Profit Trends - In May, industrial enterprises' profit growth rate dropped significantly to -9.1% year-on-year, down from 3% in April[1] - Revenue growth for industrial enterprises also declined to 0.8% in May from 2.6% in April, correlating with a slowdown in export growth[1] - The profit margin for industrial enterprises fell to 4.8% in May, down from 5.3% in April, indicating a negative impact from tariff policies[8] Sector Performance - State-owned and foreign enterprises saw profit declines of -18.1% and 7.3% respectively in May, while private enterprises' profit growth fell to 0.8% from 14.1% in April[6] - Upstream industries experienced a profit decline of 36.3% year-on-year, worsening from 30.8% in April, with coal and oil extraction profits dropping significantly[7] - Midstream manufacturing profits turned negative at -0.7%, down from 12.6% in April, with notable declines in electrical machinery and specialized equipment sectors[7] Economic Indicators - The overall fiscal expenditure growth rate slowed in May, indicating a decrease in fiscal expansion momentum, particularly affected by real estate cycle downturns[2] - High-frequency data showed a 6.6% year-on-year decline in commodity housing sales in major cities from May's 3.3% drop, reflecting weak real estate cycles[2] - The "trade war" uncertainties and the expiration of the "tariff exemption" period on July 9 may further disrupt external demand and profit margins for enterprises[2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 37.00 HKD [8][9]. Core Insights - The company's core competitive advantage lies in high-quality membership and comprehensive lifecycle management, with traditional beauty services as the foundation, complemented by medical beauty and sub-health services to extend customer lifecycles and enhance customer stickiness [1]. - The company is actively increasing its dividend payout ratio, optimizing its shareholder structure, and implementing long-term incentive mechanisms, which may improve liquidity and indicate potential for PE valuation recovery [1]. - The company is expected to continue industry consolidation and business acquisitions to enhance market share and strengthen economies of scale [2]. Financial Performance - The beauty and health services revenue for 2024 is projected to reach 1.443 billion RMB, with a year-on-year growth of 20.9%, and the company plans to increase the number of direct and franchise stores [2]. - Medical beauty and sub-health services revenue for 2024 is expected to reach 928 million RMB and 201 million RMB, respectively, with significant growth rates of 9.1% and 98.9% year-on-year [3]. - The company anticipates net profits for 2025, 2026, and 2027 to be 315.33 million RMB, 367.89 million RMB, and 418.15 million RMB, respectively, indicating a robust growth trajectory [5][20]. Strategic Initiatives - The company has outlined three strategic initiatives aimed at maximizing shareholder value: establishing a long-term shareholder return mechanism, attracting quality long-term institutional investors, and implementing a core management equity incentive plan [4]. - The company aims to allocate no less than 50% of annual net profit attributable to shareholders for dividends from 2025 to 2027, barring special circumstances [4]. Valuation Metrics - The report assigns a PE ratio of 25x for 2025, reflecting the company's position as a leading brand in beauty and health, with a target price of 37.00 HKD based on this valuation [5]. - The company’s cash position is strong, with nearly 1.4 billion RMB at the end of 2024, supporting its stable business development and ongoing market share enhancement [5].

Group 1: Macro Insights - NATO has set a new defense spending target of 5% of GDP by 2035, which may lead to a moderate boost in EU economic growth but could also increase fiscal deficits and narrow surpluses [2] - The U.S. imports have shown a fluctuating trend since June, with a notable increase in South Korea's export growth, likely due to the upcoming expiration of tariff exemptions [2] - The overall U.S. consumer and employment markets are cooling, with inflation pressures still being transmitted, indicating potential disruptions in trade volumes as tariff deadlines approach [2] Group 2: Energy Sector - Recent positive changes in port coal prices have been observed, with CCI5500/5000/4500 coal prices increasing by 2/10/9 RMB per ton respectively as of June 25 [5] - The demand for coal is expected to rise due to seasonal factors, with fire power consumption likely to increase as hydropower output declines [5] - Recommendations include focusing