citic securities·2025-08-04 08:46Group 1: China Market Focus - Extreme weather has led to a decline in manufacturing sentiment, with the manufacturing PMI for July at 49.3, down 0.4 points from the previous month and 0.7 points below the five-year average [13][12] - The political bureau meeting in July emphasized the need for macro policies to "continue to exert force and increase strength" to address structural economic issues [12] - The manufacturing PMI's decline is attributed to high temperatures and heavy rainfall, affecting production and demand, while price indices have shown a significant rebound due to anti-involution effects [13][12] Group 2: Stock Recommendations - Covos (603486 CH) is focusing on expanding its robotics core components and manufacturing project, with an expected annual output of 20 million key components and a projected revenue exceeding 1 billion yuan [21] - Zhaoyi Innovation (603986 CH) is positioned well in the AI era with its customized storage solutions, benefiting from trends in high bandwidth and low power consumption, and is expected to gain market share in the DRAM sector [21] Group 3: UK Market Focus - The UK economy is showing signs of risk, with GDP growth in April and May falling short of expectations, and a potential for two more interest rate cuts this year [31][29] - The UK stock market is facing structural challenges, with high international exposure and a strong pound affecting corporate earnings, while sectors like defense and utilities may perform better [32][31] Group 4: India Market Focus - India's economic growth is projected to slightly decline from 6.5% to 6.2% in the fiscal year 2026, with risks stemming from a slowdown in rural recovery and industrial activity [46] - The Indian government has approved significant defense contracts, with Hindustan Aeronautics (HNAL IN) expected to benefit from a substantial order backlog, indicating strong growth potential in the defense sector [51][46]