Macro Strategy - The report highlights the need to monitor domestic economic policy changes due to the upcoming Fourth Plenary Session and the focus on countering "involution" [1] Fixed Income - The report discusses why domestic commercial banks are unlikely to reduce their balance sheets, citing factors such as the need to support the economy during a slowdown, the current accommodative monetary policy, and the role of state-owned capital in maintaining financial services to the real economy [2][22] - It emphasizes that the probability of a sector-wide balance sheet reduction is low, despite some smaller banks potentially facing this situation [22] Industry Analysis - The environmental industry report indicates that the waste incineration sector saw a revenue increase of 1% year-on-year in H1 2025, with net profit rising by 8% and an improvement in cash flow [4][6] - The report notes that operational efficiency improvements and reduced financial costs are driving performance growth, with a significant increase in return on equity (ROE) for pure waste operation companies [4][6] - It highlights the importance of enhancing operational efficiency and expanding both B-end and C-end markets to boost profitability and cash flow [6] Food and Beverage Industry - The beer industry report suggests that the sector is expected to benefit from a recovery in consumption, particularly in dining and retail scenarios, with a focus on high-growth companies like Yanjing Beer and Qingdao Beer [7] - The health supplement sector is noted for its potential valuation reconstruction, with a focus on quality stocks [8] Company-Specific Insights - The report on Yingke Recycling indicates strong growth in the decorative building materials business, with a focus on expanding its recycling capabilities and global presence [9] - The analysis of Magmi Te highlights a revenue increase of 16.5% year-on-year in H1 2025, despite a significant drop in net profit due to increased strategic investments [10][11] - The report on Weirgao emphasizes its leadership in the power PCB sector, projecting significant revenue growth driven by AI server demand and production capacity expansion [12] - The analysis of Dacilin shows a revenue increase of 1.33% year-on-year in H1 2025, with a notable profit growth of 21.38% [13] - The report on Dazhu CNC highlights its position as a leader in PCB equipment, benefiting from the demand for high-layer PCB devices driven by AI server needs [14]

Investment Rating - The report maintains an "Accumulate" rating for the construction materials industry [1] Core Views - The report emphasizes the need to focus more on domestic demand as the industry navigates through current challenges [1] - The construction materials sector has shown a decline of 2.79% this week, underperforming compared to the Shanghai Composite Index and the Wind All A Index [5] - The report highlights potential recovery in consumption-related building materials, with expectations for growth in the second half of the year [5] Summary by Sections 1. Industry Trends - The construction materials sector has experienced fluctuations, with a notable decline in prices for cement and glass products [5][12] - The average price of high-standard cement is reported at 342.7 yuan/ton, down 1.7 yuan from the previous week and down 40.0 yuan from the same period last year [19][20] - The average cement inventory level is at 64.1%, showing a slight increase from the previous week but a decrease compared to last year [22] 2. Bulk Construction Materials Fundamentals and High-Frequency Data 2.1 Cement - Cement demand has not shown significant improvement, with a slight increase in average shipment rates [12] - The report anticipates a rebound in cement prices due to ongoing efforts to stabilize the market [12] - Major cement companies are expected to benefit from improved industry dynamics and potential consolidation [12] 2.2 Glass - The glass market is currently facing weak demand and high inventory levels, leading to price fluctuations [14] - The report suggests that supply-side adjustments may help stabilize prices in the medium term [14] 2.3 Fiberglass - The fiberglass sector is expected to see a recovery in profitability as supply pressures ease and demand remains resilient [13] - The report highlights the potential for growth in new applications, particularly in renewable energy sectors [13] 3. Industry Dynamics Tracking - The report notes that government policies aimed at boosting domestic demand are expected to positively impact the construction materials sector [15] - The ongoing recovery in the real estate market is anticipated to further enhance demand for building materials [15] 4. Weekly Market Review - The construction materials sector has underperformed compared to broader market indices, indicating potential investment opportunities in undervalued stocks [5][20]

