Report Summary 1. Industry Investment Rating - No industry investment rating is provided in the reports. 2. Core Viewpoints - The current inflation situation aligns with the scenario of a slow recovery in long - term bond yields, and the judgment of a gradual improvement in PPI and a slow recovery in long - term bond yields is maintained [2][14]. - Core CPI continues its upward trend, with the year - on - year increase in August reaching 0.9%, and the year - on - year growth rate expanding for the fourth consecutive month, indicating positive changes in the consumer price sector due to the continuous effectiveness of domestic demand expansion policies [2][5]. - Food prices continue to drag down CPI growth, suggesting that the growth of catering consumption may still be slow [2][5]. - The downward trend of upstream prices shows signs of stabilization, and the absolute level of the edible agricultural product price index has slightly rebounded. The price of edible agricultural products is expected to improve seasonally in September, but the narrowing of the year - on - year decline may be slow [2][11]. - In August, the signs of PPI reaching the bottom became more obvious, with the month - on - month change turning flat and the year - on - year decline narrowing due to the base effect. The narrowing of the decline in real estate and commodity export prices provides conditions for PPI to reach the bottom [2][11]. - Referring to the experience of the steel industry, it is expected that other key industries will mainly conduct precise regulation of production capacity and output, which is expected to promote the gradual improvement of PPI [14]. 3. Summary by Related Catalogs 3.1 CPI Analysis - In August 2025, the national CPI decreased by 0.4% year - on - year, with food prices dropping by 4.3% and non - food prices rising by 0.5%. The CPI remained flat month - on - month [4]. - Core CPI continued to rise, with a year - on - year increase of 0.9% in August, and the growth rate expanded for the fourth consecutive month, showing positive changes in consumption prices due to domestic demand expansion policies [2][5]. - Food prices continued to drag down CPI growth. The year - on - year decline in food CPI in August was 4.3%, and the drag on CPI year - on - year was greater than the overall CPI decline, indicating slow growth in catering consumption [2][5]. - The edible agricultural product price index slightly rebounded in August, but the year - on - year decline was still large due to the base effect. In September, prices are expected to improve seasonally, but the narrowing of the year - on - year decline may be slow because of the late Mid - Autumn Festival [11]. 3.2 PPI Analysis - In August 2025, PPI showed obvious signs of reaching the bottom, with the month - on - month change turning flat and the year - on - year decline narrowing due to the base effect. The narrowing of the decline in real estate and commodity export prices provided downstream demand conditions for PPI to reach the bottom [11]. - Referring to the steel industry experience, it is expected that other key industries will mainly regulate production capacity and output precisely, which will promote the gradual improvement of PPI. The government has set a target for the steel industry's added - value to grow by an average of 4% annually from 2025 - 2026 [14].

Group 1: CPI and Core CPI Trends - The national Consumer Price Index (CPI) remained flat month-on-month in August, with a year-on-year decline of 0.4%, while the core CPI, excluding food and energy, increased by 0.9% year-on-year, marking the fourth consecutive month of growth [1][2] - The core CPI's year-on-year growth rate expanded by 0.1 percentage points compared to the previous month, indicating a positive trend in consumer prices driven by effective consumption-boosting policies [2][3] Group 2: Factors Influencing CPI - The year-on-year decline in CPI is attributed to a high comparison base from the previous year and lower-than-seasonal food price increases, with food prices dropping by 4.3% year-on-year [2][3] - The impact of previous price changes on the current CPI was approximately -0.9 percentage points, with a downward influence that increased by 0.4 percentage points compared to the previous month [3] Group 3: PPI and Industry Price Changes - The Producer Price Index (PPI) showed a narrowing year-on-year decline of 2.9%, the smallest drop since March, indicating improved supply-demand relationships in certain industries [3][4] - Prices in industries such as coal processing and photovoltaic equipment manufacturing saw reduced year-on-year declines, reflecting a positive shift in market conditions [5] Group 4: Emerging Industries and Consumption Trends - New industries are experiencing growth, with prices in sectors like integrated circuit packaging and testing rising by 1.1% year-on-year, driven by technological and industrial innovation [6] - Increased demand for quality consumption is leading to price increases in specific sectors, such as a 13.0% rise in the price of arts and crafts products and a 4.7% increase in sports equipment manufacturing [7]

Group 1 - The consumer market in August showed overall stability, with the Consumer Price Index (CPI) remaining flat month-on-month and decreasing by 0.4% year-on-year, while the core CPI, excluding food and energy, increased by 0.9% year-on-year, marking the fourth consecutive month of growth [1] - The Producer Price Index (PPI) month-on-month ended an eight-month decline, stabilizing after a 0.2% drop in the previous month, with a year-on-year decrease of 2.9%, which is a narrowing of 0.7 percentage points from the previous month [2][3] - The improvement in supply-demand relationships in certain industries has contributed to the stabilization of PPI, with energy and raw material prices showing signs of recovery [2][3] Group 2 - The "old-for-new" consumption policy has been expanded, providing significant support for prices of covered goods, with transportation tool prices stabilizing month-on-month and the year-on-year decline narrowing from 2.1% to 1.9% [2] - Service prices have shown a continuous upward trend since March, with a year-on-year increase of 0.6% in August, indicating the release of service consumption potential [2] - The overall low price level since the beginning of the year is expected to continue, providing ample space for future growth-stabilizing policies [3][4]

