Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 78.40 [4][6]. Core Views - The company reported a revenue of HKD 42.854 billion for 1H25, a year-on-year decrease of 2.8%, and an operating profit of HKD 5.192 billion, down 11.3% year-on-year. However, the net profit attributable to shareholders was HKD 5.624 billion, a decline of 5.5%, which exceeded the forecast of HKD 5.381 billion due to gains from the sale of a 50% stake in the Wooreen energy storage project by its Australian subsidiary [1]. - The company is optimistic about future performance growth and dividend increases due to its stable and growth-oriented business model [1][4]. Summary by Sections Financial Performance - In 1H25, the company's operating profit in Hong Kong increased by 8% to HKD 4.447 billion despite a 1.7% decline in electricity sales. This was attributed to ongoing capital expenditures and improvements in fixed asset net value [2]. - The operating profit in mainland China decreased by 13%, primarily due to pressure on electricity prices at the Yangjiang Nuclear Power Station and weak wind resources in some renewable energy projects [2]. - The Australian operations saw an 86% decline in operating profit, impacted by intense retail competition and maintenance shutdowns at power plants [2]. - The company reported a free cash flow of HKD 0.1 billion in 1H25, a significant improvement from a negative HKD 1.3 billion in 1H24 [3]. Future Growth Potential - The company is expanding its zero-carbon project portfolio, with 336 MW of renewable energy capacity commissioned in mainland China and the full commissioning of the Sidhpur wind farm in India [3]. - By 2029, the company aims to achieve approximately 6 GW of renewable energy capacity in mainland China and 3 GW in Australia [3]. - The report emphasizes that the implementation of zero-carbon plans will inject growth potential into the company's performance [3]. Valuation and Estimates - The report adjusts revenue forecasts for Hong Kong, mainland China, and Australia, expecting net profits attributable to shareholders to be HKD 10.670 billion, HKD 11.396 billion, and HKD 12.128 billion for 2025-2027, respectively [4]. - The estimated EPS for 2025 is HKD 4.22, with a projected PB ratio of 1.86x, leading to a target price of HKD 78.40 [4][6].

Group 1: Macroeconomic Overview - In July, high-frequency indicators suggest a rebound in exports before the tariff exemption period, while industrial added value growth may slow down due to overproduction being curbed in some sectors [2][3] - Social financing growth is primarily supported by a year-on-year increase in local government bond issuance, despite weak real estate transaction volumes [2][3] - PPI's year-on-year decline may narrow due to rising commodity prices and a lower base effect, with a more pronounced narrowing expected after August [2][3] Group 2: Fixed Income Market - The credit bond market experienced an overall adjustment from July 18 to July 29, with the largest declines seen in 2-year bonds, followed by 3Y, 5Y, and 10Y bonds [4] - In the recovery phase from July 29 to August 1, short-term bonds showed significant recovery, particularly 1-5Y bonds, while credit bond ETFs faced slight declines [4] - The overall outlook for credit bonds is expected to be moderately bullish, with a positive buying sentiment and potential for further recovery in yields [4] Group 3: Real Estate Sector - The real estate sales scale shows signs of stabilization, but challenges remain due to inventory pressure and price adjustments, leading to a gradual formation of structural differentiation [7] - Policies aimed at stabilizing housing prices and activating demand are expected to gain momentum in the second half of the year [7] Group 4: Automotive Industry - The heavy truck market in China saw wholesale sales of approximately 83,000 units in July, a year-on-year increase of 42%, indicating strong demand driven by "old-for-new" policies [6] - The forecast for heavy truck sales in 2025 has been raised from 1.02 million to 1.05 million units, reflecting a positive industry outlook [6] Group 5: Agricultural Chemicals - Recent policies such as "one certificate, one product" are expected to optimize pesticide quality and market order, potentially reducing the number of brands and enhancing the competitiveness of companies with multiple registration certificates [5] Group 6: Data Center Hardware Opportunities - The development of AI technology is driving