Production Insights - As of the fourth week of July, the national blast furnace operating rate was 83.48%, stable compared to the previous period and above last year's average[11] - The rebar operating rate increased to 43.95%, up by 2.38 percentage points from the previous period, also above last year's average[11] - The cement mill operating rate recorded 36.95%, showing a slight decline compared to the previous period[3] Inventory and Capacity Utilization - As of the fourth week of July, rebar inventory decreased by 4.29% compared to the previous period, indicating a reduction in stock levels[27] - The capacity utilization rate for electric furnaces was 53.48%, up by 2.51 percentage points from the previous month, slightly above last year's average[46] - Cement clinker capacity utilization was 58.10%, down by 0.45 percentage points from the previous month, below last year's average[46] Demand Trends - In July, the sales area of commercial housing in 30 cities decreased by 27.43% month-on-month and 11.26% year-on-year[4] - The average daily sales of passenger cars were 53,006.50 units, reflecting a month-on-month decline of 21.88%[4] - The volume of postal express collection was 3.704 billion pieces, down by 5.29% month-on-month but up by 15.14% year-on-year[4] Price Movements - The average price of cement was 338.17 yuan/ton, down by 0.33% month-on-month, below last year's average[67] - The price of rebar increased by 4.14% month-on-month to 3,310.40 yuan/ton, still below last year's average[68] - The price of asphalt rose by 0.40% month-on-month to 3,823.00 yuan/ton, above last year's average[69]

Consumption Trends - Consumer spending shows a divergence with weak goods consumption and strong service consumption, particularly in travel and cinema during the summer[1] - Automotive retail sales have slightly declined, while wholesale volumes have increased, indicating seasonal and promotional impacts on consumption[9] - Food prices continue to drop, with agricultural products seeing an expanding year-on-year decline, particularly affecting premium products like Moutai liquor[9] Investment Insights - As of August 2, 2025, the cumulative issuance of new special bonds reached CNY 2.8 trillion, marking the second-highest issuance pace since 2022, with July alone contributing CNY 616.94 billion[17] - New housing transactions in 30 cities have shown a seasonal rebound, but the year-on-year decline in average transaction area has widened from 14.8% to 15.4%[17] Price and Production Dynamics - Consumer prices are on a downward trend, with industrial prices also showing marginal declines, leading to a cooling of price increase expectations[36] - The Producer Price Index (PPI) has seen a slight decrease, with the South China price index dropping by 1.1% week-on-week, reflecting a shift in market supply and demand expectations[36] Import and Export Activity - Port operations have slowed due to typhoon impacts, with a year-on-year decline in the number of ships docking at ports[21] - Domestic export freight rates have decreased by 2.3% compared to the previous week, while import rates have slightly increased by 1.1%[21] Liquidity Conditions - Funding rates have decreased, with R007 down by 20.7 basis points and DR007 down by 22.8 basis points, indicating a trend towards a more accommodative liquidity environment[39] - The 10-year government bond yield has fallen by 2.7 basis points to 1.71%, reflecting easing pressures in the funding market[39]

Core Viewpoint - The gaming sector has shown significant growth since early June, driven by high-frequency data that boosts earnings per share (EPS) and price-to-earnings (PE) ratios for individual companies, as well as the overall gaming sector's PE valuation [1] Group 1: Market Dynamics - The upcoming summer season is expected to be the strongest for high-frequency data in the gaming industry, with historical trends indicating increased gaming activity during this period [2] - The risk of market optimism regarding the gaming sector being invalidated before the end of summer is relatively low, and the AI industry is anticipated to bring surprises in Q3, attracting funds interested in AI applications [3][4] Group 2: Company Performances - Giant Network has performed exceptionally well, with its core product "Supernatural Action" likely surpassing 100 million in revenue in June, and its daily active users (DAU) showing continuous growth [6] - Kaiying Network has a solid fundamental outlook, with its legendary business performing well and a rich product pipeline expected to drive revenue growth [7] - Jiubite has shown signs of recovery after a downturn, with its core product "Wandao Mobile" stabilizing and new products exceeding expectations [8] - Shenzhou Taiyue is positioned for future growth with a rich product reserve and plans for significant promotion in Q3 [10] - Sanqi Interactive Entertainment is undervalued with a PE ratio below 15, and the upcoming release of its anticipated MMO product "Douluo Dalu" could yield substantial returns [11] - Perfect World is experiencing improved testing results and is set to enter overseas testing, which may catalyze its valuation [12]

