Investment Strategy - The report highlights that the PPI has seen a narrowing year-on-year decline, indicating a potential for continued focus on main thematic investment opportunities [1][4][36] - The A-share market has shown positive momentum, with significant index gains over the past five trading days, including a 2.91% increase in the Shanghai Composite Index and a 10.00% rise in the ChiNext Index [5][24] Market Review - In the recent trading period from September 5 to September 11, major indices experienced gains, with the Shanghai Composite Index rising by 2.91% and the ChiNext Index by 10.00% [5][12] - The trading volume has significantly decreased, with a total of 11.26 trillion yuan traded, averaging 2.25 trillion yuan per day, which is a reduction of 414.768 billion yuan compared to the previous five trading days [8][24] Economic Data - The customs data for August indicates a 4.4% year-on-year increase in exports, although this is a decline of 2.8 percentage points from July, attributed to a high base last year and the "export rush" effect [29][31] - The CPI for August remained flat month-on-month and decreased by 0.4% year-on-year, influenced by high base effects and weak seasonal food price changes [31][34] - The PPI for August showed a month-on-month stabilization and a narrowing year-on-year decline, marking the first such narrowing since March, driven by lower base effects and "anti-involution" measures [31][34] Policy Insights - The report emphasizes that the focus of fiscal policy will be on strengthening domestic circulation, with specific actions aimed at boosting consumption and investment in public services [35][36] - The National Development and Reform Commission has outlined key economic tasks for the second half of the year, including capacity governance in key industries and addressing irrational competition [35][36] Sector Opportunities - Investment opportunities are identified in the TMT sector due to advancements in domestic computing power and the "AI+" initiative [36] - The report suggests potential in the power equipment and non-ferrous metals sectors, driven by unexpected demand for energy storage and breakthroughs in solid-state battery industrialization [36] - The financial sector is also highlighted as a potential beneficiary of the stabilizing capital market [36]

Macro and Strategy Research - The liquidity environment is expected to improve, providing a mid-term layout window for the A-share market, with a focus on strengthening domestic circulation as a key policy direction [2][3] - The capital market is experiencing a liquidity-driven trend, with increased trading volume and a rise in margin financing balances, indicating a positive influx of funds into the market [3] Industry Research Metal Industry - The steel industry reported a revenue of CNY 945.23 billion in H1 2025, a year-on-year decrease of 9.16%, while net profit increased by 157.66% to CNY 13.14 billion, indicating significant improvement in overall performance [8] - The non-ferrous metal industry achieved a revenue of CNY 1,819.66 billion in H1 2025, a year-on-year growth of 6.49%, with net profit rising by 36.55% to CNY 95.36 billion, reflecting strong performance [10] Light Industry and Textile - The light industry manufacturing sector reported a revenue of CNY 297.01 billion in H1 2025, with a slight year-on-year increase of 0.01%, but net profit decreased by 23.14% to CNY 13.95 billion, indicating pressure on profitability [15] - The textile and apparel sector saw a revenue decline of 5.16% and a net profit decrease of 8.40% in H1 2025, highlighting challenges in the market [16] Pharmaceutical and Biotech - The pharmaceutical and biotech sector experienced a revenue decline in H1 2025, with innovative drugs and CXO segments showing strong performance, while medical devices faced pressure [18][19] - The chemical pharmaceutical segment reported a revenue of CNY 136.94 billion in Q2 2025, a year-on-year decrease of 1.4%, but net profit increased by 9.0%, indicating a recovery in profitability [19]

Core Viewpoint - The article highlights the resilience of the AI sector in the A-share market amidst broader market declines, with significant growth in AI-related indices and stocks, particularly in the context of domestic chip production and the increasing importance of computing power in the face of international competition [6][8]. Market Overview - As of August 27, 2025, the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index have P/E ratios at 97.24%, 77.89%, and 35.86% respectively, indicating varying levels of market valuation [1]. - The A-share market experienced a general downturn, with the AI sector showing a counter-trend performance, as evidenced by a 2% increase in the ChiNext AI Index [6]. Sector Performance - The top three sectors for capital inflow were Utilities (1.024 billion), Banking (496 million), and Coal (141 million), while the sectors with the highest outflows included Electronics (-14.739 billion), Computers (-14.559 billion), and Machinery Equipment (-8.537 billion) [2]. - The AI industry is witnessing a significant uptick, with the AI-related stocks like New Yisheng and Tianfu Communication showing gains of over 9% and new highs in stock prices [6]. Investment Opportunities - The domestic demand for computing power is expected to grow rapidly, potentially doubling the market size by 2025, driven by the urgency of domestic chip production amid U.S. export restrictions [6]. - The article suggests that leading companies in the computing power sector may see their valuations increase due to a combination of AI integration, new capital inflows, and ongoing industry innovation [6]. ETF Performance - The Huabao AI ETF (code: 589520) reported a 3.02% increase over the past six months, reflecting strong investor interest in AI-related investments [5]. - The article notes that the performance of AI ETFs is closely tied to the underlying indices, with significant movements observed in the AI sector [5][8].

Core Insights - The ongoing U.S. pressure on China's AI industry has led to a significant drop in NVIDIA's market share in China from 95% to 50%, while Huawei's Ascend chip shipments have surged to nearly 400,000 units, indicating a shift towards domestic alternatives in computing power [1] - Global competition for computing power is intensifying, with the U.S. "Gateway to the Stars" initiative proposing a $500 billion investment to build 5-10 supercomputing parks by 2029 [1] - The EU plans to mobilize €200 billion for AI, including a dedicated €20 billion fund for establishing European AI super factories [2] Industry Developments - China has initiated the "East Data West Computing" project, with the Ministry of Commerce emphasizing support for national-level economic development zones' computing infrastructure [2] - The current focus on computing power is shifting towards restructuring, with encouragement for acquisitions in key sectors such as semiconductors, technology, AI, and biomedicine [2] Company Opportunities - Zhejiang Data Culture is highlighted for its restructuring logic, leveraging the Zhejiang Big Data Trading Center to promote a "computing power + data" ecosystem, recently winning a supercomputing center project worth 6 billion yuan [4] - Runxin Technology is pursuing a restructuring strategy by signing an agreement to acquire 100% of Qiyimoer, a leader in high-end computing chip packaging technology [5] - A specific company is planning to establish a 100,000-card GPU computing cluster within two years, has signed a 10-year cooperation agreement with ByteDance for computing and data center services, and recently completed a share acquisition, positioning itself for significant growth [5]