a significant increase in demand for computing power, leading to growth in data center hardware investments [9] - There is a growing need for power supply and distribution systems, temperature control systems, and related components, presenting opportunities for domestic replacements and breakthroughs in overseas markets [9] Group 7: Selected Companies - Zhaoyan New Drug has been initiated with a "buy" rating, targeting a price of 37.02 CNY for A shares and 27.34 HKD for H shares, driven by recovery in domestic and overseas markets [11][20] - China Shenhua is planning to acquire 13 core assets from the State Energy Group to enhance resource integration and operational efficiency, with trading expected to resume within 10 days [17]

概览：7 月高频指标显示关税豁免期前，出口或有所回升；同时，7 月财经委会议提及"反内卷"后，部分行业过度生产有所遏制，工业 增加值增速或有回落；考虑到地产成交仍偏弱，居民部门信贷需求或 延续同比少增、而社融主要受地方债发行同比多增支撑。此外，部分 商品价格上涨叠加基数回落或有望推动 PPI 同比降幅收窄，8 月后收 窄幅度或更明显。 工业：我们预计 7 月规模以上工业增加值同比增速从 6 月的 6.8%略回落至 5.8%左右。高频数据显示，7 月高炉/焦化开工率同比变化+0.83/-0.4 个百分 点，增速较 6 月放缓。7 月制造业 PMI 较 6 月的 49.7%回落至 49.3%，弱 于季节性水平。考虑到 7 月战略性新兴产业采购经理人指数（EPMI）及中 国企业经营状况指数（BCI）环比分别回落 1.1/1.6 个点至 46.8/47.7，以及 "反内卷"对部分行业过度生产的抑制，制造业景气度回升的基础仍待夯实。 消费：购物节错位的影响消退后、我们预计 7 月社零总额同比增速小幅回升 至 5.2%左右。暑期出游及家电销售相对较强，而汽车销量增速退坡。暑期 出游拉动服务性消费增长，7 月 1 日至 2 ...

Report Industry Investment Rating No relevant content provided. Report's Core View - In August, credit bonds may fluctuate more on the whole, with more opportunities than risks, and credit buyers are relatively active. It is advisable for institutions with unstable liability ends to appropriately explore medium - and low - grade general credit bonds within 3 years, and trade 3 - 5 - year secondary perpetual bonds and high - grade general credit bonds with good liquidity. Institutions with strong trading capabilities can also appropriately trade ultra - long secondary perpetual bonds and take profit when the yield approaches the July low. General credit bonds are expected to have opportunities to narrow spreads, and the old secondary perpetual bonds are expected to have a small supplementary increase [22][23]. Summary According to the Directory Credit Hotspots: Review and Outlook of the Current Round of Credit Bond Adjustment - During July 18 - July 29, 2025, affected by policies and other factors, the bond market adjusted. Credit bonds had a larger correction amplitude than interest - rate bonds, with medium - and long - term adjustments more significant and secondary perpetual bonds adjusting more. Credit spreads generally widened, except for some passive narrowing [9]. - As of August 1, 2025, in the adjustment stage (7.18 - 7.29), secondary perpetual bonds had the largest correction amplitude, followed by 3Y, 5Y, 10Y general credit bonds. In the repair stage (7.29 - 8.1), short - and medium - term secondary perpetual bonds repaired first, and 1 - 5Y secondary perpetual bonds and medium - and high - grade 5Y, 10Y general credit bonds repaired relatively more [12]. - In terms of institutional behavior, from July 21 - July 29, funds sold a large amount of credit bonds, while wealth management and insurance increased their positions. From July 30 - August 1, institutional buyers were active, and the short - term redemption wave basically subsided. With the expected reduction of insurance product predetermined interest rates on August 31, buyers may continue to be active [14]. - Credit bond ETFs were affected by the bond market adjustment. During July 18 - July 29, the average closing prices of benchmark - making credit bond ETFs and science - innovation bond ETFs fell, and then repaired from July 29 - August 1. Most science - innovation bond ETFs increased in scale, while benchmark - making credit bond ETFs decreased slightly [15]. - The component bonds and non - component bonds of credit bond ETFs showed different trends in the adjustment and repair periods. Component bonds generally had a larger correction amplitude and a smaller repair amplitude, but the overall difference was not significant [19]. Market Review: "Anti - involution" Trading Cools Down, and Credit Bonds Fully Recover - From July 25 to August 1, 2025, after the July Politburo meeting, the "anti - involution" trading sentiment cooled down, the impact of the equity market on the bond market weakened, and the bond market recovered. Most credit bond yields declined, with short - and medium - term yields down about 3BP and medium - and long - term spreads up about 2BP passively. Secondary perpetual bond yields