Long-term Planning - The Politburo meeting in July emphasized long-term planning, focusing on the "14th Five-Year Plan" as a core topic for the upcoming Fourth Plenary Session in October[1] - The meeting highlighted the importance of new productive forces in the context of technological competition, particularly in the U.S.-China rivalry[2] Economic Performance - China's GDP grew by 5.3% in the first half of the year, with a nominal GDP target of approximately 140 trillion yuan for the full year[3] - The government anticipates maintaining a steady economic trend in the second half, with a target GDP growth of around 5%[3] Fiscal and Monetary Policy - The meeting called for a more proactive fiscal policy and moderately loose monetary policy, emphasizing the effective implementation of existing policies rather than new stimulus measures[4] - As of June 2025, new local government special bond issuance exceeded 2.2 trillion yuan, marking a significant increase from 1.5 trillion yuan in the same period last year[4] Domestic Consumption - Final consumption expenditure contributed 52% to the economy in the first half of 2025, with service trade retail growing by 5.3% and goods retail by 5.1%[7] - The government aims to enhance service consumption as a key driver for expanding domestic demand, supported by policies aimed at improving living standards[7] Industry Capacity Management - The meeting stressed the need for capacity governance in key industries, particularly in the new energy vehicle and photovoltaic sectors, to eliminate outdated production capacity[8] - Regulatory measures will focus on enhancing industry standards and preventing redundant capacity construction[8] Foreign Trade Support - China's exports to the U.S. saw a decline from a growth rate of 5.6% in March to -9.9% in June, while overall export growth remained at 7.2%[10] - The government is implementing financial policies to support foreign trade enterprises affected by external pressures, focusing on relief rather than filling external demand gaps[10] Capital Market Development - The government aims to enhance the attractiveness and inclusivity of domestic capital markets, with the Shanghai Composite Index rising over 7.8% by the end of July 2025[12] - Future policies will support technology-driven and growth-oriented enterprises, with expectations for increased dividend payouts to attract long-term capital[12]

Investment Rating - The industry rating is "Positive" (maintained) [6] Core Insights - The profitability of China's banking FICC business remains considerable, with a pre-tax total asset return on equity of approximately 3.35% as of 2024A, primarily driven by interest income [1][12] - The FICC business has experienced a decline in yield over the past five years, with interest rates decreasing by about 50 basis points [2] - Future projections indicate a potential decline in asset return on equity to 1.61% in five years, a decrease of 174 basis points compared to 2024 levels [3] Current Profitability of China's Banking FICC Business - The current yield structure shows that interest income contributes 3.10%, capital gains 1.61%, and exchange gains 0.18% to the total asset return [12][13] - The financial market business ROA is 0.98%, significantly higher than the overall banking ROA of 0.75% [1][13] - Notable performers in the FICC business include banks like China Merchants Bank and Changshu Bank, with post-tax net returns exceeding 2.0% [13] Historical Profitability Changes - Over the past five years, the FICC business yield has consistently remained above 3%, with a notable decline in interest income during the interest rate reduction cycle [2][34] Future Profitability Outlook - Projections suggest that the financial market business ROA may drop to 0.44% in five years, reflecting a significant decrease in profitability [3] Characteristics of U.S. Banking FICC Business in Low-Interest Rate Periods - U.S. banks expanded bond holdings during the initial low-interest phase, but FICC income still declined, with a 0.5 percentage point drop in income share from 2008 to 2012 [4] - Strategies employed by JPMorgan included shortening bond durations and increasing allocations to credit and overseas bonds [4] Recommendations for China's Banking FICC Business - Increase the proportion of bond assets in OCI accounts, which currently stands at 28.4%, below the U.S. average of 42.5% during low-interest periods [5] - Focus on enhancing the allocation of credit and overseas bonds, as well as improving risk hedging practices to mitigate potential losses from rapid interest rate increases [5] Investment Suggestions - The report suggests adopting a bullish mindset towards bank stocks, emphasizing the importance of stock selection within the context of a long-term bullish trend driven by low interest rates and the revaluation of RMB assets [7]

