Core Viewpoint - Zhongtong Express (02057) has seen a rise of over 4%, currently trading at 163.3 HKD, with a transaction volume of 542 million HKD, following a price increase in the express delivery sector in Guangdong Province [1] Industry Summary - Starting from August 4, the base price for express delivery in Guangdong Province has been raised by 0.4 HKD per ticket, with the average price now exceeding 1.4 HKD [1] - Companies are mandated not to collect below the cost price of 1.4 HKD, with penalties for non-compliance [1] - The National Postal Administration has emphasized the need to address issues such as "involution" competition and illegal charges in rural areas, aiming to maintain a healthy development environment for the industry [1] Company Summary - Zheshang Securities indicates that with the end of the off-peak season and the upcoming peak season in September, there is potential for broader price stabilization and recovery, which may alleviate pressure on franchise operations [1] - Recently, Shentong Express's acquisition of Daniao marks the beginning of resource consolidation in the express delivery industry under the national anti-involution policy [1] - The National Postal Administration encourages mergers and restructuring among express delivery companies, leading to a healthier industry structure and optimized competitive ecology, which may present sector-wide investment opportunities [1]

Core Viewpoint - Zhongtong Express (02057) has seen a rise of over 4%, currently trading at 163.3 HKD, with a transaction volume of 542 million HKD, following a price increase in the express delivery sector in Guangdong Province [1] Industry Summary - Starting from August 4, the base price for express delivery in Guangdong Province has been raised by 0.4 HKD per ticket, with the average price exceeding 1.4 HKD. Companies are mandated not to collect below this cost price, or they will face severe penalties [1] - The National Postal Administration held a meeting on July 29, emphasizing the need to address issues such as "involution" competition and illegal charges in rural areas, aiming to maintain a healthy development environment for the industry [1] Company Summary - Zheshang Securities indicates that with the end of the off-peak season and the upcoming peak season in September, there is potential for broader price stabilization and recovery, which may alleviate pressure on franchise operations and improve performance in the express delivery sector [1] - Recently, Shentong Express's acquisition of Daniao marks the beginning of resource consolidation in the express delivery industry under the national anti-involution policy. In the long term, the National Postal Administration encourages mergers and restructuring among express delivery companies, leading to a healthier industry structure and optimized competitive ecology, which may present sector-wide investment opportunities [1]

Group 1 - Zhongtong Express-W (02057) has seen a rise of over 4%, currently up 4.28% at HKD 163.3, with a trading volume of HKD 542 million [1] - Starting from August 4, the minimum express delivery price in Guangdong Province has been increased by HKD 0.4 per ticket, raising the average price to above HKD 1.4 [1] - The National Postal Administration held a meeting on July 29 to address issues such as "involution" competition and illegal charges in rural areas, emphasizing the need for a healthy development of the industry [1] Group 2 - Zheshang Securities predicts that with the end of the off-peak season and the arrival of the peak season in September, there is potential for broader price stabilization and recovery, which may alleviate pressure on franchise operations [1] - Recently, Shentong Express's acquisition of Daniao marks the beginning of resource consolidation in the express delivery industry under the national anti-involution policy [1] - The National Postal Administration encourages mergers and restructuring among express delivery companies, leading to a healthier industry structure and optimized competitive ecology, which may present sector-wide investment opportunities [1]

Monetary Policy and Economic Outlook - The Central Political Bureau of the Communist Party of China decided to hold the Fourth Plenary Session of the 20th Central Committee in October to discuss the 15th Five-Year Plan for economic and social development, emphasizing the need for stable and flexible policies[5] - The government plans to allocate approximately 90% of the 90 billion yuan budget for childcare subsidies from the central finance[6] Market Trends - The bond market showed signs of recovery, with the yield on the 10-year government bond decreasing by 2.75 basis points to 1.7200%[16] - The U.S. Federal Reserve maintained the federal funds rate at 4.25% to 4.5%, marking the fifth consecutive meeting without changes, while the U.S. GDP grew at an annualized rate of 3% in Q2, surpassing expectations[8][9] Financial Market Performance - The bond market experienced a net cash injection of 158.5 billion yuan on July 30, following a 3,090 billion yuan reverse repurchase operation by the central bank[12] - The weighted average interest rates for various repo transactions showed a downward trend, with DR001 and DR007 rates falling to 1.315% and 1.518%, respectively[13][14] Commodity Prices - International crude oil prices increased, with WTI rising by 1.36% to $70.99 per barrel, while natural gas prices fell by 1.89% to $3.016 per MMBtu[10] Bond Issuance and Trading - The bond auction results indicated a competitive bidding environment, with the 1-year agricultural development bond receiving a bid-to-cover ratio of 2.3[18] - The convertible bond market saw a decline, with major indices dropping, and a total trading volume of 84.376 billion yuan, down by 5.53 billion yuan from the previous day[24]