generally declined significantly, and spreads declined about 2BP. Wealth management and funds had net purchases, and the scale of credit bond ETFs increased by 1.26% compared with the previous week. Most median spreads of AAA - rated public bonds in various industries and most median spreads of urban investment bonds in each province declined, with Guizhou's spreads down more than 6BP [2][26]. Primary Issuance: Net Financing of Corporate Credit Bonds Soars, and Average Issuance Interest Rates Fluctuate - From July 28 to August 1, 2025, corporate credit bonds issued a total of 217.4 billion yuan, a 33% decrease from the previous period; financial credit bonds issued a total of 31.4 billion yuan, an 86% decrease. Corporate credit bonds had a net financing of 51.6 billion yuan, an 84% increase from the previous period, with urban investment bonds having a net repayment of 6.6 billion yuan and industrial bonds having a net financing of 48.2 billion yuan. Financial credit bonds had a net financing of 6.9 billion yuan. The average issuance interest rates of medium - and short - term notes fluctuated, and the average issuance interest rates of corporate bonds showed a downward trend except for AA - rated bonds [3][51]. Secondary Trading: Short - and Medium - Duration Trading is Active, and Long - Duration Trading Declines - Active trading entities are mainly medium - and high - grade, short - and medium - term, and central and state - owned enterprises. Urban investment bond active trading entities are divided into two types: mainstream high - grade platforms in economically strong provinces and core main platforms in areas with relatively high spreads in large economic provinces. Real - estate bond and private - enterprise bond active trading entities are mainly AAA - rated, with trading durations mostly in the short - and medium - term. There was no trading of urban investment bonds with a remaining term of more than 5 years, a decline from the previous week [4][61].

Investment Rating - The report maintains a "Buy" rating for Tianfu Communication, Xingwang Ruijie, Ruijie Network, China Mobile, China Telecom, China Unicom, Huace Navigation, and Hengtong Optoelectronics, while recommending "Hold" for Huafeng Technology [9][50]. Core Insights - North American cloud service providers (MAMG: Microsoft, Amazon, Meta, Google) reported a 69% year-on-year increase in capital expenditures (CapEx) for Q2 2025, totaling $87.4 billion, indicating strong demand for computing power [1][2][15]. - The report anticipates that the total CapEx for 2025 will reach $333.8 billion, reflecting a 49% year-on-year growth, with optimistic guidance from major players [4][15]. - The report suggests that the robust CapEx growth from overseas cloud service providers will continue to boost confidence in computing power demand, benefiting both the overseas computing supply chain and domestic internet companies [1][15]. Summary by Sections Market Performance - The communication index rose by 2.54% last week, while the Shanghai Composite Index fell by 0.94% and the Shenzhen Component Index dropped by 1.58% [1][15]. Key Companies and Dynamics - The report highlights key companies in the AI computing supply chain for 2025, recommending Tianfu Communication, Xingwang Ruijie, Ruijie Network, and Huafeng Technology, as well as core asset value reassessment for China Mobile, China Telecom, and China Unicom [5][9]. - Major cloud providers' CapEx for Q2 2025 includes Microsoft ($17.08 billion, +23%), Amazon ($31.37 billion, +91%), Meta ($16.54 billion, +102%), and Google ($22.45 billion, +70%) [16]. Capital Expenditure Guidance - Microsoft expects its Q1 FY26 CapEx to exceed $30 billion, while Amazon's Q2 CapEx rate is projected to represent the investment rate for the second half of the year [4][16]. - Meta has raised its 2025 CapEx guidance to $66-72 billion, and Google has increased its guidance to $85 billion [4][16]. Investment Recommendations - The report emphasizes the importance of focusing on the global AI computing supply chain, including components like optical modules, liquid cooling, copper connections, and switches [1][15]. - The report also notes the expected growth in domestic internet companies' investments driven by the positive outlook from overseas cloud service providers [1][15].