1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - Cash - flow ETFs have become popular products in overseas markets, and domestic products are being actively申报. "Large - medium market capitalization + central state - owned enterprises + abundant cash flow" is expected to be one of the annual investment themes. With policies like the new "Nine - Point Plan", the small - cap premium has declined, and policies are expected to drive central state - owned enterprises to improve profitability [2]. - Domestic free cash - flow indices are in the ascendant, and there are differences among them. The FTSE China A - Share Free Cash - Flow Focus Index (FTSE Cash - Flow) has a more detailed sample - selection space compared to similar indices, with 50 constituent stocks and a multi - angle screening mechanism that includes unique quality factors, volatility, and growth indicators [2]. - In terms of market - capitalization and industry distribution, the FTSE Cash - Flow shows a prominent large - medium market - capitalization style, with low valuation. It is relatively "resilient" during market corrections. The FTSE Cash - Flow has a lower correlation with traditional styles among cash - flow indices, has a high risk - return ratio, and can be used in investment strategies such as the dumbbell strategy with technology indices [2]. 3. Summary by Directory 3.1 Free Cash Flow Has Become a High - Potential Investment Direction in the Domestic ETF Market - **Maturity of Overseas Cash - Flow ETFs**: Overseas cash - flow products have achieved fruitful results. As of April 25, 2025, the largest US free cash - flow ETF, COWZ, had a scale of over $20 billion [8]. - **Diversity of Overseas Free Cash - Flow Index Compilation Schemes**: Different overseas free cash - flow indices have various compilation methods. For example, CALF and COWZ are based on different sample spaces and use free cash - flow yield for screening and weighting [10]. - **Long - Term Effectiveness of Domestic Cash - Flow Strategies**: Since 2012, A - share enterprises (excluding finance) have shifted from an incremental to a stock - thinking business model, and free cash - flow has been increasing steadily since 2014. Companies with sufficient cash flow have shown significant excess returns compared to broad - based indices [20]. - **"Large - Medium Market Capitalization + Central State - Owned Enterprises + Abundant Cash Flow" as an Investment Theme**: From 2021 - 2023, the small - cap style was dominant, but after the introduction of policies in 2024, the small - cap premium declined. The investment cash outflow of large - cap stocks has been rising steadily since June 2021, while that of small - cap stocks decreased significantly in Q1 2025 [22]. 3.2 Domestic Free Cash - Flow Indices Are in the Ascendant, with Differences Among Them - **Index Compilation Scheme Comparison**: The mainstream domestic cash - flow indices include the FTSE Cash - Flow, China Securities Cash - Flow, and Shenzhen Securities Information Cash - Flow. The FTSE Cash - Flow has 50 constituent stocks, excludes financial and real - estate industries, and uses a multi - factor screening mechanism. It combines cash - flow and volatility factors, which is expected to achieve excess returns [32][35]. - **Industry and Market - Capitalization Distribution Comparison** - **Market - Capitalization Distribution**: The FTSE Cash - Flow has a large - medium market - capitalization style, with 18% of its constituent stocks having a total market capitalization of over 100 billion. It is more "resilient" during market corrections [40]. - **Industry Distribution**: The FTSE Cash - Flow has high weights in industries such as household appliances, non - ferrous metals, and food and beverages. Overseas cash - flow ETFs have a higher proportion of technology stocks, and domestic cash - flow indices may include more technology - oriented enterprises in the future [46]. - **Constituent - Stock Overlap**: The constituent stocks of the FTSE Cash - Flow have a high overlap (95.95%) with major broad - based indices, especially 71.17% with the CSI 300, and are expected to benefit from subsequent policies [56]. - **Index Valuation**: As of July 18, 2025, the FTSE Cash - Flow has a relatively low price - to - earnings ratio (TTM of 11.25) and price - to - book ratio (1.49) among similar indices, and a relatively high dividend yield (4.76%), indicating investment value [61]. 