Group 1 - The report highlights the commencement of the Yarlung Zangbo River downstream hydropower project, which involves the construction of five cascade power stations with a total investment of approximately 1.2 trillion yuan [2][13][14] - There are 10 key companies related to water conservancy and tunnel construction, with a total market capitalization of 34.762 billion yuan as of July 25, 2025 [2][12][16] - Key companies include Weixin Tunnel Equipment, Jikang Technology, and Hengli Drill Tools, which are involved in various aspects of construction and technology services [2][19][22] Group 2 - The five major industries, including high-end equipment, information technology, chemical new materials, consumer services, and pharmaceutical biology, all experienced positive average weekly returns, with high-end equipment leading at +5.48% [3][25] - The average price-to-earnings (P/E) ratios for these industries have increased, with high-end equipment reaching a median of 50.7X and information technology at 92.7X [3][27][29] Group 3 - In the technology sector, 107 out of 150 companies saw an increase in stock prices, with a median increase of +1.47%, and notable performers included Hengli Drill Tools (+184.05%) and Jikang Technology (+51.12%) [4][40][42] - The overall market capitalization of the technology sector rose from 468.617 billion yuan to 485.780 billion yuan, with the median market capitalization increasing from 2.370 billion yuan to 2.452 billion yuan [4][43][48] Group 4 - Companies such as Minshida and Parallel Technology reported significant growth in their semi-annual reports, with Minshida achieving a total revenue of 237 million yuan (+27.91%) and a net profit of 63 million yuan (+42.28%) [5][62] - Parallel Technology reported a total revenue of 458 million yuan (+69.27%) and a net profit of 5 million yuan (+20.05%) for the first half of 2025 [5][62]

Investment Rating - The investment rating for the construction materials industry is "Positive" (maintained) [1] Core Views - The construction materials index increased by 8.20% in the week from July 21 to July 25, 2025, outperforming the CSI 300 index by 6.51 percentage points [4][13] - The construction materials sector has shown strong performance over the past three months, with an increase of 16.12%, and over the past year, it has risen by 28.09%, both outperforming the CSI 300 index [4][13] - The report highlights significant investment opportunities in the construction materials sector, particularly due to the commencement of major projects like the Yarlung Tsangpo River downstream hydropower project, which is expected to boost demand for related construction materials [3] Summary by Sections Market Overview - The construction materials index has outperformed the CSI 300 index by 6.51 percentage points this week, with a year-to-date increase of 28.09% compared to the CSI 300's 21.06% [4][13] - The average PE ratio for the construction materials sector is 29.88 times, ranking it 17th lowest among all A-share industries, while the PB ratio is 1.28 times, ranking it 7th lowest [20][23] Cement Sector - As of July 25, 2025, the average price of P.O 42.5 bulk cement is 275.19 RMB per ton, reflecting a 2.02% decrease from the previous period [25][27] - The clinker inventory ratio has increased to 69.07%, up by 1.83 percentage points [26] Glass Sector - The spot price of float glass has risen to 1255.79 RMB per ton, an increase of 3.41% [78] - The inventory of float glass has decreased by 4.05%, with a total of 53.34 million weight boxes as of July 25, 2025 [80][81] - The price of photovoltaic glass has slightly decreased to 115.63 RMB per weight box, down by 0.34% [85]

Investment Rating - The industry investment rating is "Positive" and is maintained [6]. Core Viewpoints - The report highlights that Renfu Pharmaceutical is undergoing a core restructuring, focusing on optimizing assets and enhancing innovation capabilities. The company has established itself as a leader in the anesthetics market, particularly with its Yichang Renfu subsidiary, which holds a dominant position in the fentanyl series [3][11]. - The report emphasizes the continuous growth of Renfu's product lines, with a significant number of products achieving over 100 million yuan in sales. The company is also expanding its research and development efforts, particularly in oral formulations and pain management applications [17][21]. - The report notes that the pharmaceutical and biotechnology sector has seen a 1.9% increase this week, outperforming the CSI 300 index by 0.21 percentage points, with the medical R&D outsourcing sector showing the largest gains [4][38]. Summary by Sections 1. Renfu Pharmaceutical: Core Restructuring and Innovation Pipeline - Renfu Pharmaceutical is advancing its core restructuring strategy, focusing on optimizing its asset portfolio and enhancing innovation. The company has established a strong foundation in the anesthetics market through its Yichang Renfu subsidiary, which leads the fentanyl series with approximately 90% market share [3][11]. - The company has a robust pipeline of innovative drugs, including pUDK-HGF, which has completed Phase III clinical trials for severe lower limb ischemia, and several differentiated innovative pipelines targeting pain, solid tumors, and inflammatory bowel disease [3][22]. 