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In August, credit bonds may be mostly volatile, with more opportunities than risks, and credit buying is relatively active. The "anti - involution" policy has returned to rationality, and the stock market may consolidate in August, which is conducive to the restoration of bond market sentiment. However, there are still volatile factors in the bond market in the future. The buying demand is expected to be relatively strong due to the upcoming reduction of insurance product preset interest rates and the new VAT regulations [27]. - After the previous adjustment, the spreads of general - purpose credit bonds still have room to narrow, and it is recommended to focus on general - purpose credit bonds with high - grade and good liquidity, as well as credit bond ETF component bonds. Second - tier and perpetual bonds should focus on the VAT exemption opportunities of old bonds [28][29]. 3. Summary by Directory Credit Hotspots: Review and Outlook of the Current Round of Credit Bond Adjustment - **Adjustment and Repair Process**: From July 18 - 29, credit bonds had an overall correction, with second - tier and perpetual bonds having the largest correction, followed by 3Y, 5Y, and 10Y general - purpose credit bonds. From July 29 - August 1, short - and medium - term second - tier and perpetual bonds repaired first, followed by high - grade 5Y and 10Y general - purpose credit bonds [1][13]. - **Institutional Behavior**: From July 21 - 29, funds sold a large amount of credit bonds, while wealth management and insurance increased their positions. Since the repair, institutional buying has been active, and the short - term redemption wave has basically subsided. Before the reduction of insurance product preset interest rates on August 31, the buying may continue [17]. - **Credit Bond ETF**: From July 18 - 29, the prices of credit bond ETFs declined, and the scale of benchmark - making credit bond ETFs decreased, while most of the science - innovation bond ETFs increased. During the repair period, credit bond ETFs recovered. The component bonds of credit bond ETFs had a larger decline during the adjustment and a smaller recovery than non - component bonds, but the difference was not significant [18]. Market Review: Cooling of "Anti - Involution" Trading, Comprehensive Repair of Credit Bonds - From July 25 to August 1, after the Politburo meeting, the "anti - involution" trading sentiment cooled, the impact of the equity market on the bond market weakened, and the bond market recovered. The yields of most credit bonds declined, with short - and medium - term yields down about 3BP, and medium - and long - term spreads up about 2BP passively. The yields of second - tier and perpetual bonds generally declined significantly, with 3 - 5Y varieties down more than 5BP, and spreads down about 2BP. Buying recovered, with wealth management net buying 199.1 billion yuan and funds net buying 94.62 billion yuan. The scale of credit bond ETFs was 3337 billion yuan, up 1.26% from the previous week. Industry spreads of most AAA - rated public bonds and provincial urban investment bonds declined, with Guizhou's spreads down more than 6BP [3]. Primary Issuance: Net Financing of Corporate Credit Bonds Soars, Average Issuance Interest Rates Fluctuate - From July 28 to August 1, corporate credit bonds issued a total of 217.4 billion yuan, a 33% decrease from the previous period; financial credit bonds issued a total of 31.4 billion yuan, an 86% decrease. Corporate credit bonds had a net financing of 51.6 billion yuan, a 84% increase, with urban investment bonds having a net repayment of 6.6 billion yuan and industrial bonds having a net financing of 48.2 billion yuan. Financial credit bonds had a net financing of 6.9 billion yuan. The average issuance interest rates of medium - and short - term notes fluctuated, and the average issuance interest rates of corporate bonds showed a downward trend except for AA - rated bonds [4][62]. Secondary Trading: Active Trading in Short - and Medium - Duration Bonds, Decline in Long - Duration Trading - Active trading entities are mainly high - grade, short - and medium - term, and central and state - owned enterprises. Urban investment bonds are mainly from strong economic provinces' high - grade platforms and high - spread areas in large economic provinces. Real - estate bonds and private - enterprise bonds are mainly AAA - rated, with short - and medium - term trading durations. There was no trading of urban investment bonds with a maturity of more than 5 years, a decline from the previous week [5][72].

