Group 1: Retail Market Performance - In Q2, Shanghai's retail market showed improved leasing demand with a net absorption of 156,000 square meters, driven by "consumption promotion" policies and emerging consumption trends [1] - Major brands, including luxury and sports brands, are increasingly interested in opening flagship and concept stores in core business districts, with Louis Vuitton recently launching a new landmark in Shanghai [1] - The vacancy rate in core business districts decreased by 0.3 percentage points to 9.6%, while the vacancy rate in non-core areas slightly increased by 0.3 percentage points to 14.1% due to ongoing market competition [1] Group 2: Rental Trends - Rental prices in Shanghai's retail properties continued to decline, with core district first-floor average rent decreasing by 1.1% to CNY 43.1 per square meter per day, and non-core area rent down by 1.8% to CNY 15 per square meter per day [2] - Landlords are offering rental discounts and attractive leasing terms to attract brands amid competitive market pressures [2] - Despite challenges, demand for leasing in sectors like sports apparel, trendy toys, and affordable dining is expected to grow due to consumer focus on health and entertainment [2] Group 3: Residential Market Insights - In Q2, Shanghai's overall new residential sales volume increased by 14.0% to 1.7 million square meters, with high-end residential sales showing a decline of 21.2% [2] - The pace of new residential project launches accelerated, with 1.67 million square meters of new supply introduced, a 114.5% increase from the previous quarter [2] - The average price of new high-end residential properties rose by 0.6% to CNY 147,900 per square meter, while the average price of second-hand high-end residential properties fell by 2.0% to CNY 132,800 per square meter [3]

Group 1 - The Consumer Price Index (CPI) turned positive in June after four consecutive months of decline, with a year-on-year increase of 0.1% [1][2] - The core CPI, excluding food and energy, rose by 0.7% year-on-year, marking a 14-month high, indicating improvements in supply-demand structures in certain industries [2][3] - Industrial producer prices (PPI) continued to face downward pressure, with a year-on-year decline of 3.6%, reflecting weak domestic demand and excess supply in the market [1][4] Group 2 - The decrease in CPI was less severe than seasonal trends, with food prices dropping by 0.4% month-on-month, while energy prices saw a slight increase due to rising international oil prices [3][4] - Certain consumer goods, such as gold and platinum jewelry, experienced significant price increases of 39.2% and 15.9% year-on-year, respectively, driven by changes in international commodity prices [2][4] - The implementation of consumption-boosting policies is expected to support price stability and recovery in various sectors, including automotive and household appliances [1][5] Group 3 - The PPI's month-on-month decline remained at 0.4%, with pressures from domestic demand weakness and external factors such as tariffs and slowing foreign demand [4][5] - Some industries, particularly high-tech and advanced manufacturing sectors, showed signs of price stabilization and recovery, indicating potential growth opportunities [5] - The overall economic environment remains complex, but macroeconomic policies aimed at stimulating consumption are anticipated to gradually restore domestic demand [5]

Group 1: CPI Trends - In June, the Consumer Price Index (CPI) turned from a decline to an increase of 0.1% year-on-year after four months of negative growth, influenced by the recovery of industrial product prices [1][3] - The core CPI, excluding food and energy, rose by 0.7% year-on-year, marking a 14-month high, indicating effective policies to expand domestic demand and promote consumption [1][3] Group 2: PPI Trends - The Producer Price Index (PPI) decreased by 0.4% month-on-month, with a year-on-year decline of 3.6%, which is an increase in the rate of decline by 0.3 percentage points compared to the previous month [1][5] - The decline in PPI is attributed to seasonal price decreases in domestic raw material manufacturing, increased green electricity leading to lower energy prices, and price pressures in export-oriented industries [5][6] Group 3: Industry-Specific Insights - In the automotive sector, prices for both gasoline and new energy vehicle manufacturing increased by 0.5% and 0.3% month-on-month, respectively, with year-on-year declines narrowing by 1.9 and 0.4 percentage points [1] - The photovoltaic equipment and electronic components manufacturing prices fell by 10.9% year-on-year, with the decline narrowing by 1.2 percentage points [1] - High-tech industries such as integrated circuit packaging and testing saw price increases of 3.1% year-on-year, indicating a growth in new production capacities and innovation [6] Group 4: Policy Implications - The government aims to balance the expansion of domestic demand with supply-side structural reforms to improve market price order and promote reasonable price recovery [7][8] - The effectiveness of macroeconomic policies, particularly those supporting the real estate sector, will significantly influence future industrial product price trends [6]

