Core Insights - The report maintains a positive outlook on small molecule drug conjugates (SMDCs) and related companies, highlighting their potential in cancer treatment due to their ability to enhance efficacy while reducing toxicity [1][5][17] - The report emphasizes the clinical advantages of SMDCs, including better tumor penetration, reduced toxicity to normal cells, and easier control over synthesis and costs compared to antibody-drug conjugates (ADCs) [5][11][12] - The report identifies domestic biopharmaceutical companies, particularly Affinivax, as leaders in the SMDC space, showcasing significant advancements in innovative cancer drug development [5][12][17] Industry Overview - The pharmaceutical and biotechnology sector has shown a relative price-to-earnings (P/E) ratio of 51.14 as of July 25, 2025, which is significantly higher than its historical low of 24.38, indicating a premium valuation compared to the broader market [19] - The report notes that the healthcare sector's valuation is 279% higher than the Shanghai Composite Index, reflecting strong investor interest and confidence in the industry [19] - Recent market performance indicates a 1.90% increase in the pharmaceutical and biotechnology sector from July 21 to July 25, 2025, ranking it 16th among 27 sub-industries [26][29] Company Focus - The report suggests monitoring companies involved in the SMDC space, including Affinivax, and those collaborating with them, such as Innovent Biologics and others, which are expected to benefit from the growing interest in innovative cancer therapies [5][17][18] - Specific companies highlighted for their innovative drug development capabilities include Innovent Biologics, Shunyi Pharmaceutical, and others, which are positioned to capitalize on the advancements in SMDC technology [5][18]

Group 1: Investment Rating of the Report - There is no information about the industry investment rating in the report. Group 2: Core Views of the Report - In Q2, the performance of fixed - income + funds showed significant differentiation. Convertible bond funds led with an average return of 2.70%, outperforming first - tier bond funds (1.04%), second - tier bond funds (1.16%), and partial - debt hybrid funds (1.03%). The convertible bond allocation of fixed - income + funds presented three characteristics: mid - cap expansion, credit downgrade, and increased equity nature [2][5]. - In terms of scale style, there was an active switch from large - cap to mid - cap. In Q2, the average mid - value bond holding of fixed - income + funds increased by 7.4 pct to 40.7%, and the median rose by 7.0 pct to 36.9%. The average large - value bond holding decreased by 7.6 pct to 49.5%, and the median dropped by 9.4 pct to 50.8%. The average small - value bond holding slightly increased by 0.2 pct to 9.8%, but the median remained around zero [2][5]. - The rating style concentrated on A - to AA + levels, and the funds' credit preference downgraded. In Q2, the convertible bond holding rating distribution of fixed - income + funds differed from Q1. The average holding of A - to A + convertible bonds increased by 2.2 pct to 8.2%, while the median remained at zero. The average holding of AA - to AA + convertible bonds increased by 0.1 pct to 61.0%, and the median decreased by 0.2 pct to 65.8%. The average holding of AAA - and above decreased by 2.3 pct to 30.6%, and the median dropped by 2.4 pct to 21.0% [2][7]. - The equity - debt nature style shifted to the balanced type, and the partial - debt holding declined significantly. In Q2, the equity - debt nature allocation of fixed - income + funds' convertible bond holdings changed. The average holding of balanced convertible bonds jumped by 7.1 pct to 57.8%, and the median increased by 8.5 pct to 58.3%. The average partial - debt holding decreased by 7.2 pct to 32.1%, and the median dropped by 8.4 pct to 26.9%. The average partial - equity holding slightly increased by 0.1 pct to 10.1%, but the median remained at 0% [2][8]. - In the environment of continuous prosperity in the equity market, the dumbbell strategy still has a basis for continuous superiority. One end selects dividend bonds (banks/utilities) to provide a safety cushion, and the other end focuses on technology - growth - related targets such as AI and innovative drugs. Additionally, the "anti - involution" policy drives valuation repair, and there are profit expectation difference opportunities in weak - quality industries such as automobiles and steel. Finally, pay attention to targets with better - than - expected interim reports and explore structural opportunities [2][11]. Group 3: Summary by Directory 1. Convertible Bond Market Review - Q2 fixed - income + funds' convertible