2. Market Performance - The pharmaceutical and biotechnology sector has increased by 1.9% this week, ranking 19th among 31 sub-industries. The medical R&D outsourcing sector experienced the highest growth at 8.29% [4][38]. - The report indicates that Renfu Pharmaceutical's commercial capabilities are reflected in its sales performance, with 16 products exceeding 100 million yuan in sales in 2024, showcasing the company's strong market presence [17][18]. 3. Investment Recommendations - Recommended stocks in the pharmaceutical and biotechnology sector include Heng Rui Pharmaceutical, East China Pharmaceutical, Sanofi Pharmaceutical, Renfu Pharmaceutical, and others. The report also highlights key players in the CXO and research service sectors [5].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The agricultural sector's public fund heavy holdings increased in Q2 2025, driven by US-China tariff disruptions, fundamental improvements, and policy catalysts [4][12] - The total market capitalization of the agricultural sector reached 1,320.8 billion, with a quarter-on-quarter increase of 6.80%, accounting for 1.74% of the A-share market [12][16] - The investment logic for the pig farming sector is improving, with expectations of a price increase in the second half of 2025 [20] Summary by Sections Public Fund Holdings - In Q2 2025, the public fund heavy holdings in the agricultural sector accounted for 0.47% of the total public stock investment, with a quarter-on-quarter increase of 0.07 percentage points [12][14] - The feed and breeding sub-sectors saw the most significant increase in public fund holdings, while other sub-sectors remained relatively stable [15] Individual Stocks - Leading companies in the feed and breeding sectors, such as Haida Group and Muyuan Foods, saw significant increases in their public fund holdings, with Haida Group's holdings rising by 51% to 12.44 billion [17][19] - The top public fund holdings in the agricultural sector for Q2 2025 were Haida Group, Muyuan Foods, and Wens Foodstuffs, with respective holdings of 12.44 billion, 6.64 billion, and 6.20 billion [19] Investment Recommendations - The report recommends investing in Muyuan Foods, Wens Foodstuffs, and other companies in the pig farming sector due to improving investment logic [20] - The feed sector is expected to benefit from strong overseas demand, with recommendations for Haida Group and New Hope [20] - The pet sector is highlighted for its growth potential, with recommendations for Guibao Pet and Zhongchong Co. [20]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - Continuous focus on AI applications and stablecoin investment opportunities is emphasized [5][12] - The 2025 World Artificial Intelligence Conference (WAIC) has commenced, showcasing global AI innovations with over 800 participating companies and more than 3000 cutting-edge exhibits [5][12] - OpenAI is expected to release the GPT-5 series model in early August, which is anticipated to significantly enhance AI application development [6][13][32] - Hong Kong's stablecoin regulations will take effect on August 1, 2025, with initial licenses being limited and focused on practical business proposals [7][14] Market Review - During the week of July 21-25, 2025, the CSI 300 index rose by 1.69%, while the computer index increased by 1.71% [4][16] Investment Recommendations - Recommended companies in the AI application sector include Kingsoft Office, Dingjie Zhizhi, and others, with beneficiaries such as Hanbang Gaoke and Huitian Ruisheng [8][15] - AI computing sector recommendations include Haiguang Information and others, with beneficiaries like Cambricon and Jingjia Micro [8][15] - In the stablecoin sector, recommended companies include Hengsheng Electronics and Boyan Technology, with beneficiaries such as New Cap and New Morning Technology [8][15] - RWA sector recommendations include Langxin Group and Zhuoyi Information, with beneficiaries like Anheng Information [8][15] Company Dynamics - Rongzhi Rixin expects a half-year revenue of 250 million to 260 million yuan, a year-on-year increase of 30.06 million to 40.06 million yuan, with a net profit increase of 133.42 million to 143.42 million yuan [17] - Gaolun Electronics has signed a