Core Viewpoint - Hangzhou Bank reported its first half of 2025 earnings forecast, showing revenue growth of 3.9% and net profit growth of 16.7%, despite a slight decline in return on equity (ROE) due to dilution from convertible bond conversions [2][3][5]. Financial Performance - For the first half of 2025, Hangzhou Bank achieved revenue of 20.093 billion yuan, up 3.9% from 19.34 billion yuan in the same period of 2024 [4]. - The net profit attributable to shareholders was 11.662 billion yuan, reflecting a 16.7% increase from 9.996 billion yuan year-on-year [4]. - Total assets reached 2.24 trillion yuan, a 12.6% increase, with loans amounting to 1.01 trillion yuan, also up 12% [4][5]. - The weighted average ROE was 9.5%, down 0.24 percentage points compared to the previous year [4][5]. Loan and Asset Growth - Hangzhou Bank's loan growth rate significantly outpaced the national average, with a 12% increase compared to the central bank's reported 7.1% growth in RMB loans [4][5]. - The bank's lending is concentrated in the economically developed Yangtze River Delta region, with corporate loans making up 63.6% of total loans, particularly in infrastructure-related sectors [4]. Impact of Convertible Bonds - The completion of the convertible bond conversion resulted in 14.994 billion yuan worth of bonds being converted into shares, diluting ROE but enhancing core tier 1 capital adequacy ratio [6]. - The core tier 1 capital adequacy ratio was projected to increase by 0.7 percentage points to 9.8% following the conversion [6]. Shareholder Actions - China Life Insurance announced plans to reduce its stake in Hangzhou Bank by 0.7%, raising concerns about the bank's stock valuation [7][8]. - The stock price of Hangzhou Bank has increased by 15.1% in the first half of 2025, contributing to a total rise of 79.6% since last year [7]. - The exit of Australia and New Zealand Banking Group, a long-term shareholder, further indicates shifts in shareholder composition [8].

Report Industry Investment Ratings - **Bullish**: Polycrystalline Silicon, Palm Oil, Soybean (MO1), Pulp [1] - **Bearish**: Copper, Aluminum, Alumina, Zinc, Stainless Steel, Cotton, Manganese Silicon, Pure Metal, Soda Ash, Corn (C01), Crude Oil, Fuel Oil, HK, BR Rubber, PTA, Ethylene Glycol, Short Fiber, Styrene, Fertilizer, PVC, Chlor - Alkali, LPG, Container Shipping on European Routes [1] - **Neutral (Oscillating)**: Stock Index, Treasury Bond, Gold, Silver, Nickel, Tin, Industrial Silicon, Carbonate Lithium, Rebar, Hot - Rolled Coil, Iron Ore, Silicomanganese, Coking Coal, Coke, Rapeseed Oil, Sugar, Corn (C09), Live Pig, Energy Chemicals (including various sub - items), etc. [1] Core Views - The stock index is expected to oscillate strongly in the short term due to the market's increased willingness to allocate equity assets and positive market sentiment [1] - The bond futures are favored by the asset shortage and weak economy, but the short - term interest rate risk prompted by the central bank restricts the upward space [1] - Gold is expected to mainly oscillate in the short term due to market uncertainties, while the strengthening dollar may suppress silver prices [1] - Copper prices have a risk of supplementary decline, aluminum and alumina prices are expected to oscillate weakly, and zinc prices are under pressure [1] - Nickel and stainless steel prices oscillate, and attention should be paid to supply and macro - changes [1] - Tin prices have short - term support but a risk of a downward - moving center in the long term [1] - Some commodities like polycrystalline silicon are bullish, while others such as manganese silicon are bearish, and most commodities are in an oscillating state due to various factors including supply - demand relationships, cost support, and market sentiment [1] Summary by Categories Macro - Financial - **Stock Index**: The reaction of the recent stock index to negative news is significantly dull, with strong trading volume and sentiment. The market's willingness to allocate equity assets increases, and market sentiment is boosted by "anti - involution" and real - estate policy expectations. It is expected to oscillate strongly in the short term [1] - **Treasury Bond**: Asset shortage and weak economy are beneficial to bond futures, but the central bank's short - term reminder of interest rate risks restricts the upward space [1] Precious Metals - **Gold**: Market uncertainties remain, and the price is expected to mainly oscillate in the short term [1] - **Silver**: The strengthening dollar may suppress the price [1] Non - Ferrous Metals - **Copper**: US inflation rebound and potential copper tariff implementation in August bring a risk of supplementary decline in copper prices [1] - **Aluminum and Alumina**: High aluminum prices suppress downstream demand, inventory rises, and prices oscillate weakly; alumina has a good profit, with rising production and inventory, and its price also