Report Industry Investment Rating - Not provided Core Viewpoints - The report provides a daily update on the fixed - income market, including price changes of various bonds, new issue mandates, and macro - news. It also analyzes the proposed bond issuance of China Mengniu Dairy [1][8]. Summary by Relevant Catalogs Trading Desk Comments - Chinese IGs like BABA/JD/SINOPE 48 - 57s were 0.5 - 1.9pts higher (1 - 15bps tighter). HSBC/STANLN Float 30 - 31s in financials closed 2 - 3bps tighter. SHIKON/NSINTW/CATLIF 33 - 35s in insurance widened 1 - 5bps. S&P assigned Fubon Life A - rating with stable outlook. NIPLIF/MYLIFE 55s and FUKOKU Perp were up 0.1pt. SOCGEN 6.75/LLOYDS 6.413 Perps in AT1s were 0.3 - 0.6pt lower, while INTNED 3.875/HSBC 7.05 Perp were up 0.1 - 0.2pt. BNKEA/NANYAN 34s in HK were unchanged to 2bps wider. HYSAN 7.2 Perp was up 0.5pt, NWDEVL Perps were 0.2 - 0.7pt lower. GRNCH 28/CHIOLI 42 - 43s in Chinese properties were 0.4 - 0.6pt higher, ROADKG 28 - 30s/Perps were unchanged to 0.7pt lower. WESCHI 26/HONGQI 28 were 0.7 - 1.0pt higher. VEDLN 28 - 33s in SE Asia were up 0.2 - 0.5pt, and MONMIN 30 was up 0.8pt [1]. - In CNH space, CHMEDA announced new issue mandates for 5yr and 10yr CNH bonds. Higher - yielding CNH LGFVs like LYGYIH 7.5 27s/SDGAOC 6.9 27s were sought after, and onshore AAA - guaranteed CNH LGFVs like QINLID 5.9 28s/HSIVEH 6.5 28s continued to compress. HAOHUA 28 - 30s tightened 1 - 2bps, MEITUA 30 widened 3bps, DAESEC 27 - 29s widened 1 - 2bps, and LASUDE 26 was up 0.5pt [2][3]. - LIFUNG announced a new issue mandate for a 3.5yr USD bond, and launched a tender offer for LIFUNG 5.25 Perp up to USD50mn at USD55. Pricing of new bonds is expected on 28 Jul'25, and the tender - offer expiration date is on 31 Jul'25. LIFUNG 5.25 Perp was unchanged [3]. - In USD LGFVs, CPDEV 28 was up 0.1pt. Higher - yielding USD names like HBTUID 7.5 26s/XHCTID 7 27s/FZSZJJ 7 28s tightened around 10bps. In SOE perps, CHPWCN Perp was up 0.1pt, SPICPD Perp was down 0.1pt [4]. Last Trading Day's Top Movers | Top Performers | Price | Change | Top Underperformers | Price | Change | | --- | --- | --- | --- | --- | --- | | JD 4 1/8 01/14/50 | 79.7 | 1.9 | ROADKG 5.9 09/05/28 | 27.5 | - 0.7 | | TSIVMG 1.55 12/17/29 | 71.0 | 1.2 | NWDEVL 10.131 PERP | 35.0 | - 0.7 | | WESCHI 4.95 07/08/26 | 90.4 | 1.0 | SOCGEN 6 3/4 PERP | 98.6 | - 0.6 | | MONMIN 8.44 04/03/30 | 96.7 | 0.8 | ROADKG 6.7 03/30/28 | 28.3 | - 0.6 | | HONGQI 7.05 01/10/28 | 102.8 | 0.7 | ROADKG 6 03/04/29 | 27.5 | - 0.5 | [5] Macro News Recap - On Tuesday, S&P was up 0.06%, Dow was up 0.40%, and Nasdaq was down 0.39%. Trump reached a deal with Japan to set the tariff rate at 15%. US Treasury Secretary will meet China next week to discuss an extension of the 12 Aug'25 tariff deadline on Chinese imports. UST yield was lower, with 2/5/10/30 yield at 3.83%/3.88%/4.35%/4.90% [7]. Desk Analyst Comments - China Mengniu Dairy proposes to issue 5yr and 10yr CNH senior bonds (S&P: BBB+). Considering peers' bonds and adjusting for new - issue premium and credit - rating differential, the FV of new CNH CHMEDA 30 is estimated to be 2.25% vs. IPT of 2.55%, and the FV of new CNH CHMEDA 35 is estimated to be 2.55% vs. IPT of 2.85%. Proceeds will be used for debt refinancing [8]. Mengniu Analysis - Mengniu is a leading Chinese dairy company, ranked in the top 10 globally. It has end - to - end capabilities across the value chain and a traceable digital platform. In FY24, it generated RMB88.7bn revenue, with liquid milk accounting for 82.4%. Gross profit margin rose to 39.6% in FY24, and operating margin improved