Key Points - The article discusses significant recent developments in the market, including new policies and strategies from various financial institutions and analysts regarding investment opportunities and risks in the current economic environment [1][10]. Group 1: Market Developments - Shenzhen has introduced ten measures to promote the high-quality development of the semiconductor and integrated circuit industry, including a total fund of 5 billion RMB to support the entire industry chain [3]. - The Ministry of Finance has announced measures for government procurement of medical devices imported from the EU, which will take effect on July 6, 2025, impacting procurement budgets over 45 million RMB [4]. - The People's Bank of China is seeking public opinion on the draft rules for the Renminbi Cross-Border Payment System, indicating ongoing improvements in financial infrastructure [5]. - The Shanghai Stock Exchange has approved the merger of China Shipbuilding and China Shipbuilding Industry Corporation, marking a significant consolidation in the industry [6]. Group 2: U.S. Economic Policies - President Trump signed the "Big and Beautiful" tax and spending bill, which has faced criticism for its impact on federal aid and long-term debt [7]. - Trump announced new tariffs set to take effect on August 1, with rates potentially reaching up to 70%, as part of ongoing trade negotiations [8]. Group 3: Brokerage Insights - CITIC Securities notes that the current market environment resembles late 2014, with improving investor sentiment and a focus on sectors like AI and innovative pharmaceuticals [11]. - CITIC Jiantou suggests that the market's upward trend may continue, with a focus on high-growth sectors such as electronics and new consumption [13][14]. - Huatai Securities raises concerns about external risks affecting the "anti-involution" trend, while still highlighting opportunities in banking and insurance [15]. - Guotai Junan emphasizes a shift towards real assets and the potential for improved capital returns in the context of global economic recovery [16]. - China Merchants Securities identifies "anti-involution" and AI as key drivers for market growth, with significant gains in sectors like steel and new energy [17]. - Bank of China anticipates increased volatility in overseas markets but maintains a positive outlook for A-shares due to ample liquidity [18][19]. - Shenwan Hongyuan differentiates between "de-capital expenditure," "de-capacity," and "de-output," suggesting a gradual shift in market dynamics [20]. - Cinda Securities highlights the limited short-term impact of de-capacity on profits, emphasizing the need for demand recovery to drive market performance [26].

Group 1 - The focus of the brokerage strategy discussions this week is on the upcoming trade agreement progress and the sustainability of the "anti-involution" sector [1][2] - The Huaxi strategy team indicates that the core pricing in the global market is centered around the trade agreement progress on July 9, with potential tariff extensions being a negotiation tactic [1][3] - The A-share market is expected to maintain an upward trend, with two main lines of focus: positive mid-term performance expectations in sectors like wind power, thermal power, and robotics, and the potential for domestic chains to catch up following Nvidia's overseas breakthroughs [1][3] Group 2 - The Dongfang strategy team notes that the market previously viewed the July 9 tariff as a negligible short-term risk, but it may escalate into a core issue next week, leading to a volatile market [1][3] - The Zhongyin strategy team emphasizes that the current liquidity environment supports the market, and as the third quarter progresses, domestic demand expectations may improve if tariff policies do not experience unexpected fluctuations [1][3] - The Xuch team's analysis suggests that "expectation management" is a key tool in the "anti-involution" policy, with limited space for further capacity clearance in traditional cyclical industries like coal and steel due to already high industry concentration [2][4] Group 3 - The market is currently in a state of fluctuation, with the potential for increased volatility in the coming weeks due to the expiration of the 90-day tariff grace period and the implications of the "Great Beautiful Act" [5] - The overall sentiment in the A-share market is that the liquidity environment remains a primary support factor, with expectations for recovery in domestic demand as price pressures ease and policies are implemented [5] - The current cycle of capacity reduction is crucial, but its short-term impact on profitability may be limited if demand does not show signs of recovery [4][5]

Group 1 - The core conclusion indicates that recent market and policy focus on de-capacity and anti-involution may signify the late stage of the overcapacity cycle, with market-driven capacity reduction already underway, regardless of policy [2][10][11] - Since 2021, the continuous decline in corporate revenue has led to a cumulative year-on-year negative growth in capital expenditure across the entire A-share market, marking the longest period of negative growth since 2005 [10][11] - De-capacity is a crucial part of the capacity cycle, but its short-term impact on profitability is limited if demand does not show a turning point; supply policies mainly affect the height of future price reversals rather than the direction of prices [10][11] Group 2 - The process of de-capacity typically follows three steps: declining revenue and profits lead to reduced capital expenditure, which subsequently results in a decrease in capacity growth [3][11] - The effects of de-capacity are often only visible when demand improves; during periods of declining industry prices, the supply-demand balance tends to be in a low-cost zone, meaning most companies are losing money [15][17] - The current overcapacity is primarily driven by the decline in the real estate sector since 2021, with a need to monitor whether a second demand decline similar to 2014-2015 will occur [18][21] Group 3 - The current judgment suggests a strategic outlook similar to 2013 and 2019, with a high probability of developing into a comprehensive bull market, although tactical indicators may require time to break through the recent trading range [23][24] - The market is expected to experience fluctuations in July, but a return to a bull market is anticipated in the latter part of Q3 or Q4, contingent on either earnings or policy turning optimistic [23][24] - Recent configuration suggestions include a focus on value in the short term, with potential increases in exposure to elastic industries after Q3 [26][29]