Macro Insights - The U.S. job market is cooling more than expected, with inflationary pressures still rising; tariffs have been adjusted, leading to increased tariffs on certain countries in August [2][3] - July's manufacturing PMI showed a marginal decline, indicating that previous "anti-involution" policies may have suppressed overproduction in some sectors, affecting industrial product prices [3][4] Strategy Insights - The recent market adjustments present structural opportunities, particularly in sectors with improving conditions and low valuations, such as technology and consumer electronics [4][5] - Focus on sectors with strong earnings recovery and potential for rebound, including storage chips, optical fibers, and robotics [3][4] Company-Specific Insights - Apple reported Q3 FY25 revenue of $94 billion, a 10% year-over-year increase, with net profit of $23.4 billion, reflecting a 12% increase; service revenue grew by 13% [12][15] - Xiaocaiyuan expects a net profit of 360-380 million yuan for H1 2025, a 29%-36% increase year-over-year, driven by operational efficiency and store expansion [14] - Nine Company reported H1 revenue of 11.742 billion yuan, a 76.14% increase year-over-year, with net profit growing by 108.45% [19] Fixed Income Insights - The recent changes in tax policy regarding bond interest income are expected to have a limited impact on insurance funds, with an estimated yield impact of about 12 basis points [12] - The bond market is experiencing increased volatility, with a focus on maintaining a flexible approach to operations and potential opportunities in credit bonds [10][11] Sector Performance Insights - The TMT and financial real estate ETFs saw increased allocations in the second quarter, indicating a shift towards more aggressive and defensive investment strategies [5][6] - The overall performance of valuation and surprise factors in July was positive, with growth and profitability factors showing mixed results across different stock pools [8][9] Energy Sector Insights - Cameco's investment logic is strengthened by recent developments in the U.S. power market, with an upward revision of its 2025 profit forecast to CAD 695 million [16] - First Solar's Q2 revenue reached $1.097 billion, benefiting from a surge in demand due to policy changes, maintaining a positive outlook for the next few years [17] Technology Sector Insights - The focus on AI advancements and tariff impacts remains critical for companies like Apple, with expectations for Chinese firms to close the gap in innovation [12][15] - The overall sentiment in the technology sector is influenced by macroeconomic factors and competitive dynamics, with a cautious outlook on future demand [12][15]

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company plans to acquire 13 core assets from the National Energy Group to enhance resource integration and operational efficiency, with the acquisition expected to significantly increase coal production capacity and power generation [1][2] - The acquisition will solidify the company's leading position in the industry and provide substantial room for future asset injections under the non-competition agreement [2][3] - The company maintains a commitment to high dividend payouts, with a target dividend rate of no less than 65% from 2025 to 2027, ensuring shareholder interests are protected [3][4] Summary by Sections Acquisition Details - The company intends to acquire 13 assets covering the entire coal industry chain, including coal, coal power, coal chemical, and logistics assets [2] - The expected increase in coal production capacity is over 230 million tons, representing a more than 66% increase compared to the company's 2024 coal production capacity of 350 million tons [2] - The acquisition is expected to add over 18 GW of power generation capacity, a more than 39% increase from the company's 2024 power generation capacity of 46 GW [2] Financial Forecast and Valuation - The company’s projected net profit for 2025-2027 is estimated at 50.1 billion, 50.0 billion, and 50.2 billion RMB respectively [4] - The target price for A-shares is set at 45.5 RMB, while the target price for H-shares is 40.0 HKD, based on a DDM valuation model [4] - The company is expected to maintain a stable cost and price advantage due to the integration of the entire industry chain [4] Operational Performance - The company reported a coal production of 27.6 million tons in June 2025, with a cumulative total of 165.4 million tons for the first half of the year, showing a slight decrease compared to the previous year [11] - The total power generation in June 2025 was 18.2 billion kWh, with a cumulative total of 98.8 billion kWh for the first half of the year, reflecting an 8% increase year-on-year [11]