oscillates weakly [1] - **Zinc**: The weakening of interest - rate cut expectations and the gradual realization of inventory - accumulation expectations put pressure on zinc prices [1] - **Nickel**: The interest - rate cut expectation weakens, and the price oscillates. There is a short - term opportunity to short on rallies, and long - term surplus pressure exists [1] - **Stainless Steel**: The interest - rate cut expectation falls, raw - material prices weaken, inventory increases, and attention should be paid to production and raw - material changes [1] - **Tin**: Short - term fundamentals are supported, but there is a risk of a downward - moving price center in the long term [1] Industrial Metals - **Industrial Silicon**: Supply decreases in the north and increases in the south, demand from polycrystalline silicon increases marginally but may decrease later, and market sentiment is high [1] - **Polycrystalline Silicon**: Bullish due to no supply reduction and high market sentiment [1] - **Carbonate Lithium**: Supply does not decrease, downstream replenishment is mainly by traders, and market sentiment is high [1] Building Materials - **Rebar and Hot - Rolled Coil**: Strong furnace materials provide valuation support, and prices oscillate [1] - **Iron Ore**: Commodity sentiment is good, but fundamentals are marginally weakening, and prices oscillate [1] - **Manganese Silicon**: Short - term production increases, demand is okay, supply - demand is relatively loose, and prices are under pressure [1] - **Silicomanganese**: Production increases slightly, supply - demand is relatively balanced, and prices oscillate [1] Agricultural Products - **Palm Oil**: Bullish due to expected international demand growth, an upward - adjusted reference price in Malaysia, and short - term exhaustion of negative factors [1] - **Rapeseed Oil**: Australian rapeseed may enter the domestic market, Sino - Canadian trade frictions continue, and domestic rapeseed inventory is low [1] - **Cotton**: There are trade - negotiation and weather premiums in US cotton in the short term, and macro - uncertainties are strong in the long term. The domestic cotton - spinning industry is in the off - season, and prices are expected to oscillate weakly [1] - **Sugar**: Brazil's 2025/26 sugar production is expected to reach a record high, and the weakening of crude oil may affect the sugar - production ratio [1] - **Corn**: The old - crop inventory is tightening, but downstream procurement is cautious. New - season corn has a good yield and lower production costs [1] - **Soybean**: There are expectations of increased Chinese purchases of US soybeans, and the import cost supports the price, which is expected to oscillate strongly [1] - **Pulp**: Affected by strong commodity sentiment and low valuation, it is expected to rise in the short term [1] - **Live Pig**: The inventory is being repaired, the slaughter weight is increasing, and the futures price is stable [1] Energy and Chemicals - **Crude Oil and Fuel Oil**: With the cooling of the Middle East geopolitical situation, OPEC+ is expected to increase production, and short - term consumption in Europe and the US is strong, so prices oscillate [1] - **HK and BR Rubber**: HK has a weakening downstream demand and strong supply - release expectations; BR rubber has cost - end support from partial device overhauls [1] - **PTA and Ethylene Glycol**: PTA supply contracts, but crude oil is strong, and polyester downstream load remains high; ethylene glycol has a large expected arrival volume later, but overseas supply may contract [1] - **Short Fiber and Styrene**: Short - fiber factories have more overhauls and low warehouse - receipt registration; styrene device load recovers, and the basis weakens [1] - **Fertilizer**: Domestic demand is average, but export expectations improve in the second half of the year [1] - **PVC and Chlor - Alkali**: PVC has a good market sentiment but faces seasonal supply pressure; chlor - alkali has a repaired comprehensive profit and more expected warehouse receipts [1] - **LPG**: Crude - oil support is insufficient, it is in the seasonal off - season for demand, and the price oscillates weakly [1] Shipping - **Container Shipping on European Routes**: It is in a pattern of stable reality and weak expectations, with the freight rate expected to peak in mid - July and show an arc - top trend [1]