Investment Rating - The report maintains an "Overweight" rating for the construction decoration industry [1] Core Viewpoints - The construction sector's mid-year performance is under pressure, with revenue and profit still facing challenges, although cash flow has improved. The overall sector remains under pressure due to weak infrastructure and real estate investments, but some specialized engineering fields are performing relatively well. The construction PMI for August has dropped into contraction territory, indicating a slowdown in construction activities and a persistently low new order index. There is potential for increased fiscal policy support to boost growth [2][11] - The report highlights the importance of urban renewal and major infrastructure investment projects, suggesting that central fiscal efforts and funding support could accelerate the implementation of key projects, particularly in regions like Xinjiang, Tibet, and Sichuan-Chongqing [2][11] - The overseas contracting business has shown growth, with a 9.3% year-on-year increase in completed operating revenue and a 13.7% increase in new contracts signed in the first half of 2025. The report suggests that the Belt and Road Initiative will continue to drive infrastructure cooperation, benefiting overseas engineering demand [3][12] - There are investment opportunities in specialized manufacturing engineering, energy-saving, and carbon reduction sectors, as well as in new energy-related infrastructure fields. Companies with relevant transformation layouts are expected to benefit [3][12] Summary by Sections Industry Viewpoints - The construction sector's mid-year report indicates continued pressure on revenue and profit, with cash flow showing some improvement. The overall industry remains weak, with a decline in the construction PMI and a slowdown in new orders. There is potential for fiscal policy support to enhance growth [2][11] - The report recommends focusing on major projects in central and western regions, particularly in Xinjiang, Tibet, and Sichuan-Chongqing, where infrastructure investments are expected to recover [2][11] Industry Dynamics Tracking - The Shanghai Cooperation Organization summit proposed the establishment of a development bank to support regional infrastructure projects, which could benefit construction enterprises involved in the Belt and Road Initiative [14] - From January to July, 19,800 urban old community renovation projects were initiated, reflecting a strong progress in construction activities, which is expected to drive demand for related engineering and materials [15] Weekly Market Review - The construction decoration sector experienced a decline of 1.37% this week, while the Shanghai Composite Index and the Wind All A Index saw declines of 0.81% and 1.37%, respectively [20]

Investment Rating - The report maintains a "Buy" rating for the pharmaceutical and biotechnology industry, specifically recommending an increase in holdings for companies like Chengyitong and Sanbo Brain Science [1]. Core Insights - The report highlights the significant support from policies and technological breakthroughs in the brain-computer interface (BCI) industry, indicating a promising development trajectory. It suggests that the BCI industry is entering a golden development period, with applications in neural rehabilitation and motor function reconstruction expected to be among the first to commercialize [4][29]. - The report notes that the A-share pharmaceutical index has seen a year-to-date increase of 27.3%, although it underperformed compared to the CSI 300 index [4]. - The report emphasizes the importance of the BCI technology as a strategic high ground in global technological competition, with substantial investments from the U.S. government exceeding $4 billion from 2014 to 2023 [22][26]. Summary by Sections Industry Trends - The A-share pharmaceutical index has increased by 2.8% this week and 27.3% year-to-date, while the Hang Seng Biotechnology Index has risen by 11.3% this week and 108.1% year-to-date [4][9]. - The report identifies strong performance in chemical drugs (+6.0%), biological products (+2.7%), and medical services (+5.6%), while traditional Chinese medicine and medical devices have seen declines [4]. Policy Support and Technological Breakthroughs - The report discusses the clear policy support for the BCI industry, with the Ministry of Industry and Information Technology and other departments releasing the "Brain-Computer Interface Industry Innovation Development Action Plan (2025-2028)" [26][29]. - It highlights that China has successfully conducted its first invasive BCI clinical trial, marking a significant milestone in the industry [29]. R&D Progress and Company Dynamics - The report details various companies' advancements, including the acceptance of clinical applications for new drugs by Maiwei Biotech and Hansoh Pharmaceutical [4][29]. - It recommends focusing on companies involved in BCI technology, such as Chengyitong, Sanbo Brain Science, and Xiangyu Medical [4][29]. Market Performance - The report provides a detailed overview of stock performance, noting significant gains for companies like Puris (+35.61%) and Haichen Pharmaceutical (+33.04%) this week [4][9]. - It also highlights the strong performance of large-cap pharmaceutical stocks compared to smaller-cap stocks [4].

