Industry Insights - The Yarlung Tsangpo River Hydropower Station has officially commenced construction with a total investment of approximately 1.2 trillion RMB, which is expected to benefit the equipment manufacturing industry significantly [2] - The estimated annual procurement of construction machinery for the project is around 24 billion RMB, accounting for 2-3% of China's annual construction machinery output value, which is estimated to be around 900 billion RMB [2] - The demand for construction machinery is anticipated to be higher than the 2-3% estimate during the early stages of the project cycle [2] Company Specifics - Companies expected to benefit from the project include SANY Heavy Industry (600031 CH), Hengli Hydraulic (601100 CH), and Zoomlion Heavy Industry (1157 HK / 000157 CH), all rated as "Buy" [4] - Power engineering contractors such as China Power Construction (601669 CH) and China Energy Engineering (3996 HK / 601868 CH) are also expected to gain from the project [4] - In the power equipment sector, manufacturers like Dongfang Electric (1072 HK / 600875 CH) and Harbin Electric (1133 HK) are projected to see significant benefits [4] - Regional cement companies, particularly Tibet Tianlu (600326 CH) and Huaxin Cement (6655 HK / 600801 CH), are likely to benefit from increased regional demand [4]

Company Analysis - Xtep (1368 HK) reported a slightly weaker performance in Q2 2025, but maintained its guidance for FY25, expecting overall sales growth and a net profit increase of over 10% [2][4] - The main brand of Xtep is projected to achieve mid-single-digit growth, while Saucony is expected to exceed 30% growth [2][4] - The management remains confident in achieving the annual guidance, supported by strong performance in the running category, which saw over 30% growth in professional products [4][5] Market Overview - The Chinese stock market showed mixed results, with healthcare, consumer staples, and utilities leading, while materials, energy, and financials lagged [3] - The report anticipates a volatile phase for the Chinese stock market in Q3, with weakening fundamentals in consumption and profits, but continued liquidity may lead to structural gains [3] - The US stock market saw gains led by financials, technology, and consumer staples, with TSMC's ADR hitting new highs due to strong AI chip demand [3] Retail Performance - Xtep's retail sales growth in Q2 2025 was slightly below expectations at low single digits, attributed to increased competition and weak e-commerce growth [5][6] - The company reported a healthy inventory turnover ratio of 4-4.5 months, indicating strong inventory management [6] - Retail sales growth improved in July, driven by summer demand and promotional activities, with e-commerce performance particularly strong [6] Strategic Initiatives - Xtep is progressing with its DTC (Direct-to-Consumer) transformation, planning to repurchase 100-200 stores in Q4 and 300-400 stores in FY26, with capital expenditure of approximately 400 million RMB [6] - The company is also upgrading its product and membership management systems to enhance DTC operational efficiency [6] Investment Rating - The report maintains a "Buy" rating for Xtep with a target price of HKD 7.20, based on a 14x FY25 forecast P/E ratio, which is attractive compared to the historical average of 15x [5][6]

