Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Overseas, Fed officials remain cautious about rate cuts, while the next Fed Chair candidate calls for significant rate cuts. The US August S&P Global Composite PMI hits an 8 - month high, reducing market expectations for two Fed rate cuts this year, leading to a rise in the US dollar index and a decline in global risk appetite. Domestically, China's July economic data slows down across the board and falls short of expectations. Chinese Premier indicates measures to boost consumption and stabilize the real - estate market, increasing policy stimulus expectations. The extension of the China - US tariff truce by 90 days reduces short - term tariff uncertainties and boosts domestic risk appetite [2]. - Different asset classes have different outlooks: stocks are expected to be strong in the short - term, with a cautious long - position recommendation; bonds may experience a high - level correction, suggesting cautious observation; various commodity sectors have different trends, with short - term cautious observation recommended for most [2]. Summary by Relevant Catalogs Macro - finance - **Global situation**: Fed officials' views on rate cuts diverge. The US August S&P Global Composite PMI is at an 8 - month high, reducing expectations for two Fed rate cuts this year, causing the US dollar index to rise and global risk appetite to decline. China's July economic data is weaker than expected, but policy measures are expected to boost consumption and the real - estate market. The extension of the China - US tariff truce by 90 days reduces short - term tariff uncertainties and increases domestic risk appetite [2]. - **Asset performance**: Stocks are expected to be strong in the short - term, with a cautious long - position recommendation; bonds may experience a high - level correction, suggesting cautious observation; commodities in different sectors have different trends, with short - term cautious observation recommended for most [2]. Stock Index - Driven by sectors such as digital currency, oil and gas, and internet e - commerce, the domestic stock market continues to rise. Despite weak July economic data, policy measures to boost consumption and stabilize the real - estate market, along with the extension of the China - US tariff truce, increase domestic risk appetite. The short - term macro - upward driving force is strengthening, and it is recommended to be cautious with long - positions in the short - term [3]. Precious Metals - On Thursday, precious metals showed a divergent trend. Disagreements among Fed officials increase, and the probability of a 25 - basis - point rate cut in September drops to 75%. US economic data shows mixed signals, with the US dollar strengthening and suppressing the upward movement of precious metals. Investors are focusing on the Jackson Hole Symposium and Fed Chair Powell's speech [4]. Black Metals - **Steel**: On Thursday, the domestic steel futures and spot markets rebounded slightly, but trading volume was low. The approaching Jackson Hole Symposium weakens rate - cut expectations. Real - world demand remains weak, with steel inventories rising by 25.07 tons this week, mainly due to an increase in rebar inventories. Supply shows mixed trends, with building material production decreasing and hot - rolled coil production increasing by 9.65 tons. Steel prices are expected to fluctuate in the short - term [5][6]. - **Iron Ore**: On Thursday, iron ore futures and spot prices rebounded slightly. Steel mill profits are high, and last week's pig iron production increased slightly. However, with the approaching of important events in early September, production restrictions may be tightened. Steel mills mainly replenish inventory based on rigid demand. Supply is increasing, with global iron ore shipments rising by 359.9 tons and arrivals rising by 94.7 tons this week. Iron ore prices may weaken in the later stage [6]. - **Silicon Manganese/Silicon Iron**: On Thursday, the spot prices of silicon iron and silicon manganese remained flat, and the futures prices fluctuated within a range. Manufacturers' production enthusiasm is high, with an increase in production capacity utilization and daily output. Iron alloy prices are expected to fluctuate weakly in the short - term [7]. - **Soda Ash**: On Thursday, the main soda ash contract fluctuated within a range. Supply is increasing, and the oversupply situation remains unchanged, with new production capacity expected to be put into operation in the fourth quarter. Demand is weak, and profits are decreasing. Soda ash prices are likely to fall [8]. - **Glass**: On Thursday, the main glass contract fluctuated within a range. Supply shows little change, with daily melting volume decreasing slightly. Demand from the real - estate sector remains weak, and profits are decreasing. Glass prices follow the real - world logic [8]. Non - ferrous Metals and New Energy - **Copper**: The eurozone and German August manufacturing PMI are better than expected. The approaching Jackson Hole Symposium increases rate - cut expectations, which is short - term positive for copper prices. However, high tariffs and a slowdown in the US economy may limit the upside of copper prices. Domestic demand is expected to weaken marginally [9]. - **Aluminum**: On Thursday, aluminum prices rose slightly and then fell back. Aluminum inventories decreased by 1.1 tons, but domestic social inventories have increased by nearly 15 tons. LME aluminum inventories have increased and then stabilized. Aluminum prices are expected to fluctuate in the short - term, with limited upward space [9]. - **Aluminum Alloy**: The supply of scrap aluminum is tight, increasing production costs and causing losses for some recycling plants. Demand is in the off - season. Aluminum alloy prices are expected to fluctuate strongly in the short - term, but the upside is limited [10]. - **Tin**: The combined operating rate of Yunnan and Jiangxi decreased slightly to 59.23%. The supply of tin ore is expected to be loose. Demand is weak, with a decline in downstream orders. Tin prices are expected to fluctuate in the short - term, with limited upside [10]. - **Lithium Carbonate**: On Thursday, the main lithium carbonate contract fell by 0.17%. Industry profits are improving, and production enthusiasm is high. The contract is in a key hedging pressure range, and prices are expected to fluctuate at a high level [11]. - **Industrial Silicon**: On Thursday, the main industrial silicon contract rose by 3.66%. The market is expected to fluctuate within a range [11]. - **Polysilicon**: On Thursday, the main polysilicon contract rose by 1.28%. Spot prices increased, and silicon wafer prices also rose. The government is taking measures to regulate the industry, and polysilicon prices are expected to fluctuate strongly [12]. Energy and Chemicals - **Crude Oil**: The US may double tariffs on India to punish its purchase of Russian oil, causing oil prices to rise slightly. The US is promoting a cease - fire in the Russia - Ukraine conflict. Global oil inventories are low, and the market is waiting for post - peak - season demand verification [13]. - **Asphalt**: The adjustment of refinery capacity may reduce asphalt supply slightly. The futures market rebounds following crude oil, and spot prices are slightly warmer. However, inventories are not significantly reduced, and asphalt prices are expected to remain weakly volatile [13]. - **PX**: The adjustment of upstream refinery capacity supports PX prices. PX supply is tight in the short - term, and prices are expected to fluctuate [14]. - **PTA**: A Huizhou plant's maintenance reduces supply pressure in September. Downstream demand recovers, and PTA prices are supported, but the upside is limited by crude oil prices and terminal orders [14]. - **Ethylene Glycol**: The polyester sector recovers, and new capacity is restricted. Ethylene glycol prices are expected to be strongly volatile in the short - term, and supply may increase slightly. Attention should be paid to post - September terminal orders [15]. - **Short - Fiber**: The sector rebounds, driving up short - fiber prices. Terminal orders increase seasonally, but more significant inventory reduction depends on further improvement in terminal orders [16][17]. - **Methanol**: Some methanol plants restart, and inland demand increases. However, port inventories rise due to imports and olefin plant maintenance. The price is expected to be strongly volatile in the short - term and weakly volatile in the medium - term [17]. - **PP**: Supply pressure increases with rising production capacity, and downstream demand increases slightly. With policy support, prices are expected to be weakly volatile in the 09 contract, and the 01 contract should be monitored for peak - season inventory replenishment [18]. - **LLDPE**: Supply pressure remains high, and demand shows signs of improvement. The 09 contract is expected to be weakly volatile, and the 01 contract should be monitored for demand and inventory replenishment and policy implementation [18]. Agricultural Products - **US Soybeans**: CBOT November soybeans rose by 1.83%. The Pro Farmer crop tour results will be released on Friday, and there are concerns about crop diseases. US soybean export sales show a mixed picture, with a decrease in current - year sales and an increase in next - year sales [19]. - **Soybean and Rapeseed Meal**: Customs inspections of soybeans may cause short - term disruptions to some oil mills. US soybean production prospects and export sales may affect soybean meal prices, which may be dragged down [19]. - **Soybean, Rapeseed, and Palm Oil**: CBOT soybean oil futures rose due to improved export sales. Domestic soybean oil costs are expected to be strong, with high short - term inventories. Rapeseed oil supply is expected to shrink. Palm oil prices rose, driven by US soybean oil prices and low Indonesian inventories [19][20]. - **Corn**: The national corn price is slightly weak, with low trading activity. Downstream inventories increase, and there are concerns about government grain auctions. Corn prices may be weak in the short - term, but the probability of breaking last year's price range is low [20]. - **Hogs**: Spot prices stabilize, and the weight of hogs decreases. Second - fattening activities increase slightly, but the overall scale is limited. Market sentiment for the fourth quarter is pessimistic [21].