bond allocation showed "mid - cap expansion, credit downgrade, and increased equity nature" characteristics. The scale style switched from large - cap to mid - cap, the rating style concentrated on A - to AA +, and the equity - debt nature style shifted to the balanced type [5][7][8] - The reasons for the style change include the redemption of large - cap bank convertible bonds, the improvement of the profit expectation of mid - cap manufacturing convertible bonds, the high premium rate of AAA - and above bonds, and the adjustment of the bond market and the structural opportunities in the stock market [5][7][9] - The dumbbell strategy is still superior. Select dividend bonds and technology - growth - related targets, pay attention to industries with valuation repair, and explore opportunities from mid - term reports [11] 2. Market Weekly Trend - As of Friday's close, the Shanghai Composite Index rose 1.67% to 3593.66 points, and the CSI Convertible Bond Index rose 2.14% to 463.57 points. The top three rising industries in the stock market were coal (8.00%), steel (7.55%), and non - ferrous metals (7.10%), while the top three falling industries were banks (- 2.89%), comprehensive finance (- 1.00%), and communications (- 0.47%) [12] - This week, Libo Convertible Bond and Guanghe Convertible Bond were listed. 412 convertible bonds rose, accounting for 89%. The top five in terms of increase were Tianlu Convertible Bond (69.08%), Seli Convertible Bond (35.83%), Libo Convertible Bond (32.16%), Guanghe Convertible Bond (29.80%), and Dayu Convertible Bond (28.39%), while the bottom five were Hongfeng Convertible Bond (- 13.77%), Huicheng Convertible Bond (- 13.48%), Bohui Convertible Bond (- 7.09%), Mingdian Convertible Bond (- 6.35%), and Limin Convertible Bond (- 5.69%) [14] 3. Major Shareholders' Convertible Bond Reduction - This week, Chongqing Water and Asia - Pacific Technology announced convertible bond reductions. Many companies' major shareholders have reduced their convertible bond holdings, such as Huanxu Convertible Bond and Sanfang Convertible Bond [19][20][22] 4. Convertible Bond Issuance Progress - The first - level market approval rhythm is average. Yingliu Co., Ltd. (1.5 billion yuan) and Jinchengxin Co., Ltd. (2 billion yuan) passed the issuance review committee, and Longjian Co., Ltd. (1 billion yuan) was approved by the CSRC [22][23] 5. Private EB Project Update - There is no progress update on private EB projects this week [23]

Industry Overview - The defense and military industry index increased by 1.28% in the week from July 19 to July 26, ranking 24th out of 31 in the Shenwan primary industry [1][7] - Over the past month, the index rose by 7.26%, ranking 13th out of 31 [1][10] - In the past year, the index has increased by 39.44%, ranking 12th out of 31 [1][12] Valuation Metrics - As of July 26, the PE-TTM for the defense and military industry is 84.92, which is at the 77.27 percentile of the past ten years [1][15] - The PE-TTM for the aviation equipment sector is 76.50 (71.02 percentile), for aerospace equipment is 146.02 (95.80 percentile), for naval equipment is 53.82 (3.33 percentile), for military electronics is 103.87 (96.33 percentile), and for ground armaments is 189.72 (95.27 percentile) [1][13][15] Stock Performance - The top-performing stocks in the defense and military sector for the week include: - Boyun New Material (25.16%) - Feilihua (20.79%) - Xinyu Guoke (10.14%) - Hongdu Aviation (9.69%) - Optoelectronic Co. (9.37%) [1][18] - The worst-performing stocks include: - Tianqin Equipment (-3.40%) - AVIC Shenyang Aircraft (-3.56%) - Taihao Technology (-3.89%) - Hailanxin (-3.98%) - Guorui Technology (-7.61%) [1][18] Key Industry Data Tracking - Current price of sponge titanium is 45 RMB/kg, unchanged from a week ago but down 8.16% year-on-year [1][31] - LME nickel spot price is 15,245 USD/ton, up 2.32% week-on-week and 2.97% month-on-month, but down 1.45% year-on-year [1][31] - Domestic acrylonitrile price is 8,050 RMB/ton, unchanged from a week ago, down 1.83% month-on-month, and down 11.54% year-on-year [1][33] Industry News - The Yanxin Satellite has a 1.336 billion RMB tender for launch services, with a total of 7 launches planned for 94 satellites [1][48] - The National Space Administration issued a notice to strengthen quality supervision of commercial space projects [1][48] - Conflicts occurred between Cambodia and Thailand along the border [1][48] Investment Recommendations - The report suggests focusing on military trade, commercial aerospace, and low-altitude economy as key investment themes and targets due to escalating geopolitical conflicts [1][50]