Core Viewpoint - The China Securities 500 Quality Growth Index has shown a decline of 0.54% as of July 18, 2025, with mixed performance among constituent stocks, indicating a volatile market environment [1] Group 1: Market Performance - The top-performing stocks include Kanghong Pharmaceutical, which rose by 4.66%, and Qilu Bank, which increased by 3.30%, while Chunfeng Power led the decline with a drop of 6.43% [1][4] - The China Securities 500 Quality Growth ETF has been adjusted, with the latest price at 1 yuan [1] Group 2: Analyst Insights - Several foreign investment banks have expressed optimism about the Chinese market, with Citigroup upgrading the ratings for Chinese and Korean markets to "overweight" despite macroeconomic fluctuations [1] - CICC's report highlights the value of equity markets amid an "asset shortage," suggesting a positive outlook for the second half of the year, although short-term uncertainties remain [1] Group 3: Index Composition - The China Securities 500 Quality Growth Index consists of 100 high-profitability, sustainable, and cash-rich companies selected from the broader China Securities 500 Index [2] - As of June 30, 2025, the top ten weighted stocks in the index account for 20.42% of the total index, with Dongwu Securities and Kaiying Network being the largest constituents [2]

Report Summary 1. Market Interest Rates - DR001 closed at 1.46% with a -0.49bp change, DR007 at 1.52% with -0.68bp [3] - GC001 closed at 1.13% with -37.00bp, GC007 at 1.47% with -6.50bp [3] - SHBOR 3M closed at 1.56% with -0.20bp, LPR 5 - year at 3.50% with 0.00bp [3] - 1 - year treasury closed at 1.35% with -0.50bp, 5 - year at 1.51% with -0.25bp [3] - 10 - year treasury closed at 1.66% with 0.00bp, 10 - year US treasury at 4.46% with -4.00bp [3] 2. Central Bank Operations - The central bank conducted 450.5 billion yuan of 7 - day reverse repurchase operations, with 90 billion yuan of reverse repurchases maturing, resulting in a net injection of 360.5 billion yuan [3] - This week, there are 425.7 billion yuan of reverse repurchases maturing in the central bank's open market, with 84.7 billion yuan maturing on Friday. The central bank's reverse repurchases continued to increase, signaling care for the capital market [4] 3. Stock Index Market - **Index Performance**: The CSI 300 rose 0.68% to 4034.5, the SSE 50 rose 0.12% to 2744.3, the CSI 500 rose 1.08% to 6082.5, and the CSI 1000 rose 1.14% to 6535.7 [5] - **Sector Performance**: Most industry sectors closed higher. Aerospace, biological products, electronic components, medical services, communication equipment, consumer electronics, energy metals, and chemical pharmaceuticals led the gains, while the precious metals sector led the losses [5] - **Market Analysis**: With a calm macro - news background, the stock index continued to rise, and market trading volume further increased. The large - and small - cap stocks showed a differentiated trend, with small - cap stocks performing strongly. In the short term, the stock index is expected to fluctuate strongly [5] - **Reasons for Strength**: The "asset shortage" and "national team" support increase the willingness to allocate equity assets. The "anti - involution" and the Politburo meeting at the end of July strengthen policy expectations and boost market sentiment [5] 4. Futures Contracts - **Volume and Open Interest**: IF volume increased by 5.4% to 105,631, and open interest increased by 2.9% to 263,172; IH volume increased by 5.2% to 52,058, and open interest increased by 3.6% to 94,545; IC volume decreased by 1.2% to 99,016, and open interest increased by 0.1% to 223,761; IM volume decreased by 1.0% to 195,970, and open interest increased by 1.6% to 331,365 [5] - **Basis**: IF basis was 33.39% for the next - quarter contract, 3.58% for the current - month contract, 3.21% for the next - month contract, and 3.52% for the current - quarter contract; IH basis was - 1.86% for the next - quarter contract, 1.04% for the current - month contract, 0.29% for the next - month contract, and 0.04% for the current - quarter contract; IC basis was 10.73% for the next - quarter contract, 0.39% for the current - month contract, 9.79% for the next - month contract, and 9.02% for the current - quarter contract; IM basis was 13.42% for the next - quarter contract, - 7.42% for the current - month contract, 12.68% for the next - month contract, and 11.99% for the current - quarter contract [5]

Core Viewpoint - The article discusses the recent rise in bank stocks, exploring the underlying reasons and future sustainability of this trend, focusing on asset allocation, funding dynamics, and the stability of bank earnings [1][5]. Group 1: Recent Rise in Bank Stocks - The rise in Chinese bank stocks can be attributed to three main factors: balance sheet repair, profit improvement, and a leverage bull market. The current phase is characterized by balance sheet repair, driven by the progress in financial risk management [2][6]. - The improvement in asset quality is evident, with a notable decrease in the net bad debt generation rate, indicating healthier balance sheets and a corresponding increase in valuations [2][10]. - The market perception of bank stocks has shifted, recognizing their earnings stability rather than traditional cyclical volatility, which has led to increased investment from various financial institutions [3][4]. Group 2: Funding Dynamics and Asset Allocation - The "asset shortage" phenomenon has driven a shift in funding