3.3 The Risk - Return Profiles of Cash - Flow Indices Are Generally Similar, and the FTSE Cash - Flow Index Has a Lower Correlation with Traditional Styles - **Risk - Return Analysis**: The FTSE Cash - Flow has outperformed the dividend index in the long - term and has a high risk - return ratio. As of July 18, 2025, its risk - return ratio reached 0.85, higher than the CSI Dividend's 0.63 and the Dividend Low - Volatility's 0.68 [65]. - **Reasons for the FTSE Cash - Flow's Leading Returns** - **Relationship between Market Capitalization and Cash - Flow Yield**: The cash - flow yield factor is more effective in large - cap stocks. However, it also shows a certain enhancement effect in large - medium market - capitalization stock pools. The FTSE Cash - Flow selects stocks from large - medium market - capitalization indices such as the CSI 300 and CSI 500 based on free cash - flow yield [69][70]. - **Low - Volatility and Quality Factors**: The FTSE Cash - Flow uses quality and low - volatility factors from the FTSE Global Factor Index System, which enhances the index's risk - resistance and long - term holding value [85]. - **Investment Strategies**: The free cash - flow strategy and the dividend strategy can complement each other. The FTSE Cash - Flow, as a "dividend plus" strategy, has a lower correlation with technology indices and the partial - stock hybrid fund index than traditional dividend indices, and can be used to construct investment portfolios to improve risk diversification [96][97].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - Free cash flow has become a high-potential investment direction in the domestic ETF market, and the "large and medium market capitalization + central state-owned enterprises + abundant cash flow" is expected to be one of the annual investment mainlines [3][9] - Domestic free cash flow indices are emerging, with differences among various indices. The FTSE China A-Share Free Cash Flow Focus Index (FTSE Cash Flow) stands out in terms of compilation, market capitalization distribution, valuation, and return-risk characteristics [3][30] - The FTSE Cash Flow Index has a lower correlation with traditional styles, a higher return-risk ratio, and can be used to construct investment strategies such as a dumbbell strategy with technology indices and a differentiated allocation with partial equity hybrid fund indices [3][92][93] 3. Summary According to the Table of Contents 3.1 Free cash flow has become a high-potential investment direction in the domestic ETF market - Overseas cash flow ETFs are mature, with diverse free cash flow indicator compilation schemes. For example, as of April 25, 2025, the scale of COWZ in the US exceeded $20 billion [9] - Domestic cash flow strategies are expected to be effective in the long term. Since 2014, A-share free cash flow has been positive and growing steadily, and companies with sufficient cash flow have shown significant excess returns [19] - The "large and medium market capitalization + central state-owned enterprises + abundant cash flow" is expected to be one of the annual investment mainlines. Since the introduction of the new "Nine National Policies" in 2024, the small-cap premium has declined, and large-cap stocks' investment cash outflows have been rising steadily [21][24] 3.2 Domestic free cash flow indices are emerging, with differences among various indices 3.2.1 Index Compilation Scheme Comparison - The mainstream domestic cash flow indices include the FTSE Cash Flow, Guozheng Cash Flow, and China Securities Cash Flow. The FTSE Cash Flow has a more refined sample space, with 50 constituent stocks, and uses unique quality, volatility, and growth indicators for multi-dimensional screening [3][30] - Compared with other cash flow indices, the FTSE Cash Flow's compilation scheme excludes securities with high volatility, and the combination of cash flow and volatility factors is expected to achieve higher excess returns [33] 3.2.2 Industry Market Capitalization Distribution Comparison - **Market Capitalization Distribution**: The FTSE Cash Flow has a larger market capitalization among similar indices, with 18% of constituent stocks having a