Deposit Trends - In July, household deposits decreased by 1100 billion (1.1 trillion) RMB, a year-on-year increase of 780 billion (0.78 trillion) RMB [1][2] - Corporate deposits decreased by 1500 billion (1.5 trillion) RMB in July, a year-on-year decrease of 320.9 billion RMB [1] - Non-bank deposits increased by 2100 billion (2.1 trillion) RMB in July, a year-on-year increase of 1400 billion (1.4 trillion) RMB [1][2] - Government deposits increased by 861.7 billion RMB in July, a year-on-year increase of 358.2 billion RMB [1] - The shift of deposits from residents to non-bank institutions is evident [1][2] Market Implications - Historically, a surge in non-bank deposits often reflects a trend of residents moving savings into the stock market [1] - Increased non-bank deposits are associated with residents directly entering the market via bank-securities transfers and indirectly via investments in equity funds and wealth management products [1][2] - Historically, significant year-on-year increases in non-bank deposits have corresponded with surges in new account openings and rising margin loan balances, often accompanied by positive stock market performance [1] Monetary Environment - The growth of social financing (TSF) in July was supported by government bonds, with the rolling year-on-year growth rate of new TSF continuing to rise [2] - The structure of social financing is relatively weak, with slight declines in short-term and medium-to-long-term loans to both residents and enterprises, indicating relatively sluggish demand for real economy credit [2] - With limited economic activity, resident deposits continue to be activated, with M1 growth continuing to rise in July while the M2-M1 spread continues to narrow [2] - As deposit rates continue to fall this year, coupled with continued improvement in stock market profitability, resident deposits are gradually flowing into the capital market to seek higher returns, and resident investment behavior is showing a gradual trend of becoming more active [2]

1. Investment Rating of the Report No investment rating information is provided in the report. 2. Core Views of the Report - The Politburo meeting emphasized enhancing the attractiveness and inclusiveness of the domestic capital market and consolidating the stable and positive momentum of the capital market, confirming the policy's supportive attitude towards the capital market [10][11]. - The A - share market has remained resilient recently. After continuous index increases, short - term market volatility is expected to intensify, but the overall strategy is to go long on dips [10][11]. 3. Summary According to the Table of Contents 3.1. Weekly Assessment and Strategy Recommendation - **Important News**: Articles by General Secretary Xi Jinping were published in Qiushi magazine; the central bank released the Q2 2025 China Monetary Policy Report; the Shanghai and Shenzhen Stock Exchanges monitored abnormal stocks; southbound funds had a record - high net purchase of HK$35.876 billion [10]. - **Economic and Corporate Earnings**: In July, industrial added - value grew 5.7% year - on - year, fixed - asset investment from January to July increased 1.6%, and retail sales rose 3.7%. Manufacturing PMI dropped to 49.3%, and non - manufacturing PMI to 50.1%. M1 and M2 growth rates increased. Social financing increment was 1.13 trillion yuan, with government bonds and bill financing driving growth, but overall performance was below expectations. Exports rose 7.2% and imports 4.1% [10]. - **Interest Rate and Credit Environment**: The 10 - year Treasury and credit bond interest rates continued to decline, credit spreads narrowed, and liquidity was relatively loose [10]. - **Trading Strategy**: Hold a small amount of IM long positions in the long - term as the valuation is moderately low and IM has long - term discounts. Hold IF long positions for six months as a new interest - rate cut cycle has started, and high - dividend assets may benefit [12]. 3.2. Spot and Futures Markets - **Spot Market**: The Shanghai Composite Index closed at 3696.77, up 3.46%; the Shenzhen Component Index at 11634.67, up 5.68%; and other major indices also had varying degrees of increase [14]. - **Futures Market**: All futures contracts, including IF, IH, IC, and IM, showed price increases and different levels of trading volume [15]. 3.3. Economy and Corporate Earnings - **Economy**: Q2 2025 GDP actual growth rate was 5.2%. In July, manufacturing PMI was 49.3%. Consumption growth rate was 3.7% and continued to decline. Exports in US dollars increased 7.2%. Investment growth rate was 1.6%, with manufacturing, real - estate, and infrastructure investment growth rates decreasing [32][35][38]. - **Corporate Earnings**: In Q1 2025, the revenue growth rate of non - financial listed companies in the A - share market slightly declined compared to Q4 but was higher than Q3 of last year. Operating net cash flow increased year - on - year, mainly due to inventory reduction [41]. 3.4. Interest Rate and Credit Environment - **Interest Rate**: The 10 - year Treasury bond and 3 - year AA - corporate bond interest rates showed a downward trend. Liquidity was relatively loose, and the spread between Chinese and US 10 - year bonds was presented in the report [44][49]. - **Credit Environment**: In July 2025, M1 growth rate was 5.6% and M2 was 8.8%. Social financing increment was 1.13 trillion yuan, mainly driven by government bonds and bill financing, while resident and corporate credit data declined significantly year - on - year [54]. 3.5. Capital Flows - **Inflow**: This week, new shares of equity - oriented funds were 59.47 million, and the net margin purchase was 4.5691 billion [60][63]. - **Outflow**: This week, major shareholders had a net increase of - 503.4 million, and the number of IPO approvals was 2 [66]. 3.6. Valuation - The price - to - earnings ratio (TTM) of the Shanghai 50 was 11.52, the CSI 300 was 13.46, the CSI 500 was 31.57, and the CSI 1000 was 43.79. The price - to - book ratio (LF) of the Shanghai 50 was 1.27, the CSI 300 was 1.42, the CSI 500 was 2.13, and the CSI 1000 was 2.43 [70].