Group 1 - The core initiative "Wan Qian Bai Yi" by the Bank of China aims to boost domestic demand and consumption by providing over 1 trillion yuan in loans, creating 100 billion yuan in property income, and offering 10 billion yuan in consumer subsidies and fee reductions, benefiting over 100 million consumers [1][3] - The "Zhonghang Hui Chutou · Summer Season" campaign focuses on enhancing consumer experiences in tourism, cross-border spending, youth campus activities, and night market economies, providing various discounts and benefits to encourage spending [1][2][3] - The campaign is designed to be ongoing, with seasonal promotions planned for summer, National Day, and New Year, creating a stable rhythm for annual consumption stimulation [2][3] Group 2 - The "Zhonghang Hui Chutou" initiative targets four key consumption areas: tourism, night markets, cross-border spending, and youth campuses, aiming to engage younger consumers and families [5][6] - Specific discounts include tiered payment reductions for travel-related expenses, such as flights and hotel bookings, significantly lowering travel costs for consumers [5][6] - The campaign also integrates local food culture by partnering with popular street food districts, offering payment discounts to enhance local consumption and support small businesses [6] Group 3 - The initiative includes a special focus on young consumers, particularly targeting graduates with exclusive offers such as flight discount coupons for students who meet certain transaction criteria [7] - The overall strategy is to inject strong financial momentum into the domestic summer consumption wave, encouraging consumers to utilize Bank of China cards for a more economical and enjoyable spending experience [8]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The convertible bond price is steadily recovering, and the convertible bond index outperforms the equity index. The convertible bond market and equity market declined due to Trump's tariff hikes but gradually recovered. Multiple industries and individual bonds saw price increases, and the convertible bond valuation is differentiated with the overall conversion premium rate decreasing [3][103]. - The issuance pace of convertible bonds has slowed down, and the net financing amount is at a relatively low level. The pre - issuance scale varies among different industries, with the high - end manufacturing industry having a relatively large pre - issuance scale. The un - converted balance of convertible bonds also shows significant differences among industries [3][103]. - The tariff disturbance is coming to an end, and the negative impact of tariffs on the convertible bond market will fade. The US is facing inflation pressure, and it has started economic and trade consultations with many countries, so high tariffs are expected to be unsustainable [3][76][103]. - Policies to expand domestic demand and promote consumption are frequently introduced. As the policy effects continue to emerge, the upward trend of relevant convertible bonds is expected to continue. The growth rate of necessary consumption is constantly recovering, and the "trade - in" policy promotes the consumption growth of household appliances and communication equipment [4][104]. - The profitability of multiple underlying stock industries has improved, and the net profit of individual bonds has increased, further enhancing the intrinsic value of convertible bonds. Most underlying stock industries have positive median net profit growth rates both quarter - on - quarter and year - on - year [6][105]. 3. Summary According to the Directory 3.1 Convertible Bonds: Price Steadily Recovering, Individual Bond Valuation Volatility and Differentiation - **The convertible bond and equity indexes first declined and then rose, and the bond yield fluctuated downward**: Affected by Trump's "reciprocal tariff", the domestic equity market declined in the second quarter and then gradually recovered. The bond market yield showed a fluctuating downward trend, mainly due to the central bank's moderately loose monetary policy [10][11]. - **The convertible bond and equity indexes are highly correlated, and the convertible bond index outperforms the equity index**: The convertible bond market index and the equity market index have a similar trend, and the convertible bond index has a higher return rate. The convertible bond index also shows a certain correlation with the bond yield [15][16]. - **Multiple convertible bond industries rose, and the rise - fall direction is consistent with that of the underlying stocks**: Most convertible bond industries showed an upward trend, and the rise - fall amplitude of convertible bond industries was relatively less differentiated compared to that of underlying stock industries [22]. - **Most individual bond prices rose, and the proportion of rising bonds in many industries exceeded half**: Most convertible bonds rose compared to the previous quarter. In different industries, the number of rising convertible bonds was large, and the price fluctuations of individual convertible bonds were relatively large [25]. - **The convertible bond valuation is differentiated, and the overall conversion premium rate is decreasing**: The conversion premium rate of most individual bonds is decreasing, and there is no significant correlation between the conversion premium rate and the bond balance. The different quantiles of the conversion premium rate of individual bonds have all decreased [29]. 