第 1 頁 共 11 頁 v 1.1.1 | 3. 股份分類 | 不同投票權架構公司普通股 | 股份類別 | 其他類別 (請註明) | 於香港聯交所上市 (註1) | 否 | | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | N/A | 說明 | 未指定 | | | | 2. 股份分類 | 不同投票權架構公司普通股 | 股份類別 | B | | 於香港聯交所上市 (註1) | | | 否 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | N/A | 說明 | B類普通股 | | | | | | | | | | 法定/註冊股份數目 | | 面值 | | | | 法定/註冊股本 | | | 上月底結存 | | | 1,000,000,000 USD | | | 0.0001 | USD | | 100,000 | | 增加 / 減少 (-) | | | | | | | USD | | | | 本月底結存 | | | 1,000,000,000 US ...

Report Industry Investment Rating - Not provided in the content Core Viewpoints - On July 30, the central bank conducted continuous net injections, leading to a balanced and slightly loose liquidity situation. The bond market showed a significant recovery, while the main indices of the convertible bond market closed down collectively, with most individual convertible bonds declining. Yields of U.S. Treasury bonds across various maturities generally increased, and yields of 10-year government bonds in major European economies also mostly rose [1]. Summaries by Directory I. Bond Market News (1) Domestic News - The Political Bureau of the CPC Central Committee decided to hold the Fourth Plenary Session of the 20th CPC Central Committee in October to discuss the 15th Five-Year Plan. It emphasized maintaining policy continuity and stability, implementing proactive fiscal and moderately loose monetary policies, and taking measures in multiple aspects such as supporting innovation, consumption, and resolving local government debt risks [3]. - The CPC Central Committee held a symposium with non - Communist Party personages, with General Secretary Xi Jinping stressing the need to adhere to the general principle of making progress while maintaining stability in the second half of the year, aiming to achieve the annual economic and social development goals [4]. - The central government plans to allocate about 90 billion yuan for child - rearing subsidies this year, with the central finance bearing about 90% of the funds for the national basic standard [4][5]. - The National Development and Reform Commission solicited public opinions on guiding the layout and investment of government investment funds to prevent homogenization and crowding - out effects [5]. - The National Association of Financial Market Institutional Investors issued a notice to regulate the book - building issuance and underwriting in the inter - bank bond market from August 11, 2025 [6]. (2) International News - The Federal Reserve kept the federal funds rate target range at 4.25% - 4.5% for the fifth consecutive meeting. Some members advocated a 25 - basis - point rate cut, and Fed Chairman Powell dampened market expectations of a September rate cut [7]. - The U.S. Q2 real GDP annualized quarterly growth rate was 3%, reversing the Q1 decline and exceeding expectations. The core PCE price index was 2.5%, down from the previous value but higher than expected. However, there are concerns about the economic recovery, such as weakening domestic demand [9]. (3) Commodities - On July 30, international crude oil futures prices continued to rise, while international natural gas prices continued to fall. WTI crude oil rose 1.36% to $70.99 per barrel, Brent crude oil rose 1.47% to $73.47 per barrel, COMEX gold futures fell 1.72% to $3266.90 per ounce, and NYMEX natural gas prices fell 1.89% to $3.016 per ounce [10]. II. Liquidity (1) Open Market Operations - On July 30, the central bank conducted 309 billion yuan of 7 - day reverse repurchase operations at an interest rate of 1.40%. With 150.5 billion yuan of reverse repurchases maturing, the net injection was 158.5 billion yuan [12]. (2) Funding Rates - Due to continuous net injections by the central bank on July 30, the liquidity was balanced and slightly loose, and major repurchase rates continued to decline. For example, DR001 dropped 4.81bp to 1.315%, and DR007 dropped 4.67bp to 1.518% [13]. III. Bond Market Dynamics (1) Interest - Rate Bonds - **Spot Bond Yield Trends**: After the Political Bureau meeting on July 30, the bond market recovered significantly. By 20:00, the yield of the 10 - year Treasury bond active bond 250011 dropped 2.75bp to 1.7200%, and the yield of the 10 - year China Development Bank bond active bond 250210 dropped 3.25bp to 1.8040% [16]. - **Bond Tendering Results**: Details of the tendering results of several agricultural bonds, including the issuance scale, winning yields, and multiples, were provided [17]. (2) Credit Bonds - **Secondary Market Transaction Anomalies**: On July 30, the trading price of one industrial bond, "H0 Yangcheng 04", deviated by more than 10%, rising over 747% [17]. - **Credit Bond Events**: Multiple credit - related events occurred, such as asset freezes of some companies, changes in credit ratings, and cancellations of bond issuances [18]. (3) Convertible Bonds - **Equity and Convertible Bond Indices**: On July 30, the A - share market weakened in the afternoon. The Shanghai Composite Index rose 0.17%, while the Shenzhen Component Index and the ChiNext Index fell 0.77% and 1.62% respectively. The main indices of the convertible bond market closed down collectively, and most individual convertible bonds declined [20]. - **Convertible Bond Tracking**: Companies such as Hang Lung Properties reported their performance, and there were announcements regarding bond payments, revisions of conversion prices, and decisions on early redemptions [23][24][25]. (4) Overseas Bond Markets - **U.S. Bond Market**: On July 30, yields of U.S. Treasury bonds across various maturities generally increased. The 2 - year U.S. Treasury bond yield rose 8bp to 3.94%, and the 10 - year yield rose 4bp to 4.38%. The yield spreads between 2 - year and 10 - year, and 5 - year and 30 - year U.S. Treasury bonds narrowed [26][27]. - **European Bond Market**: On July 30, the 10 - year UK government bond yield dropped 4bp, while yields of 10 - year government bonds in other major European economies mostly rose [29]. - **Daily Price Changes of Chinese - Issued Dollar Bonds**: The daily price changes of Chinese - issued dollar bonds as of July 30 were presented, including the price changes, credit entities, bond codes, and other information of top - rising and top - falling bonds [31].

