Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1] Core Insights - The Central Financial Commission's sixth meeting emphasized promoting high-quality development of the marine economy, highlighting the need for top-level design, increased policy support, and encouraging social capital participation [12][15] - The military industry is expected to see an inflection point in orders as the "Centenary Goal of Building the Army" enters its second half, with new technologies and products representing new market directions that may contain greater elasticity [15] Summary by Sections Industry Overview - The closing index for the defense industry is 1618.51, with a 52-week high of 1712.48 and a low of 1113.62 [1] Market Performance - The military sector indices showed a weekly increase, with the China Securities Military Index rising by 1.47% and the Shenwan Military Index by 1.36% [16] - The top ten performing stocks in the military sector this week included Chengxi Aviation (+24.21%) and China Ship Emergency (+20.23%) [19] Investment Recommendations - Two main investment themes are suggested: 1) Aerospace and "gap-filling" new focuses, including companies like Feilihua, Fenghuo Electronics, and AVIC Shenyang Aircraft [15] 2) New technologies, products, and markets with greater elasticity, including Aerospace Intelligent Manufacturing and Guangdong Hongda [15] Valuation Levels - As of July 4, 2025, the China Securities Military Index stands at 11391.90, with a PE-TTM valuation of 112.79 and a PB valuation of 3.52 [21][22] Data Tracking - The report includes tracking of private placements and stock incentive data for various military companies, indicating significant fundraising and stock performance [25][27]

Group 1 - The report highlights the focus on "anti-involution" policies, which aim to reduce ineffective supply and promote industrial upgrades, shifting from total stimulus to targeted measures [3][13] - The A-share market experienced fluctuations with the CSI 300 index rising by 1.54% and the CSI 1000 index increasing by 0.56% during the week of June 30 to July 4, 2025 [12] - Traditional cyclical industries such as steel, coal, and construction materials led the market rally, influenced by the recent policy announcements [12][13] Group 2 - The deep-sea technology sector is identified as a multidisciplinary industry with potential for growth as policies are released, covering a wide range of activities from raw materials to deep-sea resource development [14] - The semiconductor sector is experiencing a shift with the easing of restrictions on EDA tool exports to China, highlighting the importance of domestic EDA tool development and the need for a complete industrial chain [14] - The launch of the Beijing Stock Exchange's specialized index reflects a growing focus on high-quality, specialized small and medium enterprises, which may enhance market activity [15][17] Group 3 - The report provides performance statistics for various equity fund indices, indicating that the medical stock fund index rose by 6.88% last week, while the growth stock fund index increased by 1.15% [18] - The active equity fund indices are categorized by investment style, with the balanced stock fund index showing a weekly increase of 1.85% and the value stock fund index rising by 0.56% [18] - The report emphasizes the importance of evaluating fund performance based on various metrics, including relative benchmark performance and overall competitiveness [30][31]

Investment Rating - The report maintains an "Outperform" rating for the industry [2][6]. Core Viewpoints - The report highlights the importance of deep-sea technology in driving high-quality development of the marine economy, emphasizing the need for policy support and social capital involvement [4]. - It notes that over 70% of global oil and gas resources are found in oceans, with significant potential for exploration and development in deep-sea areas, particularly in China [4]. - The report suggests that the domestic deep-sea oil and gas exploration efforts are expected to increase, benefiting resource companies and equipment service providers [4]. Summary by Sections Market Performance - The report indicates a market performance trend with fluctuations ranging from -15% to +29% over the specified periods [3]. Investment Opportunities - The report identifies investment opportunities in the chemical sector driven by deep-sea technology, particularly in high-performance specialty chemical materials that meet extreme deep-sea conditions [4]. - Recommended companies include: - Resource companies with quality deep-sea oil and gas assets: China National Offshore Oil Corporation (CNOOC) [4]. - Equipment manufacturing and engineering service companies focused on deep-sea resource exploration: China Oilfield Services Limited, Offshore Oil Engineering Company, and Potential Energy [4]. - Companies producing high-performance materials for deep-sea environments: Hailide New Material, Maike Chemical, Guangxin Materials, and Feilu Co., Ltd. [4].