Market Overview - On July 29, the Shanghai Composite Index rose by 0.33%, the CSI 300 increased by 0.39%, the STAR 50 climbed by 1.45%, the CSI 1000 went up by 0.65%, and the ChiNext Index surged by 1.86%. In contrast, the Hang Seng Index fell by 0.15% [4]. - The best-performing sectors on July 29 were telecommunications (+3.29%), steel (+2.59%), pharmaceuticals and biology (+2.06%), electronics (+1.42%), and national defense and military industry (+1.19%). The worst-performing sectors included agriculture, forestry, animal husbandry, and fishery (-1.36%), banking (-1.19%), beauty and personal care (-0.71%), light industry manufacturing (-0.63%), and environmental protection (-0.6%) [4]. - The total trading volume for the entire A-share market on July 29 was 1,829.3 billion yuan, with net inflow from southbound funds amounting to 12.72 billion Hong Kong dollars [4]. Key Recommendations - The report focuses on IFBH (06603), a leading brand in the coconut water industry, which is positioned in a high-growth quality sector. The company is expected to achieve rapid market penetration through a light asset model in the short term, while in the long term, it aims to solidify its market share through excellent product development capabilities, a high-quality product matrix, and an expanding distribution network [5]. - The light asset model is driving rapid market penetration, leading to revenue exceeding expectations. New product launches are contributing to revenue growth, and the standards for the coconut water industry are being further refined [5]. - Revenue projections for 2025-2027 are estimated at 208 million, 270 million, and 336 million USD, with growth rates of 32.3%, 29.4%, and 24.5% respectively. Net profit attributable to the parent company is projected to be 45 million, 59 million, and 77 million USD, with growth rates of 33.8%, 32.0%, and 31.5%. The expected EPS for 2025-2027 is 0.17, 0.22, and 0.29 USD, corresponding to PE ratios of 29, 22, and 17. Given the company is in a favorable period for the coconut water sector, there is still room for growth, and an "Accumulate" rating is given [5]. Catalysts - Key catalysts for the company include the implementation of coconut water standards, expansion of offline channels, and the launch of new products [6].

Investment Rating - The report upgrades the investment rating of OSL Group to "Buy" [6] Core Views - The report highlights that while there may be short-term dilution effects, the long-term growth prospects are accelerating due to strategic acquisitions and compliance advantages [1][2][4] Summary by Sections Event Highlights - The total fundraising amount is HK$23.55 billion, completed through three agreements, including a placement of 101 million shares at HK$14.9 per share, representing a 15.34% discount to the previous closing price [1] - Post-placement, the total share capital increases by 13.9%, with the major shareholder maintaining a 29.95% stake, reinforcing control [1] - Fund allocation includes 50% for strategic acquisitions, 30% for global business initiatives, and 20% for working capital [1] Short-term and Long-term Impacts - Short-term market sentiment is affected by the placement discount, leading to a drop in stock price, but high participation from major shareholders and institutions indicates long-term confidence [2] - Long-term growth is driven by acquisitions targeting Southeast Asia and the establishment of a stablecoin business in line with upcoming regulations [2] Compliance and Global Expansion - OSL Group aims to establish itself as the Asia-Pacific equivalent of Coinbase, leveraging its strong compliance background to facilitate global expansion [3] - The management team, including experienced individuals from the cryptocurrency sector, is expected to enhance the company's ability to acquire quality compliant assets globally [3] Profit Forecast and Investment Recommendations - The report anticipates a 12% short-term EPS reduction due to share dilution, but improved cash flow and reduced debt ratios are expected to optimize financial structure [4] - Revenue projections for 2025-2027 are HK$750 million, HK$1.51 billion, and HK$2.36 billion, with year-on-year growth rates of 100%, 101%, and 56% respectively [4] - A price-to-sales (P/S) valuation method is applied, with a target price of HK$24.11 for 2025, indicating a 33% upside potential [4]

Core Insights - The report emphasizes the quantitative practices in the bond ETF era, highlighting the use of redemption lists to enhance transparency and the application of machine learning to predict which bonds are more likely to be purchased by ETFs [1][2] Group 1: Enhancing Transparency through Redemption Lists - Bond ETFs are not purely passively managed; they involve significant active sampling and timing operations. Typically, 90% of the portfolio comes from index and its alternative component bonds, with the remaining 10% sourced from non-component bonds to meet tracking error requirements [12][13] - The number of bonds in the credit bond ETF's benchmark market-making list exceeds 200, while the ETF holdings and redemption lists contain fewer than 200 and 70 bonds, respectively. This indicates a multi-layered selection process for bonds [12][13] - The rapid growth of bond ETF sizes can lead to liquidity disruptions in the primary market, affecting the cost of acquiring replacement bonds [15][24] Group 2: Machine Learning Predictions for Bond Selection - The expansion of bond ETF component bonds follows specific patterns, with a focus on selecting similar attribute bonds from the alternative pool. The redemption mechanism requires ETFs to disclose component bonds and ensure their liquidity [27][28] - The report notes that the weekly influx of new bonds into credit bond ETFs can range from a few dozen to nearly a hundred, reflecting the dynamic nature of the market [28][31] - A predictive model using LightGBM was developed to assess the likelihood of each bond being included in an ETF, with the model showing a correct prediction rate of 45% to 50% for the top 20 predicted bonds [36][38]

