Core Viewpoint - The report from Minsheng Securities highlights "speed" and "power" as the two core contradictions in current AI development, with PCB (Printed Circuit Board) being a crucial component in the AI industry chain, benefiting significantly from the ongoing advancements in PCB technology and processes [1] Group 1: PCB Industry Trends - The PCB industry is experiencing rapid development in advanced packaging and high-density interconnect technologies, transitioning from traditional HDI and substrate technologies to mSAP processes capable of sub-10μm line widths to meet the demands of high-speed signal transmission and large-scale integration [1] - New technologies such as CoWoP (Chip-on-Wafer-on-Panel) are changing the form of packaging substrates by using large-size PCBs to carry multiple chips, thereby reducing costs and enhancing interconnect density [1] Group 2: Upstream Material Demand - Driven by AI demand, leading PCB manufacturers like Shenghong Technology, Huitian Technology, and Pengding Holdings are actively expanding production, creating a resonance between material upgrades and capacity expansion [2] - Key upstream materials for PCBs include copper foil, electronic cloth, and resin, with upgrades in these materials to meet the requirements of high-speed signal transmission and lightweight designs [2] Group 3: Equipment Supply and Domestic Substitution - The core processes of PCB manufacturing, including drilling, electroplating, and etching, are critical for determining interconnect density, signal integrity, and production yield, with increasing demands for precision and reliability in these processes [3] - Domestic equipment manufacturers such as Dazhu CNC, Dingtai High-Tech, and Dongwei Technology are accelerating their layouts in advanced process equipment for high-layer boards, HDI, and mSAP, reflecting the industry's shift towards domestic substitution [3] Group 4: Investment Recommendations - Recommended PCB leading manufacturers include Shenghong Technology (300476.SZ), Pengding Holdings (002938.SZ), Huitian Technology (002463.SZ), Shenzhen South Circuit (002916.SZ), Guanghe Technology (001389.SZ), and Jingwang Electronics (603228.SH) [4] - In the materials sector, companies with core technologies and customer resources such as Honghe Technology (603256.SH), Zhongcai Technology (002080.SZ), Feilihua (300395.SZ), Defu Technology (301511.SZ), Longyang Electronics (301389.SZ), and Meilian New Materials (300586.SZ) are recommended [4] - For equipment, focus on domestic substitution in core segments with companies like Dazhu CNC (301200.SZ), Xinqi Microelectronics (688630.SH), Dingtai High-Tech (301377.SZ), and Dongwei Technology (688700.SH) [4]

Investment Rating - The report maintains a positive outlook on the building materials sector, highlighting potential opportunities in both "grouping" and "switching" strategies within the industry [2][11]. Core Insights - The building materials market is experiencing a shift in focus, with technology stocks gaining momentum while the building materials sector presents viable options for investment [2]. - The report emphasizes the importance of monitoring production capacity and quality improvements in key segments such as electronic fabrics and Q fabrics, which are expected to see increased demand due to advancements in AI and PCB technologies [3][4]. - The report identifies a growing confidence in infrastructure projects in regions like Xinjiang and Tibet, driven by government investments and the necessity of transportation infrastructure [11][12]. - The consumer building materials segment is showing signs of recovery, with expectations of improved revenue performance as the market stabilizes [24][25]. Summary by Sections Grouping in Building Materials - The electronic fabric sector is expected to maintain its performance, with leading companies like Zhongcai Technology reporting strong sales and production growth [3]. - The AI industry's production expectations are advancing, with key suppliers anticipating increased output of Q fabrics by the end of the year [4]. - The report highlights the importance of monitoring the production capacity and quality of Q fabrics, which will determine the actual supply capabilities of companies [4]. Switching in Building Materials - Infrastructure projects in Xinjiang and Tibet are gaining traction, with significant government backing and a strong demand for cement due to the region's unique geographical advantages [11][12]. - The consumer building materials sector is entering a recovery phase, with sales and construction data indicating a bottoming out of the market [13][14]. - The report notes that the cement industry is poised for potential growth, driven by policy improvements and governance enhancements [15][29]. Cement Industry - The cement sector is entering a peak season, but market performance remains subdued due to high comparative bases from the previous year [29][30]. - The report emphasizes the importance of policy measures to limit overproduction in the cement industry, which could enhance profitability [30][33]. - Companies like Conch Cement and Huaxin Cement are highlighted for their strong cash flow and potential for shareholder returns [34][38]. Glass Industry - The float glass market is experiencing price stabilization, with environmental regulations expected to impact production costs [40][41]. - The report indicates that the glass industry is facing cash flow challenges, with many companies operating at a loss [42]. - Companies like Xinyi Glass are expected to maintain competitive positions despite market pressures, with a focus on improving operational efficiency [43]. Photovoltaic Glass - The photovoltaic glass segment is seeing a decline in inventory levels, with prices remaining stable amid increased demand from downstream component manufacturers [48]. - The report notes that while domestic prices are under pressure, overseas markets are performing better, which could benefit leading companies in the sector [49]. Fiberglass - The fiberglass market is characterized by a divergence in production and sales, with electronic fabrics maintaining a favorable outlook [50].