Market Overview - The A-share market experienced a volatile increase last week, with the CSI 300 rising by 1.54% and the CSI 1000 increasing by 0.56% [2][15] - The central economic committee's sixth meeting emphasized the need to govern "involution" competition, leading to a rally in traditional cyclical industries such as steel, coal, and building materials [3][15] Policy Insights - The "anti-involution" policy aims to reduce ineffective supply and promote industrial upgrades, shifting from total stimulus to managing supply [3][16] - The focus on "anti-involution" is expected to create a macro environment conducive to technological and industrial upgrades, although related policies have yet to be fully implemented [3][16] Sector Analysis - Deep-sea technology is highlighted as a multidisciplinary industry that may see repeated catalysts as policies are released [4][17] - Recent easing of semiconductor restrictions by the U.S. government may enhance domestic EDA tool replacement rates, with a focus on building a complete industrial chain [4][17] Fund Market Dynamics - The Beijing Stock Exchange launched the "Specialized and New" index on June 30, which includes the top 50 companies in strategic emerging industries, potentially increasing trading activity on the exchange [4][18] Fund Performance Tracking - The Active Equity Fund Index rose by 0.46% last week, with a cumulative excess return of 11.29% since inception [5][19] - The Value Equity Fund Index increased by 0.56%, with a cumulative excess return of -5.87% since inception [6][19] - The Balanced Equity Fund Index saw a rise of 1.85%, with a cumulative excess return of 4.91% since inception [7][19] - The Growth Equity Fund Index increased by 1.15%, with a cumulative excess return of 15.96% since inception [8][19] - The Pharmaceutical Equity Fund Index rose by 6.88%, with a cumulative excess return of 21.94% since inception [9][19] - The Consumer Equity Fund Index increased by 0.57%, with a cumulative excess return of 15.46% since inception [10][19] - The Technology Equity Fund Index rose by 0.46%, with a cumulative excess return of 15.71% since inception [11][19] - The High-end Manufacturing Equity Fund Index increased by 1.73%, with a cumulative excess return of -3.19% since inception [12][19] - The Cyclical Equity Fund Index rose by 1.11%, with a cumulative excess return of 3.73% since inception [13][19]

Group 1 - The central government emphasizes the high-quality development of the marine economy, with the national marine GDP expected to reach 11.18 trillion yuan in 2025, reflecting a year-on-year growth of 5.9% in 2024 [4][11][20] - The marine economy's contribution to the national GDP is projected to be 7.8%, with 15 marine industries achieving a total added value of 4.3733 trillion yuan in 2024, growing by 7.5% [21][22] - The deep-sea technology sector is identified as a key area for development, with significant investments and strategic initiatives aimed at enhancing capabilities in underwater observation, construction, and resource extraction [9][30][31] Group 2 - The report identifies 11 companies within the deep-sea economic industry chain listed on the Beijing Stock Exchange, including Audiwei (ultrasonic underwater ranging sensors), Wantong Hydraulic (hydraulic cylinders for offshore drilling platforms), and Klete (ventilation and air treatment systems) [40] - The marine engineering equipment manufacturing industry in China is experiencing a recovery, with an expected added value of 112.6 billion yuan in 2025, following a growth of 9.1% to 103.2 billion yuan in 2024 [30][33] - The report highlights the increasing market interest in deep-sea technology, with emerging sectors such as deep-sea energy storage and carbon sequestration expected to drive future growth [31][32]

Group 1 - The A-share market saw a slight rebound in the afternoon on July 7, with the aerospace ETF Tianhong (159241) rising by 0.36% and a turnover rate increasing by nearly 11% [1] - The aerospace ETF Tianhong (159241) has attracted significant capital inflow, with over 24 million yuan net inflow on the previous trading day, and it has recorded net inflows for seven consecutive trading days, totaling over 150 million yuan [1] - As of July 4, the latest circulation scale of the aerospace ETF Tianhong (159241) reached 326 million yuan, with a circulation share of 296 million shares, both hitting new highs [1] Group 2 - The aerospace ETF Tianhong (159241) closely tracks the Guozheng Aerospace Index, which has over 98% weight in the defense and military industry, making it the highest military content index in the market [2] - The core sectors of aerospace equipment and aerospace technology account for 66% of the index's weight, focusing on key areas in the aerospace equipment industry chain such as large aircraft development, low-altitude economy, and commercial aerospace [2] - Current growth trends in the military industry include domestic demand for low-cost precision-guided munitions and unmanned systems, as well as international military trade demand potentially spurred by conflicts [2]

Group 1 - The core viewpoint is that 2025 marks the end of the "14th Five-Year Plan," with a structural reversal in industry demand expected to continue until 2027 [1] - The military industry chain's upstream enterprises, which have a high asset securitization rate, have seen significant order growth since the Spring Festival, leading to a notable increase in stock prices from mid-February to mid-April [1] - Following a peak in orders for upstream component companies, stock prices have retreated since mid-April, while themes related to military trade exports, weaponry, deep-sea technology, commercial aerospace, and low-altitude economy have experienced high-frequency rotations since May [1] Group 2 - The upcoming September 3 military parade is expected to catalyze sentiment in the military industry sector due to its grand scale and high media attention [1] - The military ETF (512660) tracks the China Securities Military Index, which includes representative listed companies in the defense and military industry, reflecting the overall performance of the sector [1] - The index covers multiple subfields within the national defense and military industry, showcasing high industry concentration and distinct military characteristics [1]