Production Sector - The coke oven operating rate is at 73.40%, down 0.54% from the previous week[7] - The blast furnace operating rate increased to 83.84%, up 0.45% from the previous week[7] - The PTA operating rate decreased to 78.61%, down 4.39% from the previous week[7] Consumption Sector - Weekly box office revenue is 28,100,000 CNY, a decrease of 9,000,000 CNY from the previous week[7] - Average daily retail sales of passenger cars are 60,333.45 units, down 593.05 units from the previous week[7] - Average daily wholesale sales of passenger cars are 75,186.70 units, down 371.50 units from the previous week[7] Real Estate and Infrastructure - The transaction area of commercial housing in 30 major cities is 205.32 million square meters, an increase of 28.45% from the previous week[7] - The land transaction premium rate in 100 major cities is 7.09%, up 5.64% from the previous week[7] - The area of land sold in 100 major cities is 828.87 million square meters, down 428.98 million square meters from the previous week[7] Trade and Inflation - The Shanghai export container freight index is 1,869.59, down 218.65 from the previous week[8] - The average wholesale price of pork is 20.33 CNY/kg, up 0.07 CNY from the previous week[8] - The consumer price index (CPI) shows overall weak food prices, while the producer price index (PPI) indicates a rebound in domestic and international commodity prices[40][42] Transportation - The subway passenger volume in Beijing is 1,023.73 million, an increase of 58.08% from the previous week[8] - The number of domestic flights (excluding Hong Kong, Macau, and Taiwan) is 12,848.43, up 432.71 from the previous week[8]

Summary of Key Points Industry Overview - The report discusses recent high-frequency changes in the macroeconomic environment, indicating that long-term macro logic has remained relatively stable, with factors such as domestic policies, DeepSeek, and tariffs showing little variation. The importance of high-frequency data has increased, revealing a predominantly weak trend in recent data [1][1]. Core Insights and Arguments 1. **Decline in Commodity Prices**: There has been a continuous decline in the prices of black and building materials, with the recent pace of decline accelerating. This trend has persisted for a considerable time [1]. 2. **Real Estate Market Trends**: The sales of second-hand homes in the real estate sector have experienced a seasonal decline, which aligns with the post-peak policy heat. The extent of this decline is currently under observation [1]. 3. **Travel Data During Festivals**: Travel data during the Dragon Boat Festival showed weak growth compared to the May Day holiday, indicating a year-on-year decline [1]. 4. **Stock Market Financing Balance**: Since April, the financing balance in the stock market has remained weak. During the index adjustment period in April, there was a noticeable decline in financing balance, which did not recover even when the index rebounded [1]. 5. **ETF Share Decline**: Following a significant increase in ETF shares during the volatility of March-April, there has been a decline in ETF shares since May as the market stabilized [1]. Additional Important Insights - The market is expected to fluctuate within the range of 3200-3400 from May to July, with a potential significant breakthrough anticipated in Q4 [2].

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **automotive**, **real estate**, and **foreign trade** sectors in China, highlighting their performance and trends in May 2025 [5][2]. Core Insights and Arguments 1. **Automotive Sales Growth**: - Automotive sales have shown robust growth, with average daily sales of passenger cars reaching **60,896 units** in the second week of May, a **30%** year-on-year increase. The third week saw sales of **51,175 units**, marking a **14%** increase compared to the same period last year. This growth is attributed to the continued effects of subsidy policies [5][2]. 2. **Real Estate Market Recovery**: - The year-on-year decline in the sales area of commercial housing in 30 cities has narrowed significantly, from **-21.7%** at the end of April to **-4.4%** in the last week of May. The total transaction area has exceeded **1.9 million square meters** in recent weeks, indicating a potential stabilization in the real estate market [5][2]. 3. **Foreign Trade and Shipping Rates**: - The export shipping price indices (NCFI, SCFI, CCFI) have shown a recovery from their lows, with NCFI increasing by **21.8%** and SCFI by **18.3%** since the last week of April. This improvement is linked to the reduction of tariffs between China and the US, enhancing trade relations [5][2]. 4. **Port Cargo Throughput**: - Cargo throughput at Chinese ports has remained high, exceeding **260 million tons** in the past two weeks, which is **6.4%** and **6.9%** higher than the average levels from the previous year. This trend supports the notion that export growth will continue to be strong in May [5][2]. 5. **Investment and Industrial Performance**: - Despite the positive consumer and external demand indicators, investment in heavy industrial products remains weak. The overall economic outlook is supported by strong consumption and external demand, but risks such as geopolitical tensions and domestic policy implementation remain [5][2]. Additional Important Content - **Risk Factors**: The report highlights potential risks including geopolitical tensions, domestic policy execution falling short of expectations, and the possibility of a global recession impacting major economies [5][2]. - **Production and Capacity Utilization**: Various sectors, including steel and cement, are experiencing fluctuations in production and capacity utilization rates, with some sectors showing declines while others stabilize or improve [45][48][67]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and outlook of the automotive, real estate, and foreign trade sectors in China.