on leading coal companies such as China Shenhua, Shaanxi Coal and Chemical Industry, and China Coal Energy, which are expected to benefit from the seasonal rebound in coal prices [5] Group 3: Fixed Income and Financial Markets - The TGA account's increasing share is impacting U.S. dollar liquidity, with expectations that the TGA balance will be exhausted by the end of August [7] - The balance of the TGA account is influenced by the debt ceiling, with historical trends showing a decrease before the ceiling is reached, followed by an increase [7] - The report highlights the potential for liquidity pressure on the U.S. dollar as the Treasury may need to issue short-term debt to replenish funds post-X-date [7] Group 4: Pharmaceutical Industry - The 2025 ASCO conference saw a 35% increase in the number of Chinese innovative drugs presented, with 67 studies included in oral presentations [8] - Notable drugs such as IBI363 and MRG003 have shown promising data that could revolutionize existing treatment protocols [8] - Companies like Shiyao Group, Kelun-Botai, and Hutchison China MediTech are recommended for investment due to their involvement in innovative drug development [8] Group 5: Technology Sector - Micron Technology reported better-than-expected revenue and profit guidance, with HBM revenue increasing by 50% quarter-over-quarter [10] - The company plans to reduce NAND wafer capacity by 10% to balance supply and demand, which may lead to short-term profit-taking due to stock price doubling since April [10] - Micron is expected to benefit from increased HBM demand driven by GPU and ASIC markets, with significant supply agreements in place with major clients [10] Group 6: Consumer Goods - The main brand Han Shu of the company has shown strong competitiveness in the mass skincare market, with a stable foundation and expansion into more categories [11] - The company is expected to benefit from a multi-brand strategy that captures market opportunities in various segments such as baby care and cosmetics [11] - The report maintains a "buy" rating based on the potential for valuation convergence with industry peers as the company continues to expand its product lines and channels [11] Group 7: Insurance Sector - Zhong An Online plans to issue new H shares at a price of 18.25 HKD, which will help meet capital needs and support its insurance and technology business development [11] - The company's insurance business fundamentals are expected to improve in the first half of the year, with potential benefits from the development of stablecoins in Hong Kong [11]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 71.20 [7][30]. Core Views - The launch of the YU7 SUV has exceeded market expectations with 289,000 units pre-ordered within the first hour, representing 82.5% of the company's previously announced annual shipment target for 2025 [2][4]. - The pricing of the YU7 is in line with market expectations, while its hardware specifications, including a 700 TOPS NVIDIA THOR chip and advanced driver assistance features, are above expectations [2][4]. - The AI glasses launched by the company are lightweight at 40g and feature color-changing technology, which has garnered positive market reception [3][4]. Summary by Sections Product Launch and Market Response - The YU7 SUV was launched with a pre-order of 200,000 units in three minutes and 289,000 units in one hour, significantly surpassing market expectations [2]. - The YU7 is available in nine colors, with a standard version offering a range of 835 km and equipped with advanced technology such as laser radar and a panoramic display [2]. AI Glasses - The AI glasses are priced at RMB 1,999 and weigh only 40g, featuring a Qualcomm AR1 chip and various functionalities including video calls and smart home control [3]. - The glasses have sold out on their launch night, indicating strong consumer interest [3]. Financial Projections - The report maintains net profit forecasts for 2025-2027 at RMB 41 billion, RMB 51.3 billion, and RMB 63.2 billion respectively, reflecting a robust growth trajectory [4][6]. - The target price of HKD 71.20 is based on a sum-of-the-parts (SOTP) valuation method, which includes a valuation of HKD 26.3 per share for the automotive business [4][30]. Valuation Metrics - The report projects a revenue increase from RMB 270.97 billion in 2023 to RMB 727.78 billion in 2027, with a compound annual growth rate (CAGR) of approximately 20.13% [6][38]. - The expected earnings per share (EPS) are projected to grow from RMB 0.76 in 2023 to RMB 2.52 in 2027, indicating strong profitability growth [6][38].