Summary of Deep Sea Technology Conference Call Industry Overview - The conference call focuses on the deep sea technology industry, emphasizing its critical role in national defense and energy security, particularly in domestic game development, which has a high reliance on foreign resources [1][2]. Key Points and Arguments - **Importance of Deep Sea Technology**: Deep sea technology is vital for national defense and resource security, especially in the context of domestic energy needs related to game development, which has over 30% foreign dependency [2]. - **Challenges in Deep Sea Technology**: The primary challenge is the depth of operations. Current domestic capabilities are limited to shallow water projects, with deeper projects still reliant on foreign contractors. However, advancements in geological exploration and core equipment are being made [3]. - **Global Supply Chain Shift**: The global supply chain is shifting towards the Asia-Pacific region, enhancing China's position as a key supplier in the deep sea industry. Increased demand from Southeast Asia, South America, and North Africa is driving this change [4]. - **Geopolitical Factors**: Geopolitical dynamics in regions like the South China Sea and East China Sea are influencing deep sea outsourcing. As China's strength grows, uncertainties decrease, paving the way for more high-level deep sea projects [5]. - **Optimistic Development Outlook**: The development prospects in the South China Sea and nearby areas are optimistic, with significant potential near Shenzhen Bay and Hainan. The economic viability of deep sea oil and gas development is improving, with costs dropping to approximately $30 per barrel [6][7]. - **Technological and Economic Advances**: The feasibility of deep sea oil and gas development is increasing, with costs significantly reduced through standardized production methods. Projects in Hainan are progressing, with significant procurement activities indicating steady advancement in domestic capabilities [8]. - **Impact on Related Companies**: The growth of deep sea technology will positively impact companies like CNOOC Services, Haiyou Engineering, Bomeike, and Deweier, suggesting a focus on firms with strong performance and valuation advantages in the deep sea sector [9]. - **Energy Security and Related Fields**: Energy security is a driving force behind the development of domestic deep sea technology, which is interconnected with military, communication, non-ferrous metals, and chemical industries, necessitating enhanced collaboration across these sectors [10]. Additional Important Insights - The call highlights the strategic importance of deep sea technology in enhancing national energy security and reducing reliance on foreign resources, particularly in critical sectors like gaming and defense [1][2]. - The ongoing advancements in technology and the shift in global supply chains are expected to create significant opportunities for growth in the deep sea sector over the next three to five years [4].

Group 1: Childcare Subsidy Policy - The childcare subsidy system in China has formed a progressive framework of "childcare support - economic relief - cash subsidies," aimed at reducing care costs and enhancing fertility willingness, especially among low-income groups [1][27] - The government has shifted fiscal spending from investment to improving people's livelihoods, emphasizing the need to optimize the fiscal expenditure structure to strengthen basic livelihood financial support [1][28] - The "localized" nature of subsidies is seen as a refined governance experiment under tight fiscal conditions, serving as an important tool for current fiscal policy with a core consumption stimulation effect based on the "multiplier effect" [1][29] Group 2: Marine Economy and Technology - The marine economy is projected to exceed 10 trillion yuan in 2024, accounting for 7.8% of the national GDP, highlighting its significance as a growth driver [3] - The global regulatory framework for stablecoins is accelerating, with recent legislative developments in the US and Hong Kong, which may enhance the internationalization of the Renminbi [3] - Breakthroughs in brain-computer interface technology are paving the way for commercialization, with significant clinical trials indicating rapid advancements in the field [3] Group 3: Investment Opportunities in Maternal and Infant Products - The maternal and infant products market is expected to reach 4.68 trillion yuan by 2025, with a growth rate exceeding 7%, driven by increasing disposable income and consumption capabilities [8][36] - The early education and childcare market is anticipated to expand due to government support, with a focus on integrating medical and educational services [8] - The assisted reproductive services market is projected to grow to 49.6 billion yuan by 2023, benefiting from increased fertility willingness driven by childcare subsidies [8]

Group 1: Market Overview - The Shanghai Composite Index and ChiNext Index have shown significant fluctuations over the past year, with the Shanghai Composite Index experiencing a decline of 16% [1] - The banking sector led the market with a gain of 1.842%, while the media and utilities sectors also showed positive performance [1] - Conversely, the beauty care and non-ferrous metals sectors faced declines, with the beauty care sector dropping by 1.867% [2] Group 2: Employment and Economic Indicators - The U.S. non-farm payrolls for June exceeded expectations, with an addition of 147,000 jobs, and the unemployment rate fell to 4.1% [5][6] - The labor force participation rate was approximately 62.3%, indicating a slight improvement in the overall employment situation [7] - Job openings in the U.S. increased to 7.769 million, reflecting a tightening labor market [8] Group 3: Investment Strategies - The report highlights two new investment opportunities: "Deep Sea Technology" and "Newly Listed Stocks," which are expected to perform well in the current market environment [12][13] - "Deep Sea Technology" is positioned as a strategic focus under the current policy framework, with potential for significant growth in the coming years [14][20] - Newly listed stocks are anticipated to benefit from improved economic confidence, with a focus on sectors that align with China's economic recovery [15] Group 4: Sector-Specific Insights - In the pharmaceutical sector, AbbVie announced the acquisition of Capstan Therapeutics for up to $2.1 billion, enhancing its capabilities in CAR-T therapies [36] - The automotive industry is witnessing a surge in competitive models from domestic brands, with significant launches such as the Xiaopeng G7 and Xiaomi YU7 [41][42] - The REITs market is showing strong performance, with the China REITs index up 12.84% year-on-year, indicating robust investor interest in this asset class [45][47]