1. Report Industry Investment Rating - No information provided in the content 2. Core Views of the Report - Anti - involution policies affect commodity prices, shock the market's inflation expectations, and cause a significant adjustment in the bond market. Credit bond yields rise with interest rates, and most credit spreads widen, with secondary and perpetual (二永) bonds showing large fluctuations and high spread increases. Fund companies with the most unstable liability ends sell significantly, while insurance companies increase their buying efforts, and bank wealth management remains relatively stable. The trading enthusiasm for medium - and long - term bonds such as urban investment bonds, industrial bonds, and 二永 bonds remains high [2]. - It is too early to worry about negative feedback, with a very low probability. Market learning has improved the ability to respond, and there has been no change in macro - expectations. Moreover, bank wealth management's increasing consideration of liquidity in its configuration can prevent negative feedback [3]. - The asset shortage pattern remains unchanged and may even intensify. Interest rates may have short - term adjustments but do not support continuous and significant adjustments. Once interest rates stabilize, credit is likely to stabilize. After the market adjustment, it will be more difficult to further compress credit spreads compared to previous lows, and credit spreads are more likely to fluctuate. Investors need to seize phased trading opportunities [4]. - Investors should focus on coupon - bearing assets, and consider both coupon and trading operations for long - term bonds. For trading strategies, medium - and long - term 二永 bonds are recommended; for allocation strategies, sinking investment in urban investment bonds is still recommended. Wait for trading opportunities for ultra - long - term bonds [5]. 3. Summary by Relevant Catalogs 3.1 Market Review: Significant Correction, Noticeable Widening of 二永 Bond Spreads 3.1.1 Market Performance - This week, the credit bond market significantly corrected, and credit spreads widened. The stock market strengthened, and the bond market significantly corrected. Credit bond yields generally rose, especially for medium - and long - term 二永 bonds, which increased by over 10bp, with the 10Y 二永 bond correcting by up to 14.5bp. Most credit spreads widened, with 二永 bonds seeing more significant increases, while spreads of some medium - and long - term notes, enterprise bonds, and urban investment bonds of certain grades slightly narrowed [10]. - From a daily perspective, urban investment bond yields generally rose, with the adjustment amplitude first increasing and then decreasing, reaching a daily correction high on Thursday. From Monday to Tuesday, long - term 二永 bonds led the yield increase, but the overall amplitude was relatively small. From Wednesday to Thursday, the yield increase continued to expand, with long - term 二永 bonds correcting by over 5bp on Thursday and short - term bonds increasing by about 4bp. The long - and short - term yields of urban investment bonds and medium - term notes also increased by 3.5bp - 5bp. On Friday, the market continued to decline, but the amplitude narrowed. Credit spreads showed a divergent trend. Affected by the different adjustment speeds of credit bonds and interest - rate bonds, the spreads of 二永 bonds, known as "interest - rate amplifiers," generally widened, while the spreads of less - liquid urban investment bonds and medium - term notes were still slightly compressed in the early stage and widened on Friday [16]. 3.1.2 Insurance Continues to Allocate, Funds Sell on a Large Scale - Insurance companies' credit bond allocation remains strong. This week, insurance companies continued to be net buyers, with a net buying scale of 12.563 billion yuan, a 38.7% increase from the previous week. The net buying volume of ultra - long - term credit bonds over 5 years was 6.75 billion yuan, with the increase intensity remaining basically the same as last week [18]. - Funds sold credit bonds significantly this week, with a selling scale of 22.578 billion yuan. The net selling volume within 5Y was 12.738 billion yuan, and the net selling volume over 5Y was 7.474 billion yuan [18]. - Bank wealth management scale slightly increased. As of July 20, the bank wealth management scale was 31.02 trillion yuan, an increase of 0.06 trillion yuan from the previous weekend. This week, the net buying scales of wealth management and other product categories for credit bonds were 15.301 billion yuan and 13.078 billion yuan respectively, with month - on - month changes of 15.80% and 39.13% [21][22]. 