Industry Insights - The Chinese fiscal and tax digitalization industry is experiencing growth driven by both government and enterprise initiatives, with the implementation of the fourth phase of the Golden Tax Project expected to connect approximately 300,000 medium and large enterprises to the tax bureau's direct connection system, leading to continuous industry expansion [3] - The market size for digitalized fiscal and tax-related transactions is projected to grow from 5.1 billion RMB in 2019 to 34.3 billion RMB by 2028, representing a CAGR of 36.5% from 2023 to 2028, significantly higher than the 9.2% CAGR from 2019 to 2023 [3] - The report highlights the potential for leading service providers to increase market share as the fourth phase of the Golden Tax Project accelerates in 2024, with Baiwang Co., Ltd. positioned as a leader in the industry [3] Company Analysis - Tongcheng Travel (780 HK) is expected to achieve revenue of 4.6 billion RMB in Q2 2025, a year-on-year increase of 9.3%, with non-GAAP net profit projected at 738 million RMB, up 12.4%, aligning with previous forecasts and Bloomberg consensus [4][5] - Anta (2020 HK) has seen retail growth in July 2025 improve compared to Q2, although the brand's performance remains below expectations, with management maintaining a high single-digit growth target for FY25 despite potential short-term impacts from business reforms [6][7] - The company anticipates a controlled cost environment in FY25, aided by reasonable advertising and marketing expenditures, as well as increased bargaining power in rental negotiations due to rising vacancy rates [6] - Shengyi Technology (600183 CH) expects a net profit increase of 50%-56% to 1.4-1.45 billion RMB in H1 2025, driven by strong sales of copper-clad laminate products and PCB sales, which are projected to grow by 85%-97% year-on-year [9] - Zhongji Xuchuang (300308 CH) forecasts a net profit of 3.6-4.4 billion RMB for H1 2025, reflecting a year-on-year growth of 53%-87%, supported by strong demand for AI infrastructure and improved product mix [10]

Inflation Trends - US inflation rebounded slightly in June, with CPI rising from 2.4% to 2.7% year-on-year[1] - Core CPI increased from 2.8% to 2.9% year-on-year, while month-on-month growth rose from 0.13% to 0.23%[6] - Food prices maintained a month-on-month growth of 0.3%, while energy prices rebounded from -1% to 0.9%[6] Market Expectations - Market expectations for interest rate cuts have slightly decreased, with the probability of no change in July rising to 96%[1] - The anticipated rate cut for the year has decreased from 48 basis points (bp) to 44 bp[1] - The Federal Reserve is expected to maintain rates in July, with potential cuts in September and either October or December[7] Employment and Demand - The job market shows signs of weakening demand, influenced by seasonal hiring patterns[1] - New and used car prices have declined, indicating reduced consumer demand[6] - Core service prices have shown a slight rebound, particularly in healthcare and leisure services, influenced by immigration policies[6] Future Projections - Inflation is expected to see a slight rebound in Q3 before gradually declining[1] - The CPI month-on-month growth is projected to peak around 0.4% in August-September[7] - The impact of tariffs on inflation is anticipated to become more pronounced, particularly in core goods[6]

2025 年 7 月 15 日 招银国际环球市场 | 市场策略 | 招财日报 每日投资策略 宏观经济及公司点评 2025 年 7 月 15 日 全球市场观察 招银国际研究部 邮件：research@cmbi.com.hk 敬请参阅尾页之免责声明 请到彭博 (搜索代码: RESP CMBR )或 http://www.cmbi.com.hk 下载更多研究报告 1 周一（7 月 14 日）中国股市上涨，机器人板块爆发，医药股强势反弹，公 用事业、能源与材料涨幅居前，地产、金融与通讯服务下跌。大宗商品普涨， 国债期货下跌，人民币走平。 中国 6 月社融存量、信贷与 M1 增速反弹，显示中国经济延续复苏，2 季度 经济数据可能好于预期，3 季度货币政策宽松的可能性下降，降准降息可能 推迟至 4 季度。6 月商品出口同比增长 5.8%好于预期，进口增长 1.1%， Labubu带动玩具出口破百亿，稀土出口创 2009年来最高，铁矿石进口创年 内新高，钢铁二季度出口创纪录。 字节跳动将开发一种轻便型混合现实设备，与 Meta 公司计划 2027 年推出 的一款产品类似。京东健康首个线下医美自营诊所在北京亦庄开业，第二家 ...