to 8.2% [11]. - As of Dec'24, Mengniu had a cash balance of RMB32.9bn, total debt of RMB34.6bn (mainly bank loans), and cRMB86bn available credit lines with RMB66.4bn undrawn. Total debt/EBITDA and net debt/EBITDA were 8.0x and 0.4x, and interest - coverage ratio was 3.0x. It has some outstanding bonds, and its liquidity profile is considered manageable [12]. Offshore Asia New Issues - No new offshore Asia issues were priced today [13]. - Pipeline issues include Guotai Junan International Holdings (USD, 3yr, SOFR + 115, -/BBB+/-) and Jiaozuo State - owned Capital Operation (Holding) Group (USD, 3yr, 6.5%, unrated) [14]. News and Market Color - There were 139 credit bonds issued yesterday in onshore primary issuances, amounting to RMB205bn. Month - to - date, 1,473 credit bonds were issued, raising RMB1,582bn, a 19.7% yoy increase. China property loans reached a two - year high. Del Monte seeks approval to sell business by end - September with a USD575mn stalking - horse bid. Foshan R&F Properties auctions 387 units. JD and Meituan invest in humanoid robot startups. Guangzhou Kaisa Center will be auctioned. Fitch assigned BB rating to Li & Fung with stable outlook. Road King requests bond - holders to disclose identities and holdings by 1 Aug'25 4pm CET [16].

Industry Insights - The Chinese equipment manufacturing industry is expected to benefit significantly from the rural road upgrade and renovation, which could create a market worth trillions of yuan [2][4]. - The newly implemented Rural Road Regulations emphasize improving road network quality and promoting integrated urban-rural transportation development [2]. Market Potential - As of the end of 2024, China's rural road total mileage is projected to be 4.64 million kilometers, accounting for approximately 85% of the national road total [4]. - It is estimated that 9% of rural roads (around 410,000 kilometers) may require upgrades over the next decade, with upgrade costs ranging from 30 million to 50 million yuan per kilometer, leading to potential annual expenditures of 1.2 trillion to 2 trillion yuan [4]. Beneficiaries - Companies such as SANY Heavy Industry, Zoomlion Heavy Industry, Hengli Hydraulic, Weichai Power, and China National Heavy Duty Truck are expected to benefit from the rural road upgrades, acting as catalysts for the engineering machinery and heavy truck sectors [5].

Report Industry Investment Rating - Maintain a buy recommendation on CPDEVs [3][9] Core View - The report provides a daily update on the fixed - income market, including price changes of various bonds, macro - news, new issuance information, and company - specific news [1][6][16] Trading Desk Comments - Yesterday, long - end Chinese IGs like TENCNT/BABA 50 - 57s were 0.5 - 0.7pt higher (unchanged to 5bps tighter), while JD 50 was 0.8pt lower (12bps wider) [1] - In insurance, SHIKON 35 tightened another 5bps (0.6pt higher) after tightening 20bps last week. CATLIF/NSINTW 34s were unchanged to 2bps tighter [1] - NIPILF 51/MYLIFE 55 were up 0.1pt, ASAMLI/SUMILF Perps were down 0.1 - 0.2pt. In AT1s, BACR 9.675/HSBC 7.05/UBS 6.85 Perps were up 0.1 - 0.3pt [1] - In HK, HYSAN 4.85 Perp was up 0.6pt. NWDEVL 28 - 31s/Perps were 0.7pt lower to 0.3pt higher. MTRC Perps were 0.1 - 0.2pt higher [1] - In Chinese properties, ROADKG 28 - 30s were 0.1 - 0.4pt lower, ROADKG Perps closed unchanged. LNGFOR 28/DALWAN 26 were down 0.3 - 0.5pt. Outside properties, WESCHI 26 was up 0.9pt [1] - In SE Asia, MEDCIJ 30 was up 0.6pt. Elsewhere, MONMIN 30 was up 1.0pt [1] - In CNH space, the new SWIPRO 35 was 0.1pt higher with yield tightening towards 