Market Overview - On July 28, the Shanghai Composite Index rose by 0.12%, the CSI 300 increased by 0.21%, the STAR Market 50 gained 0.09%, the CSI 1000 was up by 0.35%, the ChiNext Index climbed by 0.96%, and the Hang Seng Index increased by 0.68% [3][4] - The best-performing sectors on July 28 were defense and military (+1.86%), non-bank financials (+1.51%), pharmaceutical and biological (+1.47%), comprehensive (+1.29%), and communication (+1.24%). The worst-performing sectors were coal (-2.6%), steel (-1.41%), transportation (-1.38%), oil and petrochemicals (-1.02%), and textiles and apparel (-0.93%) [3][4] - The total trading volume for the A-share market on July 28 was 1.7662 trillion yuan, with a net inflow of 9.253 billion Hong Kong dollars from southbound funds [3][4] Key Insights - The report emphasizes a focus on consumption and growth styles, with industry attention on electric equipment, non-ferrous metals, pharmaceuticals, electronics, and brokerage firms [5] - The report suggests that under the current monetary environment, the "dumbbell strategy" remains effective, but the large-cap growth style may attract market attention in the short term [5] - Factors driving this outlook include strong support from hydropower projects and policy catalysts such as "anti-involution" and Hainan's customs closure, which have impacted the previously strong dumbbell strategy [5] - The report recommends increasing focus on mid-to-large-cap growth styles in August, particularly in sectors related to consumption and growth, as well as electric equipment and non-ferrous metals influenced by industry trends in pharmaceuticals (innovative drugs, AI healthcare) and electronics [5]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The company is integrating its self-developed digital twin platform, AISWare Digital Gemini, with NVIDIA Omniverse to enhance its product capabilities in the AI era, aiming to transform domestic manufacturing from "manufacturing" to "intelligent manufacturing" [1][2] - The digital twin platform has been recognized across various fields, having won international awards and passed evaluations for low-code platforms, indicating its leading position in the domestic digital twin sector [2] - The integration with NVIDIA Omniverse is expected to elevate the company's digital twin platform, creating a new industrial ecosystem centered around physical AI, which will provide comprehensive solutions for industries such as manufacturing and energy [2] - The company has accelerated its layout in AI large model delivery since 2023, successfully delivering over 30 large model projects in various sectors, with total order values exceeding 50 million yuan [3] - The financial forecast estimates the company's revenue for 2025-2027 to be 6.915 billion, 7.461 billion, and 8.269 billion yuan, respectively, with net profits projected at 571 million, 674 million, and 777 million yuan [4][10] Summary by Sections Digital Twin Platform - The AISWare Digital Gemini platform serves as a crucial part of the company's IT product system, enabling users to design and operate various digital twin applications across multiple sectors [2] - The platform has been successfully implemented in smart parks, digital villages, and event communication support, showcasing its practical applications [2] Integration with NVIDIA Omniverse - The collaboration with NVIDIA Omniverse aims to leverage synthetic data for training robots, facilitating a seamless transition from virtual to real-world industrial tasks [2] - This integration is anticipated to create a closed-loop solution for industries, enhancing the company's technological foundation and industrial value [2] AI Large Model Delivery - The company has made significant strides in AI large model delivery, with a comprehensive approach covering demand analysis, consulting, product development, implementation, and operational maintenance [3] - The successful application of large models in various manufacturing scenarios is expected to accelerate AI adoption in the industry [3] Financial Projections - The report maintains previous profit forecasts, with expected revenue growth and net profit increases over the next three years [4][10]