3.2 Convertible Bond Net Financing is at a Low Level, and the Supply Pace is Slowing Down - **The issuance of convertible bonds has slowed down, and the net financing is at a low level in the same period**: The issuance scale of convertible bonds has decreased, and the net financing amount is at a low level. The maturity scale of convertible bonds is relatively stable and at a low level [35]. - **The pre - issuance of different industries is differentiated, and the high - end manufacturing industry has a large scale**: The pre - issuance scale of convertible bonds is relatively sufficient, and there are significant differences among different industries. The high - end manufacturing industry has a relatively high pre - issuance scale [37]. - **The proportion of un - converted balance of convertible bonds is relatively high, and there are significant industry differences**: Most convertible bonds still have a relatively high balance. The proportion of the convertible bond balance to the initial issuance scale varies greatly among different industries [38]. 3.3 Tariff Disturbance is Approaching the End, and the External Negative Impact on the Convertible Bond Market is Fading - **Trump imposed tariffs randomly, covering goods from multiple countries and multiple fields**: Trump's government imposed several rounds of tariffs on goods exported to the US in 2025, involving goods from multiple countries and a wide range of products [43]. - **Tariffs impacted the equity and convertible bond indexes to decline and then gradually recovered steadily**: Trump's tariff hikes caused a sharp decline in the US equity market index, an increase in the demand for bond hedging, and a decrease in the US Treasury bond yield. As the tariffs eased, the US stock index gradually recovered, and the US Treasury bond yield gradually rebounded. In China, the A - share market, Treasury bond yield, and convertible bond market index also declined due to tariff impacts but gradually recovered [48][49][52]. - **Exports increased against the trend, and the impact of tariffs on investment and consumption has not yet appeared**: In terms of trade, the export growth rate continued to increase, and the import growth rate continued to improve. In terms of production, the growth rate of industrial added value was not significantly affected by tariffs, but the manufacturing PMI was significantly affected. In terms of investment, the impact of tariffs on fixed - asset investment and its main components has not yet appeared. The consumption growth rate increased marginally, and the consumer and producer price indexes decreased marginally [56][60][62]. - **Tariffs are unsustainable, and the external impact on the convertible bond market is expected to fade**: Trump's tariff hikes are likely a means to expand revenue, and the impact of tariffs in the first half of the year is expected to gradually subside. The US is facing inflation pressure, and high tariffs may prevent prices from falling. The US has conducted consultations on economic and trade issues with many countries, so high tariffs are not expected to last [76][77]. 3.4 Policies to Promote Consumption are Continuously Advancing, and the Upward Trend of Relevant Convertible Bonds is Expected to Continue - **Favorable policies to promote consumption are frequently introduced, and the recovery progress of necessary consumption is accelerating**: A series of favorable policies and specific measures to promote consumption have been introduced, and the support for consumption is extensive. The recovery progress of necessary consumption has accelerated, and the "trade - in" policy has promoted the consumption growth of household appliances and communication equipment [78][81][86]. - **The convertible bond consumption sector as a whole rose, and the rise - fall of individual bonds is differentiated**: Benefiting from the multiple favorable policies to promote consumption, the prices of convertible bonds in consumption - related fields generally increased, but the rise - fall of individual bonds was differentiated [90]. - **The "trade - in" policy continues to advance, and attention should be paid to the over - heating risk of new consumption**: The favorable policies to promote consumption are still advancing, and it is expected that consumption will remain an important engine for economic growth in the second half of the year. The continuous advancement of the "trade - in" policy is expected to continue to benefit the convertible bonds in related consumption fields. Attention should be paid to new consumption formats such as self - pleasing consumption and the "gacha economy", but the short - term over - heating risk should be noted [93][94][95]. 3.5 The Performance of Underlying Stocks has Improved, and the Intrinsic Value of Convertible Bonds may be Further Enhanced - **The net profit of underlying stock industries has achieved positive growth, and the net profit of individual bond underlying stocks has improved overall**: Most underlying stock industries have positive median net profit growth rates both quarter - on - quarter and year - on - year. The net profit of individual bond underlying stocks has improved comprehensively compared to the previous quarter [96][99]. - **Most underlying stocks have positive net profit growth, and their performance is moderate compared to listed companies in the same industry**: Compared with listed companies in the same industry that have not issued convertible bonds, the net profit growth rate of convertible bond underlying stocks is moderate. The net profit growth rate of convertible bond underlying stocks is differentiated, and in some industries, most underlying stocks have positive net profit growth rates [101]. 3.6 Convertible Bond Strategy: It is Recommended to Focus on Convertible Bonds for Expanding Domestic Demand, High Dividends, and High Growth - It is recommended to focus on the following main lines in the convertible bond market: expanding domestic demand, especially in the fields related to boosting consumption; high - dividend sectors such as banks; and individual bonds with high - growth underlying stocks [6][106].