Investment Rating - The investment rating for the company is "Buy" with a target price of $170 [7][8] Core Insights - The company reported FY25Q3 revenue of $9.3 billion, which is a 37% year-over-year increase and a 15% quarter-over-quarter increase, exceeding Bloomberg consensus estimates of $8.85 billion [2] - Adjusted EPS for FY25Q3 was $1.91, up 208% year-over-year and 22% quarter-over-quarter, also surpassing consensus expectations of $1.60 [2] - The company plans to reduce NAND wafer capacity by over 10% by the end of FY25 to balance supply and demand [1][2] - HBM revenue exceeded $1.5 billion in FY25Q3, with a quarter-over-quarter growth of over 50%, and is expected to account for 20-25% of market share in FY25H2 [3][4] Revenue and Profitability - FY25Q3 DRAM revenue was $7.1 billion, a 51% year-over-year increase, while NAND revenue was $2.2 billion, with a quarter-over-quarter growth of 16% [2] - The adjusted gross margin, operating margin, and net margin increased to 39.0%, 26.8%, and 23.4% respectively, compared to 37.9%, 24.9%, and 22.1% in FY25Q2 [2] - The company provided guidance for FY25Q4 revenue of $10.7 billion, with adjusted EPS of $2.50, both higher than consensus estimates [2] Market Position and Competitive Landscape - The company is benefiting from increased demand for HBM driven by GPU and ASIC applications, with significant supply agreements with major clients including NVIDIA and AMD [1][3] - The company has begun sampling HBM4 to major clients, with plans for mass production in early 2026 [4][14] - The competitive landscape includes rivals like SK Hynix and Samsung, both of which are also advancing their HBM technologies [13][15] Valuation and Future Outlook - The target price has been raised from $144 to $170, reflecting a shift to a 3.0x FY26E price-to-book ratio [4][38] - The company is expected to benefit from the growing AI accelerator market, with HBM becoming a critical component [4][38] - Revenue projections for FY26 are estimated at $45.4 billion, with a year-over-year growth of 25.8% [6][40]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - In recent years, as the TGA/reserves ratio increases, the influence of the TGA account on US dollar liquidity has gradually grown. The TGA account, used by the US Treasury to manage government revenues and expenditures, is an important part of the liability side of the Federal Reserve's balance sheet. Its balance passively reflects the Treasury's revenue and expenditure behavior. The impact of TGA balance changes on US dollar liquidity should be understood within the framework of the Federal Reserve's monetary policy, often causing short - term marginal disturbances, while overnight reverse repurchases act as a buffer. Historically, the debt ceiling is the core factor determining its balance changes, with the account balance typically decreasing first and then increasing after hitting the ceiling. It is expected that the current TGA balance will be depleted by the end of August. After the X - date, the Treasury's issuance of short - term bonds to replenish funds may deplete the ON RRP balance and affect the reserve scale, potentially putting pressure on US dollar liquidity [7]. Summary by Directory TGA Account Overview - The TGA account is a deposit account opened by the US Treasury at the Federal Reserve for managing government daily revenues and expenditures. It is an important part of the liability side of the Federal Reserve's balance sheet, with its share significantly increasing after 2020. Its balance is passively generated, reflecting the Treasury's revenue and expenditure behavior. The establishment of the TGA account has multiple purposes such as revenue and debt management and policy coordination, but it also has some drawbacks, including mismatched cost - benefit of funds, complex management of funds from different sources, and policy signals interfering with the market. The selection of the TGA account balance requires a trade - off between safety and cost. Fiscal cycles, tax rhythms, government expenditure patterns, and monetary coordination all affect the TGA account balance [3]. - The TGA account balance is affected by the Treasury's "revenue and expenditure behavior" in the market. Revenue inflows mainly include taxes, treasury bond issuance, government fees, and emergency funds, while outflows mainly include debt repayment and fiscal expenditures. Economic conditions, tax seasonality, fiscal policies, debt ceilings, bond issuance management, and fiscal expenditure resilience all influence TGA account changes [12]. - The Treasury's transactions with different market participants can cause TGA account changes. When the Treasury issues treasury bonds, the subscription by the Fed, commercial banks, and money market funds will affect the TGA account balance, and the corresponding changes will be reflected in reserves, currency in circulation, and reverse repurchases. When the Treasury conducts fiscal revenue or expenditure, the change in the TGA account balance will correspond to changes in reserves and cash [18][19]. TGA Account's Impact on Liquidity Levels of US Dollar Liquidity - At the macro - aggregate level, liquidity is reflected in the supply scale of the monetary base, which the Federal Reserve can regulate through policy interest rates, balance - sheet expansion and contraction. Currently, the US dollar liquidity is generally abundant, but the policy interest rate remains high, leading to a marginal tightening of liquidity. The current US liquidity management framework is based on abundant liquidity, with the Federal Reserve setting a price range for the policy interest rate and absorbing excess liquidity through commercial bank reserves and overnight reverse repurchases [31]. - At the micro - market level, liquidity can be divided into four levels: the commercial banking