2025 年 7 月 9 日 招银国际环球市场 | 市场策略 | 招财日报 每日投资策略 全球市场观察 全球市场观察 招银国际研究部 邮件：research@cmbi.com.hk | 环球主要股市上日表现 | | | | | --- | --- | --- | --- | | | 收市价 | | 升跌（%） | | | | 单日 | 年内 | | 恒生指数 | 24,148 | 0.97 | 41.65 | | 恒生国企 | 8,709 | 1.15 | 50.97 | | 恒生科技 | 5,326 | 2.10 | 41.49 | | 上证综指 | 3,497 | 0.72 | 17.56 | | 深证综指 | 2,102 | 1.28 | 14.39 | | 深圳创业板 | 2,181 | 1.15 | 15.32 | | 美国道琼斯 | 44,241 | -1.31 | 17.38 | | 美国标普 500 | 6,226 | -0.86 | 30.52 | | 美国纳斯达克 | 20,418 | -0.89 | 36.02 | | 德国 DAX | 24,207 | 1.76 | 44.50 | | ...

Investment Rating - The report assigns a "Buy" rating to several companies in the Chinese pharmaceutical industry, indicating a potential upside of over 15% in the next 12 months [31]. Core Insights - The MSCI China Healthcare Index has increased by 41.4% since the beginning of 2025, outperforming the MSCI China Index, which rose by 25.2% [2]. - The report emphasizes the need for a rational perspective on the valuation of innovative drugs, as their prices are expected to continue rising due to high expectations for overseas transactions [2]. - The Chinese innovative drug sector is characterized by high risk, long development cycles, and high returns, with a strong global competitive edge in R&D capabilities [2]. - Recent policy measures from the National Healthcare Security Administration are expected to support the long-term payment space for innovative drugs, including encouraging commercial health insurance to expand investment in innovative drugs [5]. Summary by Sections Company Ratings and Valuations - Companies such as Sanofi (1530 HK), Junshi Biosciences (2367 HK), and others are rated as "Buy" with significant upside potential, with target prices indicating potential increases of 15% to 54% [3]. - For instance, Junshi Biosciences has a market cap of $7,720 million and a target price of $79.96, suggesting a 37% upside [3]. Market Trends and Policy Impact - The report highlights that the innovative drug sector will benefit from new policies that support high-quality development, which will open up payment avenues for innovative drugs [5]. - The commercial health insurance market is projected to grow significantly, with expected premium income reaching 977.3 billion yuan in 2024, a year-on-year increase of 8.2% [5]. Investment Opportunities - The report identifies specific companies with strong growth potential, including Junshi Biosciences, Guo Shengtang, and Angelalign, which are expected to benefit from robust product offerings and market expansion [5]. - The overseas business of Angelalign is noted for its improving profitability, with expectations for continued growth driven by a large international market [5].

Market Overview - Global markets experienced a mixed performance, with the Hang Seng Index closing at 23,888, down 0.76% for the day but up 40.13% year-to-date [1] - The S&P 500 and Nasdaq also saw declines of 0.79% and 0.92% respectively, while the DAX in Germany rose by 0.58% [1] - The report highlights a rise in risk aversion due to escalating trade tensions, particularly with new tariffs imposed by the U.S. on several countries [3] Industry Insights - The Chinese pharmaceutical sector has shown strong performance, with the MSCI China Healthcare Index up 41.4% year-to-date, outperforming the MSCI China Index by 16.2% [4] - The report emphasizes the need for a rational perspective on the valuation of innovative drugs, as the market anticipates higher transaction frequencies and scales for overseas deals [4] - Recent policy measures from the National Healthcare Security Administration are expected to enhance the long-term payment landscape for innovative drugs, with commercial health insurance projected to reach 977.3 billion yuan in 2024, a growth of 8.2% [5] Investment Recommendations - The report identifies several companies within the healthcare sector as attractive investment opportunities, including: - **Giant Bio**: Expected sales recovery driven by product and brand expansion [6] - **Guo Shengtang**: Rapid expansion of stores and strong cash flow [6] - **Angelalign**: Improving profitability in overseas markets [6] - Other recommended stocks include: - **Sangfor Technologies (1530 HK)**, **Giant Bio (2367 HK)**, **Guo Shengtang (2273 HK)**, **Angelalign (6699 HK)**, **BeiGene (ONC US)**, and **Innovent Biologics (1801 HK)** [6] Focus Stocks - The report lists several focus stocks with potential upside, including: - **Geely Automobile (175 HK)**: Target price of 24.00, representing a 47% upside [7] - **Xpeng Motors (XPEV US)**: Target price of 28.00, representing a 56% upside [7] - **Sany International (631 HK)**: Target price of 8.70, representing a 32% upside [7] - Other notable mentions include **Luckin Coffee (LKNCY US)**, **Polaire (603605 CH)**, and **Tencent (700 HK)**, all rated as "Buy" with significant upside potential [7]

