Report Industry Investment Rating - Not provided in the given content Report's Core View - In June, the uncertainty of US trade policy continued to ease, and Sino-US economic and trade consultations made new progress. With the increasing expectation of the Fed's interest rate cut, the US dollar index continued to decline with an enlarged decline, the RMB bilateral exchange rate gradually appreciated, and the multilateral exchange rate continued to weaken. This helps enhance the competitiveness of China's export products, but attention should be paid to the international community's attention and even speculation on China's currency issues [2]. - Against the backdrop of the easing of Sino-US economic and trade conflicts in June, the net inflow of cross - border funds slowed down, mainly due to the small net outflow of securities investment and the expansion of the net outflow scale of income and current transfers. However, thanks to the strong resilience of China's foreign trade exports, the surplus of goods trade receipts and payments increased month - on - month, reaching a record high for the same period, and continued to play a stabilizing role in cross - border capital flows [2]. - In June, bank settlement and sales of foreign exchange showed a surplus for the fourth consecutive month, and the surplus scale expanded month by month. In May and June, the market's on - the - spot settlement willingness and purchase motivation both decreased, and the purchase motivation was relatively stable, indicating that the market's expectation of the RMB exchange rate continued to diverge, and the demand for foreign exchange purchase at low prices was relatively strong [2]. Summary According to Related Catalogs 1. Exchange Rate Situation - In June, the US trade policy uncertainty continued to ease, and Sino - US economic and trade consultations achieved new progress. After the leaders' phone call on June 5, the first meeting of the Sino - US economic and trade consultation mechanism was held in London from June 9 - 10, reaching a principled framework, and on June 27, the details of the framework were further confirmed [3]. - In June, the US dollar index continued to decline since February, dropping to 96.8 at the end of the month, a new low since March 2022. The monthly decline expanded from 0.2% last month to 2.7%, with a cumulative decline of 2.0% in late June. The expectation of the Fed's interest rate cut increased. The market expected the probability of three interest rate cuts by the Fed within the year to exceed 50% [4]. - In June, the RMB exchange rate continued to appreciate slowly. The appreciation of the central parity rate expanded from 0.2% last month to 0.4%, while the appreciation of on - shore and off - shore spot exchange rates narrowed from 0.9% last month to 0.4% and 0.7% respectively. The divergence of the "three prices" of the RMB exchange rate continued to converge [4]. - The three major RMB exchange rate indices all declined. The CFETS RMB exchange rate index and the RMB exchange rate index referring to the BIS currency basket fell for the sixth consecutive month, with the month - on - month decline expanding from 0.2% and 0.5% last month to 0.6% and 0.9% respectively; the RMB exchange rate index referring to the SDR currency basket turned from rising to falling, with a month - on - month decline of 0.9% [5]. 2. Cross - border Capital Flows - In June, the surplus of banks' foreign - related receipts and payments on behalf of customers continued for the fifth consecutive month, but the surplus scale decreased by $7.7 billion month - on - month to $25.3 billion. The RMB foreign - related receipts and payments on behalf of customers turned from a surplus of $2.6 billion last month to a deficit of $21.6 billion, contributing 316% to the narrowing of the surplus. The foreign - currency foreign - related receipts and payments on behalf of customers continued to have a surplus, increasing by $16.6 billion month - on - month to $47 billion, a new high since October last year [10]. - In June, securities investment foreign - related receipts and payments turned from a surplus of $5.2 billion last month to a deficit of $5.6 billion. Overseas institutions continued to reduce their holdings of RMB bonds, with the balance of bonds held decreasing by 116.1 billion yuan, an increase of 19.8 billion yuan from last month. However, foreign investors' willingness to increase their holdings of domestic stocks increased. In the first half of the year, foreign investors net - increased their holdings of domestic stocks and funds by $10.1 billion, and the net - increase scale in May and June reached $18.8 billion [11][12]. - In June, the deficit of income and current transfers expanded for the fourth consecutive month to $26.9 billion. The surplus of goods trade foreign - related receipts and payments increased by $7.6 billion month - on - month to $66.8 billion, reaching a record high for the same period. The deficit of service trade narrowed for the fifth consecutive month to $8.1 billion, the lowest since July 2023. The deficit of direct investment narrowed for the second consecutive month to $2.7 billion, the lowest since November last year [12]. 3. Bank Settlement and Sales of Foreign Exchange - In June, bank settlement and sales of foreign exchange (including forward and options) showed a surplus for the fourth consecutive month, and the surplus scale increased by $6.7 billion month - on - month to $32.1 billion. The surplus of bank settlement and sales of foreign exchange on behalf of customers increased by $8.3 billion to $25.6 billion, the deficit of banks' own settlement and sales of foreign exchange narrowed for the second consecutive month, and the net purchase scale of forward and options foreign exchange derivatives continued to decline [20]. - From May to June, the surplus of banks' foreign - currency foreign - related receipts and payments on behalf of customers and the surplus of bank settlement and sales of foreign exchange on behalf of customers continued to expand, and the gap between them widened. The market's overall settlement willingness and purchase motivation both decreased, indicating that the market's expectation of the RMB exchange rate continued to diverge, and the demand for foreign exchange purchase at low prices was relatively strong [21]. - In June, the settlement willingness of foreign trade enterprises and the household sector increased, and the purchase motivation decreased. The forward settlement hedging ratio ended its five - month upward trend, and the forward purchase hedging ratio stopped falling and rebounded, indicating that relevant market players' exchange rate expectations were biased towards depreciation [25].