这个周末发生了许多重要消息。一起来梳理一下这两天国内政策层面上对几个行业出现的变化苗头。我 们先来说第一个，关于新能源汽车。刚刚官方代表的一些渠道对外吹风，点评了中国商务部对欧盟白兰 地的反倾销调查。这件事情最终的结果是认定欧盟的白兰地对中国的销售存在着倾销问题。 本篇评级为★★★，主要围绕以下内容展开： 如有疑问请以音频内容为准，添加妙妙子微信huxiuvip302，入群有机会与董小姐进一步交流。 新闻解读评级说明：五星重磅，四星重要，三星级以下大家选择听。 1、明着罚，暗中缓，汽车行业的两个推力 1、明着罚，暗中缓，汽车行业的两个推力 2、"去产能"行业推力超预期，聊聊新能源和煤炭 3、芯片赛道的外部刺激，又出现了 这条消息表面上看起来是一条坏消息，似乎意味着中国和欧盟的关系出现了短期的紧张。但实际上，如 果仔细剖析，它是一个大缓和的信号。因为在此次反倾销调查中，虽然表面上认定了倾销行为，但实际 上豁免了34家欧洲最重要的相关企业，这意味着给它们免除了罚单。所以，表面上是制裁，背地里其实 是通融。 中国的这家代表官方的媒体渠道也直白地点评了出来，说你看中国商务部对欧盟相关产业的这种处理方 式，是不是也能给 ...

Core Viewpoint - The A-share market shows a recovery in capital sentiment, with significant gains in various sectors, particularly in steel and photovoltaic industries, driven by a new wave of "de-involution" and capacity reduction initiatives from the government [2]. Group 1: Market Performance - During the week of June 30 to July 4, the Shanghai Composite Index rose by 1.40% to close at 3472.32 points, while the Shenzhen Component Index increased by 1.25% and the ChiNext Index by 1.50% [2]. - The steel and photovoltaic sectors experienced a surge, with photovoltaic glass prices rising over 10% during the week [2]. Group 2: Institutional Research - A total of 158 listed companies disclosed institutional research minutes, with over 70% of the researched stocks achieving positive returns [2]. - Taotao Automotive was the most favored stock by institutions, achieving a remarkable gain of 29.82% during the week [3]. Group 3: Company Highlights - Taotao Automotive, a leader in the North American leisure vehicle market, reported an expected net profit of 310 million to 360 million yuan for the first half of 2025, representing a year-on-year growth of 70.34% to 97.81% [3]. - Shunwang Technology, a core supplier in the esports service sector, discussed its multi-layered computing power service system and AI computing power platform during institutional interactions [4]. - Xinjie Electric, focused on industrial automation, highlighted its advancements in core components for humanoid robots, including hollow cup motors and high-performance optical encoders [5]. - Xiamen Tungsten New Energy is developing new profit growth points, including high-stability lithium supplement materials and a new structure cathode material with improved energy density and performance [6].

Core Insights - The report emphasizes the distinction between "capital expenditure reduction," "capacity reduction," and "output reduction" in the context of the current anti-involution policies, suggesting that these elements will shape the supply-demand dynamics in the manufacturing sector from mid-2026 onwards [3][4][7][9]. Group 1: Anti-Involution Policies - The current anti-involution policies are reminiscent of the supply-side reforms from 2016-2017, which can be broken down into three core elements: "capacity reduction," "output reduction," and demand-side stimulation [4][8]. - "Capacity reduction" involves eliminating outdated capacity and curbing new capital expenditures, leading to a long-term decline in future capacity formation. This has historically supported high profitability in cyclical commodities like coal until 2022 [4][8]. - "Output reduction" aims to quickly improve the supply-demand balance in cyclical industries through general capacity shutdowns and production limits, which was crucial when capacity utilization rates were low [4][8]. Group 2: Current Manufacturing Sector Dynamics - The current state of supply in the midstream manufacturing sector closely resembles the upstream cycle of 2016, but the policy focus differs. The reduction in capital expenditure has reached its lowest growth rate since 2012, indicating a systemic correction of over-investment in advanced manufacturing driven by local government subsidies [9][10]. - The report anticipates that the capital expenditure growth rate will continue to decline, potentially remaining negative for an extended period, which will lead to fixed asset growth (capacity growth) being at absolute lows starting from 2026 [9][10]. - The report highlights that "capacity reduction" will manifest through delayed impacts of reduced capital expenditure, abandonment of existing projects, and mechanisms to encourage the exit of less competitive firms [9][10]. Group 3: Future Market Outlook - The report predicts that by mid-2026, the fixed asset formation growth rate of midstream manufacturing companies will fall below the nominal GDP growth rate, increasing the visibility of a turning point in supply-demand dynamics [10]. - The current low capacity utilization rates and weak internal investment willingness among firms suggest further room for decline in capital expenditure growth, reinforcing the notion that anti-involution investments will be critical for long-term profitability improvements [10]. - The report views the improvement in the supply-demand landscape of midstream manufacturing and the easing of anti-involution narratives as essential components of a bullish market outlook for 2026-2027 [10].