allocation towards high-dividend assets, including bank stocks, as investors seek to compensate for low yields in a low-interest-rate environment [3][4]. - Insurance companies and asset management companies are increasingly investing in bank stocks due to their stable dividend yields, which meet their asset allocation needs [4][9]. - The comparison of bank stocks with other sectors reveals that banks offer a unique combination of high dividend yields and large market capitalization, making them attractive to institutional investors [4][9]. Group 3: Future Sustainability and Growth Potential - The sustainability of the recent rise in bank stocks is supported by their current valuation levels, which remain below historical averages, suggesting that there is still room for growth [6][7]. - The convergence of dividend yields among different types of banks indicates a trend towards stability and reduced risk premiums, enhancing the attractiveness of bank stocks [6][12]. - The potential for further appreciation in bank stock prices is linked to successful debt restructuring and improved investor confidence in the sustainability of smaller banks [6][7]. Group 4: Stock Selection Criteria - Preference is given to H-shares over A-shares due to tax advantages for insurance investments and higher dividend yields in the Hong Kong market [9]. - Stocks with high and stable dividend yields, particularly from large banks, are favored for their consistent profit expectations [9]. - The selection of bank stocks should also consider performance stability, which is influenced by factors such as liability capacity and organizational efficiency [9].

Report Industry Investment Ratings - Bullish: Index Futures, Polysilicon [1] - Bearish: Copper, Aluminum, Zinc, Stainless Steel [1] - Volatile: Treasury Bonds, Gold, Silver, Alumina, Nickel, Industrial Silicon, Lithium Carbonate, Rebar, Hot Rolled Coil, Iron Ore, Manganese Silicon, Ferrosilicon, Glass, Soda Ash, Coking Coal, Coke, Palm Oil, Rapeseed Oil, Cotton, Sugar, Corn, Soybean Meal, Pulp, Live Pigs, Crude Oil, Fuel Oil, HK, BR Rubber, PTA, Ethylene Glycol, Short Fiber, Styrene, PE, PVC, Chlor - Alkali, LPG, Container Shipping European Line [1] Core Views - The market's reaction to negative news in the stock index has become dull, with strong trading volume and sentiment. The market's willingness to allocate equity assets has increased, and short - term index futures are expected to fluctuate strongly [1]. - Asset shortage and weak economy are beneficial to bond futures, but the central bank's short - term interest rate risk warning restricts the upward space [1]. - Gold and silver prices are expected to fluctuate in the short term due to various factors such as the strength of the US dollar and market uncertainties [1]. - Copper prices may fall due to US inflation rebound and potential copper tariff implementation [1]. - Aluminum prices are expected to weaken due to high prices suppressing demand and inventory accumulation [1]. - Alumina prices have stabilized and rebounded due to supply - side reform expectations [1]. - Zinc prices are under pressure, and short - selling opportunities should be watched for [1]. - Nickel prices are volatile, and short - term short - selling and long - term supply pressure should be considered [1]. - Tin prices have short - term support but may decline in the long term [1]. - The prices of various industrial and agricultural products are affected by factors such as supply and demand, policies, and macro - economic conditions, showing different trends of rise, fall, or fluctuation [1]. Summary by Related Catalogs Macro - finance - Index Futures: The market's reaction to negative news is dull, trading volume and sentiment are strong. With the "asset shell" situation and "national team" support, the market's willingness to allocate equity assets has increased. Short - term index futures are expected to fluctuate strongly [1] - Treasury Bonds: Asset shortage and weak economy are beneficial to bond futures, but the central bank's short - term interest rate risk warning restricts the upward space [1] Precious Metals - Gold: Market uncertainties exist, and gold prices are expected to fluctuate in the short term [1] - Silver: The strengthening of the US dollar may suppress silver prices, and silver prices are expected to fluctuate [1] Non - ferrous Metals - Copper: US inflation rebound and potential copper tariff implementation may lead to a decline in copper prices [1] - Aluminum: High prices suppress demand, inventory accumulates, and aluminum prices are expected to weaken [1] - Alumina: Supply - side reform expectations have led to price stabilization and rebound [1] - Zinc: Prices are under pressure, and short - selling opportunities should be watched for [1] - Nickel: Prices are volatile, and short - term short - selling and long - term supply pressure should be considered [1] - Stainless Steel: Futures prices