Group 1 - The overall activity level of the A-share merger and acquisition market in China has slightly decreased, characterized by high frequency, diverse participants, and broad fields [1][2] - A total of 66 disclosed merger and acquisition events were recorded, with a cumulative transaction amount of 523.44 billion RMB, showing a significant increase in transaction value despite a decrease in the number of major events [1][2] - Key sectors such as machinery, basic chemicals, electronic equipment, instruments and components, electrical equipment, and automotive parts are experiencing high activity levels, becoming the main drivers of mergers and acquisitions [1][2] Group 2 - Private enterprises and local state-owned enterprises are actively engaging in horizontal integration and strategic cooperation, indicating diverse motivations for mergers and acquisitions [1][2] - Although the number of mergers and acquisitions has decreased, structural reorganizations are on the rise due to optimized regulatory policies, suggesting potential for further industry integration and value reconstruction supported by economic recovery and policy encouragement [1][2] - The report anticipates that the A-share merger and acquisition market will maintain a high-frequency operational trend in the future, driven by both policy and proactive corporate adjustments [2] Group 3 - 38 listed companies have suspended trading to plan or announce restructuring proposals, with an average bi-weekly stock price fluctuation of 5.19%, and 16 companies have made significant progress post-announcement, with an average fluctuation of 4.29% [2] - The report highlights that the restructuring index has shown a bi-weekly fluctuation of 4.29%, indicating ongoing investor interest in merger and acquisition activities [2][3] Group 4 - The report includes detailed tables of companies that have announced restructuring plans, including their stock codes, names, industries, company attributes, restructuring events, and purposes, showcasing a variety of strategic intents across different sectors [3][4][5] - Notable companies such as China Shipbuilding and China Heavy Industry are involved in significant mergers, with strategic cooperation as a common goal [8][9]

Investment Rating - The report assigns an "Outperform" rating to the nuclear fusion industry [1] Core Insights - China's nuclear fusion technology has developed over 60 years, establishing a theoretical and engineering foundation for next-generation energy [1] - The report highlights significant advancements in nuclear fusion technology, with many countries accelerating their development strategies, particularly in the U.S. with Tokamak and linear devices [3] - The investment in China's nuclear fusion sector is expected to be sustainable, benefiting the related industrial chain [1][3] Summary by Sections Industry Overview - The nuclear fusion industry is transitioning from a "0 to 1" phase, with key components such as magnets, power supplies, and vacuum switches presenting investment opportunities [3][29] - The report emphasizes the importance of the ITER project in enhancing China's theoretical knowledge and equipment manufacturing capabilities [3][21] Technological Advancements - Breakthroughs in key technologies, including superconducting magnets and tritium processing, have resolved engineering obstacles in nuclear fusion devices [3][21] - The report notes that the U.S. aims to demonstrate nuclear fusion by 2030 and commercialize it by 2040, while China is expected to see significant project launches in the next 2-3 years [3][29] Policy and Government Support - The Chinese government has identified nuclear fusion as a key focus for future energy development, with various local governments actively supporting foundational research and equipment manufacturing [3][31] - The report outlines that the 14th Five-Year Plan emphasizes the importance of nuclear fusion, hydrogen energy, and biomass as future energy sources [3][29] Investment Recommendations - The report recommends focusing on companies involved in core components of the nuclear fusion industry, such as Western Superconducting, Lianchuang Optoelectronics, and Antai Technology [3][29] - It suggests that the nuclear fusion sector is poised for accelerated investment during the 14th Five-Year Plan period [3][29]