3.1.3 Transaction Proportion: Decrease in Low - Rating Transaction Proportion - The transaction proportion of urban investment bonds, industrial bonds, and 二永 bonds with a remaining term of over 3 years was 30%, 29%, and 72% respectively, indicating that the transaction proportion of medium - and long - term bonds remained high. For urban investment bonds, the proportion of transactions under 3 years remained basically the same as last week, with the 3 - 5Y transaction proportion decreasing by 2 percentage points and the over - 5Y proportion increasing by 2 percentage points. For industrial bonds, the proportion of transactions within 1 year decreased by 1 percentage point, the 1 - 3Y proportion decreased by 2 percentage points, and the 3 - 5Y proportion increased by 3 percentage points. For 二永 bonds, the proportion of transactions within 1 year decreased by 1 percentage point, the 1 - 3Y proportion increased by 2 percentage points, and the 3 - 5Y proportion decreased by 3 percentage points [28]. - The proportion of low - rating transactions of non - financial credit bonds decreased this week. The proportion of transactions of urban investment bonds with a rating of AA(2) and below decreased by 1 percentage point from last week, the proportion of industrial bonds with a rating of AA and below decreased by 1 percentage point month - on - month, and the proportion of 二永 bonds with a rating of AA and below decreased by 3 percentage points from last week [29]. 3.2 Market Outlook: Redemption is Controllable, Seize Trading Opportunities 3.2.1 Redemption is Controllable, Seize Trading Opportunities - Reasons for market adjustment: With the continuous implementation of anti - involution policies, commodity futures prices have risen significantly, affecting the market's inflation expectations. The Nanhua Industrial Products Index, which reflects commodity price trends, has also risen significantly. Historically, this index has a certain forward - looking predictive effect on PPI. By observing the term structure of interest - rate swaps, indicators such as IRS FR007 5 - year - 1 - year and 1 - year - FR007 have quickly turned positive, indicating a change in the market's inflation expectations [31][33]. - Regarding the concern of negative feedback: It is too early to worry about negative feedback, with a very low probability. Market adjustments in September 2024 and March 2025 were more significant than the current one, but no obvious negative feedback occurred. The key lies in the increasing consideration of liquidity in bank wealth management's configuration. Since April this year, the absolute amount and proportion of inter - bank certificate of deposit (NCD) allocation have been at historically high levels, enabling wealth management to handle market fluctuations. As long as bank wealth management remains stable, the key link of market negative feedback can be stopped [38][40]. - Analysis of tight funds: The funding situation tightened on Thursday this week, leading to a higher market adjustment amplitude. The tightening on Thursday may be due to banks' liability - side issues. From the perspective of large banks' deposit - loan spreads, the deposit - loan spreads of large banks generally decline seasonally in July. After the significant reduction of deposit interest rates in May, large banks face the pressure of term - deposit maturity transfer, resulting in relatively large liability pressure. A low deposit - loan spread means reduced stability of funding rates, which are more dependent on the central bank's liquidity injection. Any daily misalignment in the central bank's liquidity injection can significantly impact funding rates [41][42]. - Future trends: The asset shortage pattern remains unchanged and may even intensify. Interest rates may have short - term adjustments, but the current macro - environment does not support continuous and significant interest - rate adjustments. The impact of anti - involution policies on inflation expectations has been fully priced in the short term through the significant rise in commodity prices. For credit bonds, it will be more difficult to further compress credit spreads below previous lows this year. Credit spreads are more likely to fluctuate, and investors need to seize phased small - band opportunities [50][56]. 3.2.2 Science and Technology Innovation Bonds Continue to Contribute Net Financing to the Market - In July, non - financial credit bond financing performed well, with the net financing exceeding the levels of the same month in the previous two years, reaching 347.9 billion yuan. The supply of long - term credit bonds has increased. Recently, the sentiment for extending the duration of credit bonds has been positive. Although the issuance duration in July has decreased month - on - month, there is still room for extending the duration [57][59]. 