Macro Insights - The macro policy for the second half of the year may involve non-traditional measures, with a focus on price stability and the marginal improvement of asset prices, particularly in equity products [2][32] - The "anti-involution" policy is expected to drive companies to reduce capital expenditures and clear excess capacity, leading to improved economic supply-demand relationships and enhanced corporate profitability [3][44] Strategy Insights - The "anti-involution" trend is identified as a key driver for a bullish market, with high-quality stocks likely to play a crucial role in pushing indices higher [3][44] - AI is recognized as a core driver of the current technological revolution, creating investment opportunities across multiple industries in the A-share market [3][44] - Key sectors to watch in July include solid-state batteries, domestic computing power, non-bank financials, defense and military, and innovative pharmaceuticals, all showing signs of marginal improvement [3][44] Market Performance - The Shanghai Composite Index closed at 3510.18, reflecting a weekly increase of 1.09% [5][7] - The Shenzhen Component Index closed at 10696.10, with a weekly increase of 1.78% [8] Economic Indicators - The manufacturing PMI rose to 49.7% in June, indicating a slight recovery, while the construction PMI significantly improved to 52.8% due to accelerated infrastructure projects [12][13] - Consumer spending showed mixed results, with significant growth in automobile and home appliance sales driven by government subsidies, while other sectors like clothing and cosmetics remained weak [13][14] Industry Trends - The real estate market continues to face challenges, with declining sales and investment, leading to a negative outlook for related sectors [13][14] - The "anti-involution" policy is expected to address price competition and improve product quality, particularly in the durable consumer goods sector [30][44]

Core Viewpoint - ASML's stock performance in 2024 has been poor, with its market value remaining around $280 billion despite significant fluctuations throughout the year, primarily due to disappointing order volumes and external market pressures [1][4]. Group 1: ASML's Financial Performance - ASML's market value dropped from a peak of $432.4 billion on July 10 to a low of $259.1 billion by November 15, representing a 40% decline [1]. - In Q3 2024, ASML reported new orders of only €2.6 billion, significantly below analyst expectations of €5.4 billion [1]. - The company sold only 44 EUV lithography machines in 2024, a decrease of 9 units or 17% from the previous year, largely due to reduced demand from major clients like Intel and Samsung [3]. Group 2: Market Dynamics and Competitors - TSMC, ASML's largest customer, experienced a remarkable stock performance in 2024, with its market value increasing from $520 billion to $1.1 trillion, nearly doubling [2]. - TSMC's revenue and net profit grew by 39% and 54% year-on-year, respectively, driven by strong demand for AI chips [2]. - Nikon has re-entered the high-end lithography market, launching a new ArF immersion lithography machine, aiming to capture market share in China following ASML's exit [5][6]. Group 3: Political and Regulatory Factors - ASML's sales to China, which constituted 49% of its revenue in Q1 2024, have been severely impacted by U.S. export restrictions, dropping to 27% by Q4 2024 and projected to fall to around 20% in 2025 [4]. - The Dutch government has expressed dissatisfaction with U.S. pressures limiting ASML's exports to China, indicating a desire for more autonomy in export policy decisions [8]. Group 4: Future Outlook - ASML's confidence in market performance for 2025 is low, leading the CFO to announce that the company will stop quarterly reporting of new order amounts [8]. - The rise of China's semiconductor manufacturing capabilities is anticipated, with significant advancements in domestic lithography technology being reported [9].

Earnings Reports - Major companies such as JPMorgan Chase (JPM.N), Morgan Stanley (MS.N), Citigroup (C.N), Goldman Sachs (GS.N), Netflix (NFLX.O), and TSMC (TSM.N) are scheduled to release their Q2 earnings next week [1]. Economic Data - Key economic data to be released next week includes China's Q2 GDP year-on-year, June trade balance, and June industrial output year-on-year [1]. - In the U.S., June CPI, PPI, and initial jobless claims for the week ending July 12 will be published [1]. Federal Reserve Activities - The Federal Reserve will release its Beige Book on economic conditions, and several Fed officials are scheduled to speak next week [1].