system, the repo market, the real - sector financing market, and the offshore US dollar market. Each market has corresponding quantitative and price indicators to measure liquidity [35]. Relationship between TGA Account and Liquidity - The impact of the TGA account on US dollar liquidity should be understood within the framework of the Federal Reserve's monetary policy. The Federal Reserve's policy determines the direction of liquidity, while TGA balance changes are more of a short - term marginal disturbance. During the Fed's balance - sheet expansion, a rising TGA balance's pressure on liquidity can be absorbed, but a rapid decline in the TGA balance may lead to short - term liquidity abundance. During the Fed's balance - sheet contraction, a falling TGA balance can partially relieve the pressure on liquidity, but a rapid rise in the TGA balance may cause short - term shocks to liquidity [68][69]. - There is an inverse relationship between the overnight reverse repurchase balance and the TGA account balance, which can smooth the impact of TGA account changes on market liquidity. When the TGA balance decreases, excess liquidity is absorbed by overnight reverse repurchases; when the TGA balance increases, the reverse repurchase market provides liquidity [70]. - TGA balance changes usually have a small impact on the reserve scale, and reserves will only decline significantly in a liquidity - depleted situation. The change in the TGA account balance involves issues such as the sustainability of US fiscal revenue and expenditure, debt repayment, and bond issuance, which may affect liquidity through indirect channels such as debt risk, sector leverage willingness, and bond - market structure [4][71]. Analysis of TGA Account Fluctuations and Trends Fluctuations and Causes of the Current TGA Balance - Since the beginning of 2025, the TGA account balance has changed significantly, first decreasing and then increasing. As of June 18, 2025, the balance was $3836 billion. The changes are mainly related to the debt ceiling and taxes. At the beginning of 2025, the government debt ceiling expired, and government spending accelerated, causing the TGA account balance to shrink. Then, it was replenished during the tax season and due to increased tariffs, but later entered a phase of accelerated balance depletion [84]. Analysis of TGA Balance Trends - Historically, the debt ceiling is the core factor determining the TGA balance. After hitting the ceiling, the account balance usually decreases first and then increases. Before the X - date, the balance is depleted to meet fiscal expenditures, and after the X - date, it is replenished through bond issuance. - Regarding when the TGA balance will be depleted, it depends on fiscal revenue, expenditure rhythms, and the TGA scale. Revenue - side factors include tax - policy changes and economic trends. Expenditure - side factors involve rigid expenditures such as interest costs and mandatory spending. The TGA balance can be used to estimate the X - date. It is expected that the TGA balance will be depleted by the end of August [85][89]. - Regarding the impact of TGA balance changes on liquidity, before the X - date, the government uses fiscal deposits to pay for government operations and interest, creating market liquidity. After the X - date, the Treasury needs to replenish the TGA account by issuing bonds, which may deplete the ON RRP balance and affect the reserve scale, potentially causing significant pressure on US dollar liquidity [95]. Conclusions and Insights - The TGA account balance is expected to first decrease and then increase. The X - date may occur before August, and at that time, the TGA account balance will be difficult to support subsequent expenditures, increasing the probability of a bipartisan negotiation. - Before the X - date, liquidity will be relatively abundant, and after the X - date, it will tighten rapidly. The impact of TGA balance changes on different markets varies. For the bond market, the impact on yields depends on the Federal Reserve's policy direction. For the stock market, a decrease in the TGA balance benefits growth stocks, but the approaching X - date restricts risk appetite. For commodities, industrial commodities are more affected by fiscal policies, and gold is a good hedging asset [103][104][105].

Trade Trends - U.S. imports showed a low-to-high trend in June, with container arrivals indicating imports below last year's levels, particularly from China, while imports from Vietnam accelerated significantly[2] - Korean exports to the U.S. improved notably in June, with a year-on-year growth of 8.3% in the first 20 days, compared to -2.3% in May, driven mainly by semiconductor exports[4] - China's exports to the U.S. have shown resilience, with container throughput at major ports gradually increasing, surpassing last year's levels[2] Inflation and Consumer Behavior - Retail data indicates that inflation pressure from tariffs continues, with prices of imported goods rising approximately 1% and domestic goods by 0.3% since April[5] - U.S. consumer spending on goods and services has continued to slow, with the Redbook weekly retail index showing a downward trend in June[4] Business Confidence and Employment - Business investment expectations have been slow to recover, with a marginal decline in capital expenditure willingness reported in June surveys[5] - The labor market has shown signs of cooling, with initial jobless claims rising since late May, indicating a slight increase in layoffs[5] Financial Conditions - U.S. financial conditions have continued to ease, as indicated by Bloomberg's financial conditions index and narrowing corporate bond spreads[5] - Market inflation expectations remain stable, with 5-year inflation expectations slightly rising to 2.5% and 10-year expectations stable around 2.3%[5] Risks - Potential risks include the possibility of renewed fluctuations in tariff policies and unexpected price pressures from tariffs exceeding forecasts[6]