Group 1: Domestic Policy Insights - The article by General Secretary Xi Jinping emphasizes the importance of private enterprises in the development of the socialist market economy, highlighting the need for policies that support and protect non-public ownership [10][11][12] - The 2025 National Ecological Day event focused on promoting the concept of "Lucid waters and lush mountains are invaluable assets," aiming for a more beautiful ecological environment and sustainable economic growth [12][14] Group 2: Monetary and Fiscal Policy - The People's Bank of China (PBOC) reported a GDP growth of 5.3% year-on-year for the first half of 2025, indicating a need for stable and flexible monetary policies to support economic growth [25][26] - Recent fiscal policies include the implementation of interest subsidy programs for personal consumption loans and service industry loans, aimed at reducing financing costs and stimulating consumer spending [15][23] Group 3: Equity Market Analysis - A-share indices showed significant gains, with the ChiNext Index rising by 8.58% and the CSI 500 and Shenzhen Component Index both increasing by over 3.5% [24] - The MSCI China A-share Index rose by 2.85%, reflecting positive market sentiment and capital inflows, with net inflows exceeding 35 billion yuan in the second week of August [24] Group 4: Commodity Market Trends - The non-ferrous metals sector experienced a rebound, while crude oil prices saw a slight decline, and agricultural products remained under pressure [4][27] - The OPEC monthly report predicts a tighter oil market in the coming year, indicating potential supply constraints [4] Group 5: Foreign Exchange Market Overview - The US dollar index fell to 97.84, down 0.43% week-on-week, while the Chinese yuan remained stable at 7.19 [5][30] - Recent developments include a slight decrease in the bank's foreign exchange settlement and sales balance, reflecting ongoing adjustments in the foreign exchange market [5][30]

