Core Viewpoint - The Beijing Stock Exchange (BSE) has experienced a structural bull market in 2024, with the BSE 50 Index achieving a year-to-date increase of 39.45%, leading all major market indices [1][5]. Group 1: Market Performance - The BSE 50 Index has become a significant indicator of the market, comprising 50 representative companies with relatively small average market capitalization, highlighting many "specialized and innovative" small giants [5]. - The active management of BSE-themed funds has outperformed the index, with the Huaxia BSE Innovation Small and Medium Enterprises Selected Two-Year Open Fund (014283) achieving a net value growth rate of 72.16%, ranking third in the market [3][11]. Group 2: Market Drivers - A loose liquidity environment in China's financial market has provided ample "liquid capital," attracting funds to small-cap, high-growth companies on the BSE [6]. - The preference for small-cap stocks has increased during the early stages of economic recovery, with over 70% of BSE-themed funds outperforming the BSE 50 Index in the past three years [8]. Group 3: Investment Opportunities - The BSE remains an underappreciated source of alpha, with many quality companies yet to be fully discovered and priced, presenting significant value discovery opportunities for institutions with deep research capabilities [10][19]. - The Huaxia fund manager, Gu Xinfeng, emphasizes the importance of deep research and understanding of the market to capture long-term value, leveraging a unique understanding of the BSE and its companies [13][16]. Group 4: Future Outlook - The trading volume on the BSE has increased approximately 30 times over the past three years, indicating a significant improvement in trading ecology and liquidity [21]. - Continuous policy support aimed at enhancing the quality of listed companies and attracting long-term capital is expected to inject strong momentum into the market's long-term healthy development [22].

Key Insights - As of June 2025, China's foreign exchange reserves stood at 33,174 billion USD, indicating a stable economic environment [1] - The convertible bond market showed a 3.3% increase in June, following a 4.7% rise in the stock market, driven by policy stimuli and geopolitical factors [2][3] - The life sciences upstream sector is experiencing a turning point, with a projected revenue growth of 10.75% year-on-year in 2024, driven by stable investment and domestic substitution trends [7][8] - The North Exchange is expected to maintain high trading activity and market attention, with a focus on new industries such as artificial intelligence and commercial aerospace for the second half of 2025 [12][17] Convertible Bond Market - The convertible bond market's valuation is not overly high, with structural opportunities still available, particularly in sectors showing improved economic conditions such as non-ferrous metals, machinery, agriculture, and computing [4][3] - The market is transitioning from a policy-driven focus to a fundamental pricing approach, with expectations of a 5% economic growth target being met [3][4] - Recommended convertible bonds for July include Guotou Convertible Bond, Ran 23 Convertible Bond, and others, indicating a strategic focus on sectors benefiting from policy support [4] Life Sciences Upstream Sector - The life sciences upstream sector is characterized by high specialization and significant barriers to entry, with major companies expanding and exploring international markets [7][8] - The sector is poised for growth due to the booming demand for innovative drugs, with the Chinese antibody drug market expected to reach 510.8 billion RMB by 2030 [8] - Mergers and acquisitions are becoming more prevalent, with domestic companies looking to replicate the growth paths of global giants, enhancing industry concentration and growth potential [9][10] North Exchange - The North Exchange's trading activity has slightly decreased, with an average daily turnover of approximately 279.83 billion RMB, but it remains higher than other markets [13] - The North Exchange's overall price-to-earnings ratio is around 50.4 times, indicating a slight decline but still higher than other boards, with the electronics sector showing the highest ratios [14] - The North Exchange is optimizing its evaluation system to support the high-quality development of small and medium-sized enterprises, focusing on innovation and market ecology improvement [15][17]