Trade Trends - In June, U.S. imports showed a low-to-high trend, with container arrivals indicating imports below the same period last year[3] - Imports from China have seen a mild recovery but remain significantly lower than the 2023-24 period, while imports from Vietnam and other countries have accelerated[3] - The forecast for container arrivals at the Port of Los Angeles indicates a significant rebound in the last two weeks of June, likely due to preemptive imports before the tariff suspension ends on July 9[3] Consumer Behavior - U.S. consumer spending on goods and services has continued to slow, with hotel occupancy rates significantly below seasonal averages since mid-June[4] - Retail sales have been affected by a slowdown in discretionary spending, with the Redbook weekly retail index showing a decline in both year-on-year and month-on-month growth rates[4] Corporate Investment - Corporate capital expenditure intentions have weakened, with some regional Federal Reserve surveys indicating a decline in investment sentiment[4] - Manufacturing output has shown marginal recovery, but overall inventory levels are declining, with soft data indicating a downward trend[4] Labor Market - The labor market has cooled, with a slight increase in layoffs and a rise in initial and continuing unemployment claims since late May[4] - Job openings have continued to decline, indicating a slowdown in hiring intentions among companies[4] Inflation and Financial Conditions - Market inflation expectations remain stable, with 5-year and 10-year inflation expectations at approximately 2.5% and 2.3%, respectively[5] - Supermarket prices have continued to rise, reflecting ongoing tariff impacts, with imported goods prices increasing by about 1% and domestic goods by 0.3% since April[5] - Financial conditions have loosened further, as indicated by Bloomberg's financial conditions index and corporate bond spreads[5]

Investment Rating - The report maintains an "Overweight" rating for the coal industry [6] Core Views - The coal market is expected to see a rebound in prices driven by seasonal demand, with recent positive changes in port coal prices and structural shortages supporting this trend [2] - The report highlights the potential for increased coal demand due to rising temperatures and declining hydropower output, which may lead to higher thermal power consumption [3] - A reduction in coal imports is contributing to a marginal contraction in supply, further supporting the coal market [4] Summary by Sections Price Trends - As of June 25, the prices for CCI5500/5000/4500 thermal coal have increased by 2/10/9 RMB per ton, reaching 617/546/481 RMB per ton respectively [2] - The average daily consumption of thermal coal in 25 provinces has risen by 2.1% and 5.2% year-on-year and month-on-month respectively [3] Demand Drivers - The report notes a 14.3% year-on-year decline in hydropower generation in May, while thermal power generation has turned positive with a growth rate of 1.2% [3] - The average temperature in major cities has increased by 15.7% from May to June, leading to a rise in electricity demand [3] Supply Dynamics - Coal imports for the first five months of 2024 reached 190 million tons, a decrease of 8.0% year-on-year, with Indonesian coal imports dropping significantly [4] - The report indicates that domestic coal production has contracted due to increased safety and environmental inspections, as well as maintenance shutdowns at some mines [2] Recommended Stocks - The report recommends investing in leading coal companies such as China Shenhua, Shaanxi Coal and Energy, and China Coal Energy, which are expected to benefit from the seasonal rebound in thermal coal prices [2][9]

Investment Rating - The report maintains an "Increase" rating for the biopharmaceutical industry [6] Core Insights - The participation of domestic innovative drugs in the ASCO conference has increased, with approximately 67 domestic innovative drug studies included in oral presentations, a 35% increase from 2024, accounting for about 20% of all clinical results [1] - Several domestic new drugs, such as IBI363, MRG003, and others, have shown promising data that could revolutionize existing treatment protocols or fill therapeutic gaps [1] - The report recommends companies including Shiyao Group, Kelun-Botai, and Hutchison China MediTech, with industry-related companies including 3SBio [1] Summary by Sections IO Resistance - IBI363 shows excellent survival data in treating IO-resistant NSCLC, with a 12-month OS rate exceeding 70.9% and 71.6% for different cancer types, significantly outperforming chemotherapy and other innovative drug competitors [2][10] - MRG003 demonstrates significant PFS and OS improvements in PD-1 and platinum-based chemotherapy-resistant NPC patients, with HR values of 0.63 and 0.73, respectively [2][21] Lung Cancer - Phase III clinical trials for domestic new drugs show potential for therapeutic innovation, with results from studies on Beimuosubai monoclonal antibody combined with Anlotinib indicating PFS of 11.0 months and 13.3 months in different patient groups, outperforming competitors [3][24] - The SACHI study shows that the combination of Saiwo and Osimertinib in 2L EGFRm Met-amplified NSCLC achieves a PFS of 6.9 months, significantly better than chemotherapy [3][32] Gastrointestinal Tumors - Domestic innovative drugs have made breakthroughs in gastric cancer and CRC, with the Vidiqi monoclonal antibody showing an ORR of 82.4% in HER2 high-expressing patients, significantly outperforming existing treatment options [4][35] - JMT101 combined with Irinotecan shows a PFS of 7.4 months in 3L+ CRC, outperforming current SoC treatments [4][43]