Group 1: Key Recommendations - The report highlights the strong growth potential of Weichuang Electric (688698) driven by its comprehensive robot layout and core component orders for humanoid robots, with projected revenue growth rates of 23.2%, 23.6%, and 22.2% from 2025 to 2027 [6][7] - The report emphasizes the undervaluation of GF Securities (000776), noting its balanced business structure and strong profitability, with expected revenue growth rates of 12.3%, 12.9%, and 14.1% from 2025 to 2027 [7][8] Group 2: Market Insights - The report indicates a bullish outlook for the A-share market, suggesting that the Shanghai Composite Index may aim to surpass its previous high of 3674 points, supported by a favorable macroeconomic environment and a potential appreciation of the RMB against the USD [9] - The report suggests a strategic shift in bank investments from large to smaller banks to enhance portfolio flexibility, while maintaining exposure to the brokerage sector to mitigate upward risks [9] Group 3: Industry Analysis - The chemical industry is experiencing a recovery, driven by improved market sentiment, liquidity easing, and policy catalysts, with recommendations to focus on undervalued leading companies and low PS/PB elastic varieties [13][14] - The report notes that the gaming and social business of ShengTian Network (300494) is expected to benefit from self-built computing power and self-developed AI platforms, with new game launches anticipated to boost profit levels in 2025 [10][11]

Report Investment Rating No investment rating information is provided in the report. Core Viewpoints - In the next week, funds will cross the month, but the central bank is expected to maintain net injections, potentially reducing the pressure on fund fluctuations. If the central bank provides sufficient support, there is a high probability of a smooth transition across the month, with DR001 likely to fluctuate between 1.35% - 1.55% [1][2]. - In the past week, funds experienced significant frictions due to factors such as the equity market absorbing inter - bank liquidity, large net government bond payments, and the central bank's continuous net withdrawals after the tax period. The tightening of funds was mainly driven by pressures within the banking system [2]. - The maturity pressure of certificates of deposit (CDs) will significantly decrease in the next week, with a maturity scale of only 37.67 billion yuan. If the pressure on the funds eases, CD rates may slightly decline when crossing the month [2]. - In the past week, funds sold off bonds across all varieties, with a rapid shift in sentiment. However, the willingness of allocation - oriented investors such as banks, insurance companies, and wealth management firms to absorb bonds is not weak, suggesting that the current market adjustment may present investment opportunities [3]. Summary by Directory 1 Liquidity Tracking 1.1 Central Bank Operations - In the past week (7/21 - 7/25), the central bank's open - market operations resulted in a net liquidity injection of 10.95 billion yuan, including 20 billion yuan in long - term liquidity and a net withdrawal of 9.05 billion yuan in short - term liquidity. As of 7/25, the central bank's reverse repurchase balance was 1.66 trillion yuan, slightly higher than the seasonal average [10]. - In the next week (7/28 - 8/1), 1.66 trillion yuan of reverse repurchases will mature. Considering the month - end period, the central bank may maintain a small net injection [10]. - In July, the central bank injected a total of 30 billion yuan in long - term liquidity, including 10 billion yuan in net MLF injections and 10 billion yuan each in 3M and 6M outright reverse repurchases [11]. 1.2 Government Bond Issuance - In the past week, the expected net government bond payment was 27.1 billion yuan, with treasury bonds contributing 1.07 billion yuan and local government bonds 26.02 billion yuan. In the next week, the expected net payment is 28.76 billion yuan, with a smaller overall pressure. Treasury bond net payment is expected to be - 2 billion yuan, while local government bonds will contribute 30.76 billion yuan. The net payment pressure will be higher on Tuesday, with a single - day net payment of 12.67 billion yuan [13]. 1.3 Bill Market - In the past week, bill rates declined significantly. As of 7/25, the 3M direct and transfer discount rates for national - owned banks were 1.25% and 1.10% respectively, down from 1.30% and 1.23% on 7/18. The 6M rates were 0.79% and 0.72% respectively, down from 0.87% and 0.81% on 7/18. Currently, bill rates are still significantly weaker than the seasonal average, indicating slow credit demand recovery [22]. 1.4 Fund Review - In the past week, fund fluctuations increased significantly, with daily frictions intensifying. After the tax period, the central bank continuously withdrew funds. Although the funds were relatively loose on Monday and Tuesday, with DR001 closing at 1.3144% on Tuesday, the situation fluctuated rapidly from Wednesday to Friday. The fund sentiment index reached a maximum of 58 on Thursday morning and 57 on Friday morning, but funds eased significantly in the late afternoon on Thursday and after 10 am on Friday [24]. - Inter - bank fund price fluctuations were larger than those in the exchange market, and the 7 - day fund price fluctuations were greater than overnight. On 7/25, DR001 rose 6.08bps to 1.52%, DR007 rose 14.56bps to 1.65%, R001 rose 6.41bps to 1.55%, and R007 rose 18.65bps to 1.69% [29]. - The term spread widened, and the market spread narrowed. Compared to 7/18, on 7/25, the R007 - R001 spread rose 12.24bps to 14.15bps, the R007 - DR007 spread rose 4.09bps to 4.14bps, and the GC007 - R007 spread fell 4.45bps to - 5.67bps [30]. - The proportion of overnight fund transactions in the inter - bank market decreased significantly as the month - end approached. The net lending of the banking system decreased significantly, with large banks experiencing the most significant decline. The net borrowing demand of core non - bank institutions also decreased significantly, while the net lending of core non - bank net lenders increased [35][38]. 