SINOLINK SECURITIES·2025-06-29 11:45Group 1: Core Views - The report highlights a new cycle in the market, indicating that China and the US are in mirrored economic cycles, with China lacking capital returns while the US sacrifices government credit [3][9][10] - The expectation is that high interest rates will have limited impact on private and household sectors overseas, and that a global shift from virtual to real manufacturing will begin, benefiting China's economy through increased physical consumption [3][10] Group 2: Investment Strategy - Short-term investment opportunities in China are constrained by risks associated with dollar repatriation and weakening volume and price dynamics, but preparations for a shift towards real economy investments in the second half of the year are advised [4][11] - The focus for Chinese investors should be on increasing volume across various sectors, with particular attention to physical assets like oil and copper as manufacturing activities resume [4][11] Group 3: Sector Recommendations - Wind Power Equipment: Daikin Heavy Industry is recommended due to the upward trend in European offshore wind market, with expectations for continued performance and order fulfillment [14] - Engineering Machinery: Hengli Hydraulic is favored as domestic excavator industry recovers, with potential growth in humanoid robot components [15] - Defense Electronics: Aerospace Electric is positioned as a leader in military connectors, benefiting from high demand in defense sectors [16] - Commercial Vehicles: China National Heavy Duty Truck is expected to benefit from recovering demand in heavy truck sector and improving profitability [17] - Agricultural Chemicals: Yangnong Chemical is at a cyclical turning point with potential for growth supported by capital expenditures [18] - Non-Bank Financials: China Taiping is recommended due to its low valuation and potential for profit growth driven by insurance transformation [19] - Food and Beverage: Yanjinpuzi is highlighted for its strong growth in konjac products and multi-channel expansion [20] - Retail: Meituan is expected to maintain its leading position in food delivery, with growth potential in instant retail and international expansion [21] - Light Manufacturing: Smoore International is positioned to benefit from the expanding legal vaping market in Europe and the US [23] - Telecommunications: China Unicom is recommended due to its leading investment in AI computing and growth in IDC and cloud services [25]