Core Viewpoint - The A-share market shows a certain degree of differentiation, with the Shanghai Composite Index performing relatively strong, breaking through the 3600-point mark again, while the ChiNext Index shows weaker performance [2][4]. Market Performance - As of the midday close, the Shanghai Composite Index rose by 0.53% to 3602.13 points, the Shenzhen Component Index increased by 0.14% to 11056.69 points, while the ChiNext Index fell by 0.26% to 2328.36 points [4][5]. - The PEEK materials concept saw significant gains, with stocks like Huami New Materials rising over 20%, and Xinhang New Materials hitting a 20% limit up [2][6]. Sector Performance - In terms of sector performance, industries such as comprehensive, steel, real estate, banking, and agriculture showed notable gains, while sectors like computer, pharmaceutical, and communication experienced declines [5]. Notable Stocks - Huami New Materials saw a rise of 20.23%, with a market cap of 3.998 billion [7]. - Xinhang New Materials reached a limit up, with a market cap of 6.497 billion [7]. - Nanjing Julong increased by 13.63%, with a market cap of 4.116 billion [7]. - Zhongxin Fluorine Materials also hit a limit up [6]. Convertible Bonds - Dongjie Intelligent and its corresponding convertible bond, Dongjie Convertible Bond, both experienced a continuous 20% limit up for three consecutive trading days [9][11]. Overseas Orders - Dongjie Intelligent announced it received an overseas order worth 37.09 million Malaysian Ringgit, approximately 62.5 million RMB, which is expected to positively impact its business performance [12]. Hong Kong Market - In the Hong Kong market, Xindong Company saw a significant rise of over 26% [13][14]. - Xindong Company projected a revenue of no less than 3.05 billion RMB for the first half of the year, a year-on-year increase of approximately 37%, and a net profit of no less than 790 million RMB, a year-on-year increase of about 215% [16].