total market capitalization exceeding 100 billion yuan, showing a large and medium market capitalization style. It is more resistant to market downturns [38][42] - **Industry Distribution**: The weights of the FTSE Cash Flow are concentrated in the energy and consumption industries. As of July 18, 2025, the top three industries in terms of weight are household appliances, non-ferrous metals, and food and beverages [44] - **Constituent Stock Overlap**: The FTSE Cash Flow has a higher overlap with major broad-based indices, with a cumulative overlap of 95.95% with the CSI 300, CSI 500, and CSI 1000, and is expected to benefit from subsequent policies [54] 3.2.3 Index Valuation - The FTSE Cash Flow has a lower valuation and a higher dividend yield among similar indices. As of July 18, 2025, its price-to-book ratio is 1.49, and its dividend yield is 4.76%, providing a relatively high margin of safety [59] 3.3 The return and risk of cash flow indices are generally similar, and the FTSE Cash Flow Index has a lower correlation with traditional styles 3.3.1 Return and Risk - The FTSE Cash Flow has outperformed the dividend index in the long term and has a high return-risk ratio. As of July 18, 2025, its return-risk ratio is 0.85, higher than that of the CSI Dividend Index (0.63) and the Dividend Low Volatility Index (0.68) [60][63] 3.3.2 Reasons for the Leading Returns of the FTSE Cash Flow Index - **Relationship between Market Capitalization and Cash Flow Yield**: The cash flow yield factor is more effective in large-cap stocks. The FTSE Cash Flow selects stocks from large and medium-cap stock pools, enhancing returns by selecting stocks with superior cash flow yields [67][68] - **Low Volatility and Quality Factors**: The FTSE Cash Flow further filters stocks using low volatility and quality factors from the FTSE Global Factor Index System, enhancing the index's risk resistance and long-term holding value [82] 3.3.3 Investment Strategy - The free cash flow strategy and the dividend strategy can complement each other. The FTSE Cash Flow, as a "dividend plus" strategy, can be combined with technology indices to construct a dumbbell strategy with lower volatility and form a differentiated allocation with partial equity hybrid fund indices [92][93]

Core Viewpoint - The Hong Kong Dividend ETF (159331) announced a dividend of 0.3% for this month, with the record date on August 5 and the payment date on August 8 [1]. Group 1: Fund Performance and Investment Strategy - The Hong Kong Dividend ETF (159331) saw a net inflow of 2 million units today, indicating active investment in Hong Kong dividend assets [2]. - Huachuang Securities highlighted that high-dividend sectors in Hong Kong stocks are attractive due to their stable free cash flow generation, which supports dividend capabilities and shareholder returns [2]. - Companies with abundant free cash flow can maintain dividend performance while also enhancing return on equity (ROE) through capital expenditures, offering both defensive and growth characteristics [2]. - Traditional sectors such as banking, ports, and highways are favored for their stable earnings and dividends, especially in a low-interest-rate environment [2]. - Industrial metals benefit from inventory destocking and demand recovery, while telecom operators are experiencing accelerated free cash flow release due to maturing projects and increasing industry penetration [2]. - The valuation of Hong Kong stocks is lower compared to A-shares, and a higher proportion of foreign investment makes them more attractive for international capital allocation, particularly in a weakening dollar environment [2]. Group 2: Dividend Distribution Principles - The fund's distribution principle includes cash dividends, with the management evaluating excess returns relative to benchmarks and available distributable profits for potential distributions [4]. - The fund can distribute profits monthly if the net asset value growth exceeds the benchmark or if distributable profits are positive [4]. - The fund's dividend distribution does not require prior loss compensation, and the net asset value may fall below par after distribution [4]. - Each fund share has equal distribution rights, and any specific regulations from legal or regulatory bodies will take precedence [4].

