Core Insights - The A-share market experienced a collective decline last Friday, with the Shanghai Composite Index down by 0.33%, the Shenzhen Component down by 0.22%, and the ChiNext Index down by 0.23%. The total trading volume in the Shanghai and Shenzhen markets was 1,786.98 billion yuan [2][6] - In terms of industry performance, the electronics, computer, and real estate sectors led the gains, while the construction decoration, building materials, and food and beverage sectors lagged behind. Concept sectors such as Sora, photolithography machines, and multimodal AI saw significant increases, while the Hainan Free Trade Zone, Yaxia Hydropower concept, and pumped storage experienced declines [2][6] - The Hang Seng Index fell by 1.09%, and the Hang Seng Technology Index dropped by 1.13%. In overseas markets, the three major U.S. indices collectively rose, with the Dow Jones up by 0.47%, the S&P 500 up by 0.4%, and the Nasdaq up by 0.24% [2][6] Industry News - According to the National Bureau of Statistics, profits of industrial enterprises above designated size fell by 4.3% year-on-year in June, with the decline narrowing compared to May. The new momentum industries, represented by equipment manufacturing, showed rapid profit growth, indicating the sustained effect of the "two new" policies. From January to June, the total profit of industrial enterprises was 34,365 billion yuan, a year-on-year decrease of 1.8%. The black metal smelting and rolling processing industry saw profits increase by 13.7 times, while the mining industry experienced a 30.3% decline [3][7] - The U.S. and the EU reached a 15% tariff agreement, which will impose tariffs on most European goods exported to the U.S., including automobiles. The EU is expected to increase investments in the U.S. by 600 billion dollars and purchase 150 billion dollars worth of U.S. energy products. Some products will be exempt from tariffs, including aircraft and certain chemicals and pharmaceuticals [3][7] Transportation Industry Insights - Public fund holdings in the transportation industry saw a rebound in Q2 2025 after three consecutive quarters of decline, with the total market value of public fund holdings in the transportation sector reaching 48.252 billion yuan, accounting for 13.3% of the fund's heavy positions, which is still below the benchmark allocation by 1.86 percentage points [8][9] - The transportation industry index rose by 2.71% in Q2 2025, achieving a relative return of 2.17% compared to the Shanghai and Shenzhen 300 Index [9] - Within the sub-industries, the aviation and logistics sectors saw an increase in holdings, while the shipping ports and railway-highway sectors experienced a decrease. The express delivery sector is expected to benefit from reduced competition and improved profitability [8][10] Gaming Industry Insights - In July 2025, the National Press and Publication Administration announced the approval of 127 domestic games and 7 imported games, maintaining a high volume of game license issuance [11][12] - The approval of several major titles, including "Kingshot" by Diandian Interactive, indicates a robust supply side and a steady trend towards normalization in game licensing, suggesting ongoing recovery in the industry [12][15] - The gaming market is expected to see significant contributions from established companies with diverse product offerings and strong R&D capabilities, as evidenced by the successful approval of high-profile titles [12][15]

Funding Sources - Incremental funds since late April have been driven by margin financing and insurance contributions, with significant structural inflows observed since late June[1] - Northbound funds have fluctuated around a market value of CNY 2.3 trillion, with trading activity declining to approximately 6% recently, close to levels seen in early April[1] - Margin financing balance has accelerated since late June, reaching CNY 1.94 trillion by July 24, nearing the historical high of CNY 1.95 trillion from March 2025[1] Market Trends - Market style has shifted from a "barbell" structure to a broader sector expansion, with small-cap stocks showing a steeper upward trend compared to mid and large-cap stocks since mid-July[2] - The average repeat rate of leading concepts from April 7 to July 25 has remained around 16%, indicating a lack of sustained momentum in market hotspots, with rapid rotation of themes occurring every 2 to 3 trading days[2] - Overall market sentiment has improved, with increased trading volume and a more optimistic outlook for the third quarter, despite potential limitations in economic growth compared to the second quarter[2] Sector Selection Strategy - Recommended sectors for investment include those likely to benefit from upcoming policies, such as photovoltaic, coal, and chemical industries, as well as technology sectors like robotics that have shown weaker prior performance[2] - Sectors that have not yet experienced significant upward movement, such as alcoholic beverages, service consumption, and real estate development, are also suggested for balanced investment strategies[2] Risk Considerations - Potential risks include delays in policy implementation, crowded funding risks as margin financing approaches previous highs, and discrepancies between estimated and actual fund positions[2]