are volatile, and short - selling hedging and positive basis trading opportunities should be grasped [1] - Tin: Short - term support exists, but prices may decline in the long term [1] Industrial Products - Industrial Silicon: Supply and demand factors co - exist, and the market has high sentiment [1] - Polysilicon: Bullish due to supply - side reform expectations and high market sentiment [1] - Lithium Carbonate: Supply and demand factors lead to price fluctuations [1] - Rebar and Hot Rolled Coil: Supported by strong furnace materials, prices are expected to fluctuate [1] - Iron Ore: Market sentiment is good, but fundamentals are weakening, and prices are expected to fluctuate [1] - Manganese Silicon and Ferrosilicon: Supply and demand are relatively balanced, and prices are expected to fluctuate [1] - Glass: Short - term support exists, but medium - term over - supply may limit price increases [1] - Soda Ash: Supply is expected to increase, demand is weak, and prices are under pressure [1] - Coking Coal and Coke: Due to market expectations, short - selling should be avoided in the short term, and positive basis trading opportunities should be grasped [1] Agricultural Products - Palm Oil: MPOB monthly report is neutral to bearish, and wait for a callback to buy the 01 contract [1] - Rapeseed Oil: The entry of Australian rapeseed may have a negative impact on prices in the short term [1] - Cotton: Domestic cotton prices are expected to fluctuate weakly [1] - Sugar: Brazilian sugar production is expected to increase, and price trends are affected by factors such as crude oil prices [1] - Corn: CO9 is expected to fluctuate, and C01 is recommended to short at high prices [1] - Soybean Meal: MO1 is supported, and a low - buying strategy can be adopted [1] Energy and Chemicals - Crude Oil and Fuel Oil: Affected by factors such as geopolitical situation, OPEC+ production, and seasonal consumption, prices are expected to fluctuate [1] - HK: Downstream demand is weakening, supply is expected to increase, and inventory is increasing slightly [1] - BR Rubber: Fundamentals are under pressure, but there is some support from device maintenance [1] - PTA: Supply has shrunk, but crude oil is strong. Polyester downstream load remains high, and market supply is becoming more abundant [1] - Ethylene Glycol: Coal prices have risen slightly, and there are factors of supply increase and decrease [1] - Short Fiber: Warehouse receipt registration is low, and cost follows closely [1] - Styrene: Device load has increased, and the basis has weakened [1] - PE: Macro - sentiment has subsided, and prices are expected to fluctuate weakly [1] - PVC: Affected by factors such as coking coal prices and seasonal demand, prices are expected to fluctuate strongly [1] - Chlor - Alkali: Maintenance is coming to an end, and attention should be paid to changes in liquid chlorine [1] - LPG: Affected by factors such as crude oil prices and seasonal demand, prices are expected to fluctuate weakly [1] Others - Container Shipping European Line: The freight rate is expected to show an arc - top trend, and the peak time is advanced [1]

Core Viewpoint - The recent pullback in bank stocks has been attributed to profit-taking by investors and shareholder reductions, despite the overall positive outlook for the banking sector in the long term [2][4][6]. Group 1: Market Performance - The bank index has experienced a decline of approximately 2.54% over the past four trading days, impacting the overall market indices [2][3]. - Despite the recent downturn, the bank index has shown a year-to-date increase of 19.4%, and over 47% since September 24 of the previous year, indicating its role as a stabilizer in the A-share market [5][6]. Group 2: Valuation Metrics - As of July 16, the bank sector's price-to-earnings (P/E) ratio stands at approximately 7.42, placing it in the 96.28th percentile over the past decade, while the price-to-book (P/B) ratio is around 0.74 [2][8]. - Some analysts suggest that current valuations of bank stocks are not considered cheap, with a P/B ratio not exceeding 0.8 indicating a lack of bubble risk [8]. Group 3: Investor Sentiment and Fund Flows - Recent shareholder reductions, such as those from China Life and Chongqing Huayu, have negatively affected market sentiment [4]. - Insurance funds have been significantly increasing their holdings in bank stocks due to the stable returns and dividend characteristics, with an estimated annual influx of over 350 billion yuan into the market [6][7]. Group 4: Future Outlook - Analysts believe that the banking sector's stability in earnings and dividends remains strong, with a 12-month dividend yield of 5.13% compared to a 10-year treasury yield of only 1.6% [7]. - The potential for banks to transition from value stocks to stable growth stocks is highlighted, driven by factors such as bond gains, stable net interest margins, and consistent growth in bank scale [8].

