Summary of Hangyang Co., Ltd. Conference Call Industry Overview - The gas industry is closely related to the manufacturing sector, with China's manufacturing value added accounting for over 30% of the global total, while China's gas market share is only about 2%, indicating significant future growth potential [3][4] - The international industrial gas giants have market capitalizations far exceeding that of Chinese leaders, highlighting the vast potential of the Chinese industrial gas market and the growth space for domestic leaders like Hangyang [2][6] Company Insights - Hangyang's business structure includes equipment and gas segments, with gas business divided into pipeline gas and retail gas. Pipeline gas has a defensive attribute due to long-term contracts and guaranteed capacity utilization, while retail gas has an offensive attribute due to price fluctuations [2][7] - The current investment climate for Hangyang is favorable as the company is at a cyclical bottom, with a price-to-book (PB) ratio of approximately 2 and a price-to-earnings (PE) ratio of about 20, indicating a significant valuation gap compared to international leaders [2][8] - In 2024, Hangyang's revenue structure is expected to consist of approximately one-third from equipment and two-thirds from gas, with pipeline gas accounting for about 80% and retail gas for about 20% of the gas business [2][10] Financial Performance - Recent price increases in gases such as oxygen and nitrogen have positively impacted Hangyang's stock price, with a 15%-16% quarter-over-quarter increase in comprehensive gas prices in Q2 [4][11] - The company is projected to achieve a net profit of around 1 billion RMB this year, corresponding to a PE ratio of about 20 [4][13] - The company reported a 10% year-over-year growth in Q1, with expectations for continued steady growth in Q2 despite economic challenges [5][14] Market Dynamics - The recovery of gas prices is a positive signal for Hangyang's stock, with recent trends indicating a reversal from the cyclical bottom. If market demand improves or the competitive landscape optimizes, gas prices may further recover [4][11] - Supply-side reforms could lead to a rapid increase in the Producer Price Index (PPI), which would subsequently drive up the prices of upstream raw materials, including industrial gases [12] Valuation Perspective - Compared to international industrial gas leaders, which have PE ratios between 25 and 30, Hangyang's valuation has been relatively low at 15 to 20 times, primarily due to domestic macroeconomic factors [13] - If the economic outlook improves, Hangyang's valuation could see significant upward movement, with potential for market share to increase from 12%-13% to 23%-30% in the future [8][9] Conclusion - Hangyang Co., Ltd. is positioned for potential growth in a recovering gas market, with a favorable investment opportunity due to its current valuation and market dynamics. The company’s defensive and offensive business attributes, along with the anticipated recovery in gas prices, suggest a positive outlook for future performance [2][4][8]

Investment Rating - The industry investment rating is "Overweight" [1] Core Viewpoints - The report highlights that the retail sales of consumer goods in June 2025 reached CNY 42,287 billion, with a year-on-year growth of 4.8%, which is below the consensus expectation of 5.56% [5][10] - The report indicates that the online retail sector is growing rapidly, while offline retail remains stable, with online sales increasing by 8.5% year-on-year in the first half of 2025 [5][15] - The report emphasizes the impact of national subsidy policies on retail categories, with essential and discretionary goods showing continued growth [5][27] Summary by Sections Overall Retail Sales - In Q2 2025, retail sales grew by 5.4% year-on-year, with June showing a growth of 4.8%. The total retail sales for the first half of 2025 reached CNY 245,458 billion, marking a 5.0% increase [5][10] - Urban retail sales outpaced rural sales for four consecutive months, with urban sales in June at CNY 36,559 billion, growing by 4.8% year-on-year [12][10] By Category - Retail sales of goods outperformed the restaurant sector, with June's total for restaurant services at CNY 4,708 billion, a year-on-year increase of 0.9%, while goods retail reached CNY 37,580 billion, growing by 5.3% [22][5] - The report notes that national subsidy policies are effectively driving growth in essential and discretionary categories, with June's year-on-year growth rates for essential and discretionary goods at 5.92% and 2.15%, respectively [27][29] Price Performance - The Consumer Price Index (CPI) rose by 0.1% year-on-year in June 2025, while the Producer Price Index (PPI) fell by 3.6%, leading to an expanded PPI-CPI gap of -3.7% [33][36] - Food prices decreased by 0.3% year-on-year, with non-food prices showing a slight increase [35][36] Employment Situation - The urban unemployment rate remained stable at 5.0% in June 2025, unchanged from the previous month [43][44] Investment Recommendations - The report suggests that the white liquor sector may see demand recovery due to expanding domestic demand policies, despite short-term weakness from a "ban on alcohol" [51] - It also recommends focusing on core leading companies in the cosmetics sector, which are expected to perform well due to strong domestic growth and increasing market share [51]

数据公布后，投资者纷纷进场，除4个月期短债外，其余期限美债收益率全线走低。截至新华财经发稿时，2年期美债收益率下跌2.3BPs 至3.936%，10年期美债收益率下跌2.6BPs至4.463%，30年期美债收益率也下跌2.6BPs至4.992%。 美国劳工统计局周四发布的报告显示，与5月份相比，生产商面临的定价环境有所缓和，当月PPI环比增长0.3%、同比增长2.7%。尽管6 月份汽油价格上涨，但服务价格（尤其是酒店、航空公司和汽车经销商的服务价格）的下跌，压低了整体指数。旅游和休闲价格一直低 于通常水平，这可能表明，在经济高度不确定的时期，消费者需求有所下降。 周二，受到密切关注的消费者价格指数显示，6月份价格稳步走高，部分原因是关税敏感行业的商品价格上涨。核心PPI（不包括波动较 大的食品和能源成分）也与5月份持平，而年率从3.2%放缓至2.6%。 "随着关税引发的通胀迹象在耐用品和非耐用品进口中显现出来，通胀已开始缓慢攀升，" RSM咨询公司美国首席经济学家乔· 布鲁苏埃 拉斯表示，"这引发了一个重要问题，正在放缓但仍处于高位的服务业和住房通胀是否会进一步降温，以抵消耐用品和非耐用品价格将 更为明显的增 ...