1.5 Certificates of Deposit - In the past week (7/21 - 7/27), the total issuance of CDs was 51.67 billion yuan, with a net financing of - 55.98 billion yuan. The net financing scale declined significantly. As of 7/27, the cumulative net financing of CDs for the year was 1.32 trillion yuan [50]. - The issuance scale of CDs by different entities in the past week ranked as follows: city commercial banks (17.48 billion yuan)> state - owned banks (16.38 billion yuan)> joint - stock banks (12.92 billion yuan)> rural commercial banks (4.15 billion yuan). The weighted issuance term of CDs decreased to 0.61 years from 0.69 years last week [50]. - The issuance rates of CDs for national - owned and joint - stock banks increased across all tenors. The secondary - market CD yields also adjusted significantly. On 7/25, the 1 - year AAA CD yield rose 5.75bps to 1.6750% compared to 7/18 [53]. - In the next four weeks, the CD maturities will be 37.67 billion yuan (7/23 - 8/3), 59.82 billion yuan (8/4 - 8/10), 90.71 billion yuan (8/11 - 8/17), and 79.47 billion yuan (8/18 - 8/24) respectively, indicating controllable maturity pressure. In the next week, the maturity pressure will be higher on Tuesday and Wednesday [55]. 2 Institutional Behavior Tracking 2.1 Secondary Market Transactions - Large banks slightly increased their purchases of short - term treasury bonds. In the past week, funds net sold 20.76 billion yuan of interest - rate bonds, while rural commercial banks net bought 25.73 billion yuan of interest - rate bonds [60]. - Wealth management subsidiaries and other products were the main buyers of CDs, while city commercial banks, rural commercial banks, funds, and securities firms were the main sellers [60]. - Funds quickly switched from buying to selling credit bonds, while the buying power of other institutions such as wealth management firms remained relatively stable. Insurance companies were the main buyers of credit bonds with a maturity of over 5 years [60]. - Funds' net selling of secondary - tier bonds also increased rapidly. For secondary - tier bonds with a maturity of less than 2 years, funds switched to large - scale net selling on Friday, with a net selling of 370 million yuan in the past week. For 2 - 5 - year secondary - tier bonds, funds' demand also declined significantly [60]. 2.2 Institutional Duration - The median duration of medium - and long - term bond funds fluctuated. On 7/25, the 10 - day moving average of the median duration was 4.18 years, slightly higher than 4.13 years on 7/18, but it declined significantly on Friday [62]. - The trading duration of general credit bonds decreased, while that of secondary - tier bonds increased. On 7/25, the 5 - day moving average of the trading duration of urban investment bonds decreased to 2.43 years, and that of industrial bonds decreased to 3.51 years, while the trading duration of secondary - tier bonds increased to 3.16 years [66]. 2.3 Institutional Leverage - The bond market leverage ratio was estimated to be 107.16% in the past week, basically unchanged from last week's 107.04% [68].

Investment Rating - The investment rating for the company is "Buy" [3] Core Views - The company plans to acquire 100% of Daniao Logistics for a cash consideration of 362 million yuan, enhancing its logistics competitiveness [1] - The acquisition will create a dual business matrix of "economical express + quality express," allowing the company to tap into high-end markets and improve its service offerings [1] - The company is responding to industry trends by accelerating its focus on value rather than price competition, aligning with recent regulatory changes [1] Summary by Sections Acquisition Details - The company announced its intention to acquire Daniao Logistics, a key player in quality express and reverse logistics services, which operates a network covering nearly 300 cities [1] - Daniao Logistics has established a strong market presence with over 400 million daily transactions and a significant penetration rate in e-commerce platforms [1] Strategic Implications - The acquisition is expected to fill the company's gap in the quality express segment and leverage Daniao's superior delivery capabilities [1] - The integration will allow the company to optimize its product structure and create differentiated advantages in emerging delivery scenarios [1] Financial Projections - The company forecasts a significant increase in net profit, projecting 1.29 billion yuan for 2025, with a corresponding PE ratio of 17.9 times [1] - Revenue is expected to grow from 47.17 billion yuan in 2024 to 55.88 billion yuan in 2025, reflecting a growth rate of 18.46% [7]