Market Overview - The Hang Seng Index closed at 24,028, up 0.57% for the day and 19.78% year-to-date[3] - The Hang Seng China Enterprises Index rose 0.83% to 8,668, with a year-to-date increase of 18.91%[3] - The Hang Seng Tech Index fell 0.29% to 5,217, with a year-to-date increase of 16.75%[3] Capital Flows - Southbound capital recorded a net inflow of HKD 2.902 billion[9] Sector Performance - Major tech stocks generally declined, with Xiaomi, Meituan, Tencent, JD.com, and Baidu all falling, while Alibaba saw a slight increase[9] - Real estate stocks performed strongly, with China Oceanwide Holdings surging over 27% and Longfor Group rising nearly 21% due to debt restructuring progress[9] - Financial stocks also rose, with Zhengzhou Bank and Sunshine Insurance both increasing over 6%[9] U.S. Market Performance - The Dow Jones Industrial Average rose 0.43% to 44,651, while the S&P 500 increased by 0.27% to 6,280, both breaking previous highs[9] - The Nasdaq Composite gained 0.09% to 20,631, marking two consecutive days of record highs[9] Cryptocurrency Trends - Bitcoin surpassed USD 117,000, setting a new record, with cryptocurrency-related stocks also performing well[9] Japanese Market Insights - The Nikkei 225 index fell 0.4% to 39,821, ending a two-day rally due to concerns over U.S.-Japan tariff negotiations and upcoming elections[13] - The 20-year Japanese government bond auction saw lower demand, indicating market concerns over rising debt levels[13]

Group 1 - The Hang Seng Technology Index opened lower but rose over 1.5% during the session, with key stocks like Alibaba and semiconductor companies such as Hua Hong Semiconductor and SMIC showing strength [1] - TSMC reported a revenue of NT$263.71 billion for June, a decrease of 17.7% from May but a year-on-year increase of 26.9%. The company's revenue for the first half of the year was NT$1,773.046 billion, up 40.0% year-on-year [1] - TSMC maintained its forecast for a double-digit revenue growth in USD for the year, estimating a growth rate of 24% to 26% [1] Group 2 - The Hong Kong technology sector has seen a valuation correction over the past quarter, with the latest valuation of the Hang Seng Technology Index ETF (513180) at 19.69 times P/E, which is below 92% of the time since the index was launched [2] - The sector is expected to have significant upside potential if favorable events act as catalysts, given its high growth and elasticity characteristics [2] Group 3 - The semiconductor industry is undergoing a structural transformation driven by geopolitical factors, leading to a decrease in the proportion of externally sourced chips from 63% in 2024 to 42% in 2025 [1]

Core Viewpoint - The semiconductor industry is experiencing growth, with TI expanding production to meet future demand and storage prices continuing to rise [3][5]. Group 1: Market Overview - In June 2025, the SW semiconductor index rose by 5.96%, underperforming the electronic industry by 2.90 percentage points but outperforming the CSI 300 index by 3.46 percentage points [3][11]. - The Philadelphia semiconductor index increased by 16.57%, while the Taiwan semiconductor index rose by 8.15% [3][11]. - Among semiconductor sub-industries, integrated circuit packaging and testing (+9.24%), discrete devices (+8.18%), and semiconductor equipment (+7.05%) had the highest growth rates [3][11]. Group 2: Industry Data Update - Global semiconductor sales in May 2025 reached $58.98 billion, marking a year-on-year increase of 19.8% and a quarter-on-quarter increase of 3.5% [7][26]. - In May, both DRAM and NAND Flash contract prices increased, with DRAM prices rising from $1.65 to $2.10 and NAND Flash prices from $2.79 to $2.92 [28][29]. - The sales of major enterprise SSD brands decreased in the first quarter of 2025, but a recovery is expected in the second quarter [7][28]. Group 3: Investment Strategy - The semiconductor heavy holdings in the 1025 fund accounted for 12.0% of the total, reflecting a 0.6 percentage point increase [6][19]. - The top five semiconductor heavy holdings in the 1025 fund saw a decrease in their combined share from 63.8% to 52.8% [19][23]. - The valuation of the SW semiconductor index is at 84.24x PE (TTM), which is at the 64.82% percentile since 2019 [15][19].

Group 1 - Delta Air Lines (DAL.N) surged 11% after reporting Q2 earnings that exceeded expectations and reinstated full-year guidance [1] - American Airlines Group (AAL.O) rose 7.3%, while Southwest Airlines (LUV.N) increased by 3.4% [1] - TSMC (TSM.N) saw a 0.4% increase in stock price, with Q2 sales up 39% year-over-year [1] Group 2 - MP Materials, a rare earth producer, experienced a nearly 60% surge in stock price following a multi-billion dollar contract with the U.S. Department of Defense [1]