Investment Rating - The report maintains an "Outperform" rating for the non-bank financial sector, indicating a positive outlook for investment opportunities in this industry [2]. Core Insights - The report highlights the acceleration of stablecoin regulation and a reduction in insurance product interest rates as significant developments impacting the non-bank financial sector [1]. - The capital market is experiencing structural changes driven by policy support and internal demand, with expectations for continued improvement in brokerage valuations and performance due to mid-year earnings catalysts and long-term capital inflows [4][11]. - The upcoming implementation of the stablecoin licensing regime in Hong Kong is expected to create new growth opportunities for brokerages, particularly in the virtual asset ecosystem [13]. Summary by Sections Securities Business Overview and Weekly Review - The China Securities Regulatory Commission (CSRC) is focused on stabilizing the market and enhancing regulatory effectiveness, with key tasks including risk prevention and promoting market vitality [11]. - The merger of Guotai Junan Asset Management and Haitong Asset Management is expected to enhance operational efficiency and profitability, with projected net profits for the first half of 2025 expected to increase by 205%-218% year-on-year [12]. - The securities sector indices outperformed major indices, with the non-bank financial index up by 3.37% and the securities index up by 5.35% [16]. Insurance Business Overview and Weekly Review - The maximum preset interest rates for various insurance products have been reduced, with ordinary life insurance rates dropping from 2.5% to 2.0%, reflecting regulatory adjustments to align with market conditions [31]. - The Ministry of Human Resources and Social Security is promoting the expansion of entrusted basic pension fund investments, which is expected to inject significant long-term capital into the market [32]. - The report notes a surge in insurance capital's equity market participation, with 21 instances of capital increases recorded this year, indicating a strong interest in equity investments by insurance institutions [33]. Market Liquidity Tracking - The central bank's net injection of liquidity amounted to 55.487 billion yuan during the week, with significant reverse repo operations contributing to market liquidity [43]. - The average daily trading volume in A-shares increased by 14.20% compared to the previous week, indicating heightened market activity [21].

Group 1 - The A-share market experienced a significant rise of 200 points in July, driven by insurance capital seeking returns in a low-interest-rate environment [1] - Insurance companies are increasingly investing in high-dividend stocks and quality equity assets to hedge against the challenge of "interest spread loss" due to declining bond yields [1][2] - The long-term bond market, which has been profitable for insurance capital, is undergoing adjustments, leading to a shift towards bank stocks, particularly H-shares, which offer stable cash flow [2][3] Group 2 - All bank stocks saw price increases in the first half of 2025, with 18 banks reaching historical highs and 32 banks rising over 10% [3] - The insurance capital's pursuit of dividend stocks is evident, with significant investments in various sectors beyond banking, including utilities, energy, and technology [4] - Regulatory policies are encouraging insurance capital to adopt long-term investment strategies, with a focus on high-dividend, low-volatility assets [5][6] Group 3 - The insurance capital's investment in A-shares is still below the regulatory limit, indicating potential for further investment growth in the future [6]