Group 1 - The core viewpoint is that the soybean meal market is showing signs of strength despite recent fluctuations, with a notable divergence between futures and spot prices [2][4] - The soybean meal market is supported by a projected shortage in the fourth quarter, which is a significant factor influencing market dynamics [4][5] - The cost of imports is a critical support factor for soybean meal prices, as even if U.S. soybeans return to the Chinese market, prices are unlikely to drop significantly due to high import costs [6][9][10] Group 2 - Demand for soybean meal is being bolstered by recent developments in the canola meal market, particularly following anti-dumping measures against Canadian canola seeds, which have led to a rise in canola meal prices [11][13] - The current market situation for soybean meal reflects a balance between high inventory levels and long-term bullish expectations, indicating a gradual upward shift in spot prices [13] - Any unexpected regulatory changes could trigger a significant price increase in soybean meal, highlighting the market's sensitivity to external factors [13]

Group 1 - The core issue is the significant decline in U.S. soybean exports to China, leading to an accumulation of soybeans in U.S. storage facilities [3][5][11] - President Trump's request for China to increase soybean purchases by four times reflects the urgency of the situation, as U.S. farmers face unsold stock [3][5] - The trade tensions initiated by the "tariff war" have disrupted the traditional soybean trade between the U.S. and China, prompting China to seek alternative suppliers from South America [5][9][16] Group 2 - China has already secured soybean orders from South America, with approximately 8 million tons confirmed for September, indicating a shift away from U.S. soybeans [9][11] - The current soybean prices in the U.S. are declining, yet there are still few buyers, exacerbating the situation for American farmers [11][13] - China's diversification in trade relationships and the potential for increased orders from Argentina suggest that the U.S. may struggle to regain its market share in the soybean sector [13][16][18]

Core Viewpoint - Applied Materials (AMAT.US) experienced a significant decline of over 12%, marking its largest drop since March 2020, primarily due to disappointing sales and earnings forecasts, raising concerns about demand suppression from US-China trade tensions [1] Financial Performance - For the third fiscal quarter ending July 27, Applied Materials reported a revenue increase of 8% year-over-year to $7.3 billion, surpassing analyst expectations of $7.21 billion [1] - The adjusted net profit for the quarter was $1.989 billion, reflecting a 13% year-over-year growth, with adjusted earnings per share (EPS) of $2.48, also exceeding the average analyst estimate of $2.36 [1] Future Outlook - The company forecasts fourth fiscal quarter revenue to be approximately $6.7 billion, falling short of the analyst average expectation of $7.32 billion [1] - Expected adjusted EPS for the fourth quarter is around $2.11, which is below the analyst average estimate of $2.38 [1] Market Challenges - The CEO of Applied Materials, Gary Dickerson, indicated a decline in demand from Chinese customers and delays in technology export approvals to China [1] - Major clients are postponing procurement plans amid ongoing negotiations related to tariffs and other economic issues, contributing to a degree of uncertainty [1]