Group 1 - The issuance of satellite internet licenses marks a significant step towards commercial operations in China's satellite internet sector [1] - As of August 25, 2025, the Zhongzheng National Defense Index (399973) rose by 1.56%, with notable increases in constituent stocks such as Zhongke Xingtou (688568) up 11.97% and Hongyuan Electronics (603267) up 6.86% [1] - The National Defense ETF (512670) increased by 1.62%, with the latest price reported at 0.88 yuan [1] Group 2 - The National Defense ETF closely tracks the Zhongzheng National Defense Index, which includes listed companies under the top ten military industrial groups and those providing equipment to the armed forces [2] - As of July 31, 2025, the top ten weighted stocks in the Zhongzheng National Defense Index accounted for 43.88% of the index, with companies like AVIC Shenyang Aircraft (600760) and AVIC Aviation Power (600893) among the leaders [2] - The management and custody fees for the National Defense ETF are the lowest in its category at 0.40% [2]

Investment Rating - The investment rating for the defense and military industry is "Positive" [2] Core Viewpoints - The year 2025 is expected to be a "big year for military investment" characterized by "dual-cycle resonance, industrial turning point" due to economic recovery, value reassessment, and event catalysts [3][45] - The industry has shown signs of a turning point since February 2025, with significant order growth in the upstream sector [3][46] - New warfare forms are anticipated to stimulate new demands, opening up new growth spaces for China's military industry [3][46] Summary by Sections Market Performance - From August 18 to August 22, the Shanghai Composite Index rose by 3.49%, while the defense and military index increased by 3.15%, underperforming the market by 0.34 percentage points [1][25] - Year-to-date, the defense and military index has risen by 27.1%, outperforming the market by 12.9 percentage points [1][27] Key Events - The upcoming September 3 military parade is expected to showcase a significant number of new-generation weapons, emphasizing the military's operational capabilities [4][10] - The parade will feature domestically produced main battle equipment, including new tanks, carrier-based aircraft, and fighter jets [4][10] Technological Trends - The era of unmanned and intelligent warfare is emerging, with significant applications observed in recent conflicts such as the Russia-Ukraine war [5][20] - Countries worldwide are heavily investing in unmanned systems, with the U.S. and Ukraine planning to produce millions of drones in the coming years [5][21] Investment Focus - Key investment themes include "new combat capabilities" and "value reassessment under economic recovery" [5][45] - Notable companies to watch include AVIC Shenyang Aircraft Corporation, Huayin Technology, and Aerospace Electronic [5][45] Stock Performance - Notable stock performances from August 18 to August 22 include Chengfei Integration (+33.27%) and Lijun Shares (+19.76%) [32] - Year-to-date, Longcheng Military (+432.14%) and Beifang Changlong (+399.25%) have shown significant gains [34]

Key Points - The report highlights a selection of stocks for August, including companies such as SF Holding, Satellite Chemical, and Industrial Fulian, indicating potential investment opportunities in these sectors [1] - The macroeconomic analysis indicates that the US tariff policies are increasing global trade uncertainties, while the RMB exchange rate has shown a strong average performance despite some fluctuations [2][4] - The merger and acquisition activity in the A-share market has slightly decreased but remains characterized by high frequency, diverse participants, and broad sectors, with a total of 80 disclosed transactions amounting to 601.89 billion RMB [5] - China Southern Airlines is noted for its leading fleet size and passenger volume, benefiting from a recovering tourism market and lower aviation fuel prices, which enhances profitability [6][7] - The aviation industry has seen significant growth in passenger transport over the past 15 years, with a 172.8% increase, and the domestic passenger transport volume is expected to reach 730 million in 2024, a 17.86% year-on-year increase [8][9]