Core Viewpoint - Insurance funds are showing a strong enthusiasm for allocation in the capital market, with significant increases in stock holdings and a rise in equity asset allocation ratios [1][5]. Group 1: Insurance Fund Holdings - As of the end of Q1 2025, the stock market value held by the life insurance industry reached 2.65 trillion yuan, an increase of 377.5 billion yuan from the end of 2024, representing a growth rate of 16.65% [1]. - The stock allocation ratio for insurance funds is now 8.43%, up by 0.86 percentage points from the end of 2024 [1]. - In 2025, insurance funds have made 21 stake acquisitions, surpassing the total for 2024 and marking a four-year high [1][2]. Group 2: Investment Trends - Major insurance companies have indicated plans to moderately increase their equity asset allocation in 2025, highlighting the growing importance of equity investments in a prolonged low-interest-rate environment [1][5]. - The focus of insurance funds is shifting from short-term speculation to long-term investments, acting as a stabilizing force in the capital market [5]. Group 3: Sector Focus - The banking sector has been the most frequently targeted for stake acquisitions, followed by public utilities, energy, and technology sectors [4]. - Insurance funds are increasingly interested in high-dividend and technology sectors, with a strategy that combines defensive and growth-oriented investments [8][9]. Group 4: Policy Impact - Recent policies have opened up more space for insurance funds to enter the market, including a new long-cycle assessment mechanism for state-owned commercial insurance companies [7][8]. - The adjustment in performance evaluation criteria for insurance companies aims to promote long-term stable operations and sustainable development [8]. Group 5: Research and Engagement - Over 190 insurance institutions have conducted more than 9,800 research engagements with over 1,400 A-share listed companies, indicating a significant increase in research activity compared to previous years [9][10]. - The focus of these research activities includes high-dividend sectors like banking and emerging technology sectors such as artificial intelligence and semiconductors [9][10].

Core Viewpoint - The successful transportation of six valuable warmblood horses from Europe to Shanghai by China Eastern Airlines Logistics marks a significant breakthrough in the high-value, specialized logistics sector, showcasing the company's commitment to enhancing its service capabilities and strategic transformation [6]. Group 1: Market Opportunity - The horse racing and equestrian industry in China has immense growth potential, with an increasing number of international competitions being held in the country, leading to a rising demand for specialized logistics services [2]. - China Eastern Airlines Logistics has identified this market opportunity and is actively engaging with renowned European horse farms to offer tailored air transport solutions for equestrian events and horse breeding transactions [2]. Group 2: Logistics and Operations - To ensure a smooth logistics chain, China Eastern Airlines Logistics has meticulously coordinated key operations, including ground handling, air transport, and emergency support, specifically tailored for live animal transportation [4]. - The company utilizes specialized air containers for horses, implements temperature-controlled transport, and has dedicated personnel for sanitation and compliance with regulatory standards, ensuring safety and efficiency throughout the transportation process [4]. Group 3: Future Plans - Moving forward, China Eastern Airlines Logistics aims to deepen its focus on the horse and live animal transport market, continuously optimizing its service product system and enhancing its high-end logistics solutions [8]. - The company is committed to providing safer, more efficient, and higher-value air logistics services, while promoting the standardization, specialization, and internationalization of specialized logistics [8].

Group 1 - Zhongyou Insurance has acquired 726,000 shares of Green Power Environmental, triggering a stake increase [1][2] - Prior to this acquisition, Zhongyou Insurance held 19.784 million shares, representing 4.8927% of the H-share capital [2][3] - After the acquisition, the total shares held increased to 20.51 million, raising the ownership percentage to 5.0722% [2][3] Group 2 - In 2023, insurance companies have made 21 stake increases in listed companies, surpassing the total for the entire previous year [1][5] - Major insurance firms, including Ping An Life and Great Wall Life, have also made significant stake increases in various companies across different sectors [5] - The trend of stake increases is driven by low interest rates, regulatory support for long-term investments, and a focus on high-dividend stocks [5]

Core Viewpoint - Zhongyou Insurance has increased its stake in Green Power Environmental Protection, marking the 21st time insurance companies have made such moves this year, surpassing the total for the previous year [2][6]. Group 1: Zhongyou Insurance's Actions - On July 22, Zhongyou Insurance announced the purchase of 726,000 shares of Green Power Environmental Protection H-shares, triggering a stake increase [2][4]. - Prior to this purchase, Zhongyou Insurance held 19.784 million shares, representing 4.8927% of the H-share capital. After the purchase, the total shares held increased to 20.51 million, or 5.0722% of the H-share capital [4]. Group 2: Financial Metrics - As of July 4, the book value of Zhongyou Insurance's holdings in Green Power Environmental Protection was approximately RMB 94.1 million, accounting for 0.014% of the company's total assets as of the end of Q2 2025 [5]. - As of March 31, Zhongyou Insurance reported total assets of RMB 631.38 billion and net assets of RMB 7.997 billion. By June 30, the book value of equity assets was RMB 100.775 billion, making up about 17.08% of total assets [5]. Group 3: Industry Trends - In 2023, over ten insurance institutions have made stake increases in A-shares and H-shares, totaling 21 instances, which exceeds the total from the previous year [6][7]. - The most frequently targeted sector for stake increases by insurance companies has been the banking sector, followed by public utilities, energy, transportation, high technology, and environmental protection [7]. - The motivations behind these stake increases include the pursuit of higher yields in a low-interest-rate environment, the implementation of new financial instrument standards encouraging long-term equity investments, and supportive policies for long-term capital market entry [7].