Core Viewpoint - Applied Materials (AMAT.US), the largest semiconductor manufacturing equipment producer in the U.S., provided disappointing sales and earnings forecasts, raising concerns about demand suppression due to U.S.-China trade tensions [1][3]. Financial Performance - For Q3 FY2025, Applied Materials reported a revenue of $7.302 billion, an 8% increase from $6.778 billion in Q3 FY2024, exceeding analyst expectations of $7.21 billion [2]. - The adjusted net income for the same period was $1.989 billion, a 13% increase year-over-year, with adjusted earnings per share (EPS) of $2.48, surpassing the expected $2.36 [2]. - The company forecasts Q4 FY2025 revenue to be approximately $6.7 billion, below analyst expectations of $7.32 billion, and adjusted EPS is expected to be around $2.11, also below the anticipated $2.38 [3]. Market Dynamics - Applied Materials' customer base includes major semiconductor manufacturers like TSMC, Samsung, and Intel, making its performance guidance a key indicator of future demand [3]. - The CEO, Gary Dickerson, indicated a decline in demand from Chinese customers and delays in technology export approvals to China, contributing to uncertainty in procurement plans [3][4]. - Competitor Lam Research (LRCX.US) also projected lower revenue for the upcoming quarter, citing reduced spending from Chinese clients following a previous surge in orders [3]. Long-term Outlook - Despite current challenges, the long-term demand for computing power remains strong, with Chinese customers having significantly increased their purchases in recent years, currently in a phase of inventory digestion [4]. Strategic Initiatives - Recently, Applied Materials announced plans to invest over $200 million in a factory in Arizona as part of Apple's expansion of manufacturing in the U.S., reinforcing its position as a key supplier for advanced semiconductor manufacturing [5]. - The company is optimistic about the U.S. government's focus on enhancing domestic semiconductor supply chains [5].

Core Viewpoint - The recent extension of the suspension of the 24% tariff increase between China and the U.S. is seen as a positive signal for trade stability and global economic growth, despite ongoing uncertainties in international trade and geopolitical conflicts [3]. Export Orders Recovery - A Jiangsu automotive parts exporter reported that orders to the U.S. have remained stable this year, although high tariffs continue to exert cost pressure on businesses [5]. - Shanghai-based Silede Industrial Co. stated that their U.S. orders have recovered to about 80%, thanks to established brand recognition, while a Zhejiang kitchenware exporter noted a 20% decline in U.S. orders [6]. - Customs data indicated that China's exports to the U.S. fell by 21.7% year-on-year in July, with the high tariffs and uncertainty leading to a cautious approach from buyers [6][7]. Supply Chain and Long-term Strategies - Companies are adapting to tariff fluctuations by enhancing efficiency and potentially passing some costs to consumers, although this impacts profit margins [7]. - The recent tariff suspension has led to increased orders from U.S. clients as they stock up during the 90-day window [7]. - Despite the short-term strategies, companies are focusing on long-term international supply chain development and local investments to enhance competitiveness [10]. Regional Trade Dynamics - The U.S. has imposed varying tariffs on different countries, prompting a need for stricter product origin requirements and accelerating regional integration efforts among non-U.S. regions [11]. - China's exports to ASEAN and other emerging markets have increased, compensating for the decline in U.S. exports, with total exports growing by 6.1% in the first seven months of the year [11][12]. Industry Transformation - The focus on diversifying markets and production locations is becoming more pronounced, with an emphasis on reducing dependency on single markets [12]. - High-tech product exports, such as integrated circuits, have shown significant growth, indicating a shift towards higher value-added and innovative products [12].

Group 1: Export Orders Recovery - The recent suspension of additional tariffs for 90 days is seen as a stabilizing factor for foreign trade and a positive signal for both China and the US to achieve their development goals [1] - A Jiangsu automotive parts manufacturer reported that their orders to the US have returned to normal levels, while a Shanghai company noted an 80% recovery in US orders due to established brand presence [2] - A Zhejiang kitchenware exporter indicated a 20% decline in US orders, reflecting the ongoing cost pressures from tariffs [2] Group 2: Impact of Tariffs on Costs and Consumer Behavior - Increased costs from tariffs are being passed down the supply chain, leading to signs of consumer fatigue in the US market [3] - Companies are attempting to mitigate high costs through internal efficiencies and price adjustments, but these measures still impact profit margins [3] - Some manufacturers, particularly in the automotive sector, have not yet seen a significant drop in demand, attributing stable US demand to ongoing needs [3] Group 3: Long-term Supply Chain Strategies - Despite the temporary tariff suspension, geopolitical tensions and trade uncertainties continue to rise, prompting companies to focus on long-term supply chain strategies [5] - Companies are investing in overseas warehouses and supply chain development to enhance international competitiveness [6] - Over 30% of larger domestic companies have established factories overseas, while others focus on improving design and technology to increase brand value [6] Group 4: Trade Diversification and Regional Cooperation - China's exports to the US have decreased by 12.6%, while exports to ASEAN, India, Africa, and Belt and Road Initiative countries have seen significant growth [7][8] - The Regional Comprehensive Economic Partnership (RCEP) is expected to deepen cooperation and reduce reliance on single markets, promoting internal industry chain integration [8] - High-tech exports from China have shown growth, with specific categories like integrated circuits increasing by 20.5% [8]