Core Viewpoint - The emergence of "involution" competition in recent years is not merely due to the short-sightedness of companies and employees, but is deeply rooted in macroeconomic backgrounds influenced by economic cycles, institutional issues, and technological development patterns [1][27]. Group 1: Industry Responses to Involution - The automotive industry has been notably active, with a significant "60-day account period revolution" and calls from the National Federation of Industry and Commerce for manufacturers to shorten rebate periods and simplify policies [3][4]. - The pig farming sector is also responding, with major companies being urged to reduce production capacity and stabilize prices, controlling the weight of pigs for market [5]. - The photovoltaic industry is proactively reducing production, with leading glass manufacturers planning a collective 30% cut in output [6]. - The cement industry is undergoing self-examination, with the China Cement Association requiring members to align actual production with registered capacity [7]. Group 2: Historical Context of Capacity Reduction - Historical capacity reduction efforts have typically focused on high-pollution and high-energy-consuming traditional industries, employing methods such as limiting new capacity and eliminating outdated production [16][20]. - The current round of capacity reduction is characterized by a broader scope, including emerging industries like photovoltaics and new energy vehicles, indicating a shift from traditional sectors [21][22]. Group 3: Economic and Policy Factors - The low demand in the domestic market and uncertainties in foreign demand are contributing to the "involution" competition, exacerbated by supply-demand mismatches in certain industries [28]. - Local governments' performance evaluation mechanisms lead to "race-to-the-bottom" competition, distorting industry entry costs and slowing down market adjustments [29]. - Technological advancements often result in structural overcapacity, particularly in emerging industries, as companies invest heavily to adapt to rapid changes [30]. Group 4: Future Directions and Recommendations - To address "involution" competition, authorities should enhance counter-cyclical adjustments to boost domestic demand and reform the income distribution structure to improve labor compensation [34][36]. - Encouraging differentiated competition among enterprises and establishing industry standards can help mitigate excessive competition [38]. - A tailored approach to supply-side guidance based on industry-specific technological development patterns is necessary to support innovation [39]. Group 5: Investment Opportunities - Investors should be aware of the typical patterns of capacity reduction, as stock prices in affected industries may initially drop but can rebound significantly post-adjustment [57]. - Emerging industries such as semiconductors and artificial intelligence, despite current bubbles, present substantial arbitrage opportunities [58].

Core Viewpoint - The polysilicon market is experiencing price fluctuations influenced by government policies aimed at reducing low-price competition and promoting sustainable development, despite underlying supply-demand imbalances putting downward pressure on prices [2][3][4]. Group 1: Market Dynamics - Polysilicon prices have shown a strong rebound due to recent policy signals against "involution," with futures contracts experiencing significant gains [2]. - On July 2, multiple polysilicon futures contracts hit the upper limit, and on July 3, the main contract opened higher and rose over 2% during the day [2]. - The current market sentiment is driven by expectations of capacity reduction, which is anticipated to accelerate, thereby supporting price recovery [2][3]. Group 2: Supply and Demand Analysis - The polysilicon market is currently characterized by increasing supply and weak demand, leading to ongoing downward pressure on prices [3]. - Forecasts indicate that July production could reach 110,000 to 120,000 tons due to the resumption of major production facilities, which may further pressure prices [3]. - Demand is expected to decline, with silicon wafer production projected to drop to 55-56 GW and battery cell production to 57-58 GW, reflecting a month-on-month decrease of 4-5% [3]. Group 3: Future Outlook - Short-term market performance is likely to remain strong due to policy-driven sentiment, but mid-term price fluctuations are expected as the market adjusts to production reduction policies [4]. - The industry is advised to monitor the implementation of capacity reduction policies and the potential for further market sentiment development, as a return to fundamental price logic could lead to renewed price declines [4].