Investment Rating - The industry investment rating is positive, indicating a favorable outlook for the sector, with a focus on companies with stable performance and reasonable valuations [35]. Core Insights - The report highlights that the North Exchange 50 Index experienced a slight decline of 1.71% this week, closing at 1415.04 points, while the average market capitalization of A-share constituent stocks is 3.083 billion [5][11]. - The report emphasizes the importance of focusing on quality stocks with stable growth and reasonable valuations in the North Exchange, particularly in the context of the 2025 investment landscape [5]. Summary by Sections Overall Market Overview - As of July 4, 2025, the North Exchange A-share market consists of 268 stocks, with an average market capitalization of 3.083 billion. The North Exchange 50 Index saw a decline of 1.71% this week, while the Shanghai and Shenzhen 300 Index increased by 1.54% [5][11]. - The average daily trading volume for the North Exchange 50 was 27.983 billion, down 17.81% from the previous week, with a turnover rate of 3.18% [5][24]. Stock and Industry Performance - In the past week, 50 stocks increased in value, while 217 stocks decreased, resulting in an increase ratio of 18.66%, which is a decrease of 74.63 percentage points week-on-week [17]. - The top five performing industries were Beauty Care (8.60%), Light Industry Manufacturing (1.9%), Pharmaceutical Biology (1.57%), Transportation (0.60%), and Environmental Protection (0.47%). Conversely, the bottom five industries included Electronics (-4.86%), Automotive (-4.58%), Communications (-3.92%), Media (-3.88%), and Public Utilities (-3.22%) [19][22]. New Stock Updates - No new stocks were listed on the North Exchange this week, but one company, Jinhua New Materials, passed the review for listing, while another, Beikang Testing, is scheduled for review next week [28][29]. Key Companies and Earnings Forecast - The report identifies key companies to watch, including: - Tongli Co., Ltd. (stock code: 834599.BJ) with a buy rating and an expected EPS of 1.99 for 2025 [6]. - Wuxin Tunnel Equipment (stock code: 835174.BJ) also rated as buy with an expected EPS of 1.64 for 2025 [6]. - Kaide Quartz (stock code: 835179.BJ) rated as hold with an expected EPS of 1.03 for 2025 [6]. - Hualing Co., Ltd. (stock code: 430139.BJ) rated as hold with an expected EPS of 0.34 for 2025 [6]. - Hengtou Open Source (stock code: 834415.BJ) rated as hold with an expected EPS of 0.22 for 2025 [6]. - Tianli Composite (stock code: 873576.BJ) rated as buy with an expected EPS of 1.03 for 2025 [6].

Core Insights - The North Exchange thematic funds have emerged as the biggest winners in the fund market in the first half of 2025, with significant returns indicating effective active management and value discovery [1][2][6] Group 1: Fund Performance - The Huaxia North Exchange Innovation Small and Medium Enterprises Selected Two-Year Open Fund achieved a year-to-date return of 72.16%, ranking third in the market excluding QDII funds [1][3] - Over the past three years, this fund has delivered a remarkable return of 175.64%, significantly outperforming the North Certificate 50 Index, which rose by 39.45% during the same period [1][3][6] - The overall performance of North Exchange thematic funds has been impressive, with many funds from various companies, including Huaxia Fund and CITIC Construction Investment Fund, reporting returns exceeding 50% in the first half of the year [2][6] Group 2: Fund Management and Strategy - The fund manager, Gu Xinfeng, has over ten years of experience in the New Third Board and North Exchange, showcasing strong capabilities in identifying market potential [4][5] - Gu Xinfeng's investment strategy emphasizes the importance of high-quality companies for the long-term development of the securities market, with notable companies listed on the North Exchange [5][6] Group 3: Market Dynamics and Future Outlook - As of July 2, 2023, there are 268 companies listed on the North Exchange, with a total market capitalization exceeding 800 billion yuan, primarily consisting of innovative small and medium enterprises [6][7] - The North Exchange has shown resilience and growth potential, with approximately 70% of thematic funds outperforming the North Certificate 50 Index over the past three years [6][7] - Institutional investors are increasingly recognizing the investment value of the North Exchange, with significant growth in public fund allocations from 7.90 million yuan in 2021 to 67.43 million yuan by the first quarter of 2025 [7][8]

Investment Rating - The report maintains a positive outlook on the industry, suggesting a focus on high-quality stocks with stable growth and reasonable valuations, particularly in the context of the North Exchange [3][5]. Core Insights - The North Exchange 50 Index experienced a significant increase of 100.53% over the past year, indicating strong market performance compared to other indices [2][10]. - The report highlights the recent listing of Guangxin Technology, which specializes in high-pressure transformers and insulation materials, projecting a revenue of 578 million yuan and a net profit of 116 million yuan for 2024 [27][28]. - The report emphasizes the importance of focusing on companies with stable performance and growth potential, particularly in sectors such as power equipment, computing, and communication, which have shown strong performance recently [21][27]. Summary by Sections North Exchange Market Overview - As of June 27, 2025, the North Exchange A-share component stocks totaled 268, with an average market capitalization of 3.139 billion yuan. The North Exchange 50 Index rose by 6.84% during the week [10][15]. - The trading volume increased, with an average daily turnover of 34.049 billion yuan, up 18.09% from the previous week [24][25]. New Stock Updates - Guangxin Technology was listed on June 26, 2025, focusing on high-pressure and ultra-high-pressure transformer products, with a significant growth trajectory in revenue and profit from 2021 to 2024 [27][28]. - The report notes that one company, Aomeisen, passed the review this week, while another, Jinhua New Materials, is scheduled for review next week [33]. Key Companies and Earnings Forecast - The report identifies several key companies with their respective earnings per share (EPS) and price-to-earnings (PE) ratios, recommending "Buy" for Tongli Co. and Wuxin Tunnel Equipment, and "Hold" for Kaide Quartz and Hualing Co. [5][34]. - For instance, Tongli Co. is projected to have an EPS of 1.99 in 2025 with a PE ratio of 10.84, indicating strong investment potential [5].