Economic Data Comparison - The core economic indicator for both China and the U.S. is GDP, with different statistical methods: China primarily uses the production approach, while the U.S. relies on the expenditure approach[1] - China's GDP data is mainly sourced from the National Bureau of Statistics, while the U.S. data comes from multiple agencies, including the Department of Commerce and the Bureau of Labor Statistics[2] Statistical System Differences - China's statistical system is centralized, with a unified leadership structure, while the U.S. employs a decentralized system involving over 70 federal agencies[3] - In the U.S., the Bureau of Economic Analysis (BEA) is responsible for GDP calculations, which include comprehensive data, direct indicators, and trend-based data[4] GDP Calculation Methods - China's quarterly GDP is often estimated using related indicators, while annual GDP is calculated using production or income methods[5] - The U.S. GDP is published quarterly, with initial estimates released 30 days after the quarter ends, followed by two revisions[6] Monthly Economic Data - The U.S. releases key economic data monthly, including employment figures and consumer spending, while China’s data is more production-oriented[7] - Important monthly indicators in the U.S. include PMI, manufacturing orders, and trade data, which are released at different times throughout the month[8] Data Source and Reliability - China's GDP data relies heavily on statistical surveys and administrative records, while the U.S. incorporates a mix of official and non-official data sources, including private sector reports[9] - The differences in data collection methods lead to variations in the interpretation and application of economic indicators between the two countries[10]

Key Points - The report highlights a selection of stocks for July, including companies such as Binjiang Group (002244.SZ) and SF Holding (002352.SZ) as part of the recommended investment portfolio [1] - The establishment of China Fusion Energy Co., Ltd. marks a significant step in the commercialization of fusion energy in China, with a capital increase of 11.5 billion yuan from seven state-owned enterprises [2][7][9] - The fusion company aims to develop fusion energy through a phased approach, focusing on magnetic confinement Tokamak technology, with the goal of achieving commercial application [8][10] - The report discusses the acquisition plan by GoerTek to purchase 100% equity of Mega Precision Technology Limited and Channel Well Industrial Limited for approximately 9.5 billion yuan, which is expected to enhance the company's performance [3][12][13] - The report emphasizes the strong competitive position of the target companies in the precision metal components sector, which is crucial for high-tech industries [14]

Core Insights - H20's resumption of sales to China is expected to alleviate supply pressure on computing chips, stimulating the entire computing infrastructure and AI industry chain [2][3] - Since the rebound on April 9, overseas computing has seen a significant increase of 40.9%, while domestic computing, represented by Huawei's chain, has only increased by 21.1% [3][4] - The performance of domestic computing has improved, and H20's impact on domestic computing is limited, indicating that domestic computing still has long-term growth potential [5] Industry Overview - The computing power industry chain has been catalyzed by H20's return to the Chinese market, which is designed to comply with U.S. export restrictions and is specifically tailored for the Chinese market [3][5] - The domestic computing power industry is entering a growth cycle, supported by technological advancements, commercial applications, and increasing demand for AI models [4] - Key companies in the domestic computing power sector, such as Huawei, have demonstrated significant performance improvements, with Huawei's computing cluster outperforming NVIDIA's GB200 NVL72 [4][5] Investment Opportunities - The report suggests focusing on specific segments within the computing infrastructure industry, including servers, liquid cooling, copper connections, PCBs, optical communications, cloud computing, and domestic computing [5] - The IPO acceptance of domestic GPU manufacturers like Muxi Integration and Moore Threads fills the gap in the A-share market for full-function GPUs, further supporting the domestic computing ecosystem [4]

Investment Rating - The industry investment rating is "Outperform the Market," indicating that the industry index is expected to perform better than the benchmark index in the next 6-12 months [12]. Core Insights - The establishment of China Fusion Energy Co., Ltd. marks a new phase in the development of controllable nuclear fusion in China, with a total capital increase of approximately 11.5 billion yuan from seven state-owned enterprises [2][4]. - The company aims to commercialize fusion energy through a three-step development approach: pilot experimental reactor, demonstration reactor, and commercial reactor [4]. - The controllable nuclear fusion industry in China is entering a rapid development phase, supported by multiple technological routes and significant investments from state-owned enterprises [4]. Summary by Sections Industry Dynamics - The establishment of the fusion company is a significant step towards the commercialization of fusion energy in China, with a registered capital reaching 15 billion yuan after the recent capital increase [4]. - The company currently has total assets of 5.369 billion yuan and equity of 5.367 billion yuan, with no operating revenue reported yet [4]. Investment Recommendations - Investors are advised to focus on companies with key materials and core components for controllable nuclear fusion devices, as well as those that have secured relevant orders. Recommended companies include Hezhong Intelligent, Lianchuang Optoelectronics, Western Superconducting, and Antai Technology [4].