Group 1 - The core viewpoint emphasizes the importance of stable free cash flow as a financial foundation for a long-term bull market in A-shares, particularly in a low-interest-rate environment [1] - The shift in economic operation models is leading to a change in stock market pricing logic, focusing on the accumulation of cash flow rather than front-end expansion [1] - Assets with abundant free cash flow, such as companies with controlled capital expenditures and efficient operations, can maintain value creation even in profit stagnation scenarios [1] Group 2 - The Cash Flow ETF (159399) tracks the FTSE China A-Share Free Cash Flow Focus Index (888888), which selects listed companies with high free cash flow yield from the Chinese A-share market [1] - The index covers multiple industries and focuses on financially sound companies with strong cash flow generation capabilities, reflecting the overall performance of such companies in the Chinese market [1] - The index adopts a value investment style, providing investors with a reference for companies with quality cash flow [1] Group 3 - Investors without stock accounts can consider the Guotai FTSE China A-Share Free Cash Flow Focus ETF Initiated Link A (023919) and Link C (023920) [2]

Summary of Conference Call Notes Industry or Company Involved - The discussion revolves around the drug delivery systems and packaging industry, specifically focusing on plastics and devices, as well as glass products [2][5]. Core Points and Arguments - There is a mention of net debt to EBITDA, indicating a focus on financial metrics relevant to assessing the company's leverage and operational performance [3]. - The company is experiencing fluctuations in free cash flow, with a noted negative movement but an expectation to reach a positive free cash flow in the future [4]. - The quality of glass products is highlighted, suggesting that it plays a significant role in the business unit's performance [5]. Other Important but Possibly Overlooked Content - The involvement of a private equity firm is mentioned, indicating potential strategic partnerships or investments that could influence the company's direction [4]. - The reference to Eminence Capital suggests that there are significant stakeholders involved, which may impact decision-making and corporate governance [5].

Core Insights - eBay Inc. reported second-quarter 2025 non-GAAP earnings of $1.37 per share, exceeding the Zacks Consensus Estimate by 5.38%, with a year-over-year increase of 16.1% [1] - Net revenues reached $2.73 billion, surpassing the Zacks Consensus Estimate by 2.79%, and increased by 6.1% year-over-year on a reported basis [1] - Total gross merchandise volume (GMV) was $19.5 billion, reflecting a year-over-year growth of 6% on a reported basis, exceeding the Zacks Consensus Estimate of $19 billion [3] Financial Performance - eBay's first-party advertising products generated revenues of $455 million, marking a 19% increase on an as-reported basis [1] - Total advertising offerings yielded $482 million in revenues, representing 2.5% of the gross merchandise volume [2] - Operating expenses grew to $1.47 billion, a 14.1% increase year-over-year, with operating margin at 28.4%, expanding 40 basis points [4] GMV Breakdown - U.S. GMV totaled $9.43 billion, accounting for 48.3% of total GMV, with a year-over-year increase of 7.2% [3] - International GMV was $10.09 billion, representing 51.7% of total GMV, with a year-over-year increase of 4.8% [3] Balance Sheet & Cash Flow - As of June 30, 2025, cash equivalents and short-term investments were $3.75 billion, down from $4.79 billion as of March 31, 2025 [5] - Long-term debt improved to $5 billion, down from $5.75 billion in the prior quarter [5] - Operating cash flow turned negative at $307 million, a significant decline from $787 million in positive cash flow in the previous quarter [5] Shareholder Returns - eBay generated a negative free cash flow of $441 million during the second quarter [6] - The company repurchased $625 million worth of shares and paid out dividends of $134 million in the reported quarter [6] - Approximately $2 billion remained under its buyback authorization as of June 30, 2025 [6] Future Guidance - For Q3 2025, eBay expects revenues between $2.69 billion and $2.74 billion, with an anticipated FX-neutral revenue growth of 3-5% [8] - The non-GAAP operating margin for Q3 2025 is expected to be between 26.6% and 27.1% [8] - GMV for Q3 is projected to be between $19.2 billion and $19.6 billion [8] Earnings Expectations - Non-GAAP earnings per share for Q3 2025 are anticipated to be between $1.29 and $1.34, with the Zacks Consensus Estimate at $1.32 [9]