Core Viewpoint - The article discusses the current landscape and future strategies of China's display materials industry, emphasizing the dual mainstream technologies of LCD and OLED, the rise of new technologies, and the critical need for domestic material innovation to overcome reliance on foreign imports [2][3][5]. Group 1: Display Technology Overview - The main display technologies currently dominating the market are TFT-LCD and OLED, with TFT-LCD holding a 40% market share due to its low cost and high durability [7][11]. - OLED technology is preferred for small to medium-sized high-end displays, with significant advancements in flexible display materials [11][15]. - The demand for new display technologies such as QLED, Micro-LED, and electrochromic displays is increasing, driven by the need for energy efficiency and improved user experience [4][42]. Group 2: Material Challenges - The high-end materials required for display technologies are predominantly imported, with 90% of high-purity OLED materials and key components like PI films being sourced from foreign suppliers [5][7][23]. - The industry faces significant challenges, including reliance on foreign patents for liquid crystal and OLED materials, and the dominance of a few companies in the glass substrate and target material markets [7][8][63]. Group 3: Strategic Solutions - A multi-faceted strategy is proposed to address these challenges, including the establishment of national platforms for material sharing, leading enterprises focusing on key technological breakthroughs, and fostering talent through collaboration between academia and industry [6][8]. - Key areas of focus include the development of high-purity OLED materials, ultra-thin flexible glass, and rare earth-doped target materials [6][8]. Group 4: Future Material Innovations - Emerging materials such as quantum dots and micro-LEDs are highlighted for their potential to enhance display technology, with ongoing research aimed at overcoming stability issues and improving performance [4][42]. - The article emphasizes the importance of developing domestic capabilities in producing critical materials to reduce dependency on foreign technology and ensure the sustainability of the display industry [5][63].

Group 1 - The report tracks stocks, industries, and sectors that are reaching new highs, serving as market indicators and highlighting the effectiveness of momentum and trend-following strategies [1][4][24] - As of August 22, 2025, the Shanghai Composite Index, Shenzhen Component Index, CSI 300, CSI 500, CSI 1000, CSI 2000, ChiNext Index, and Sci-Tech 50 Index all have a distance to their 250-day highs of 0.00%, indicating they are at their recent peaks [5][24] - Among the CITIC first-level industry indices, home appliances, defense and military, comprehensive, media, and computer industries are closest to their 250-day highs, while food and beverage, coal, real estate, banking, and consumer services are further away [8][24] Group 2 - A total of 1,606 stocks reached 250-day highs in the past 20 trading days, with the most significant numbers in the machinery, pharmaceuticals, and electronics sectors [2][13][24] - The highest proportion of new high stocks is found in the defense and military, non-ferrous metals, and pharmaceuticals industries, with respective proportions of 52.94%, 51.61%, and 44.88% [13][16] - The manufacturing and technology sectors have the most stocks reaching new highs this week, with respective counts of 512 and 403 [16][24] Group 3 - The report identifies 48 stocks that have shown stable new highs, with the technology and manufacturing sectors contributing the most, having 22 and 12 stocks respectively [3][21][25] - Within the technology sector, the electronics industry has the highest number of new high stocks, while the automotive industry leads in the manufacturing sector [21][25]

Investment Rating - The report maintains a "Recommended" rating for leading PCB manufacturers such as Shenghong Technology, Pengding Holdings, and Huadian Co., Ltd. [4][5] Core Viewpoints - The PCB industry is experiencing rapid advancements in packaging and high-density interconnect technologies, with traditional HDI and substrate technologies evolving into mSAP processes to meet the demands of high-speed signal transmission and large-scale integration [1][2] - The demand for PCB is driven by AI applications, leading to significant expansions in production capacity among leading companies, with total investments exceeding 30 billion RMB [2][20] - The core materials for PCB, including copper foil, electronic cloth, and resin, are undergoing upgrades to meet the high-frequency and high-speed requirements of AI applications [2][20][26] Summary by Sections 1. CoWoP and mSAP as Core Technologies - CoWoP (Chip-on-Wafer-on-PCB) is emerging as a future packaging route, enhancing interconnect density and reducing costs by directly using large-size PCBs [1][11] - mSAP (Modified Semi-Additive Process) is becoming the core process for achieving sub-10 µm line capabilities, essential for high-performance applications [1][14] 2. PCB Capacity Expansion and Material Upgrades - Leading PCB manufacturers are actively expanding production capacity, with significant investments announced by companies like Huadian Co., Ltd. and Shenghong Technology [2][20] - The upgrade of core materials includes the transition of copper foil from HVLP1 to HVLP5, electronic cloth to third-generation low-dielectric cloth, and resin to hydrocarbon and PTFE types [2][20][28] 3. Tight Supply of Core Equipment and Acceleration of Domestic Substitution - The supply of core PCB equipment, including drilling, plating, and etching imaging, is tight, with domestic manufacturers accelerating their layouts in advanced process equipment [2][49] - Companies like Dazhu CNC and Ding Tai High-Tech are focusing on high-layer boards and HDI equipment to meet the increasing demands of the industry [2][49] 4. Investment Recommendations - The report suggests focusing on leading PCB manufacturers such as Shenghong Technology, Pengding Holdings, and Huadian Co., Ltd., as well as material companies with core technologies like Honghe Technology and Zhongcai Technology [3][4] - Equipment manufacturers involved in domestic substitution, such as Dazhu CNC and Xinqi Microelectronics, are also highlighted as potential investment opportunities [3][4]