Market Overview - The main board saw significant gains with Huamai Holdings up by 10.09%, Huanrui Century by 10.06%, and Jingyida by 10.02% [1] - The ChiNext board led the gains with Pulian Software increasing by 20.00% and Changxin Bochuang by 15.07% [1] - The Sci-Tech Innovation board also saw increases, with Lexin Technology up by 5.77% [1] - Active sub-industries included SW Panel with a rise of 1.04% and SW Portal Websites by 0.77% [1] Domestic News - TSMC reported a June sales figure of NT$263.71 billion, a decrease of 17.7% month-on-month but an increase of 26.9% year-on-year, with a cumulative sales figure of NT$1,773.046 billion for the first half of the year, up 40.0% year-on-year [1] - United Microelectronics Corporation's advanced packaging interposer has been validated by Qualcomm and is expected to enter mass production in Q1 2026 [1] - Upwind New Materials announced a control acquisition of at least 63.62% of shares in Zhiyuan Robotics for approximately RMB 2.1 billion, making it the first intelligent listed company in A-shares [1] - STMicroelectronics launched a new 3MP automotive-grade CMOS image sensor, SC326AT, featuring significant optimizations in sensitivity, noise suppression, and power control [1] Company Announcements - Dinglong Co. expects a net profit of RMB 290 million to 320 million for H1 2025, representing a year-on-year increase of 33.12% to 46.9% [3] - Shenzhen Textile A anticipates a net profit of RMB 28 million to 42 million for H1 2025, a decrease of 4.31% to 36.20% year-on-year [3] - Heertai forecasts a net profit of RMB 326.67 million to 366.27 million for H1 2025, a growth of 65% to 85% year-on-year [3] - Quectel expects revenue of RMB 11.45 billion for H1 2025, a year-on-year increase of 38.81%, with a net profit of RMB 463 million, up 121.13% year-on-year [3] International News - Murata Manufacturing is ramping up production of its first high-frequency filter using XBAR technology, crucial for 5G and emerging wireless technologies [2] - India's first semiconductor chip manufacturing plant has commenced operations in Gujarat, with production expected to start by December 2026 [2] - NEXTIN, a South Korean testing equipment company, is expanding into the next-generation display sector with orders for OLEDoS testing equipment from major Chinese firms [2] - IDC reported a 6.5% year-on-year increase in global PC shipments in Q2, reaching 68.4 million units, with Apple and Asus showing the largest growth [2]

Group 1 - Dow Jones futures fell by 0.17%, S&P 500 futures decreased by 0.11%, and Nasdaq futures dropped by 0.07% [1] - TSMC reported a 39% revenue growth in Q2, exceeding expectations, leading to a 1.02% increase in its stock price [1] - Amazon is considering a multi-billion dollar investment in AI startup Anthropic to strengthen their strategic partnership, following an earlier investment of $8 billion [1] - Morgan Stanley predicts that Alibaba's investment in food delivery and flash sales will reach approximately 10 billion RMB, impacting short-term profits, with expectations for the second quarter to double to 20 billion RMB [1] Group 2 - Elon Musk announced that Tesla plans to expand its Robotaxi service to the San Francisco Bay Area within one to two months, pending regulatory approval, resulting in a 0.7% increase in Tesla's stock [2] - Nvidia's market capitalization briefly surpassed $4 trillion, becoming the first publicly traded company to reach this milestone, driven by surging demand for AI technology [2] - Oracle announced a partnership with DayOne to launch its first cloud service center in Indonesia, leading to a nearly 2% increase in Oracle's stock [2] Group 3 - Multiple institutions raised their target prices for McDonald's, with Goldman Sachs increasing its target from $325 to $345, and Citigroup maintaining a "buy" rating while raising its target from $364 to $365 [3] - Reports indicate that Ferrero is close to acquiring WK Kellogg for $3 billion, with WK Kellogg's stock surging by 51.43% [3]

Core Viewpoint - ASML is set to announce its Q2 financial results on July 16, with significant order expectations creating uncertainty in stock performance. Morgan Stanley maintains an "Overweight" rating with a target price of €970 (approximately $1,137.71) [1] Group 1: Market Sentiment and Order Expectations - The market sentiment towards ASML's stock is bearish, with concerns over order uncertainty impacting short-term outlooks. However, Morgan Stanley believes mid-term risks are low due to a projected 7.7% revenue growth in 2026 compared to 2025 [1] - Current consensus for orders stands at €4.8 billion, reflecting a 22% increase from Q1, but the sustainability of this growth is contingent on TSMC receiving 2026 orders in the current quarter [1][2] - If TSMC receives all its 2026 orders in Q2, ASML is likely to exceed order expectations, as over 50% of TSMC's 2026 EUV orders are still pending [1] Group 2: Q2 Performance Expectations - Morgan Stanley forecasts ASML's Q2 revenue at €7.433 billion, a 4.0% decline quarter-over-quarter but a 19.1% increase year-over-year, slightly below market expectations [3] - The anticipated order amount for Q2 is €4.19 billion, which is 12.6% lower than market expectations, reflecting a conservative view on order predictability [3] - The estimated gross margin is 51.5%, aligning with market expectations, while EBIT is projected at €2.325 billion with a profit margin of 31.3%, slightly below market forecasts [3] - Earnings per share are expected to be €5.11, which is 2.7% lower than market expectations, and ASML is likely to narrow its 2025 revenue guidance to a midpoint of €30 billion to €35 billion [3]