strategic cooperation agreement with Shanghai Guotou and Shanghai Xinhui [19] - Huitian Ruisheng anticipates a half-year revenue of 148.86 million to 164.53 million yuan, a year-on-year increase of approximately 61.06% to 78.01% [18]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - Google's capital expenditure has been raised, with cloud customer orders continuing to grow, and token consumption has doubled compared to May [13] - Alibaba's Qwen3 model has been updated, showing continuous performance breakthroughs, and domestic computing power is accelerating development [16] - The report emphasizes optimism towards the global AI computing power industry chain, satellite internet, and 6G among seven major industry directions [19] Summary by Sections 1. Investment Insights - Google's Q2 2025 revenue reached $96.4 billion, a year-on-year increase of 13.8%, with cloud revenue at $13.6 billion, growing 31.7% year-on-year [13] - The operating profit margin for Google Cloud improved to 20.7%, up 9.4 percentage points year-on-year, with backlog orders reaching $106 billion, a 38% increase [13][15] - Alibaba's new Qwen3 model has 235 billion parameters and shows superior performance in various benchmarks, indicating significant advancements in AI capabilities [16][18] 2. Industry Trends - The report highlights the ongoing construction of AIDC data centers, with recommended stocks including Yingwei Technology and New Idea Network Group [20] - In IT equipment, recommended stocks include Unisplendour and ZTE, while beneficiaries include Cambricon and Inspur [21] - For network equipment, recommended stocks include Unisplendour and ZTE, with beneficiaries like Ruijie Networks and Minghan Technology [22] 3. Cloud Computing and AI Applications - Beneficiaries in cloud computing platforms include China Mobile, China Telecom, and Alibaba [25] - In AI applications, beneficiaries include Guohua Tong and Meige Intelligent [26] - The report suggests that the AI computing power industry chain is a core focus area, with significant investment potential in AI applications and satellite internet [19] 4. Communication Data Tracking - As of May 2025, the total number of 5G base stations in China reached 4.486 million, with a net increase of 235,000 stations compared to the end of 2024 [29] - The number of 5G mobile phone users reached 1.098 billion, a year-on-year increase of 21.3% [29] - The report notes that 5G mobile phone shipments in May 2025 were 21.19 million units, accounting for 89.3% of total shipments, although this represents a year-on-year decrease of 17% [29]

Group 1 - The report maintains an optimistic long-term outlook for the index, suggesting a "slowly rising oscillating market" pattern, with short-term risks of adjustment as the index approaches key levels [2][11][19] - There are two main doubts regarding the market breakthrough: "the fundamentals have not yet bottomed" and "the fiscal support for anti-involution is weak" [12][30] - The central Huijin is identified as a core driving force behind the current market breakthrough, providing stability and support through sustained long-term capital inflows [13][19] Group 2 - The trading heat is currently high, with a significant number of industries showing increased trading activity, particularly in anti-involution sectors [20][21] - The report highlights that the trading volume in several anti-involution industries has surpassed warning thresholds, indicating heightened market activity [23][28] - The report notes that while the overall trading heat is elevated, it does not necessarily indicate the end of the market rally, as seen in previous years [21][30] Group 3 - The anti-involution market phase is characterized by skepticism regarding the strength of fiscal support, despite recent policy changes that may extend the definition of anti-involution [30][31] - Future prospects for the anti-involution market depend on the strength of demand-side policies; insufficient support may lead to a temporary rebound rather than a sustained reversal [34][35] - The report outlines three advantages driving the anti-involution trend: high-level policy attention, clean chip distribution in industries, and increased market risk appetite [31][32] Group 4 - The report recommends a diversified investment strategy focusing on technology, military, finance, and stable dividend stocks, alongside gold [35][36] - Specific sectors highlighted for investment include AI, robotics, semiconductors, and consumer goods, with an emphasis on areas showing marginal improvement in profit growth [36][37] - The report suggests that the current market environment requires a "bull market mindset" while maintaining a cautious approach to avoid blind chasing of highs [35][36]