3.3 What to Buy in Credit? 3.3.1 Focus on High - Grade 二永 Bonds for Trading, Weak - Quality Urban Investment Bonds for Coupon - The price - comparison of short - term 二永 bonds is positive, while that of medium - and long - term 二永 bonds is negative. Considering different investor needs, high - grade trading strategies are recommended to focus on 二永 bonds, and low - grade coupon strategies are recommended to focus on urban investment bonds. This week, the price - comparison advantage of short - term AAA second - tier capital bonds over medium - term notes remained positive, and the price - comparison of long - term AAA second - tier capital bonds with medium - term notes fluctuated around 0. The price - comparison of short - term urban investment bonds with medium - term notes is positive, and the price - comparison of long - term low - grade urban investment bonds has quickly recovered to the historical central level. Urban investment bonds still have a price - comparison advantage over medium - term notes, but the difference is not significant. Considering the bond - selection scope, urban investment bonds are still preferred [62][64]. 3.3.2 General Credit Coupon is More Advantageous - Currently, the proportion of urban investment bonds with a valuation above 2.3% is 19.8%, that of non - financial industrial bonds is 10.8%, and that of 二永 bonds is 6.8%. From the perspective of coupon - based bond selection, general credit offers a wider bond - selection space. For urban investment bonds, investors can consider both coupon and trading operations for the long - term, and can continue to participate in short - term high - coupon varieties. For industrial bonds, investors can focus on important local state - owned real - estate enterprises among real - estate developers, such as Shoukai and Jianfa Real Estate; among non - real - estate entities, focus on China Minsheng Bank, Jizhong Energy, and Bohai Bank [68][72]. 3.3.3 Statistics of Primary Issuance - Relevant data shows the weekly net financing and cumulative net financing of various credit bonds, including urban investment bonds, industrial bonds, 二永 bonds, and other financial bonds from December 30, 2024, to July 27, 2025 [77]. 3.3.4 Details of Secondary Valuation Changes - No detailed information provided in the content

Investment Rating - The report assigns an "Accumulate" rating for the company [2]. Core Viewpoints - The cheese industry is experiencing an improvement in competitive landscape, with a significant growth potential compared to overseas markets. The market size is expected to reach 300-400 billion yuan in the medium term [8]. - The company is focusing on diversifying its product offerings and breaking into new consumer segments, particularly in the C-end market, while leveraging its strong R&D capabilities [8]. - The collaboration with Mengniu is expected to enhance the B-end business growth, capitalizing on the rising demand in Western fast food and ready-to-drink markets [8]. - The company aims to achieve a revenue target of 53.7 billion yuan by 2025, with a net profit of 2.4 billion yuan, reflecting a significant growth trajectory [8]. Summary by Sections 1. Industry Overview - The cheese industry is transitioning from a high-growth phase to a more mature stage, with a market size of 93.7 billion yuan in 2024, down 13.5% year-on-year [15][17]. - The competitive landscape is improving, with the CR5 of the cheese industry expected to rise to 63.7% in 2024, indicating a consolidation of market share among leading brands [17][19]. 2. C-end Market Strategy - The company is implementing a "Cheese+" strategy, focusing on small packaging and healthy cheese snacks, while exploring new consumption scenarios such as baking and breakfast [8][35]. - The C-end business is expected to diversify beyond children's cheese sticks, with a projected revenue growth of 7.8% for ready-to-eat nutrition products in 2024 [8]. 3. B-end Market Strategy - The company is actively expanding its B-end business, achieving breakthroughs in five major channels including Western cuisine and tea drinks, supported by Mengniu's resources [8][35]. - The integration of Mengniu's cheese business is anticipated to enhance product offerings and customer resources, driving collaborative growth in the B-end market [8]. 4. Financial Projections - Revenue projections for 2025-2027 are set at 53.7 billion yuan, 60.2 billion yuan, and 68.2 billion yuan, respectively, with corresponding net profits of 2.4 billion yuan, 3.5 billion yuan, and 4.6 billion yuan [7][8]. - The company expects to achieve a PE ratio of 61, 42, and 31 times for the years 2025, 2026, and 2027, respectively, indicating a positive outlook on profitability [8].