Core Insights - The report critiques Ray Dalio's understanding of national debt, arguing that he applies microeconomic thinking to macroeconomic issues, leading to flawed conclusions about debt sustainability [2][4][13] - It emphasizes the importance of recognizing different levels of understanding debt: microeconomic, macroeconomic, and international monetary system perspectives [5][11] - The report highlights that a country's debt sustainability is primarily determined by its production capacity rather than just cash flow, especially in cases of insufficient domestic demand [6][9][10] Section Summaries Understanding Debt at Different Levels - The first level of understanding debt is microeconomic, focusing on individual or corporate cash flows covering debt obligations [5] - The second level is macroeconomic, where a country's debt sustainability is linked to its production capacity and domestic demand [6][9] - The third level involves the international monetary system, particularly how the U.S. can sustain high debt levels due to its status as the issuer of the world's primary reserve currency [11][12] Critique of Dalio's Methodology - Dalio's analysis is criticized for being overly simplistic and not accounting for the complexities of macroeconomic dynamics [13][20] - The report argues that Dalio's view of macroeconomics as a machine is outdated and fails to capture the fluid nature of economic interactions [15][18] - It points out that macroeconomic outcomes can differ significantly based on the prevailing economic conditions, which Dalio's framework does not adequately address [19][20] Implications for National Debt - The report asserts that countries with excess production capacity and insufficient demand can manage higher debt levels without facing crises [9][10] - It warns against applying microeconomic debt sustainability criteria to macroeconomic contexts, as this can lead to misjudgments about a country's financial health [20][21] - The analysis suggests that the focus should be on the broader economic environment rather than rigid debt-to-GDP ratios or deficit targets [19][20]

Investment Rating - The report maintains a "Buy" rating for the company, with a previous rating also being "Buy" [2][4][6]. Core Views - The company is planning a significant equity acquisition to expand its precision structural components business, which is expected to create synergies with the listed company and enhance its competitive edge in the precision structural components sector [4][6][9]. - The acquisition is valued at approximately RMB 95 billion, funded by the company's own cash reserves, which are sufficient to cover the acquisition costs [9]. - The report projects the company's net profit for 2025, 2026, and 2027 to be RMB 3.64 billion, RMB 4.21 billion, and RMB 5.07 billion respectively, with corresponding P/E ratios of 22.6, 19.5, and 16.2 [6][8]. Financial Summary - The company's revenue is projected to grow from RMB 98.57 billion in 2023 to RMB 139.20 billion in 2027, with a compound annual growth rate (CAGR) of approximately 19.2% from 2025 to 2027 [8][10]. - The EBITDA is expected to increase from RMB 4.92 billion in 2023 to RMB 10.09 billion in 2027, indicating a strong growth trajectory [8][10]. - The report anticipates a significant recovery in net profit growth, with a forecasted increase of 144.9% in 2024, followed by steady growth rates of 36.6% and 15.6% in the subsequent years [8][10].

Key Insights - The report highlights a focus on the humanoid robot industry, which has seen a significant increase in market attention, with the National Securities Robot Industry Index rising by 7.6% from July 7 to July 18, 2025 [6][8] - Major factors driving this resurgence include substantial orders from leading companies, capital acquisitions, influential statements from industry leaders, and supportive government policies aimed at fostering innovation in humanoid robotics [7][8] - The report also notes that the active equity fund median position reached 90.63% in Q2 2025, indicating a historical high and a shift towards increased allocations in TMT, Hong Kong stocks, and machinery sectors [9][10] Humanoid Robot Industry - The humanoid robot market is experiencing a revival, with key players like China Mobile placing significant orders, which serve as a validation of product functionality and market readiness [6][7] - The report identifies a trend of increased capital activity, with companies pursuing mergers and acquisitions to enhance their market positions [7] - Government initiatives are also playing a crucial role, with policies aimed at promoting the development of humanoid robots and related technologies [8] Active Equity Fund Analysis - The report indicates that the highest allocation sectors for active equity funds in Q2 2025 were TMT (23.37%), Hong Kong stocks (20.41%), and machinery (19.68%), reflecting a strategic shift in investment focus [9][10] - The report emphasizes that the current allocation levels are above historical averages for several sectors, indicating a bullish sentiment among fund managers [9][10] AI Computing Industry - The AI computing supply chain is entering a phase of maturity, driven by advancements in generative AI and large language models, leading to a closure of the demand-supply loop [11][12] - The report highlights that the infrastructure for AI computing is expected to see continued investment, with significant growth in demand for high-end AI servers [12][13] - The competition in the PCB industry is intensifying due to the rising demand for AI servers, with a projected 150% increase in demand for high-density interconnect (HDI) boards [13]