Quantitative Models and Construction Methods Model Name: DBD-GRU Model - **Model Construction Idea**: Combining factor slicing theory with deep learning to enhance information extraction and prediction capabilities[4][25] - **Model Construction Process**: - Assume input data x contains features A and B, where feature A is the slicing indicator[4] - Use the median of feature A in the time series as the threshold to construct two masks: mask_Ahigh and mask_Alow[4] - Input the masked data into two branch networks: GRU_high and GRU_low[4] - Take the difference between the outputs of the last time step of the two networks as the input to the output layer[4] - Formula: $ \text{DBD-GRU} = \text{GRU}_\text{high} - \text{GRU}_\text{low} $[4] - **Model Evaluation**: The DBD-GRU model provides significant information increment compared to the original slicing theory factors and baseline GRU model factors[5][55] - **Model Testing Results**: - Ideal Amplitude-DBD RankIC: -10.33%[5] - Ideal Reversal-DBD RankIC: -10.31%[5] - Active Buy-Sell-DBD RankIC: -9.81%[5] Quantitative Factors and Construction Methods Factor Name: Ideal Reversal Factor - **Factor Construction Idea**: Improve traditional reversal factors by slicing the time series data based on transaction amount[14][15] - **Factor Construction Process**: - Retrieve past 20 days of data for selected stocks[17] - Calculate the average transaction amount per trade for each day[17] - Sum the price changes for the 10 days with the highest transaction amounts, denoted as M_high[18] - Sum the price changes for the 10 days with the lowest transaction amounts, denoted as M_low[18] - Ideal Reversal Factor M = M_high - M_low[18] - **Factor Evaluation**: The slicing process effectively distinguishes between strong and weak reversal periods, enhancing the factor's stability and predictive power[24] - **Factor Testing Results**: - RankIC: -6.06%[40] - RankICIR: -2.98[40] - Annualized long-short return: 24.26%[40] - Annualized long-short volatility: 9.38%[40] - Long-short return volatility ratio: 2.59[40] - Maximum long-short drawdown: 7.80%[40] - Monthly win rate: 78.57%[40] Factor Name: Ideal Amplitude Factor - **Factor Construction Idea**: Measure the difference in amplitude information between high and low price states of stocks[78] - **Factor Construction Process**: - Retrieve past 20 days of data for selected stocks[80] - Calculate the daily amplitude (highest price/lowest price - 1)[80] - Calculate the average amplitude for the 25% of days with the highest closing prices, denoted as Amplitude_high[80] - Calculate the average amplitude for the 25% of days with the lowest closing prices, denoted as Amplitude_low[80] - Ideal Amplitude Factor = Amplitude_high - Amplitude_low[80] - **Factor Evaluation**: The factor effectively captures the difference in amplitude information between high and low price states, providing a stable and predictive measure[24] - **Factor Testing Results**: - RankIC: -7.00%[40] - RankICIR: -3.47[40] - Annualized long-short return: 21.02%[40] - Annualized long-short volatility: 10.53%[40] - Long-short return volatility ratio: 2.00[40] - Maximum long-short drawdown: 17.67%[40] - Monthly win rate: 76.98%[40] Factor Name: Active Buy-Sell Factor - **Factor Construction Idea**: Measure retail investors' trading behavior in a declining market environment[79] - **Factor Construction Process**: - Retrieve past 20 days of data for selected stocks[79] - Calculate the daily stock price change and small order inflow intensity[79] - Formula for small order inflow intensity: $ \frac{\text{Active Buy Amount (small orders)} - \text{Active Sell Amount (small orders)}}{\text{Active Buy Amount (small orders)} + \text{Active Sell Amount (small orders)}} $[79] - Calculate the average small order inflow intensity for the 25% of days with the lowest closing prices to obtain the Active Buy-Sell Factor[79] - **Factor Evaluation**: The factor effectively captures retail investors' trading behavior in a declining market, providing a stable and predictive measure[24] - **Factor Testing Results**: - RankIC: -3.39%[40] - RankICIR: -1.27[40] - Annualized long-short return: 10.20%[40] - Annualized long-short volatility: 12.57%[40] - Long-short return volatility ratio: 0.81[40] - Maximum long-short drawdown: 25.26%[40] - Monthly win rate: 70.63%[40] Factor Backtesting Results DBD-GRU Model Factors - **Ideal Amplitude-DBD**: - RankIC: -10.33%[47] - RankICIR: -3.68[47] - Annualized long-short return: 34.31%[52] - Annualized long-short volatility: 15.17%[52] - Long-short return volatility ratio: 2.26[52] - Maximum long-short drawdown: 17.98%[52] - Monthly win rate: 76.98%[52] - **Ideal Reversal-DBD**: - RankIC: -10.31%[47] - RankICIR: -3.57[47] - Annualized long-short return: 37.62%[52] - Annualized long-short volatility: 12.55%[52] - Long-short