Employment and Inflation Outlook - The upcoming FOMC meeting in September will be influenced by the recalibration of non-farm payroll data and August inflation figures[2] - The BLS will adjust non-farm employment data based on the QCEW, which covers 97% of businesses, providing a more accurate employment picture[2] - A significant downward revision of 818,000 jobs in March 2024 was noted, marking the second-largest adjustment since 1979, which may lead to a 50bps rate cut in September 2024[2] Inflation Data Expectations - Analysts expect August CPI to show a month-on-month increase of 0.3% and a year-on-year increase of 2.9%, with core CPI also expected to rise by 0.3% month-on-month[4] - The impact of tariffs on core CPI is anticipated to manifest gradually, with a moderate effect expected on inflation[4] Market Reactions and Predictions - The recent cooling of U.S. employment data has led to a strong market expectation for a rate cut in September, with a baseline prediction of a 25bps cut and potential for 1-2 additional cuts throughout the year[3] - Gold prices surged to over $3,600 per ounce, driven by falling U.S. Treasury yields and increased risk aversion due to fiscal concerns in the Eurozone[3] Economic Indicators - The ISM Manufacturing PMI for August was reported at 48.7, slightly below expectations, while the ISM Services PMI rose to 52, indicating mixed economic signals[3] - Non-farm payrolls added only 22,000 jobs in August, significantly below the expected 75,000, with the unemployment rate at 4.324%[3] GDP Forecasts - The Atlanta Fed's GDPNow model predicts a 3.0% growth for Q3 2025, while the New York Fed's Nowcast model estimates a 2.1% growth for the same period[3]

Economic Indicators - The weekly ECI supply index is at 50.03%, down 0.02 percentage points from last week, while the demand index remains stable at 49.90%[6] - The monthly ECI supply index decreased by 0.04 percentage points from August, while the demand index increased by 0.01 percentage points[7] - The ECI investment index is at 49.90%, unchanged from last week, and the consumption index is at 49.71%, down 0.02 percentage points[6] Loan and Financing Trends - The ELI index is at -0.68%, up 0.01 percentage points from last week, indicating a potential decrease in new loans for August[11] - New loans in August are expected to be between 800 billion and 850 billion CNY, a year-on-year decrease of 100 billion to 50 billion CNY[15] - Government bond financing in August is projected at 1.33 trillion CNY, down 510 billion CNY year-on-year[15] Real Estate Market - As of September 6, the transaction area of commercial housing in 30 major cities has turned positive year-on-year, indicating a potential recovery in real estate sales[7] - Recent policy adjustments in major cities like Shenzhen, Beijing, and Shanghai aim to ease purchase restrictions, which may stabilize the real estate market[7] Industrial Production and Consumption - The operating rate for automotive tires has decreased, with full steel tires at 59.78%, down 4.06 percentage points from last week[16] - The average wholesale price of pork is 19.91 CNY/kg, down 0.05 CNY/kg from last week, while the price of key monitored vegetables is 5.08 CNY/kg, up 0.17 CNY/kg[40] Export and Shipping - The Shanghai export container freight index is at 1444.44 points, down 0.62 points from last week, indicating a slight decline in export shipping costs[34] - South Korea's export growth rate for August is 1.30%, down 4.60 percentage points from July, reflecting a slowdown in export performance[34]

Investment Rating - The report maintains an "Overweight" rating for the non-bank financial sector [1]. Core Insights - The public fund fee reform's third phase has commenced, and listed insurance companies continue to increase their allocation to OCI stocks [1]. - The non-bank financial sector has shown a decline of 5.05% recently, underperforming the CSI 300 index, which fell by 0.81% [10]. - The insurance sector's net profit has generally increased, with a notable growth in new business value (NBV) for life insurance [24][25]. - The securities sector has experienced a significant increase in trading volume, with a year-on-year rise of 223.25% in daily average stock trading value [16]. - The multi-financial sector is transitioning into a stable growth phase, with trust assets continuing to grow despite a decline in profits [35]. Summary by Sections Non-Bank Financial Sector Performance - All sub-sectors of non-bank financials underperformed the CSI 300 index in the recent five trading days, with declines of 4.07% in insurance, 5.29% in securities, and 6.32% in multi-financials [10][12]. Securities Sector - Trading volume has significantly increased, with a daily average stock trading value of CNY 29,496 billion as of September 5, 2025, marking a 223.25% increase year-on-year [16]. - The margin balance reached CNY 22,795 billion, up 63.74% year-on-year [16]. - The average price-to-book (PB) ratio for the securities industry is projected at 1.3x for 2025 [22]. Insurance Sector - Listed insurance companies reported a total net profit of CNY 1,782 billion for the first half of 2025, reflecting a 3.7% year-on-year increase [24]. - The NBV for life insurance has shown substantial growth, with increases of 20% to 72% across major companies [25]. - The insurance sector's valuation is currently between 0.62-0.93 times the expected P/EV for 2025, indicating a historical low [34]. Multi-Financial Sector - The trust industry saw its asset scale reach CNY 29.56 trillion by the end of 2024, a 23.58% increase year-on-year, despite a 45.5% drop in total profits [35]. - The futures market experienced a trading volume of 10.59 billion contracts in July 2025, with a transaction value of CNY 71.31 trillion, representing year-on-year growth of 48.89% and 36.03%, respectively [41]. Industry Ranking and Recommendations - The report ranks the sectors as follows: Insurance > Securities > Other Multi-Financials, with key recommendations including China Ping An, New China Life, China Pacific Insurance, CITIC Securities, Tonghuashun, and Jiufang Zhitu Holdings [51].