Investment Rating - The report maintains an "Overweight" rating for the communication industry and communication equipment manufacturing sector [8]. Core Insights - North American cloud service providers (CSPs) have shown a significant increase in capital expenditures (CapEx), with a 69% year-on-year growth in Q2 2025, totaling $87.4 billion. This trend is expected to continue, with a projected total CapEx of $333.8 billion for 2025, reflecting a 49% increase year-on-year [2][12]. - Major cloud companies such as Microsoft, Amazon, Meta, and Google have provided optimistic guidance for their 2025 CapEx, indicating strong demand for AI and cloud services. Microsoft anticipates over $30 billion in CapEx for Q1 FY26, while Amazon expects a capital expenditure rate of 18.7% for the second half of the year [11][13]. - The report suggests that the robust CapEx from overseas CSPs will boost confidence in computing power demand, benefiting both the overseas computing supply chain and domestic internet companies [1][11]. Summary by Sections Market Performance - The communication index rose by 2.54% last week, while the Shanghai Composite Index and Shenzhen Component Index fell by 0.94% and 1.58%, respectively [1][11]. Key Companies and Dynamics - The report highlights several companies as key investment opportunities in the AI computing chain for 2025, including Tianfu Communication, Xingwang Ruijie, Ruijie Network, and Huafeng Technology. It also emphasizes the core asset value reassessment of major telecom operators like China Mobile, China Telecom, and China Unicom [3][8]. Capital Expenditure Insights - The report details the Q2 2025 CapEx for the four major cloud providers: Microsoft ($17.1 billion, +23%), Amazon ($31.4 billion, +91%), Meta ($16.5 billion, +102%), and Google ($22.4 billion, +70%) [12][13]. - The optimistic outlook for 2025 CapEx includes upward revisions from Meta and Google, with Meta's guidance adjusted to $66-72 billion and Google's to $85 billion [2][12]. Recommended Stocks - The report recommends several stocks with target prices and investment ratings, including: - Tianfu Communication (Buy, target price: 119.12) - Xingwang Ruijie (Buy, target price: 35.65) - Ruijie Network (Buy, target price: 88.70) - Huafeng Technology (Hold, target price: 59.86) - China Mobile (Buy, target price: 126.40) - China Telecom (Buy, target price: 9.13) - China Unicom (Hold, target price: 7.62) [8][46].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 13.15, up from a previous value of HKD 12.61 [6][4]. Core Views - The company is expected to achieve a net profit of HKD 360-380 million in 1H25, representing a year-on-year growth of 29%-36% and a quarter-on-quarter growth of approximately 20%-27% [1][2]. - The company is focusing on optimizing operational efficiency and enhancing single-store profitability while balancing revenue growth [1][2]. - The long-term outlook remains positive due to the company's strong brand positioning and effective management strategies [1][4]. Summary by Sections 1H Performance - The company reported a strong profit forecast for 1H25, with net profits expected to be between HKD 360-380 million, showing significant growth compared to 1H24 and 2H24 [1]. - The company is implementing various strategies to optimize operational efficiency and improve management practices [2]. 2H Outlook - The company plans to accelerate store openings in 2H25, with a marketing campaign to enhance brand visibility [3]. - The company aims to open a total of 120 new stores in 2025, with a significant number of openings planned for July and August [3]. Profit Forecast and Valuation - Revenue forecasts for 2025-2027 have been slightly adjusted downwards by 5%-4%-2% to HKD 6.035 billion, HKD 7.318 billion, and HKD 8.886 billion respectively [4]. - EPS estimates for 2025-2027 have been raised by 9%-13%-18% to HKD 0.63, HKD 0.77, and HKD 0.93 respectively [4]. - The target price is based on a 19x PE for 2025, reflecting the company's resilient earnings and brand strength [4].