PPI came in lower than expected, which means the Fed should be cutting interest rates now. ...

美国6月PPI环比基本持平，主要受服务成本下滑抑制，表明企业正在吸收至少部分来自进口关税上升的 成本。PPI报告紧随6月CPI数据之后，后者显示更高的关税正逐步传导至包括家居用品、家电和休闲用 品在内的多个类别。尽管今年以来通胀总体温和，但许多经济学家预计，随着更多企业试图抵消更高的 贸易成本，通胀将逐步升温。 ...

Core Viewpoint - The June PPI in the U.S. showed no month-on-month growth, with service prices unexpectedly declining and moderate increases in goods prices, indicating that the current "inflation pipeline" is not heating up. However, revisions to previous data and a rebound in intermediate demand goods may signal potential risks in the future [1][10]. Group 1: PPI Data Overview - The June PPI year-on-year increased by 2.3%, significantly lower than the expected 2.5%, marking the lowest year-on-year growth since September 2024. The previous value was revised from 2.6% to 2.7% [1]. - The core PPI year-on-year growth was 2.6%, the lowest since March 2024, also below the expected 2.7%, with the previous value revised from 3% to 3.2% [2]. Group 2: Price Movements in Goods and Services - Despite the overall zero growth in PPI, there was a moderate rebound in goods prices, with final demand goods prices rising by 0.3%, the largest increase since February [3]. - Excluding food and energy, goods prices also rose by 0.3%, indicating a broad but moderate inflationary trend [4]. - Energy prices increased by 0.6% month-on-month, while food prices rose by 0.2%. However, energy prices remain in a "deflationary" state year-on-year, providing a buffer for overall PPI growth [5]. Group 3: Service Prices and Inflation Dynamics - Service prices declined by 0.1% month-on-month, down from a previous increase of 0.4%, which was a major driver of the weaker PPI [7]. - The "deflationary" effect in services has successfully offset the price pressures from the goods sector, as companies have not fully passed on tariff pressures, leading to moderate changes in profit margins [8][10]. - The transmission of "tariff inflation" has not fully materialized in June, appearing more like a delayed process [9]. Group 4: Future Outlook and Economic Implications - The path of inflation remains uncertain, with "lagged transmission" being a core concern for the market. Economists believe the coming months will be critical for observing whether "tariff inflation" will be fully released [10]. - The upcoming PCE data is expected to reflect a "moderate inflation" trend, providing the Federal Reserve with room to maintain its interest rate policy in the short term [12].

TARIFFS ARE NOT INFLATIONARYEXHIBIT #2950201Geiger Capital (@Geiger_Capital):Producer Inflation 🥶🥶🥶PPI MoM: 0.0% vs 0.2% exp.PPI Core MoM: 0.0% vs 0.2% exp.PPI YoY: 2.3% vs 2.5% exp.PPI Core YoY: 2.6% vs 2.7% exp. https://t.co/KLgZML5ETq ...

🇺🇸 JUST IN: U.S. PPI falls to 2.3%, below expectations. https://t.co/7tvaVluLDg ...

美国6月PPI年率 2.3%，预期2.5%，前值由2.60%修正为2.7%。 ...

Historical Review of Size and Style Rotation - From 2008 to 2010, small-cap stocks outperformed due to significant economic stimulus and abundant liquidity, with small-cap stocks being more sensitive to funding[6] - Between 2011 and 2013, large-cap stocks gained favor as economic growth pressures increased, highlighting their defensive attributes[8] - The period from 2013 to 2015 saw a resurgence of small-cap stocks driven by the rise of new industries and increased M&A activity, with leverage funds entering the market[9] - From 2016 to 2021, large-cap stocks dominated as supply-side reforms improved profitability for leading companies, while M&A activity cooled[10] - In the 2021 to 2023 period, small-cap stocks regained strength due to changes in funding structure and the rise of new industries like AI[12] Growth vs. Value Style Rotation - From 2011 to 2014, value stocks outperformed as the economy shifted from stimulus-driven growth to self-sustained growth, with GDP growth declining[15] - In 2015, growth stocks saw a rebound due to the rise of the internet and new industries, despite ongoing economic pressures[19] - The period from July 2016 to October 2018 favored value stocks as traditional industries improved amid tightening liquidity[21] - From November 2018 to July 2021, growth stocks outperformed due to the rise of new industries and favorable liquidity conditions[23] - From August 2021 to August 2024, value stocks are expected to dominate due to tightening global liquidity and geopolitical uncertainties[25] Key Indicators and Future Outlook - The historical analysis indicates that size and style rotations are influenced by fundamental factors, liquidity, valuation, and policy[27] - The correct prediction rate for small-cap outperformance since 2005 is 69%, while for growth vs. value since 2011 is 77%[2] - In the first half of 2025, small-cap stocks outperformed with a 7.54% increase in the CSI 1000 index compared to a 1.37% increase in the CSI 300 index[2] - The outlook for the second half of 2025 suggests a potential shift towards large-cap stocks due to institutional investor preferences and external uncertainties[2]