Global Asset Prices - Nikkei 225 index rose by 4.1% this week, leading global stock markets[3] - S&P 500, Dow Jones, and Nasdaq increased by 1.1%, 0.8%, and 1% respectively[7] - 10-year U.S. Treasury yield decreased by 4 basis points[3] U.S. Economic Dynamics - Initial jobless claims fell from 221,000 to 217,000, indicating a stable labor market[4] - Core capital goods orders in June showed a negative month-on-month growth of -0.7%[4] - U.S. manufacturing PMI dropped from 52.9 to 49.5, marking the first decline below the neutral line since December[4] Central Bank Policies - Federal Reserve's rate cut probability for July is close to 0, with expectations of two cuts this year[4] - European Central Bank maintained its benchmark interest rate, indicating no urgency for further cuts[4] - Bank of Japan's deputy governor suggested potential for rate hikes due to reduced economic uncertainty from the U.S.-Japan trade agreement[4] Other Economic Developments - Eurozone services PMI rose to 51.2%, while manufacturing PMI increased to 49.8%, the highest in 36 months[4] - Ongoing military conflict between Thailand and Cambodia following border tensions[4] Upcoming Focus - Key upcoming events include U.S.-China trade talks, Q2 GDP data, and U.S. non-farm payrolls for July[4]

Group 1 - The report highlights a significant trend in the futures market driven by "anti-involution" strategies, with leading sectors such as polysilicon and coking coal showing substantial price increases due to production cuts and environmental regulations [4][11]. - The report indicates that there is still potential for over 15% price appreciation in leading stocks related to polysilicon, coking coal, glass, and coke, as the price trends in commodities remain upward [4][11]. - The report emphasizes the importance of monitoring the Producer Price Index (PPI), which is expected to bottom out and recover, suggesting that stock market performance is closely tied to PPI movements [5][12]. Group 2 - The report outlines a "dumbbell trading" strategy observed in fund holdings, where there is an increase in allocations to TMT sectors like telecommunications and media, while reducing exposure to consumer goods and manufacturing sectors [6][15]. - The report notes that the second quarter saw a consensus among both northbound and domestic funds to increase allocations in dividend-paying sectors and cyclical industries, while reducing exposure to consumer and manufacturing sectors [16]. - The report discusses the historical performance of PPI cycles, indicating that during PPI upturns, cyclical sectors such as coal, non-ferrous metals, and basic chemicals tend to perform strongly [5][13].

Group 1: Report Overview - The report analyzes the regular reports of active equity funds from multiple perspectives, including scale, quantity, position, concentration, industry and sector allocation, and individual stock allocation, aiming to provide an overview of fund trading behavior characteristics and asset allocation [6]. Group 2: Scale and Quantity Analysis - As of 2Q2025, there were 4,385 active equity funds in the market, an increase of 44 compared to the end of the previous quarter. The total scale of active equity funds was 3.17 trillion yuan, a decrease of 30.472 billion yuan or 0.95pct compared to the end of the previous quarter [8]. - In 2Q2025, 71 active equity funds were established in the market, with a combined issuance share of 3.6593 billion shares, a significant increase of 139.18pct compared to the end of the previous quarter [10]. - In terms of fund scale distribution, in 2Q2025, the proportion of active equity funds with a scale of less than 100 million yuan was as high as 80.55%. The proportion of large - scale funds continued to decline. The proportion of funds with a scale of less than 200 million yuan was 46.51%, a 0.12pct increase compared to the end of the previous quarter [14]. Group 3: Position Analysis - In 2Q2025, the equity positions of active equity funds increased slightly. The equity positions of common stock - type, partial - stock hybrid, and flexible - allocation funds were 90.20%, 87.50%, and 72.58% respectively, an increase of 0.86pct, 1.14pct, and 1.12pct compared to the end of the previous quarter [16]. - The Hong Kong stock positions of active equity funds increased significantly. The Hong Kong stock positions of common stock - type, partial - stock hybrid, and flexible - allocation funds were 12.85%, 17.09%, and 4.08% respectively, an increase of 0.84pct, 1.61pct, and 0.36pct compared to the end of the previous quarter [18]. Group 4: Concentration Analysis - In 2Q2025, the concentration of individual stocks and industries of active equity funds decreased slightly. The concentration of the top 3, top 5, and top 10 individual stocks was 20.92%, 31.25%, and 51.77% respectively, a decrease of 0.43pct, 0.87pct, and 1.17pct compared to the end of the previous quarter. The concentration of the first, top 3, and top 5 industries was 18.24%, 37.31%, and 46.53% respectively, a decrease of 0.33pct, 1.07pct, and 