Core Viewpoint - The article highlights the paradox of increasing money supply (M2) without corresponding inflation or asset price increases, raising questions about the flow of this new money and its implications for the economy [1][3]. Group 1: Money Supply and Inflation - M2 balance reached 330.29 trillion yuan in the first half of the year, growing by 8.3% year-on-year, indicating an increase in the money supply [1]. - CPI rose slightly to 0.1%, while PPI fell to -3.6%, suggesting persistent low inflation despite the increase in money supply [1][3]. Group 2: Allocation of New Money - Approximately 30% of the new money has flowed to the government through bond financing, used for debt repayment and infrastructure investments [4]. - About 60% of the new money has gone to enterprises, primarily for production expansion, leading to potential overproduction and price deflation [5]. Group 3: Export and Currency Dynamics - Trade surplus reached 586.7 billion USD in the first half of 2025, while foreign currency deposits hit a record high of 824.87 billion USD [7][8]. - Many export companies are retaining their foreign currency earnings overseas instead of converting them to RMB, which limits domestic liquidity and complicates inflation dynamics [10][12]. Group 4: Capital Market Strategies - The article suggests that enhancing the capital market, particularly in Hong Kong, is crucial for attracting foreign and repatriated funds, with measures like allowing mainland investors to buy Hong Kong stocks [11]. - The anticipated easing of monetary policy by the Federal Reserve and expectations of RMB appreciation may further incentivize capital to flow into Hong Kong's market [13].

Group 1 - The core viewpoint of the article is that the recent economic data shows a mixed picture, with CPI rising while new RMB loans have turned negative, indicating a complex economic situation [2][4][8] - In July, the national Consumer Price Index (CPI) rose by 0.4% month-on-month, marking a shift from a decline to an increase, which suggests initial success in combating deflation [4][6][7] - The negative new RMB loans of -500 billion yuan in July represent the first negative value since July 2005, highlighting a significant decline in overall loan activity [9][12][13] Group 2 - The decline in new loans is attributed to banks actively reducing bill financing, with a decrease of 4.5 trillion yuan in July compared to the previous year [15][16] - The reduction in bill financing is linked to the end of the half-year performance assessment for banks, leading to a decrease in loan volume as banks redeemed maturing bills [17][18] - The anti-involution movement has caused many enterprises to halt unrestrained capacity expansion, contributing to the significant drop in new loans [19][20][21] Group 3 - The article suggests that the reduction in new loans is understandable as the anti-involution aims to end deflation, albeit with short-term economic pain [23][24][25] - The article posits that to completely overcome deflation, there needs to be a substantial increase in government investment and leverage [29][30][31] - The article emphasizes the importance of repatriating foreign trade earnings that have been invested overseas, which is a significant factor in the ongoing deflationary environment [35][36][42] Group 4 - The article discusses the need for the government to increase its leverage to stimulate economic growth, as the current leverage ratio is lower than that of many developed countries [31][32] - It highlights that the return of foreign trade earnings is more critical than anti-involution or increasing fiscal stimulus to resolve deflation [42][43] - The article notes that the government has recognized this issue and is supporting capital markets to attract funds back into the domestic economy [43][45]