Consumption - Automotive consumption remains high, with wholesale and retail sales showing a slight decline due to seasonal factors, but the four-week average year-on-year growth rate remains stable[4] - Service consumption is relatively flat, with urban congestion indices decreasing and subway passenger flow rebounding, although overall numbers are slightly down year-on-year[4] Investment - Infrastructure investment is accelerating, with special bond issuance reaching CNY 1.48 trillion as of May 18, 2025, and CNY 285.2 billion issued in the first 18 days of May[11] - Real estate transactions in 30 cities show a seasonal rebound but year-on-year growth has dropped from 6.3% to -15.0%[14] Trade and Port Operations - Import and export activities have rebounded due to tariff adjustments, with port operations improving and the number of ships docking at ports increasing significantly[17] - Export freight rates have seen a notable increase, with Shanghai and Ningbo export rates rising by 10.0% and 6.5% respectively[17] Production - Power generation coal consumption has rebounded, indicating marginal recovery in production, with some industries showing improved operating rates[19] - The steel and petrochemical sectors have seen slight improvements in operating rates, although some areas still face year-on-year declines[20] Inventory and Prices - Most inventories have decreased, except for coal and cement, which have seen increases, with coal inventories reaching historical highs[32] - Consumer Price Index (CPI) has decreased while Producer Price Index (PPI) has increased, indicating a stabilization in industrial product prices overall[34] Currency and Liquidity - The Chinese Yuan has appreciated to 7.20 against the US dollar, with the dollar index rising by 56 basis points due to favorable US economic data[39] - Funding rates have slightly increased, with R007 and DR007 rising by 5 and 10 basis points respectively[36]

Group 1: Importance of Data and Factor Construction - The report emphasizes the significance of "high-frequency data + discretization construction methods" for future research on price-volume factors to obtain incremental information with low correlation to existing factors[1] - Continuous factor construction methods, based on a segment of continuous data, show limited incremental benefits when applied to portfolio levels, with excess annualized returns only improving by approximately 0.5%-0.6% when adding minute and tick data factors to daily frequency factors[2][3] - Discretization methods, which extract discrete time points from historical data, can provide significant incremental benefits at the portfolio level, with a constructed portfolio based on "continuous + tick discretization" achieving an excess annualized return of 8.15%[3] Group 2: Performance Metrics of Factors - The "tick discretization" factor shows a monthly IC mean of 0.073 and an annualized ICIR of 2.87, with a 10-group long-short hedge yielding an annualized return of 38.30% and a maximum drawdown of 11.87%[4] - The "minute continuous" factor has a monthly IC mean of 0.079 and an annualized ICIR of 3.57, resulting in an annualized return of 35.99% with a maximum drawdown of 8.10%[3][4] - The combined factor of "daily continuous + minute continuous + tick continuous" achieves a monthly IC mean of 0.087 and an annualized return of 43.08%, indicating the effectiveness of combining different data frequencies[3][4] Group 3: Risk and Limitations - The report warns that the conclusions drawn are based on historical data and statistical models, and significant changes in market conditions could lead to model failure[4] - Despite the apparent improvements in backtesting results when adding minute and tick factors, their contribution at the portfolio level is limited, suggesting that the incremental information they provide may not be substantial[3][4]