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core Viewpoints - The overall atmosphere in the commodity market rebounded yesterday, with the prices of finished steel products showing a volatile and upward trend. The "anti - involution and capacity reduction" proposal and the expected production restrictions in the Beijing - Tianjin - Hebei region have pushed up the prices of steel products. However, the actual implementation of these policies needs further verification. The static fundamentals of steel have no obvious contradictions, and future attention should be paid to policy trends, terminal demand recovery, and cost support [3]. - The price of iron ore is in a wide - range volatile state in the short term. The supply of iron ore has decreased, and the demand has also declined due to factors such as seasonal maintenance of blast furnaces and production cuts by some steel mills. The impact of macro - expectations on the market has increased, and attention should be paid to the interference of production restrictions in Tangshan and the reduction of pellet production expectations by Vale [6]. - For manganese silicon and silicon iron, the prices are expected to maintain a volatile or slightly rebound state in the short term. The market is optimistic about the "capacity reduction" policy, but there are still uncertainties. Enterprises with hedging profit margins are recommended to conduct appropriate hedging operations [9][10]. - The price of industrial silicon is still in a downward trend. The market is optimistic about the "capacity reduction" policy, but the comparison with the 2015 supply - side reform is questionable. Short - term speculative short positions are recommended to wait and see [12][13]. - For glass, the policy expectation has a strong impact on the price, and short positions are recommended to avoid and wait. For soda ash, the supply is still abundant, and the inventory pressure is large. It is expected to rebound following glass, but the sustainability of the rebound is limited [15][17]. 3. Summary by Category Steel - **Futures and Spot Prices**: The closing price of the rebar main contract was 3076 yuan/ton, up 11 yuan/ton (0.358%) from the previous trading day. The spot prices in Tianjin and Shanghai remained flat. The closing price of the hot - rolled coil main contract was 3208 yuan/ton, up 17 yuan/ton (0.532%) from the previous trading day. The spot price in Lecong increased by 10 yuan/ton, while that in Shanghai remained flat [2]. - **Fundamentals**: This week, the apparent supply and demand of rebar both increased, and the inventory depletion speed slowed down. The output of hot - rolled coils slightly increased, the demand declined, and the inventory slightly accumulated, but it was still at a five - year low [3]. Iron Ore - **Futures and Spot Prices**: The main contract of iron ore (I2509) closed at 733.00 yuan/ton, up 1.45% (+10.50). The spot price of PB powder at Qingdao Port was 725 yuan/wet ton, with a basis of 35.46 yuan/ton and a basis rate of 4.61% [5]. - **Supply and Demand**: The latest iron ore shipments decreased, and the near - end arrivals also declined. The daily average pig iron output decreased, and the terminal demand was neutral. The port inventory changed little, and the steel mill's imported ore inventory increased [6]. Manganese Silicon and Silicon Iron - **Futures and Spot Prices**: On July 3, the main contract of manganese silicon (SM509) closed down 0.24% at 5712 yuan/ton, and the spot price in Tianjin was at a premium to the futures. The main contract of silicon iron (SF509) closed down 0.85% at 5390 yuan/ton, and the spot price in Tianjin was also at a premium to the futures [8]. - **Market Outlook**: The prices are expected to be volatile or slightly rebound in the short term. The market is optimistic about the "capacity reduction" policy, but there are uncertainties [9][10]. Industrial Silicon - **Futures and Spot Prices**: On July 3, the main contract of industrial silicon (SI2509) closed down 2.44% at 8010 yuan/ton. The spot prices of 553 and 421 in East China increased, and both were at a premium to the futures [12]. - **Market Outlook**: The price is still in a downward trend. The market's optimism about the "capacity reduction" policy needs further verification [12][13]. Glass and Soda Ash - **Glass**: The spot price in Shahe increased by 21 yuan, and that in Central China remained flat. The national inventory decreased slightly. The policy expectation pushed up the futures price, and short positions are recommended to avoid and wait [15]. - **Soda Ash**: The spot price decreased by 20 yuan. The domestic inventory increased by 2.30%. The demand continued to decline, and the supply was still abundant. It is expected to rebound following glass, but the rebound sustainability is limited [15][17].

Group 1 - The "capacity reduction" sector is currently experiencing a rebound, with various industries participating, particularly in new energy, while steel and coal show signs of slight pullback after significant gains [3] - More industries are joining the capacity reduction and anti-involution initiatives, including automotive, steel, coal, new energy, construction materials, and cement, indicating ongoing upward potential under policy guidance [3] Group 2 - The technology and consumer electronics sector has shown significant improvement, reaching the top of the rankings, although the underlying reasons are not fully disclosed [4] - Foxconn, Apple's largest supplier, has unexpectedly withdrawn several hundred Chinese engineers from India, raising questions about the challenges faced in the production process, despite earlier plans to expand operations in India [4]