidity easing and a stable interest rate environment[6] Sector Performance - The banking sector is expected to see marginal improvements in mid-year earnings, with the banking index rising by 2.73% recently, outperforming the CSI 300 index[9] - Real estate sales are declining, with new home sales down 13.4% year-on-year in 30 cities, prompting calls for increased investment in urbanization initiatives[10] - The securities sector is becoming more active, with daily trading volumes rising from 1.22 trillion to 1.74 trillion CNY, indicating a recovery in investor confidence[11]

Investment Rating - The report maintains a "Positive" investment rating for the building materials industry, indicating an expectation of performance that exceeds the market benchmark by more than 5% [2][19]. Core Insights - The recent Central Urban Work Conference has provided specific guidance for urban development, aiming to promote a new balance between supply and demand in the real estate sector, which is expected to lead to a long-term healthy development of the industry [4][5]. - The conference emphasizes the construction of modern urban clusters and the promotion of urban renewal, which will enhance the quality of urban infrastructure and housing supply, thereby supporting the recovery of building materials demand [5][6]. - The report highlights that the industry is currently experiencing a historical low in market sentiment, which is accelerating the process of industry consolidation and the elimination of outdated production capacity [6][11]. Summary by Sections Urban Development and Policy - The Central Urban Work Conference serves as a directive for urban modernization in China, with a focus on high-quality urban development and the enhancement of living conditions [4][5]. - The conference outlines the need for innovative, livable, and resilient cities, which will drive the demand for building materials as urban infrastructure is upgraded [5]. Industry Demand and Supply Dynamics - The report anticipates that the policies from the conference will stimulate demand in the real estate sector, leading to a stabilization of building materials demand over the next 3-6 months [6][11]. - The focus on urban renewal and infrastructure improvement is expected to create a new balance between supply and demand in the building materials industry, benefiting leading companies in the sector [11]. Market Performance and Outlook - The building materials industry is projected to see a recovery in demand as urbanization progresses and policies are implemented, with a particular emphasis on the renovation of urban villages and old city areas [11]. - The report suggests that leading companies in the sector will benefit the most from these developments, as they are better positioned for growth and valuation recovery [11].

Investment Rating - The industry investment rating is "Positive" for the banking sector, indicating an expectation of performance that exceeds the market benchmark by more than 5% in the next six months [10]. Core Insights - The report highlights that the overall credit growth in June met expectations, driven by active fiscal policies and increased government bond issuance, with a year-on-year growth in social financing of 8.9% [2][19]. - The report notes that the demand for credit from the real economy remains weak, suggesting that further stimulus may be necessary to boost credit demand [10]. - The report anticipates that the issuance of government bonds will peak in the third quarter, which is expected to support stable social financing growth [2]. Summary by Sections Social Financing and Credit Growth - In June, social financing increased by 4.2 trillion yuan, a year-on-year increase of 901.6 billion yuan, with RMB loans contributing 2.36 trillion yuan, reflecting a seasonal increase in credit issuance [2][21]. - The year-on-year growth rate of RMB loans remained stable at 7.1% by the end of June, with a total of 12.92 trillion yuan in new loans issued in the first half of the year, a decrease of 350 billion yuan compared to the previous year [2][3]. Corporate Loans - Non-financial corporate loans increased by 1.77 trillion yuan in June, with short-term loans contributing 1.16 trillion yuan, showing a significant seasonal increase [3]. - The report indicates that the impact of debt replacement on medium and long-term loans is gradually diminishing, with a year-on-year increase of 400 billion yuan in medium and long-term loans [3]. Household Loans - Household loans saw a slight year-on-year increase, with new loans totaling 597.6 billion yuan in June, driven by consumption scenarios [4]. - The report suggests that the willingness of households to leverage remains dependent on further policy support, as employment and income conditions have not shown significant improvement [4]. Interest Rates and Market Conditions - The average interest rate for new corporate loans was approximately 3.3% in the first half of the year, indicating a slowdown in the decline of loan rates [9]. - The report expects that the overall pricing of new loans will remain stable, with limited downward pressure on loan rates for the remainder of the year [9]. Investment Outlook - The report predicts that the banking sector will see improved revenue and profit growth in the first half of the year, supported by a narrowing trend in interest margins and a recovery in the bond market [10]. - It emphasizes the attractiveness of bank stocks due to their high dividends and stable performance, with a recommendation to focus on banks with strong regional advantages and performance release potential [10].