Core Insights - The New Quality 50 concept index rose by 3.18%, ranking 7th among concept sectors, with 46 stocks increasing in value, including Kunlun Wanwei and Cambricon, which hit a 20% limit up [1] - The sector saw a net inflow of 3.049 billion yuan, with 26 stocks receiving net inflows, and 12 stocks exceeding 100 million yuan in net inflow [1] Sector Performance - The top-performing concept sectors included: - China AI 50: +5.31% - National Big Fund Holdings: +5.00% - SMIC Concept: +3.67% - MCU Chips: +3.64% - Automotive Chips: +3.46% - Storage Chips: +3.44% - New Quality 50: +3.18% [1] - The sectors with declines included: - Hair Medical: -1.01% - Soybeans: -0.94% - Hyperbaric Oxygen Chambers: -0.76% [1] Fund Flow Analysis - The leading stocks in terms of net inflow ratio were: - Tongfu Microelectronics: 14.83% - Kunlun Wanwei: 14.22% - Sitaiwei: 12.28% [2] - The top stocks by net inflow included: - Kunlun Wanwei: 1.286 billion yuan - Tongfu Microelectronics: 626.57 million yuan - China Unicom: 452.04 million yuan [2][3] Stock Performance - Notable stock performances included: - Kunlun Wanwei: +20.01% with a turnover rate of 17.29% - Tongfu Microelectronics: +4.71% with a turnover rate of 9.29% - China Unicom: +4.06% with a turnover rate of 3.85% [2][3] - Stocks with significant declines included: - New Morning Technology: -2.80% - Aerospace Electric: -0.66% - Wolong Materials: -0.16% [4]

Market Overview - The aviation equipment sector rose by 2.28% on August 22, with Mai Xin Lin leading the gains [1] - The Shanghai Composite Index closed at 3825.76, up 1.45%, while the Shenzhen Component Index closed at 12166.06, up 2.07% [1] Stock Performance - Mai Xin Lin (688685) closed at 60.00, up 9.69% with a trading volume of 115,300 shares and a transaction value of 675 million [1] - Fei Li Hua (300395) closed at 100.78, up 7.89% with a trading volume of 328,500 shares and a transaction value of 3.271 billion [1] - Zhong Wu Drone (688297) closed at 59.14, up 4.84% with a trading volume of 199,100 shares and a transaction value of 1.137 billion [1] - Li Jun Co., Ltd. (002651) closed at 15.88, up 4.47% with a trading volume of 1,528,100 shares and a transaction value of 2.312 billion [1] - Hongdu Aviation (600316) closed at 42.49, up 2.88% with a trading volume of 254,800 shares and a transaction value of 1.072 billion [1] Capital Flow - The aviation equipment sector saw a net inflow of 48.0016 million from institutional investors, while retail investors contributed a net inflow of 211 million [2] - The sector experienced a net outflow of 259 million from speculative funds [2] Individual Stock Capital Flow - Fei Li Hua (300395) had a net inflow of 242 million from institutional investors, but a net outflow of 69.3025 million from speculative funds [3] - Hong Fa Power (600893) saw a net inflow of 164 million from institutional investors, with a net outflow of 110 million from speculative funds [3] - Guang Qi Technology (002625) had a net inflow of 57.187 million from institutional investors, while experiencing a net outflow of 63.1011 million from retail investors [3]