Core Viewpoint - The central government and local authorities have launched a series of consumption-boosting policies, which are expected to sustain consumer demand growth in the second half of the year, with service consumption emerging as a new driving force [1] Group 1: Policy Initiatives - A joint document by the central bank and six departments was released in late June, introducing 19 new policies aimed at enhancing financial support for consumption, including innovative financial products and increasing property income [1] - The Ministry of Commerce announced a campaign for the 2025 New Energy Vehicle Consumption Season, running from July to December, focusing on vehicle exchanges and creating diverse consumption scenarios [1] - Major cities like Beijing, Shanghai, and Chengdu have rolled out special action plans to boost consumption, featuring unique activities [1] Group 2: Economic Indicators - In May, the total retail sales of consumer goods reached 41,326 billion yuan, marking a year-on-year increase of 6.4%, the highest growth rate since 2024 [1] - The National Development and Reform Commission plans to allocate a third batch of funds for the replacement of consumer goods, with a national subsidy plan in place [1] - An estimated 1,380 billion yuan in funds is expected to stimulate consumption by 700 to 900 billion yuan in the second half of the year [1] Group 3: Future Expectations - The retail sales total is projected to grow by approximately 6% year-on-year in 2025, with an anticipated increase of 1 percentage point in growth rate for the second half of the year [1] - The "old-for-new" policy is expected to drive sales, and service consumption is likely to peak during holiday seasons [1] - Experts predict a recovery in consumption trends, emphasizing the importance of structural changes and the rise of online consumption, with a shift towards green, smart, and personalized consumption driven by digital technologies [1]

Core Insights - Despite the prevailing narrative of declining consumer confidence, the company "胖东来" achieved a remarkable sales figure of 11.707 billion yuan in the first half of the year, nearing 70% of last year's total sales [1][2]. Group 1: Business Model and Strategies - "胖东来" differentiates itself from competitors not through aggressive discounting but by emphasizing transparency in pricing, such as displaying "purchase prices" on clothing items [4]. - The company offers extensive customer service policies, including a "no-reason return and exchange" policy and a half-price refund for unsatisfactory movie experiences, enhancing customer trust and satisfaction [4]. - Employee welfare is prioritized, with an average post-tax monthly salary of 9,000 yuan for over 8,000 employees and a commitment to a maximum 36-hour work week and at least 40 days of annual leave [4][6]. Group 2: Insights for Consumer Promotion - The impressive performance of "胖东来" suggests that effective consumer promotion should focus on creating a sustainable ecosystem where consumers feel secure and willing to spend, rather than merely stimulating short-term spending [8]. - The company’s success in selling tea, with sales reaching 50.862 million yuan, illustrates the importance of consumer confidence in purchasing decisions, as customers are willing to buy products without hesitation [10]. - Promoting consumer spending should also involve enhancing the income levels of service industry workers, as a robust service sector can drive internal consumption growth [10]. - A conducive environment for business, characterized by fairness, efficiency, and trust, is essential for fostering consumer confidence and spending [10][12].