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - This week (2025.9.1 - 2025.9.5), the yield of the 10 - year active treasury bond decreased by 1.25bp to 1.7675%. The stock - bond relationship remains an important theme this year. The ERP indicator is used to measure the stock - bond cost - performance. It is expected that the ERP will fall back to the central value, and the 10Y treasury bond yield will rise moderately, with the top at 1.85% [1][10][14] - Gold has strong allocation value currently. The short - end of US bonds has higher winning probability, and the long - end has higher odds. The long - end's higher volatility and long - duration may become the key to allocation [1][15] - The US ISM manufacturing PMI has been contracting for six consecutive months, while the service PMI has expanded at the fastest pace in half a year, exceeding market expectations. The US labor market is cooling, strengthening the market's expectation of the Fed's interest rate cut this month [17][18][20] 3. Summary by Relevant Catalogs 3.1 One - Week Viewpoints - **Stock - Bond Cost - Performance Assessment**: This week, the 10 - year active treasury bond yield decreased from 1.78% to 1.7675%. The daily fluctuations were affected by factors such as regulatory statements, capital conditions, stock market trends, and policy expectations [10][11] - **Analysis of US Bond Yield Trends**: Gold has strong allocation value. The short - end of US bonds has higher winning probability, and the long - end has higher odds. The US ISM manufacturing PMI has contracted for six consecutive months, and the service PMI has expanded rapidly. The labor market is cooling, and the market expects the Fed to cut interest rates this month [15][17][20] 3.2 Domestic and Foreign Data Summaries 3.2.1 Liquidity Tracking - **Open - Market Operations**: From 2025/09/01 - 2025/09/05, the total net investment in open - market operations was - 12047 billion yuan, showing a net withdrawal of funds [29] - **Interest Rate Changes**: Various money market interest rates such as R, DR, and SHIBOR have changed to different degrees, with most showing a downward trend [31] 3.2.2 Domestic and Foreign Macroeconomic Data Tracking - **Real - Estate Market**: The total commercial housing transaction area has declined across the board [50][51] - **Commodity Prices**: Steel prices have declined across the board, while LME non - ferrous metal futures official prices have shown mixed trends [52] 3.3 Local Bond One - Week Review 3.3.1 Primary Market Issuance Overview - **Issuance Scale**: This week, 19 local bonds were issued, with a total issuance amount of 933.91 billion yuan, a repayment amount of 566.83 billion yuan, and a net financing amount of 367.09 billion yuan [80] - **Provincial Distribution**: Five provinces and cities issued local bonds, with Hebei, Henan, Heilongjiang, Hubei, and Shandong ranking in the top five in terms of issuance amount [82] 3.3.2 Secondary Market Overview - **Transaction Volume and Turnover Rate**: The current stock of local bonds is 53.08 trillion yuan, with a trading volume of 3601.18 billion yuan and a turnover rate of 0.68% [100] - **Regional and Maturity Distribution**: The top three provinces with active local bond transactions are Jiangsu, Anhui, and Sichuan, and the top three active maturities are 5Y, 30Y, and 10Y [100] 3.3.3 This Month's Local Bond Issuance Plan - No specific plan details are provided, only a related chart is mentioned [107] 3.4 Credit Bond Market One - Week Review 3.4.1 Primary Market Issuance Overview - **Total Issuance and Net Financing**: This week, 177 credit bonds were issued, with a total issuance amount of 1366.97 billion yuan, a total repayment amount of 1919.64 billion yuan, and a net financing amount of - 552.67 billion yuan, a decrease of 248.59 billion yuan compared with last week [107] - **Sub - category Issuance and Net Financing**: The net financing of urban investment bonds was - 377.95 billion yuan, and that of industrial bonds was - 174.72 billion yuan. By bond type, short - term financing bonds had a net financing of - 239.53 billion yuan, medium - term notes had a net financing of - 241.28 billion yuan, enterprise bonds had a net financing of - 89.04 billion yuan, corporate bonds had a net financing of 48.46 billion yuan, and private placement notes had a net financing of - 31.27 billion yuan [108][112][113] 3.4.2 Issuance Interest Rates - The issuance interest rates of short - term financing bonds decreased by 4.26bp, those of medium - term notes increased by 2.94bp, and those of corporate bonds decreased by 14.97bp [118] 3.4.3 Secondary Market Transaction Overview - The total trading volume of credit bonds this week was 4606.97 billion yuan, with different trading volumes for different bond types and credit ratings [119] 3.4.4 Maturity Yields - The maturity yields of national development bonds generally decreased. The yields of short - term financing bonds and medium - term notes generally decreased, while the yields of enterprise bonds and urban investment bonds showed a differentiated trend [120][121][123] 3.4.5 Credit Spreads - The credit spreads of short - term financing bonds and medium - term notes showed a differentiated trend, while the credit spreads of enterprise bonds widened across the board, and the credit spreads of urban investment bonds generally widened [127][130][133] 3.4.6 Rating Spreads - The rating spreads of short - term financing bonds and medium - term notes generally narrowed, the rating spreads of enterprise bonds showed a differentiated trend, and the rating spreads of urban investment bonds generally widened [136][139][143] 3.4.7 Trading Activity - The top five most actively traded bonds of each bond type this week are presented in a table, but specific details are not provided in the text [148]