Core Viewpoint - Since 2025, insurance companies have triggered 21 investment events involving stock acquisitions, surpassing the total number of such events in the previous year [4]. Group 1: Investment Activities - The A-share market has been experiencing upward fluctuations, and the Hong Kong stock market is recovering, leading to increased activity from insurance funds in the capital markets [2]. - In July 2025, Zhongyou Insurance announced its acquisition of shares in Green Power Environmental (01330.HK), triggering a stock acquisition disclosure [3][8]. - Other insurance companies, such as Xintai Life and Lianan Life, also disclosed stock acquisitions in July 2025 [9] [10]. Group 2: Specific Investment Cases - Zhongyou Insurance purchased 726,000 shares of Green Power Environmental, increasing its holdings to 20.51 million shares, representing 5.0722% of the company's H-share capital [8]. - Xintai Life increased its holdings in Hualing Steel (000932.SZ) to 345 million shares, raising its ownership from 4.99% to 5.00% [10]. - Lianan Life acquired 1.1 million shares of Jiangnan Water (601199.SH), increasing its stake from 4.91% to 5.03% [10]. Group 3: Financial Data and Trends - As of June 30, 2025, Zhongyou Insurance reported a net buy of over 90 billion yuan in public market equity investments [6]. - Xintai Life's equity assets amounted to 565.78 billion yuan, accounting for 19.07% of its total assets as of June 30, 2025 [10]. - Lianan Life's equity assets were reported at 205.6 billion yuan, making up 16.29% of its total assets as of May 31, 2025 [10]. Group 4: Market Dynamics and Regulatory Environment - The current wave of stock acquisitions by insurance companies is driven by a preference for high-dividend stocks, particularly in sectors like banking, public utilities, and pharmaceuticals, with an average dividend yield of 4.6% since 2024 [14]. - The downward trend in interest rates has increased investment pressure on insurance companies, prompting them to seek stable long-term investment returns through frequent stock acquisitions [15]. - Regulatory changes have encouraged insurance funds to engage in long-term equity investments, with new guidelines introduced to assess net asset returns over extended periods [19].

Core Viewpoint - The insurance sector is increasingly active in the capital markets, with a notable rise in shareholding stakes in listed companies, indicating a strategic shift towards long-term equity investments driven by low interest rates and regulatory support [2][7][11]. Group 1: Shareholding Activities - In 2025, insurance companies triggered 21 shareholding events, surpassing the total for the previous year, with notable participation from companies like China Life, Postal Insurance, and Xinhua Life [3][4]. - Postal Insurance acquired 726,000 shares of Green Power Environmental, raising its stake to 5.0722%, and previously triggered a shareholding event in April by acquiring 79.42 million shares of Eastern Airlines Logistics [4][5]. - Xintai Life and Lian Life also reported shareholding increases in July, with Xintai Life raising its stake in Hualing Steel to 5.00% and Lian Life increasing its stake in Jiangnan Water to 5.03% [5]. Group 2: Investment Trends - The average dividend yield of companies targeted for shareholding by insurance funds has reached 4.6%, the highest in recent years, reflecting a preference for high-dividend stocks in sectors like banking and utilities [7][8]. - The shift towards long-term equity investments is partly due to the mismatch in asset and liability durations, with insurance liabilities averaging over 12 years compared to asset durations of about 6 years [9]. Group 3: Regulatory Environment - Recent regulatory changes encourage insurance funds to engage in long-term equity investments, with new assessment criteria introduced that emphasize long-term performance metrics [11]. - The new accounting standards allow for more stable valuation of long-term equity investments, motivating insurance companies to increase their holdings in high-dividend stocks [10].