Group 1: Financial Market Data - DRO01 closed at 1.47 with a -6.11bp change, DR007 at 1.53 with a -4.05bp change, GC001 at 1.50 with a 0.50bp change, and GC007 at 1.54 with a -1.50bp change [3] - SHBOR 3M closed at 1.56 with no change, LPR 5 - year at 3.50 with no change, 1 - year treasury at 1.35 with a -0.60bp change, 5 - year treasury at 1.51 with a 0.60bp change, 10 - year treasury at 1.66 with a 0.40bp change, and 10 - year US treasury at 4.50 with a 7.00bp change [3] - The central bank conducted 520.1 billion yuan of reverse repurchase operations with an interest rate of 1.4%, and the net injection was 444.6 billion yuan after 75.5 billion yuan of reverse repurchases matured [3] Group 2: Market Analysis - This week, 425.7 billion yuan of reverse repurchases will mature in the central bank's open - market operations. Due to the tax period, liquidity has tightened, and the central bank's reverse repurchases have increased to signal care for the capital market [4] - The Shanghai and Shenzhen 300 fell 0.3% to 4007.2, the Shanghai 50 fell 0.23% to 2740.9, the CSI 500 fell 0.03% to 6017.2, and the CSI 1000 rose 0.3% to 6462.1. The trading volume of the two markets was 1.442 trillion yuan, a decrease of 170 billion yuan [5] - The stock index fluctuated throughout the day. The banking sector corrected, and small and medium - cap stocks rose slightly due to news about AMD. The stock index is expected to fluctuate strongly in the short term due to factors like the "asset shortage" and policy expectations [6] Group 3: Futures Data - IF's current - month contract closed at 3998 with a -0.3% change, IH at 2734 with a -0.2% change, IC at 6007 with no change, and IM at 6444 with a 0.3% change [5] - IF's trading volume was 100,264 with a -19.3% change, and its position was 255,864 with a -4.3% change; IH's trading volume was 49,486 with a -19.3% change, and its position was 91,270 with a -6.4% change; IC's trading volume was 100,200 with a -0.5% change, and its position was 223,573 with a -3.3% change; IM's trading volume was 197,891 with a -6.0% change, and its position was 326,014 with a -5.4% change [5] - IF's current - month contract had an annualized premium rate of 41.91%, IH 48.61%, IC 32.13%, and IM 49.88% [7]

Group 1 - The core viewpoint is that in the context of asset scarcity, the value of dividend-paying industries is becoming more prominent, with the banking sector leading in dividend strategies by mid-2025 due to its stable dividend capability and sustainability [1] - Analysts suggest that in a low-interest-rate environment, it is essential to select industries with stable dividends, focusing on sectors with high dividend levels such as oil and petrochemicals, home appliances, and those with strong dividend intentions like banks and transportation [1] - The current market favors stocks that combine defensive attributes with dividend certainty, as evidenced by the strong performance of the banking sector [1] Group 2 - The Hongxin Securities Dividend ETF tracks the Shanghai Dividend Index, which focuses on high-quality companies listed on the Shanghai Stock Exchange with stable dividend records, covering representative enterprises in finance, energy, and consumer sectors [1] - The index aims to provide investors with a benchmark for measuring the performance of high-dividend stocks in the Chinese market by selecting state-owned enterprises with strong continuous dividend capabilities [1] - Investors without stock accounts can consider the Guotai Shanghai State-Owned Enterprise Dividend ETF Initiation Link A (021701) and Link C (021702) [1]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The report maintains a bullish stance on stocks and commodities in the long - term, driven by global fiscal support for the economy and the shift in monetary policy. In the short - term, it is necessary to focus on the marginal effect of fiscal policy in the third quarter, the Politburo meeting at the end of July, and whether the US will rally other countries against China. [73] - There is a trend of asset spillover, including US assets flowing to non - US and alternative assets, and Chinese fixed - income assets flowing to low - volatility stocks (banks and neutral stocks). The "asset shortage" has shifted towards a better match between