Core Viewpoint - The Guangzhou Housing Provident Fund Management Center has proposed a policy to allow the conversion of commercial housing loans to housing provident fund loans, aiming to reduce costs and promote consumption [1][3][12]. Group 1: Policy Implementation - The proposed policy allows for the conversion of commercial loans to housing provident fund loans when the personal housing loan rate is below 75% [1][4]. - Only pure commercial loans for self-occupied and sole housing can qualify for this conversion, and the original commercial loan must have been disbursed for over five years [2][5]. - The policy aims to alleviate the interest burden on contributors and stimulate social consumption [4][12]. Group 2: Application Conditions - Applicants must be contributors to the housing provident fund in Guangzhou and have not used housing provident fund loans elsewhere [4][10]. - The original commercial loan must be for a self-occupied property within the city, and the loan must be with a bank that handles housing provident fund loans [5][6]. - The property must have a real estate ownership certificate, and there should be no other mortgage registrations or legal restrictions on the property [7][8]. Group 3: Loan Details - The loan amount for the conversion will be determined based on the current housing provident fund loan policies and cannot exceed 60% of the total purchase price [10][11]. - If the converted loan amount is insufficient to cover the original commercial loan, the borrower must make up the difference [11]. - The loan term will be aligned with the original commercial loan's remaining term, not exceeding a total of 30 years [11]. Group 4: Market Implications - The policy reflects a shift in housing policy from traditional stimulus measures to promoting consumption and reducing costs, particularly benefiting young buyers and new residents [12][13]. - The recent national meeting emphasized the need for stronger measures to stabilize the real estate market, indicating a proactive approach to market recovery [12][13].

Core Viewpoint - The article emphasizes the importance of "expanding domestic demand and promoting consumption" as a key macroeconomic policy in China, especially under the dual challenges of stabilizing growth and external pressures. It advocates for a combination of short-term stimulus measures and long-term structural reforms to enhance consumer capacity and confidence [1][2]. Summary by Sections Historical Consumption Promotion Toolbox - China's past consumption promotion policies can be categorized into direct fiscal subsidies and indirect support measures. Direct measures include subsidies for rural areas, "trade-in" subsidies, and consumption vouchers, while indirect measures involve tax reductions and fee exemptions [3]. - Significant past initiatives include the "home appliance and motorcycle to the countryside" policies from 2007 to 2012, and various tax incentives for automobile purchases from 2014 to 2017 [3][4]. Effectiveness of Consumption Promotion Policies - The first round of home appliance and motorcycle policies resulted in substantial sales growth, with a reported sales revenue of 6,597.6 billion yuan against a subsidy expenditure of 765 billion yuan, yielding a fiscal multiplier of 8.6 [6]. - The policies led to a notable increase in the ownership of home appliances in rural areas, with refrigerator and air conditioner ownership rising significantly during the implementation period [6][7]. Current Consumption Promotion Measures - The recent "trade-in" policy has shown significant results, with a 39% year-on-year increase in sales of home appliances in December 2024 following the policy's implementation [9]. - Service consumption recovery remains a challenge, with current levels still below pre-2019 trends. The article suggests expanding consumption promotion policies to include service sectors to stimulate recovery [10]. Long-term Mechanisms for Consumption Growth - To sustain consumption growth, it is essential to focus on reducing burdens and increasing income for residents. This includes improving pension levels and implementing targeted subsidies for key demographics such as the elderly and children [11][12]. - The article highlights the need for a policy framework that combines short-term effectiveness with long-term structural reforms, particularly in income distribution and social security systems, to transition from "policy-driven consumption" to "endogenous growth-driven consumption" [13].

Group 1: Economic Outlook - The expectation of improved national governance effectiveness is driving an increase in risk appetite among investors[4] - Despite anticipated GDP growth pressure, the market has already priced in the "high-low" trend and inflation concerns, suggesting that macro policy efficiency and international comparisons are undervalued[4] - The "anti-involution" measures are expected to enhance the sense of gain for small and medium enterprises (SMEs) and workers, potentially leading to a decrease in risk assessments[5] Group 2: Policy Implications - Recent policies, such as the "Guarantee for Payment to SMEs" regulation, aim to shorten payment terms, which may improve profitability quality for SMEs[6] - The focus of policies is shifting towards more elastic service consumption, reflecting a change in consumer demand from essential goods to optional services as income rises[7] - Local governments are expanding service consumption capabilities, indicating a policy shift towards enhancing consumer protection and infrastructure development[7] Group 3: Global Context - Global geopolitical instability, including fluctuating U.S. tariff policies and the ongoing Russia-Ukraine conflict, is leading investors to recognize the stability of China's national governance[9] - The certainty of China's governance is becoming a driving force for foreign investment, as it contrasts with the uncertainties in Western economies[9] - The market has already factored in pressures on GDP growth and inflation, but the certainty of governance and efforts to improve economic structure remain undervalued, presenting a fundamental reason to invest in China[10]