Investment Rating - The industry investment rating is maintained as "Overweight" [1] Core Insights - The third phase of public fund fee reduction has been implemented, expected to result in annual savings of 30 billion, with a total of 50 billion saved across three phases [1] - The report outlines the regulatory changes by the China Securities Regulatory Commission (CSRC) regarding the management of sales fees for public funds, which includes lowering subscription and service fees [4] - The fee reduction is expected to significantly impact the banking channels, while third-party and brokerage firms have already been offering lower rates [4] - The overall fee reduction from the third phase is estimated at 30 billion, representing a 34% decrease based on average data from the past three years [4] - The report emphasizes the optimization of the public fund sales ecosystem to encourage long-term holding by investors [4] - The CSRC has approved the operation of a direct sales service platform for institutional investors, which is expected to enhance efficiency and reduce operational costs [4] - The cumulative fee reduction across all three phases is projected to be 50 billion, with the first two phases contributing 14 billion and 6.8 billion respectively [4] Summary by Sections Regulatory Changes - The CSRC has revised the regulations governing public fund sales fees, including reductions in subscription and service fees for various fund types [4] - The maximum rates for subscription and service fees have been lowered significantly, with the aim of promoting investor retention [4] Impact on Industry - The overall impact on brokerage firms is expected to be limited, as the majority of front-end fees are already discounted [4] - The report notes that the reduction in sales service fees will have a minor effect on brokerage revenues, as these fees constitute a small percentage of overall income [4]

Investment Rating - The report maintains an "Accumulate" rating for the coal mining industry [1] Core Viewpoints - The coal price has slightly declined due to weakening demand as temperatures drop, with the current port price for thermal coal at 679 RMB/ton, down 11 RMB/ton week-on-week [1] - Supply remains stable, with an average daily inflow of 1.8214 million tons to the four ports in the Bohai Rim, a decrease of 0.0084 million tons or 0.46% from the previous week [1] - Daily outflow from the same ports is 1.8393 million tons, down 0.0574 million tons or 3.03% week-on-week, indicating a slight reduction in demand [1] - The total inventory at the Bohai Rim ports is 22.71 million tons, down 0.37 million tons or 1.60% from the previous week, reflecting a slight decrease in overall inventory levels [1] - The report suggests that as the peak season for coal approaches its end, the combination of strong supply and weak demand may put pressure on inventory depletion in the short term, with coal prices expected to remain volatile [1] Summary by Sections 1. Weekly Market Review - The Shanghai Composite Index closed at 3,812.51 points, down 63.02 points or 1.63% week-on-week, with the coal sector index at 2,634.16 points, down 9.33 points or 0.35% [10] 2. Domestic Coal Prices - Domestic thermal coal prices have shown mixed trends, with some regions experiencing price increases while port prices have decreased [16][18] 3. International Prices - International thermal coal prices have shown a slight decline, with the Newcastle coal price index down 0.87 USD/ton to 109.30 USD/ton [18] 4. Inventory and Shipping - The average daily inflow and outflow of coal at the Bohai Rim ports have both decreased, indicating a slowdown in coal movement [27][30] - The average shipping cost on domestic routes has decreased by 3.9 RMB/ton to 29.81 RMB/ton, a drop of 11.57% [32] 5. Recommendations - The report emphasizes the importance of monitoring insurance capital inflows and suggests focusing on resource stocks, particularly recommending companies like Haohua Energy and Guanghui Energy as elastic targets in the thermal coal sector [35]