1.13pct compared to the end of the previous quarter [21]. Group 5: Heavy - Positioned Sector Analysis - In the A - share market, in 2Q2025, the top three sectors with heavy - positioned stocks of active equity funds were technology, manufacturing, and consumption, accounting for 27.89%, 23.84%, and 14.84% respectively. The sectors with increased positions were technology, financial real estate, and medicine, with an increase of 2.82pct, 1.83pct, and 0.38pct compared to the previous quarter [25]. - In the Hong Kong stock market, the top three sectors with heavy - positioned stocks of active equity funds were technology, consumption, and medicine, accounting for 46.82%, 14.40%, and 13.42% respectively. The sectors with increased positions were medicine and financial real estate, with an increase of 4.94pct and 2.39pct compared to the previous quarter [26]. Group 6: Heavy - Positioned Industry Analysis 6.1 Active Equity Funds - In A - share allocation, in 2Q2025, the top three industries with heavy - positioned stocks of active equity funds in terms of market value were electronics, medicine, and power equipment and new energy, accounting for 18.11%, 11.47%, and 8.85% respectively. The industries with the top three active increases in positions were communication, banking, and non - banking finance, with an increase of 2.51pct, 0.76pct, and 0.74pct respectively [30][32]. - In Hong Kong stock allocation, the top three industries with heavy - positioned stocks of active equity funds in terms of market value were media, electronics, and medicine, accounting for 25.69%, 13.48%, and 13.42% respectively. The industries with the top three active increases in positions were medicine, non - banking finance, and computer, with an increase of 3.88pct, 1.48pct, and 0.88pct respectively [36][37]. 6.2 Performance - Excellent and Hundred - Billion Funds - In A - share allocation, in 2Q2025, the top three industries with heavy - positioned stocks of performance - excellent funds in terms of market value were medicine, national defense and military industry, and communication, accounting for 64.66%, 9.03%, and 8.41% respectively. The top three industries with heavy - positioned stocks of hundred - billion funds were food and beverage, electronics, and medicine, accounting for 19.55%, 19.52%, and 19.35% respectively [40]. - In Hong Kong stock allocation, the top three industries with heavy - positioned stocks of performance - excellent funds in terms of market value were medicine, media, and commerce and retail, accounting for 91.45%, 2.40%, and 1.51% respectively. The top three industries with heavy - positioned stocks of hundred - billion funds were media, communication, and commerce and retail, accounting for 32.18%, 13.18%, and 12.03% respectively [41]. Group 7: Heavy - Positioned Individual Stock Analysis 7.1 Heavy - Positioned Individual Stock Market Value Analysis - In 2Q2025, the top three A - shares with the highest absolute market value of heavy - positioned stocks of active equity funds were CATL, Kweichow Moutai, and Midea Group, with market values of 46.6 billion yuan, 26.213 billion yuan, and 25.094 billion yuan respectively. The top three A - shares in terms of allocation market - value ratio were InnoCare Pharma - U, Weichai Heavy Machinery, and BeiGene - U, with the proportion of shares held in the floating shares being 31.99%, 24.84%, and 24.50% respectively [47]. - The top three Hong Kong stocks with the highest absolute market value of heavy - positioned stocks of active equity funds were Tencent Holdings, Xiaomi Group - W, and Alibaba - W, with market values of 55.608 billion yuan, 19.662 billion yuan, and 18.9 billion yuan respectively. The top three Hong Kong stocks in terms of allocation market - value ratio were 3SBio, Kelun Botai Biopharma - B, and Shanghai Fudan, with the proportion of shares held in the floating shares being 12.56%, 10.57%, and 8.95% respectively [49]. 7.2 Heavy - Positioned Individual Stock Active Position - Adjustment Analysis - In 2Q2025, the top three A - shares with the highest active increase in positions of active equity funds compared to the end of the previous quarter were Zhongji Innolight, Hudian Co., Ltd., and Sinnet Technology, with an increase of 12.953 billion yuan, 7.642 billion yuan, and 7.506 billion yuan respectively. The top three A - shares with the highest active decrease in positions were BYD, Kweichow Moutai, and Wuliangye Yibin, with a decrease of 11.04 billion yuan, 5.527 billion yuan, and 5.021 billion yuan respectively [51]. - The top three Hong Kong stocks with the highest active increase in positions of active equity funds compared to the end of the previous quarter were 3SBio, Innovent Biologics, and JD Health, with an increase of 4.919 billion yuan, 4.07 billion yuan, and 2.793 billion yuan respectively. The top three Hong Kong stocks with the highest active decrease in positions were Tencent Holdings, Alibaba - W, and SMIC, with a decrease of 10.71 billion yuan, 8.463 billion yuan, and 3.235 billion yuan respectively [53].