liquidity and assets, and stocks and commodities tend to move in tandem. [73] 3. Summary by Directory 3.1. Fiscal Dominance in the Kondratieff Winter - Fiscal policy determines the economic performance differences among global countries in the past few years due to high leverage ratios in the household and corporate sectors. All countries are expanding fiscal spending. [13] - China's exports have been strong, as shown by the economic formula \(Y = C + I + G+(X - M)=C + S+T\), and \(M - X=(I - S)+(G - T)\). [13] - Fiscal spending shows a "front - loaded high, back - loaded low" pattern this year. The remaining quota in the second half of 2024 was close to 8 trillion, while in 2025 it is only close to 6 trillion. Local government bond net financing has been high, reaching 4.6 trillion, with replacement bond issuance exceeding 1.8 trillion and a nearly 90% issuance progress. In the third quarter, special bond issuance is expected to be 2 trillion, lower than 2.56 trillion in 2024 and close to 1.98 trillion in 2023. [16] - The 300 - billion - yuan ultra - long - term special treasury bond is used to stimulate consumption. It has various subsidy policies for home appliances, new energy vehicles, and other fields, with different subsidy standards for different regions. Some localities have faced issues such as running out of funds, and future adjustments will shift from "universal" to "precise" regulation. [17] 3.2. Why Involution? Why Anti - Involution? - Involution refers to the serious deviation of production factor prices. The current supply - side reform emphasizes "quality improvement" rather than "quantity reduction" and is aimed at long - term high - quality development, which is different from the previous one. [47] - In June, the year - on - year CPI increased by 0.1%, and the PPI decreased by 3.6%, with the PPI - CPI gap continuing to widen. Fiscal policy has addressed the "quantity" issue, and there is no intention to use monetary policy to solve the "price" problem. [51] - Most industries show "quantity increase" but "price decrease." The real estate market has shifted from "price - for - quantity" to a situation of both quantity and price decline. [52][53] - The trade war has compressed profits and costs in an economy that relies on foreign trade. Coal and electricity prices have decreased to benefit downstream industries. [57][59] - There are signs of active inventory replenishment in industrial enterprises, but inventory cycle prediction should not be dogmatic. The commodity index leads the PPI by two months and seems to have bottomed out, and the PMI also shows signs of improvement. [65][66][68] 3.3. Some Conclusions on Major Asset Classes - **Stocks**: The dumbbell strategy is still applicable. Although the market is bullish, it is not recommended to chase high prices at present, especially for small - and micro - cap stocks. [84] - **Commodities**: - The bullish sentiment in the current round may last until the end of this month or early next month. There are many opportunities in different sectors, but no comprehensive ones. Volatility will increase after the release of global liquidity. [85][88] - Precious metals are worth long - term allocation to hedge against currency credit risks, but they need an "asset shortage" scenario to continue rising. [87] - Base metals such as copper, aluminum, zinc, and tin have supply disruptions and long - term supply shortages, with positive demand prospects driven by technological trends. However, they lack short - term drivers. New - energy metals like lithium carbonate and industrial silicon are in a supply - demand surplus, and it is recommended to use range - trading strategies. [87] - The black metal sector is in an overall supply - demand surplus, and it is advisable to observe supply disruptions and demand verification. Iron ore is a good long - position after a decline, while coal and soda ash are suitable for short - positions after an increase. [87] - In the energy and chemical sector, attention should be paid to the impact of raw materials on the overall valuation. With excess supply of oil and coal and a shortage of gas, the profit of downstream chemical products is difficult to expand under the current situation of low demand and ongoing large - scale capacity expansion. [87]