Financial Data and Key Metrics Changes - Adjusted EBITDA improved by 9% year-over-year to $660 million despite lower aggregate shipments [8][14] - Adjusted EBITDA margin expanded by 260 basis points, and cash gross profit per ton increased by 13% [7][19] - Year-to-date cash gross profit per ton reached $11.25, over 50% higher than three years ago [19] Business Line Data and Key Metrics Changes - Aggregate shipments were impacted by an estimated 2 to 3 million tons due to extreme weather conditions [9][22] - Freight-adjusted average selling prices improved by 5%, with mix-adjusted prices up by 8% [10][19] - Residential construction activity remains weak, accounting for about 20% of shipments, but multifamily starts are showing signs of improvement [11][12] Market Data and Key Metrics Changes - Public infrastructure contract awards in Vulcan markets increased by over 20% year-over-year [13][37] - Data center activity is a bright spot, with discussions on projects totaling over $35 billion [13][72] - Private non-residential construction is beginning to recover, with positive trends in data centers and warehouses [12][56] Company Strategy and Development Direction - The company is focused on a two-pronged growth strategy: improving organic profitability and adding strategic assets [8][19] - Continued investment in maintenance and growth capital expenditures is expected to reach approximately $700 million for the full year [18][45] - The company aims to deliver between $2.35 billion and $2.55 billion of adjusted EBITDA for the year [18][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year due to improving weather conditions and strong backlogs [24][72] - The company is optimistic about the recovery in private non-residential demand and the acceleration of public infrastructure spending [12][37] - Management noted that the underlying demand is improving, which supports the reaffirmation of full-year guidance [24][14] Other Important Information - Free cash flow on a trailing twelve-month basis surpassed $1 billion, enabling disciplined capital allocation [15][109] - The company reclassified $550 million of commercial paper borrowings from long-term to short-term debt [16][17] - The company is actively discussing potential M&A opportunities to enhance growth [110][111] Q&A Session Summary Question: What gives confidence in reaffirming EBITDA guidance despite a tough first half? - Management highlighted strong pricing and unit margins despite volume declines, indicating quality earnings [22][23] Question: Are project timelines stretching or improving? - Management noted that project timelines are improving, with increased bookings and backlogs across all end markets except single-family housing [30][31] Question: How is the infrastructure spending trend? - Management confirmed that infrastructure spending is strong, with significant increases in contract awards and bookings [36][37] Question: What is the outlook for capital expenditures? - Management expects full-year capital expenditures to be around $700 million, lower than the initial guidance due to weather impacts [45][18] Question: How will pricing be affected in 2026? - Management anticipates strong visibility in highway work and potential pricing growth, especially if private demand improves [106][107] Question: What is the expected free cash flow baseline moving forward? - Management indicated that the new baseline for free cash flow is around $1 billion, which may influence capital allocation strategies [109][110]

Financial Data and Key Metrics Changes - Adjusted operating income increased by 32% year over year, reaching $427 million or $2.36 per diluted share [25][4] - Net income available to common stockholders was $688 million or $3.80 per diluted share, reflecting positive market risk benefits [25][26] - The estimated RBC ratio remained above 420%, consistent with the company's strategy to maintain a capital buffer above the 400% target [40][22] Business Line Data and Key Metrics Changes - Group Protection business achieved record earnings of $173 million, up 33% year over year, with a margin increase to 12.5% [26][17] - Annuities generated operating income of $287 million, slightly down from $297 million in the prior year, primarily due to traditional variable annuity outflows [32] - Life Insurance reported operating earnings of $32 million, a significant improvement from an operating loss of $35 million in the prior year [37] Market Data and Key Metrics Changes - All four business segments delivered double-digit sales growth in the first half of the year, with notable contributions from previously non-key products [7] - Retirement Plan Services saw first-year sales increase by nearly 50% year over year, with total deposits up by 10% [20] - Annuities sales reached $4 billion, a 6% sequential increase, with fixed annuity sales growing by 41% [9][11] Company Strategy and Development Direction - The company is focused on increasing risk-adjusted returns, reducing volatility, and growing its franchise through disciplined execution [5][6] - Strategic investments are being made in higher-margin products and segments, enhancing digital capabilities, and optimizing the operating model [6][22] - The company aims