Macro Economic Overview - The US job market remains robust, with June non-farm payrolls significantly exceeding market expectations, leading to a drop in the unemployment rate. However, the job growth is primarily supported by seasonal government education positions, while private sector employment, especially in manufacturing and key service industries, has slowed considerably [2] - The Federal Reserve is expected to maintain a wait-and-see approach, with a reduced probability of interest rate cuts in the near term. Inflation is anticipated to slightly rebound from June to August before declining again in September [2] - The report indicates that the Chinese stock market showed mixed results, with Hong Kong stocks declining while A-shares rose, driven by sectors such as banking and public utilities [4] Company Analysis - Alibaba (BABA US) announced plans to issue HKD 12 billion in zero-coupon exchangeable bonds due in 2032 to support international business development. The proceeds will be used for general corporate purposes, including investments in cloud infrastructure and international business [5] - The issuance of these bonds is expected to help Alibaba quickly raise overseas funds for international expansion and increase the liquidity of Alibaba Health's shares upon conversion [5] - The report maintains a "Buy" rating for Alibaba with a target price of USD 155.5, reflecting a potential upside of 43% from the current price of USD 108.70 [6] Focus Stocks - Geely Automobile (175 HK) is rated "Buy" with a target price of HKD 24.00, indicating a potential upside of 48% from the current price of HKD 16.26 [6] - Xpeng Motors (XPEV US) is also rated "Buy" with a target price of USD 28.00, representing a 49% upside from its current price of USD 18.85 [6] - Luckin Coffee (LKNCY US) is rated "Buy" with a target price of USD 40.61, suggesting a 6% upside from the current price of USD 38.49 [6]

Industry Insights - The technology sector is significantly impacted by the recent US-Vietnam trade agreement, with Apple’s supply chain expected to benefit the most from the elimination of a major uncertainty [2][6] - The US will impose a 20% tariff on goods exported from Vietnam, while a 40% "transshipment" tariff will apply to goods from other countries, down from a previously announced 46% [2] - Companies with high revenue exposure to the US and production capabilities in Vietnam, such as AAC Technologies, BYD Electronics, and Hon Teng Precision, are likely to respond positively in the short term [6] Company Analysis - BeiGene (ONC US) has shown promising initial efficacy with its CDK4 inhibitor BGB-43395, which demonstrates good hematological safety and a lower incidence of neutropenia compared to other approved CDK4/6 inhibitors [6][9] - The incidence of grade 3 or higher treatment-related adverse events (TRAEs) was only 19.7% in the dose optimization cohort, significantly lower than the 29-55% range seen in other CDK4/6 inhibitors [6][9] - The objective response rate (ORR) for BGB-43395 in a small cohort of HR+/HER2- advanced breast cancer patients was 11%, with a disease control rate (DCR) of 55.6%, indicating potential for improved outcomes with longer follow-up [7][9] - The company plans to initiate a Phase III trial for BGB-43395 in second-line HR+/HER2- breast cancer in Q4 2025, maintaining confidence in its development [7][9] - The blood cancer treatment pipeline is competitive, with the BTK inhibitor Zebrutinib leading in new prescriptions and Sonrotoclax showing differentiated advantages over Venetoclax [8][9] - BeiGene is advancing clinical trials for Sonrotoclax in various indications and plans to submit new drug applications in China for R/R MCL and R/R CLL by 2H25 [8][9]