Investment Rating - The report rates the transportation industry as "Outperform" [1] Core Insights - The report highlights a significant decline in crude oil shipping rates and a downward trend in shipping rates for the US routes. As of July 31, the China Import Crude Oil Comprehensive Index (CTFI) was reported at 880.79 points, down 6.8% from July 24. The VLCC market on the Middle East route continues to decline, with rates dropping to an annual low of WS45 due to a lack of concentrated shipments [2][14] - Ezhou Huahu International Airport has seen rapid growth in its cargo hub capabilities over three years, establishing 104 cargo routes and handling a cumulative throughput of 2 million tons. The Shenzhen low-altitude infrastructure plan aims to establish over 1,200 takeoff and landing points and 1,000 commercial routes by 2026, with a projected low-altitude economy output exceeding 130 billion yuan [2][16][17] - Shentong Express announced a cash acquisition of 100% of Daniao Logistics for 362 million yuan, enhancing its high-value delivery network. Baidu's autonomous vehicles are also expanding internationally through a partnership with Uber [2][25] Industry Dynamics - **Air Cargo**: The air cargo price index for outbound flights from Shanghai was reported at 4429.00 points as of July 28, down 3.7% year-on-year but up 0.2% month-on-month. Domestic cargo flights increased by 7.61% year-on-year in July 2025 [26][33] - **Shipping Ports**: The SCFI index was reported at 1550.74 points, down 2.63% week-on-week and down 53.47% year-on-year. The PDCI index for domestic shipping increased by 1.45% week-on-week [40][51] - **Express Logistics**: In June 2025, the express delivery volume increased by 15.78% year-on-year, with total revenue reaching 126.32 billion yuan, up 9.00% year-on-year [53][55] Investment Recommendations - The report suggests focusing on the equipment and manufacturing export chain, recommending companies such as COSCO Shipping, China Merchants Energy Shipping, and Huamao Logistics. It also highlights investment opportunities in low-altitude economy trends and road-rail sectors, recommending companies like Ganyue Expressway and China Eastern Airlines [4]

Summary of Conference Call on the Express Delivery Industry Industry Overview - The conference call focused on the express delivery industry in China, particularly the recent regulatory measures aimed at reducing vicious price competition and promoting healthy competition [1][3][19]. Key Points and Arguments - **Regulatory Measures**: The State Post Bureau held a high-level meeting to address the issue of excessive competition in the express delivery sector, emphasizing the need for companies to commit to anti-involution measures and ensure network stability [2][3]. - **Price Increases in Guangdong**: Express delivery prices in Guangdong have increased by 0.4 to 0.5 yuan, based on reasonable cost assessments, aimed at ensuring fair compensation for delivery personnel and improving profit margins for franchisees [1][5][8]. - **Rural Issues**: The meeting highlighted the need to resolve illegal charges for package collection in rural areas, which stem from low delivery fees. The solution involves raising collection prices to ensure reasonable compensation and prevent franchisee defaults [6][19]. - **Future Development**: The express delivery industry is expected to continue implementing anti-involution measures through enhanced regulation and self-discipline among companies, leading to high-quality development [7][19]. - **Impact of Price Adjustments**: The price adjustments in Guangdong are primarily focused on small and electronic items, with base prices now ranging from 0.95 to 1 yuan. This adjustment is seen as necessary to restore delivery fees and profits for franchisees [8][9]. - **Comparison with Yiwu**: Unlike Yiwu's gradual price increases, Guangdong's approach is characterized by strong local regulatory determination to implement price hikes in a more immediate manner [10]. - **Regional Price Effects**: The price increase in Guangdong is likely to influence surrounding regions, such as Fujian, with potential for broader price adjustments across the industry [11][15]. - **Current Industry Challenges**: The express delivery sector has faced intense competition leading to deteriorating conditions for franchisees, with reports of major brands experiencing defaults. Single-package profits are at historical lows, and cash flow is weaker than in 2021 [4][12]. - **Future Price Trends**: The industry is expected to see further price increases during the peak season in 2025, with optimistic projections for profitability based on historical data [13][14]. - **Investment Recommendations**: Investors are advised to focus on companies with lower single-package profits and greater elasticity, such as Shentong, while also considering leading companies like YTO and ZTO for balanced risk and return [18]. - **Long-term Industry Impact**: The anti-involution measures are anticipated to have a profound impact on the express delivery sector, improving profitability and reducing social risks associated with over-competition [19]. Additional Important Insights - **Market Sentiment**: The current market conditions reflect only partial expectations of price increases, suggesting potential for further upward adjustments in the future [17]. - **Regulatory Environment**: The express delivery industry is entering a new regulatory phase aimed at improving pricing structures and overall market health, which is crucial for long-term sustainability [17][19].