Core Viewpoint - The article introduces a "Fish and Human" analysis method to evaluate investment opportunities based on market participants and profit opportunities, categorized into four quadrants [1]. Group 1: Human and Fish Analysis - The number of participants (humans) indicates market engagement, while the number of profit opportunities (fish) reflects potential gains. Metrics such as trading volume, online discussions, and news heat can be used to assess these factors [1]. - The analysis emphasizes that the assessment of participants and opportunities should be objective and independent of personal circumstances [1]. Group 2: Quadrant Summaries - **Many Humans, Many Fish**: High market interest and numerous profit opportunities, but also intense competition. Investors should leverage unique advantages to succeed in this environment [2]. - **Many Humans, Few Fish**: Overhyped market with high valuations and reduced profit opportunities. Investors need strong risk management skills and should seek undervalued assets or operational opportunities [3]. - **Few Humans, Few Fish**: Low market participation and limited opportunities. Investors should assess the potential for future opportunities and may need to wait patiently for market conditions to improve [4]. - **Few Humans, Many Fish**: Abundant investment opportunities with low valuations but low market attention. This quadrant is ideal for finding hidden gems before they attract more investors [5].

Group 1: Personal Pension System - The personal pension system in China has been fully implemented for six months, showcasing low-risk and stable returns as its core advantages, indicating significant investment potential in a multi-tiered pension system [2][6][8] - By the end of 2024, the total scale of the multi-tiered pension system in China was approximately 18.8 trillion yuan, with a year-on-year growth of 12.77%, and the participation rate in basic pension insurance reached 76.2% [6][7] - As of May 2025, the personal pension product matrix consists of four main categories: savings (45%), funds (29%), insurance (23%), and wealth management (3%), with leading institutions capturing market share through comprehensive product offerings [7][8] Group 2: North Exchange Market Strategy - The North Exchange has transitioned from "out of the circle" to "outstanding," experiencing market fluctuations and continuous policy improvements, with the North 50 index showing a remarkable increase of 36% since the beginning of 2025 [11][12] - Future expectations include ongoing policy support for the North Exchange, continuous supply of high-quality enterprises, and increased capital inflow, with a focus on scarcity investments as the strongest investment theme [12][14] - The merger and acquisition concept remains a hot investment topic in the North Exchange, with significant potential for companies that can leverage acquisitions for business diversification and optimization [25][26] Group 3: Renewable Energy Sector - As of May 2025, the cumulative installed power generation capacity in China reached 3.61 billion kilowatts, a year-on-year increase of 18.8%, with solar and wind power installations hitting record highs [17][18] - The wind power sector saw a significant increase in installed capacity, with 46.3 GW added in the first five months of 2025, representing a year-on-year growth of 134.2% [18][19] - The profitability of wind turbine manufacturers is expected to improve due to the stabilization of bidding prices and the reduction in the proportion of new product deliveries, which had previously pressured profit margins [21][24]