Economic Overview - In July, China's economy showed steady progress with improved economic data, driven by effective policies to stabilize growth [1][4] - The industrial production, consumption, and service sectors all experienced certain improvements, contributing to a stronger capital market [1][4] Industrial Production - In July, the industrial added value for large-scale enterprises grew by 5.7% year-on-year and 0.38% month-on-month [1] - The equipment manufacturing and high-tech manufacturing sectors performed particularly well, with year-on-year growth rates of 8.4% and 9.3%, respectively [1] Service Sector - The service sector production index increased by 5.8% year-on-year in July, with notable growth in information transmission, software, and financial services [2] - Social retail sales reached 38,780 billion yuan, a year-on-year increase of 3.7%, with online retail sales growing by 9.2% [2] Fixed Asset Investment - From January to July, fixed asset investment rose by 1.6% year-on-year, with a 5.3% increase when excluding real estate development investment [3] - Real estate development investment continued to decline, dropping by 12% year-on-year in July [3] Trade Performance - In July, the total value of goods imports and exports grew by 6.7% year-on-year, with exports increasing by 8% and imports by 4.81% [3] - The trade structure is improving, with a notable upgrade in the value-added of export products [3] Consumer Prices - The Consumer Price Index (CPI) remained flat year-on-year in July, with a month-on-month increase of 0.4% [3] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, indicating a need for measures to boost consumption and investment [3] Capital Market Dynamics - The capital market is showing signs of strength, with the Shanghai Composite Index surpassing 3,700 points, indicating increasing investor confidence [1][4] - New stock accounts opened in July approached 2 million, and trading volume has significantly increased, reflecting a growing willingness of outside funds to enter the market [4] Investment Opportunities - Compared to the U.S. stock market, which is at historical highs, A-shares and Hong Kong stocks remain below historical average valuations, presenting a favorable investment opportunity [5] - Investors are encouraged to consider quality stocks or funds to capitalize on the current market conditions for wealth growth [5]

Core Viewpoint - The significant increase in non-bank deposits in July reflects a trend of residents shifting their savings towards financial products, influenced by a recovering stock market and declining interest rates [3][5][9]. Group 1: Non-Bank Deposits - In July, non-bank deposits increased by 2.14 trillion yuan, a year-on-year increase of 1.39 trillion yuan, while household deposits decreased by 1.1 trillion yuan, a year-on-year decrease of nearly 0.8 trillion yuan [5][6]. - The total increase in non-bank deposits from January to July reached 4.69 trillion yuan, which is 1.73 trillion yuan more than the same period last year, indicating a structural trend [5][6]. - Analysts attribute the increase in non-bank deposits to the end of the mid-year bank assessment period and the recent rise in the stock market, leading to a large-scale return of household deposits to wealth management products [5][9]. Group 2: Money Supply and Economic Activity - The growth rate of M2 (broad money) in July increased by 0.5 percentage points to 8.8%, exceeding market expectations of 8.3%, while M1 (narrow money) growth rate rose to 5.6%, marking a significant rebound over three consecutive months [5][6]. - The narrowing of the M1-M2 spread to -3.2% further confirms the enhanced liquidity of funds, indicating a shift from low-efficiency to high-efficiency states in both enterprises and households [6][9]. - The increase in M1 growth is seen as a positive signal for potential economic recovery, despite the ongoing challenges in the real estate market [6][12]. Group 3: Capital Market Expectations - There is a strong market expectation that capital markets will become a significant outlet for household deposits, with historical trends showing that each bull market is accompanied by a migration of bank deposits to capital markets [8][9]. - The estimated scale of maturing deposits is substantial, with approximately 105 trillion yuan maturing by 2025 and 66 trillion yuan thereafter, which could lead to significant liquidity impacts if these funds flow into any asset market [8][9]. - Analysts caution that while there is potential for a shift of funds into capital markets, the current low proportion of equity-related wealth management products may limit immediate large-scale movements [8][9]. Group 4: Monetary Policy Outlook - Despite recent market optimism, July's financial data indicates slow recovery in demand, with new credit showing a negative growth for the first time in 20 years, highlighting insufficient economic demand [11][12]. - The implementation of targeted fiscal subsidy policies is expected to reduce the need for broad monetary easing, with analysts suggesting that the likelihood of interest rate cuts may decrease [13][12]. - The overall sentiment is that while the economic environment remains challenging, there are signs of potential improvement in demand, supported by stable growth in social financing [12][13].