Inflation Trends - June CPI year-on-year growth rebounded slightly to 2.7%, while core CPI increased to 2.9%[1] - Energy prices showed a narrowing decline, with electricity prices rising 5.8% year-on-year, influenced by increased demand from data centers and aging infrastructure[1][15] - Gasoline CPI decline narrowed to -8.3%, a significant improvement of 3.7 percentage points from the previous month[1][15] Commodity and Service Inflation - Core commodity year-on-year growth rose to 0.7%, up 0.4 percentage points from last month, indicating that tariff costs are being gradually passed on to consumers[4][17] - Core service inflation remained stable at 3.6%, with rent growth holding steady at 3.8%[21] - The overall service inflation lacks strong upward momentum, limiting significant rebounds[21] Economic Outlook - Market expectations suggest two interest rate cuts by the Federal Reserve within the year, with the earliest cut anticipated in September[26] - The rebound in inflation is primarily driven by energy and core commodity inflation, while core service inflation remains stable[26] - Risks include potential unexpected tightening by the Federal Reserve and further economic downturns in the U.S.[30]

Group 1 - The report indicates a gradual recovery in global economic conditions, with the US economy showing weaker-than-expected performance and potential impacts from new policies [5][16][22] - The report highlights the ongoing monetary easing in China, while the US and Europe are at the beginning of their easing cycles, with expectations of rate cuts in the near future [5][44][48] - The report notes that geopolitical tensions, particularly the Israel-Palestine conflict, have influenced market sentiment, leading to fluctuations in asset prices, especially in gold and oil [7][30][64] Group 2 - The report emphasizes the performance of different asset classes, with gold and oil leading due to geopolitical risks, while US equities continue to rise despite mixed economic signals [7][11][27] - The report discusses the divergence in performance between A-shares and H-shares, with H-shares showing stronger performance driven by sectors like healthcare and cyclical stocks [11][61] - The report suggests that the current market environment favors a "barbell strategy" in A-shares, combining growth sectors (TMT) with dividend-paying stocks, as the economic recovery is still in verification phase [56][58] Group 3 - The report outlines the trends in interest rates, indicating that US Treasury yields are fluctuating around 4.4%-4.5%, while Chinese bond yields are around 1.6%-1.7% [64][67] - The report highlights the weakening demand for US Treasuries amid a declining dollar, suggesting a potential shift in investment preferences towards non-US assets [24][27] - The report indicates that the RMB is stabilizing against the dollar, alleviating some pressure on the currency due to the ongoing monetary policy adjustments [67][68] Group 4 - The report identifies the potential for recovery in the Chinese economy, with signs of improvement in consumption and investment, particularly in infrastructure [32][36] - The report notes that credit growth is primarily driven by fiscal measures, while household credit growth remains low, indicating a cautious recovery [32][34] - The report suggests that the outlook for the Chinese economy is cautiously optimistic, with expectations of continued recovery in the second half of the year [36][39] Group 5 - The report discusses the valuation comparisons between A-shares and US equities, indicating that A-shares are trading at a lower price-to-earnings ratio compared to US stocks, suggesting potential upside [54][56] - The report highlights the recovery potential in the technology sector within H-shares, which is expected to benefit from easing trade tensions and a weaker dollar [61][62] - The report emphasizes the importance of monitoring geopolitical developments and their potential impact on global markets, particularly in the context of energy prices and risk sentiment [30][64]