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the **Chinese economy**, focusing on **trade dynamics** including exports and imports, particularly in relation to the United States and other regions. Key Insights and Arguments 1. **Export Growth Trends** - In July, the year-on-year export growth rate increased slightly from 5.9% in June to 7.2% in July. However, seasonally adjusted exports showed a slight month-on-month decline, indicating weakening momentum in export growth [1][4]. 2. **Exports to the United States** - Exports to the U.S. decreased by 3% month-on-month in July, with a year-on-year decline expanding from 16.1% in June to 21.6% in July. This reflects a continued low level of exports to the U.S., although slightly higher than in April and May [2][4]. 3. **Regional Export Performance** - Exports to ASEAN countries saw a month-on-month decline of 2.6%, but year-on-year growth remained robust at 16.6%. In contrast, exports to the EU grew by 9.2% year-on-year, while exports to Japan slowed to a 2% growth rate [2][4]. 4. **Import Growth** - July imports showed a year-on-year growth rate of 4.1%, up from 1.1% in June. The actual import volume growth rate also improved from 3% to 4.9%. Notably, the decline in the import of a basket of commodities narrowed from 9% to 4% [3][4]. 5. **Impact of Trade Policies** - Trade uncertainties remain high, with new tariffs announced by the U.S. affecting over 70 economies. The potential for further tariffs on semiconductors could significantly impact China's exports to the U.S., which currently account for over 20% of its export volume [4][4]. 6. **Future Export Projections** - The expectation is that China's year-on-year export decline to the U.S. will widen in the second half of the year, with projections indicating a 1% growth in exports for 2025, followed by a potential 3% decline in 2026 due to tariff impacts [4][4]. Additional Important Content - **Product-Specific Export Trends** - Key products such as electronics saw a slowdown in export growth, with mobile phone exports declining by 22% year-on-year. In contrast, integrated circuit exports continued to grow [2][17]. - **Macroeconomic Indicators** - The overall trade surplus and nominal import/export growth rates are illustrated in various charts, indicating fluctuating trends over the years [6][10]. - **Currency Fluctuations** - The Chinese yuan experienced a mild depreciation against the U.S. dollar in July, which may influence trade dynamics [20][22]. This summary encapsulates the critical insights from the conference call regarding the current state and future outlook of the Chinese economy, particularly in the context of international trade.

Group 1: U.S. Monetary Policy and Market Impact - The probability of a rate cut by the Federal Reserve in September has increased to nearly 90%, driven by negative impacts of tariff policies on the U.S. economy, including a decline in consumer purchasing power and a drop in service sector PMI [2] - The core driver of market growth in the short term is abundant liquidity rather than fundamentals, as evidenced by historical data showing that even with slowing GDP growth, stock market lows have continued to rise since 2011 [2] Group 2: Hong Kong Stock Market Outlook - The Hong Kong stock market is expected to have upward potential in the second half of the year, supported by the "northbound capital" inflow, which typically leads the Hang Seng Index by 100-200 days [3] - The Hang Seng Index has risen 24% year-to-date, making it one of the best-performing major markets globally, with a booming IPO market and significant performance in sectors like innovative pharmaceuticals, semiconductors, and new consumption [3] Group 3: Investment Opportunities in A-shares and Hong Kong Stocks - Both Hong Kong and A-shares present investment opportunities, but require differentiated strategies; Hong Kong benefits from abundant liquidity and expected further easing, while A-shares have unique highlights such as infrastructure, Apple and Tesla supply chains, and the STAR Market [3] Group 4: Real Estate and Economic Challenges - The real estate sector faces significant challenges, with a continuous decline in housing prices over four years and major developers experiencing a sales growth drop of 25%-50% year-on-year as of July [4] - The importance of real estate in policy planning may be diminishing, as it is increasingly integrated into broader urban development frameworks [4] Group 5: U.S.-China Trade Relations - The worst outcomes of the U.S.-China trade war have been priced in by the market, with short-term volatility expected but an overall upward market direction [5] - China holds advantages in critical areas such as rare earths and supply chain positioning, which provide leverage in negotiations, and there is a possibility of more constructive dialogue between the two nations [5]