return volatility ratio: 3.00[52] - Maximum long-short drawdown: 8.96%[52] - Monthly win rate: 80.95%[52] - **Active Buy-Sell-DBD**: - RankIC: -9.81%[47] - RankICIR: -3.63[47] - Annualized long-short return: 33.33%[52] - Annualized long-short volatility: 13.32%[52] - Long-short return volatility ratio: 2.50[52] - Maximum long-short drawdown: 13.82%[52] - Monthly win rate: 75.40%[52] DBD-Combine Factor - **Performance in Major Broad-Based Indices**: - **CSI 300**: - RankIC: -5.76%[63] - RankICIR: -1.87[61] - Annualized long-short return: 14.9%[63] - Annualized excess return: 7.64%[67] - Excess IR: 1.84[61] - Maximum excess drawdown: 3.37%[61] - **CSI 500**: - RankIC: -7.40%[68] - RankICIR: -2.58[65] - Annualized long-short return: 17.5%[69] - Annualized excess return: 7.23%[70] - Excess IR: 1.37[65] - Maximum excess drawdown: 6.43%[65] - **CSI 1000**: - RankIC: -9.84%[75] - RankICIR: -3.48[71] - Annualized long-short return: 30.8%[72] - Annualized excess return: 11.8%[76] - Excess IR: 2.21[71] - Maximum excess drawdown: 3.94%[71]

Revenue Performance - In June, the national general public budget revenue was CNY 18,943 billion, a year-on-year decline of 0.3%[2] - Tax revenue showed marginal improvement, growing by 1% year-on-year, while non-tax revenue decreased by 3.7%[2] - Corporate income tax and consumption tax saw marginal increases, with corporate income tax benefiting from a low base effect[2] Expenditure Trends - Public fiscal expenditure in June was CNY 28,318 billion, growing by only 0.4% year-on-year, down from 2.6% in the previous month[3] - Cumulative expenditure growth for the first half of the year was 3.4%, below the annual target of 4%[3] - Expenditure on science and technology increased by 18%, while infrastructure spending continued to decline, with transportation spending down by 13%[3] Government Fund Dynamics - Government fund revenue in June was CNY 3,959 billion, a year-on-year increase of 20.8%, marking a significant recovery[4] - Land sales revenue rose by 22% year-on-year, contributing to the improved government fund revenue[4] - Government fund expenditure surged by 79% year-on-year in June, driven by accelerated issuance of special bonds[5] Fiscal Deficit Insights - The broad fiscal deficit has widened, but the gap between actual revenue and budgeted revenue has narrowed effectively[6] - The potential fiscal gap for the year is estimated to be no more than CNY 3,000 billion if current revenue growth is maintained[6] - There is a risk of further widening fiscal gaps if revenue growth does not sustain the levels seen in the first half of the year[7]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report highlights a moderate recovery in the beauty and cosmetics sector, with a notable performance in hair care and color cosmetics, indicating a stable growth trajectory [7][35] - The medical aesthetics sector is expected to gain momentum from the introduction of innovative products, particularly in the field of collagen and hair loss treatments [30][46] Summary by Sections Market Review - In June, the beauty and personal care index fell by 3.61%, ranking 31st among all primary industries, underperforming the market [14] - The medical aesthetics sector saw significant stock price increases for companies like Meili Tianyuan Medical Health (+64.4%), Yonghe Medical (+50.0%), and Sihuan Pharmaceutical (+13.3%) [20][26] - For the first half of 2025, the medical aesthetics sector recorded substantial gains, with Jinbo Biological (+124.6%), Yonghe Medical (+83.3%), and Meili Tianyuan Medical Health (+69.9%) leading the way [20][26] Medical Aesthetics - Jinbo Biological launched the world's first recombinant type III humanized collagen gel, HiveCOL, which is expected to revolutionize tissue regeneration [30] - Sihuan Pharmaceutical introduced new products targeting skin quality improvement and contour shaping, while Kedi's external finasteride spray received approval, marking a significant advancement in hair loss treatment [31][32] Cosmetics - The retail sales of cosmetics in the first half of 2025 reached 229.1 billion yuan, reflecting a year-on-year growth of 2.9% [35] - Online sales of cosmetics amounted to 267.83 billion yuan, growing by 11.1%, while offline sales decreased by 4.1% to 228.44 billion yuan [36] - The report emphasizes the strong performance of domestic brands in the online market, particularly on platforms like Douyin and Tmall [40][43] Investment Recommendations - The report recommends focusing on leading domestic beauty brands that are expected to gain market share, particularly in high-growth segments [46][47] - Key recommendations include companies like Shangmei Co., Ltd., Maogeping, and Pulaia, which are well-positioned to benefit from the ongoing trends in the beauty market [50]