Group 1 - The Shanghai Composite Index (SHCI) broke through the 3700-point mark on August 14, marking the first time since December 2021 that it has reached this level [1] - Historically, the SHCI has crossed the 3700-point threshold multiple times, with notable instances in April 2007, March 2015, and February 2021, each followed by varying degrees of market performance [1] - The article raises questions about market sentiment and potential strategies for investors in light of the SHCI's recent performance [1] Group 2 - A survey initiated by China Fund News aims to gauge investor sentiment across four core dimensions: short-term expectations, behavioral signals, risk preferences, and profit-loss pressure [5] - The survey is designed to reveal underlying market consensus and divergences, serving as a sentiment anchor for both new and experienced investors [5] - The emphasis is placed on the importance of market sentiment as a reflection of capital market truths [5]

Core Insights - The article highlights Midea Group's transformation from a local manufacturing enterprise to a global technology giant, emphasizing the role of capital markets in this evolution [2][11] - Midea's strategic use of mergers and acquisitions has been pivotal in expanding its industrial boundaries and enhancing its technological capabilities [5][6] Group 1: Company Growth and Development - Midea Group was established in 1968 and became the first township enterprise to be listed on the Shenzhen Stock Exchange in 1993, initially focusing on electric fans and air conditioners [3] - The company underwent a significant transformation after its overall listing in 2013, which allowed it to leverage capital market resources for rapid growth, resulting in a 200% increase in revenue and a 300% increase in net profit over the past decade [4][11] Group 2: Mergers and Acquisitions - Midea's acquisition strategy has included key purchases such as the Toshiba Wan Jia Le compressor business in 1998 and the KUKA Group in 2017, which facilitated vertical integration and entry into the robotics sector [5][6] - Recent acquisitions have expanded Midea's presence in smart building technology, renewable energy, and healthcare, enhancing its core technology and sales networks [6] Group 3: Research and Development - Midea has invested over 43 billion yuan in R&D from 2022 to 2024, with a focus on innovative technologies and a global R&D network comprising 38 centers in 12 countries [7][8] - The company ranks eighth globally in patent families, reflecting its commitment to innovation and technological advancement [7] Group 4: Financial Performance - In 2024, Midea reported a revenue of 407.15 billion yuan, a year-on-year increase of 9.44%, and a net profit of 38.54 billion yuan, up 14.29% [10] - Since its overall listing, Midea has returned over 134 billion yuan to shareholders through dividends and share buybacks, reinforcing its commitment to investor returns [11]

Group 1: Financial Data Overview - In July 2025, the credit balance decreased by 0.2 percentage points year-on-year to 6.9%[8] - The social financing stock increased by 0.1 percentage points year-on-year to 9.0%[8] - M2 increased by 0.5 percentage points year-on-year to 8.8%[8] Group 2: M2 and Non-Bank Deposits - The significant improvement in M2 growth is primarily driven by an active capital market, leading to a record high in non-bank deposits of 21,400 billion RMB, an increase of 13,900 billion RMB year-on-year[2] - Non-bank deposits surged due to the strong performance of the capital market since late June 2025, attracting off-balance-sheet funds back to the banking system[2] Group 3: Loan Trends - Resident loans decreased by 4,893 billion RMB, a year-on-year reduction of 2,793 billion RMB, reflecting a cautious attitude towards debt amid an unstable job market[11] - Corporate short-term loans and bill financing showed positive growth, while medium- to long-term loans remained weak, indicating a cautious stance on long-term investments[14] Group 4: Social Financing and Government Bonds - The social financing scale continued to show a year-on-year increase, primarily due to net financing from government bonds, which increased by 4,900 billion RMB year-on-year[16] - From January to July 2025, the social financing stock rose from 8.0% at the end of 2024 to 9.0%[16] Group 5: Future Outlook - The introduction of interest subsidy policies aims to lower the comprehensive financing costs and stimulate credit growth, with a subsidy rate of 1 percentage point[18][19] - The cautious approach of enterprises towards long-term investments is reflected in the decline of the PMI production expectation index to 52.6, down from 53.3[14]

Group 1 - The total number of new A-share companies in Jiangsu province reached 14, ranking first among all provinces from January to July 2025 [4] - In July 2025, A-share IPO fundraising amounted to 241.64 billion, marking the highest monthly total in the past year [15] - Jiangsu added 2 new A-share companies in July, with Suzhou Dingjia Precision raising 2.57 billion and Wuxi Jiyuan Group raising 5.44 billion [15] Group 2 - From January to July 2025, Jiangsu's total fundraising ranked fourth nationally despite having the highest number of new listings [15] - The net increase in A-share companies for Jiangsu this year is 14, accounting for two companies that have delisted [15] - New companies are primarily concentrated in strategic emerging industries such as semiconductors, biomedicine, and new materials, indicating an ongoing optimization of the industrial structure [15] Group 3 - Suzhou led the province with 5 new A-share companies, while Wuxi and Changzhou each had 2, and other cities like Nantong and Huai'an had 1 each [15] - Suzhou also topped the fundraising list within the province, raising a total of 18.37 billion from January to July 2025 [15]