Summary of Conference Call Notes Industry or Company Involved - Focus on the macroeconomic environment and stock markets in China and the United States - Discussion on the implications of U.S.-China relations, particularly in the context of technology and trade Core Points and Arguments 1. **Market Adjustment and Economic Indicators** - Both Chinese and U.S. stock markets are experiencing adjustments since late June, raising questions about potential market shifts in the second half of the year [1][15][16] - Recent economic indicators suggest subtle changes in the economic landscape, prompting concerns among investors [1][15] 2. **Performance of Offshore Chinese Markets** - The offshore Chinese market, particularly Hong Kong stocks, is expected to remain in a volatile state from June to August, with lower chances of outperforming other major global markets [3][4] - A-shares are showing more resilience compared to Hong Kong stocks, with lower volatility observed since June [3][4] 3. **Political and Policy Expectations** - The upcoming Politburo meeting is anticipated to be a disappointment in terms of new policies, which could lead to profit-taking behavior in the market [5][15] - The lack of new policies regarding real estate has been noted, with expectations managed due to previous GDP growth targets being met [15][16] 4. **U.S.-China Trade Relations** - Ongoing uncertainties in U.S.-China trade negotiations, including potential tariff increases, are causing market volatility [6][7][8] - Despite short-term uncertainties, a long-term view suggests that U.S.-China relations will not deteriorate significantly [8][9] 5. **Consumer Sector and New Consumption Trends** - The new consumption theme is undergoing adjustments, with expectations for continued volatility in the market [9][10] - While there is long-term optimism for the new consumption sector, the current timing is deemed not favorable for significant investments [10] 6. **U.S. Economic Performance** - Recent U.S. non-farm payroll data has been revised downwards, indicating potential economic slowdown [11][12] - Despite strong corporate earnings, concerns about the sustainability of U.S. economic growth are emerging, particularly in light of trade policy uncertainties [12][24] 7. **Future Economic Outlook** - The expectation is for a potential economic slowdown in the second half of the year, particularly in exports and real estate [28][30] - The real estate market is facing challenges, especially in lower-tier cities, leading to cautious forecasts for price adjustments and transaction volumes [31][32] 8. **Policy Adjustments and Economic Rebalancing** - The government is expected to maintain a reactive rather than proactive policy stance, with potential adjustments in fiscal and monetary policies towards the end of the year [35][36] - The focus on "anti-involution" policies indicates a shift towards structural economic reforms aimed at addressing long-term challenges [19][20][36] Other Important but Possibly Overlooked Content 1. **Global Trade Agreements** - Recent trade agreements between the U.S. and other countries are seen as temporary and fragile, with potential for future renegotiations [16][24] - The effectiveness of these agreements in stabilizing U.S.-China relations is questioned, as they may not significantly alter the existing trade dynamics [16][24] 2. **Social Perception Index** - The social perception index, which reflects employment and income confidence, has shown signs of decline, indicating underlying economic pressures despite surface-level growth [37][38] 3. **Long-term Economic Strategy** - The discussion emphasizes the need for deeper reforms in fiscal and tax policies to support consumption and reduce reliance on investment-driven growth [19][20][22] 4. **Market Sentiment and Investment Strategy** - Investors are advised to remain cautious and seek better entry points for investments, particularly in light of the current market volatility and economic uncertainties [12][13][14]