Investment Rating - The report maintains a positive outlook on the industry, suggesting a focus on high-quality stocks with stable growth and reasonable valuations in the medium to long term [3][4]. Core Insights - The North Exchange (北交所) has shown a mixed performance, with the North Exchange 50 Index declining by 3.11% in the week ending June 13, 2025, while the average market capitalization of its constituent stocks is 3.046 billion [10][21]. - The report highlights the recent listing of Jiao Da Tie Fa (交大铁发), which specializes in rail transit intelligent products and services, with a projected revenue of 335 million and a net profit of 53 million for 2024 [27][29]. - The report emphasizes the importance of focusing on undervalued stocks and thematic investments, particularly in sectors benefiting from infrastructure development and technological advancements [3][4]. Summary by Sections North Exchange Market Overview - As of June 13, 2025, the North Exchange consists of 267 A-share stocks with an average market capitalization of 3.046 billion. The North Exchange 50 Index has experienced a decline of 3.11% during the week [10][15]. - The trading volume has increased, with an average daily turnover of 32.603 billion, up 31.28% from the previous week, indicating heightened market activity despite the index's decline [24][25]. Stock and Industry Performance - In the week from June 9 to June 13, 2025, 106 stocks rose, while 160 fell, resulting in a 39.70% increase ratio, which is a decrease of 28.34 percentage points from the previous week [15][21]. - The top-performing industries included petroleum and petrochemicals, transportation, textiles, light manufacturing, and national defense, with respective gains of 37.78%, 20.66%, 12.90%, 6.51%, and 5.97% [21][22]. New Stock Updates - Jiao Da Tie Fa was listed on June 10, 2025, focusing on rail transit intelligent products and services, with a significant portion of its revenue coming from safety monitoring products [27][29]. - The report notes the approval of Sanxie Electric (三协电机) for listing and the registration submission of Zhigao Machinery (志高机械) [35][36]. Investment Strategy - The report suggests a focus on stocks with stable earnings growth and reasonable valuations, recommending specific companies such as Tongli Co. (同力股份) and Wuxin Tunnel Equipment (五新隧装) for their low valuations and potential benefits from infrastructure projects [3][4][5].

Group 1 - The report indicates that the North Exchange 50 index decreased by 3.11%, while the average daily trading volume increased significantly by 64.1% [12][24][29] - The report highlights a rapid rotation of sector themes, with previous themes like new consumption and innovative drugs showing significant declines, while geopolitical changes in the Middle East boosted oil and gold prices [12][24] - The report suggests that the valuation of the North Exchange may be too high, indicating a potential bubble, and notes the presence of trading stratification within the exchange [12][24] Group 2 - The report mentions that one new stock, Jiaoda Tifa, was listed this week, with a first-day price increase of 262.09%, bringing the total number of listed companies on the North Exchange to 267 [33][7] - The upcoming IPO of Guangxin Technology is highlighted, with a planned issuance price of 10.00 yuan per share and a PE ratio of 7.59 [49][38] - The report provides insights into the performance of key companies, with Jiuling Technology and Luchao Information showing significant gains, while other companies faced declines [39][44] Group 3 - The report emphasizes the importance of monitoring the potential for a mid-year earnings rally, suggesting specific companies to watch, including Lintai New Materials and Minshida [12][19] - It also recommends focusing on Guangxin Technology's IPO opportunity and maintaining long-term interest in competitive companies in the technology and new consumption sectors [12][19]

Group 1 - 17 automotive companies have committed to a payment term of no more than 60 days, highlighting the focus on scarce automotive parts in the North Exchange [2][12][13] - The current automotive industry chain in the North Exchange consists of 24 companies, with a total market capitalization of 63.517 billion [15][12] - Lin Tai New Material (920106.BJ) provides wet-type paper-based friction plates for automatic transmissions, with significant collaboration with leading domestic brands like BYD [17][18] Group 2 - The high-end equipment, information technology, chemical new materials, consumer services, and pharmaceutical biology sectors showed average weekly changes of +1.58%, -1.39%, +3.00%, +0.83%, and -2.30% respectively [3][23] - The median price-to-earnings (P/E) ratio for the high-end equipment sector decreased to 44.3X, while the chemical new materials sector's median P/E ratio increased to 44.1X [24][27] Group 3 - In the technology new industry, 61 out of 149 companies saw an increase, with a median price change of -1.06%, and the total market capitalization rose from 459.574 billion to 460.324 billion [4][39] - The median P/E ratio for the technology new industry increased from 54.8X to 54.9X [38][39] Group 4 - The automotive sector's median P/E ratio rose to 35.7X, with companies like Tongxin Transmission (833454.BJ) and Huayang Transmission (839946.BJ) showing significant market performance [51][53] - The information technology sector's median P/E ratio decreased to 93.6X, with companies like Luqiao Information (837748.BJ) and Huaxin Yongdao (837592.BJ) leading in market performance [56][49] Group 5 - Recent announcements include Biyang Technology winning a bid for 518,100 tons of quartz sand for hydraulic fracturing, and Oputai establishing a third-party testing agency [57]