3%. In LGFVs, CPDEV 26 was down 0.2pt, CPDEV 29 was up 0.2pt [2] - There were two - way interests on USD names like CHDOHU 7.6 28s/KNMIDI 8.5 26s and CNH names like ZCHTCD 6.7 28s/QHURGR 7.8 26s. In SOE perps, AVIILC Perp was up 0.2pt, CHPWCN Perp was down 0.2pt [2] Morning Updates (22 Jul 2025) - SHIKON 35 widened 10bps and NSINTW 34 widened 5bps. NACF/SHINFN 29 - 30s widened 1 - 2bps. HYSAN 4.85/FAEACO 12.814 Perps were down 0.3 - 0.4pt. WESCHI 26 was up another 0.5pt [3] - USD90.4mn of CPDEV 4.65 01/19/26 was validly tendered at expiration, meeting adjourned to 5 Aug'25. CPDEV 26 was 0.1pt higher this morning [3] - VEDLN: Hindustan Zinc 1QFY25 results beat estimates on record output and silver gains, VEDLNs were unchanged this morning [3] Top Performers and Underperformers | Top Performers | Price | Change | Top Underperformers | Price | Change | | --- | --- | --- | --- | --- | --- | | FWDGHD 6.675 PERP | 99.5 | 1.2 | GRNLGR 5 7/8 07/03/30 | 22.7 | - 4.4 | | RILIN 3 5/8 01/12/52 | 68.9 | 1.0 | JD 4 1/8 01/14/50 | 77.8 | - 0.8 | | MONMIN 8.44 04/03/30 | 95.9 | 1.0 | NWDEVL 4 1/2 05/19/30 | 48.6 | - 0.7 | | WESCHI 4.95 07/08/26 | 89.4 | 0.9 | LNGFOR 4 1/2 01/16/28 | 89.9 | - 0.5 | | CCAMCL 5 02/08/48 | 87.0 | 0.8 | NWDEVL 3 3/4 01/14/31 | 47.3 | - 0.5 | [4] Macro News Recap - On Monday, S&P (+0.14%), Dow (-0.04%) and Nasdaq (+0.38%) were mixed. The S&P 500 Index finished at 6305.6, its highest close ever [6] - UST yield was lower on Monday, with 2/5/10/30 - year yields at 3.85%/3.91%/4.38%/4.94% [6] Desk Analyst Comments on CPDEV - Central Plaza Development adjourned the meeting on CPDEV 4.65 01/19/26 to 5 Aug'25 due to lack of quorum. As of expiration, USD90.42mn of the bond was validly tendered [7] - Voting deadline for consent solicitation extended to 31 Jul'25. If approved, CPDEV can redeem all CPDEV 26 outstanding at par with 5 - business - day notice [8] - Maintain buy on CPDEVs due to Beijing SASAC's ownership, CPDEV's strategic importance, and good access to on - shore funding, and proactive management of offshore maturity profile [9] Offshore Asia New Issues - No new offshore Asia issues were priced today [14] - There are no new offshore Asia issues in the pipeline today [15] News and Market Color - Yesterday, 89 credit bonds were issued onshore with an amount of RMB170bn. Month - to - date, 1,337 credit bonds were issued, raising RMB1,409bn, a 12.8% yoy increase [16] - Land sales in China's smaller cities fell to the lowest level in over a decade [16] - Indonesian coal exports to China fell 12% yoy in 1H25 due to falling prices [16] - Fitch changed Continuum Green Energy's outlook to stable from positive and affirmed its B+ rating [16] - CTF Services issued HKD850mn CTFSHK 2.8 01/18/27 (CB) and repurchased HKD566mn CTFSHK 4 07/22/25 (CB), with the remaining HKD74mn converted into shares [16] - China Water Affairs Group and its top shareholder offered to buy the remaining stake in wastewater firm Kangda [16] - EQT and Brookfield are in active negotiations to acquire Gland Pharma from Fosun Group [16] - S&P assigned Fubon Life an A - rating with a stable outlook [16] - Vale Indonesia plans to raise USD1 - 1.2bn in 2026 - 27 for mine and smelter projects [16] - Road King bondholders were advised to reject the revised consent solicitation offer [16] - Sands China's new incentives on table - side bets could boost market share [21] - SoftBank - OpenAI US venture scaled back near - term goals due to disputes [21] - Hindustan Zinc 1Q25 results beat estimates on record output and silver gains [21]

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].