Investment Rating - The industry investment rating is optimistic, indicating a potential recovery in profitability and valuation levels for the steel industry due to the "anti-involution" policy [1][4]. Core Insights - The "anti-involution" policy aims to shift the steel industry from low-cost homogeneous competition to high-end differentiated competition, which is expected to lead to a reversal in industry profitability and valuation levels [1][4]. - The steel industry is currently facing weak demand, with prices and profit levels declining. The Producer Price Index (PPI) for black metal smelting and rolling industries has dropped to 89.8, the lowest among five sub-industries [2][4]. - The current state of the steel industry shows a divergence in profitability between upstream and midstream sectors, with upstream mining absorbing most of the industry's profits [2][4]. Summary by Sections Current Industry Status - The steel industry is experiencing weak demand, with PPI for black metal smelting and rolling industries at 89.8, indicating a decline in prices and profits [2]. - The gross profit margin for black metal smelting and rolling industries is only 5.48%, significantly lower than the 19.57% margin for black metal mining [2]. Comparison with 2015 Supply-Side Reform - The supply-demand situation in the steel industry has improved compared to 2015, with a reduction in the degree of supply surplus [3][4]. - The current "anti-involution" policy is less administratively forceful than the 2015 supply-side reforms, which were primarily focused on eliminating outdated production capacity [3]. Policy Impact and Guidance - The "anti-involution" policy aims to prevent homogeneous competition and emphasizes the need for market mechanisms and industry self-regulation to optimize and upgrade production capacity [4]. - The policy includes stricter standards for capacity elimination and encourages the adoption of green and intelligent production methods [5]. Inventory and Profitability Outlook - The steel inventory is expected to rise from the bottom, with significant reductions in social inventory levels for rebar and wire rod [6]. - The industry's return on equity (ROE) and return on assets (ROA) have declined due to the real estate market downturn, but the "anti-involution" policy may help restore market sentiment and improve profitability [6]. Valuation Observations - The current median price-to-earnings (P/E) ratio for the steel industry is 35.51X, indicating potential for valuation recovery as supply-demand structures improve [6].

Investment Rating - The report maintains a positive outlook on the non-ferrous metals industry, indicating a "look good" investment rating [2]. Core Insights - The report emphasizes the impact of the "anti-involution" policy on various cyclical sub-industries, particularly highlighting the steel industry, which is currently facing weak demand and declining prices and profit levels. The policy aims to prevent vicious competition and promote high-quality development [4][62]. - The steel industry is expected to undergo a transformation towards high-end differentiated competition, with potential recovery in profitability and valuation levels [19][51]. - The transportation industry, particularly the express delivery and aviation sectors, is anticipated to benefit from the government's focus on balancing supply and demand and promoting high-quality development [5][52]. - The construction materials industry is also set to experience a new balance due to the implementation of the "anti-involution" policy, which will accelerate the optimization of supply [7][66]. - The chemical industry, including silicon-based products and pesticides, is expected to see improvements in supply dynamics, leading to a potential recovery in profitability [68][74]. Summary by Sections 1. Metal Industry - The steel industry is currently facing weak demand, with both supply and demand weakening compared to 2015, but the degree of oversupply has lessened [24][25]. - The report notes that the profitability of the steel industry has declined to levels seen in 2015, with profits shifting towards the upstream iron ore sector [33][46]. - The "anti-involution" policy is expected to enhance the industry's supply-demand structure and profitability, with a median P/E ratio of 35.51X indicating room for valuation recovery [4][48]. 2. Transportation Industry - The express delivery and aviation sectors are highlighted as areas that will benefit from the government's anti-involution measures, which aim to improve supply-demand balance and service quality [5][60]. - The aviation sector has already seen improvements in passenger load factors due to supply-side controls, which are expected to enhance pricing power during peak seasons [55][56]. 3. Construction Materials Industry - The report discusses the gradual implementation of the "anti-involution" policy in the construction materials sector, particularly in cement, which is expected to lead to better supply-side optimization [62][64]. - The focus on eliminating excess capacity and promoting high-quality development is anticipated to solidify the growth of leading companies in the industry [66]. 4. Chemical Industry - The silicon-based products and pesticide sectors are projected to benefit from improved supply dynamics due to regulatory measures aimed at curbing low-price competition [68][74]. - The report indicates that self-discipline within the pesticide industry, particularly in the glyphosate sector, will help improve market conditions and profitability [75].

Core Insights - The report highlights the impact of the recent US-Vietnam trade agreement on China's textile exports, with US tariffs on Vietnam reduced from 46% to 20%, potentially leading to a shift of orders from US buyers to Vietnam [8] - The outdoor industry is expected to continue thriving, supported by increasing participation in events and a growing market for outdoor products, with a target industry scale exceeding 3 trillion yuan by 2025 [9] - The real estate market is anticipated to stabilize, with potential policy support from the government, which may positively influence the home furnishing sector [10] Economic News - The National Development and Reform Commission has allocated an additional 10 billion yuan for employment projects, expected to create jobs for 310,000 individuals [2] - The People's Bank of China is exploring new measures to open the bond market to foreign investors, aiming to enhance the liquidity of RMB bonds [3] - The Hong Kong Monetary Authority plans to expand offshore RMB repurchase operations, enhancing market liquidity and supporting the development of the Hong Kong bond market [4] Company News - Shentong Express has partnered with Cainiao to advance the application of unmanned vehicles in last-mile delivery, aiming to enhance its smart delivery network [6] - Huawei has announced a new patent for an auxiliary driving method, which aims to improve drivers' perception of surrounding obstacles [6] - JD.com has launched a "Double Hundred Plan" to invest over 10 billion yuan to support quality merchants, enhancing their online sales capabilities [6] Market Review - The textile and apparel industry saw a 1.36% increase, while the light industry rose by 0.58%, indicating a positive trend in these sectors [11]