to deepen its strategic moat and evolve into a more agile organization, aligning capital deployment with strategic priorities [22][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, emphasizing the importance of disciplined execution and strategic clarity [46][23] - The economic backdrop remains volatile, but the company is committed to delivering long-term value and sustainable growth [7][22] - Management noted that while results may not be linear, the momentum is building, and they are excited about the path forward [7][8] Other Important Information - The company launched a Bermuda-based reinsurance subsidiary to enhance capital efficiency and respond to market opportunities [6] - The alternative investment portfolio achieved a 10% annualized return, supporting the overall financial performance [25][45] - The company is actively exploring external reinsurance solutions to optimize its legacy life portfolio [88] Q&A Session Summary Question: On group and the shift into smaller local markets and supplemental health products - Management highlighted the successful execution of targeted segment strategies, particularly in local markets and supplemental health, which are expected to continue driving margin expansion [50][51] Question: On the restructuring of the Life Captives - Management indicated that while they are working on optimizing the life portfolio, concrete numbers regarding earnings impact will be provided later [61][62] Question: On RILA product sales and market competition - Management reported a 32% increase in RILA sales year over year, emphasizing a focus on profitable growth and capital efficiency [66][68] Question: On free cash flow conversion guidance for 2026 - Management expressed confidence that the long-term free cash flow conversion rate should be above previous targets, especially with the deployment of Bain Capital [74][76] Question: On distribution growth drivers in the group business - Management discussed the importance of strategic broker relationships and investments in digital capabilities to enhance competitive differentiation and drive growth [80][82] Question: On external reinsurance solutions - Management noted that while it is too early to discuss specifics, they are focused on optimizing the legacy life block through potential reinsurance deals [88]

Group 1 - The core viewpoint is that the long-term logic of stock market pricing will shift towards cash flow accumulation in a low-interest-rate environment, with stable free cash flow being the cornerstone of a prolonged bull market [1] - In a stagnant profit environment, assets capable of generating substantial free cash flow, such as controlled capital expenditures and efficient operating capital, can still maintain their value [1] - Consumer leaders are expected to provide stronger cash flow generation capabilities amid increasing industry concentration, while cyclical resource products may see cash flow recovery under anti-involution policies [1] Group 2 - The cash flow ETF (159399) tracks the FTSE China A-Share Free Cash Flow Focus Index (888888), which selects listed companies with stable free cash flow and financial health from the A-share market [1] - Investors without stock accounts can consider the Guotai FTSE China A-Share Free Cash Flow Focus ETF Initiated Link A (023919) and Link C (023920) [1]

Group 1 - The Ministry of Finance has issued a notice to guide insurance funds towards long-term stable investments, emphasizing the establishment of a long-cycle assessment mechanism for state-owned commercial insurance companies [1] - In a low-interest-rate environment, the alignment of insurance capital with high free cash flow assets is highlighted, with new funds expected to flow into quality cash flow targets that demonstrate strong profitability and stable dividend capabilities [1] - The upcoming 富国中证800自由现金流ETF联接基金 aims to provide investors with an efficient tool to access core cash flow assets, focusing on 50 "cash cow" companies from the 中证800 index that have sufficient free cash flow [1][2] Group 2 - The 富国中证800自由现金流ETF联接基金 closely tracks the 中证800自由现金流指数, which selects companies based on positive free cash flow and enterprise value, excluding financial and real estate sectors [2] - The index has shown impressive long-term performance, with a historical win rate of over 90% and a return of 327.13% since its inception, outperforming similar indices [2] - The proposed fund manager, 金泽宇, has 7 years of experience in the securities industry and is familiar with market style rotation, managing multiple ETFs across various indices [3] Group 3 - 富国基金 has over 16 years of experience in quantitative index investment, with a dedicated team led by Dr. 李笑薇, comprising over 20 research and investment professionals [4] - The company has developed a diverse product line in the ETF space, including sector-specific ETFs and broad-based ETFs, aiming to capture excess returns in core long-term sectors [4]