1. Report Industry Investment Rating Not provided in the report. 2. Core View of the Report - The inflation data in August showed a differentiated feature of "weak CPI and stable PPI". The year-on-year growth rate of CPI was lower than market expectations, mainly dragged down by a significant decline in food prices. The year-on-year decline of PPI narrowed, which was attributed to the initial effect of the "anti-involution" policy [1][6]. - For the bond market, the continuous recovery of core CPI for four months indicates that domestic demand is still moderately recovering, and the narrowing decline of PPI reflects that the "anti-involution" policy and the improvement of supply-demand relationship are taking effect. The ultimate impact of the "anti-involution" policy on the bond market depends on whether the price increase expectation it brings can be supported by real demand [1][6]. - Negative inflation means a passive increase in real interest rates. Compared with the weak economic fundamentals and low investment returns, the current level of real interest rates is relatively high, so the central bank may still have the demand to "reduce the financing cost of the real economy" [2][6]. 3. Summary According to Relevant Catalogs 3.1 8 - Month CPI: Food Prices Significantly Drag, Core CPI Continuously Improves - The year-on-year turn of CPI negative in this month was mainly due to two factors: the high-base effect, with the carry-over effect of last year's price changes on this month's CPI year-on-year being about -0.9 percentage points, and the pull-down effect expanding by 0.4 percentage points compared with last month; food prices were weaker than seasonal, with the month-on-month increase of food prices being 0.5%, about 1.1 percentage points lower than the seasonal level, and the price changes of pork, eggs, and fresh fruits all being weaker than seasonal [2][7]. - Although the overall performance of CPI was weak, core CPI showed resilience. The year-on-year increase of core CPI (excluding food and energy prices) was 0.9%, with the increase expanding for the fourth consecutive month. The year-on-year increase of industrial consumer goods prices excluding energy was 1.5%, with the increase expanding by 0.3 percentage points compared with last month, and the year-on-year increase of gold and platinum jewelry prices may be related to the rise in international gold prices; the year-on-year increase of service prices was 0.6%, with the increase expanding by 0.1 percentage points compared with last month [2][7]. 3.2 8 - Month PPI: Year-on-Year Decline Narrows, the First Narrowing Since March This Year - PPI decreased by 2.9% year-on-year, with the decline narrowing by 0.7 percentage points compared with last month, the first narrowing since March this year. This was affected by the lower comparison base in the same period last year and the implementation of active and effective macro - policies in China [3][8]. - Consistent with the "purchase price of major raw materials" in the manufacturing PMI in August being in the expansion range, price transmission started from "upstream to mid - stream", but the downstream consumer goods end still lacked bargaining power. - The optimization of market competition order drove the narrowing of year-on-year price declines in related industries. The year-on-year price declines of coal processing, ferrous metal smelting and rolling processing, coal mining and washing, photovoltaic equipment and component manufacturing, and new energy vehicle manufacturing narrowed by 10.3, 6.0, 3.2, 2.8, and 0.6 percentage points respectively compared with last month, reducing the pull - down effect on PPI year-on-year by about 0.50 percentage points compared with last month, which was the main reason for the narrowing of the PPI year-on-year decline [3][8]. - The new driving force of industry development drove the year-on-year price recovery of related industries. The prices of integrated circuit packaging and testing series increased by 1.1%, the prices of ship and related device manufacturing increased by 0.9%, the prices of communication system equipment manufacturing increased by 0.3%, and the prices of solid waste treatment equipment increased by 0.3% [3][8].

Key Points - The report highlights a focus on the macroeconomic environment, noting that the August CPI growth rate was lower than expected, while the PPI growth rate met expectations, indicating structural changes in consumer prices and the impact of policies on supply-demand dynamics [2][5][6] - The report discusses the recent trends in the A-share merger and acquisition market, indicating a decrease in overall activity but with a diverse range of participants and sectors involved [8] - The Shanghai real estate market is analyzed, revealing a high proportion of older properties, with 82% of existing residential communities being over 20 years old, which poses challenges for the market [9][10][11] Macroeconomic Analysis - August CPI remained flat month-on-month but decreased by 0.4% year-on-year, with core CPI increasing by 0.9% year-on-year, indicating a structural divergence in consumer prices [5][6] - The report notes that food prices have a significant downward impact on CPI, while non-food prices have shown a consistent increase, contributing to the overall CPI growth [6][7] Mergers and Acquisitions - The report states that there were 68 disclosed M&A events during the period, with a total transaction value of 519 billion RMB, reflecting a decline in both the number and value of major M&A activities [8] - Key sectors for M&A activity included real estate management, machinery, and semiconductor products, indicating a trend towards horizontal integration and strategic cooperation among private and local state-owned enterprises [8] Real Estate Market Insights - The report identifies that as of May 2025, Shanghai had 27,500 existing residential communities, with 64% of the 9.62 million existing homes being over 20 years old, highlighting the aging housing stock [9][10] - The analysis of the Shanghai housing market indicates a cyclical evolution, with significant price fluctuations and regulatory impacts over the past three decades, leading to a current phase of stabilization and structural differentiation [10][11] Future Development Plans - The report outlines the "CAZ" (Central Activity Zone) and "One River, One River" initiatives as key future development directions for Shanghai, aiming to enhance urban functionality and livability [12][13] - The CAZ is projected to cover 75 square kilometers, contributing 25% of the city's GDP, while the "One River" initiative focuses on ecological and cultural improvements along the Huangpu and Suzhou Rivers [12][13] Sales and Pricing Trends - New home sales in Shanghai showed a positive year-on-year growth of 5% in the first five months of 2025, reversing a downward trend from previous years, while second-hand home sales also experienced significant growth [14][15] - The report notes that the average price of new homes reached 92,119 RMB per square meter, while second-hand home prices faced downward pressure, indicating a divergence in market performance [17][19] Inventory and Supply Dynamics - The report highlights that the overall inventory in Shanghai has increased, with a total of 39.06 million square meters of new and second-hand home inventory, but the average de-stocking period remains healthy at 14.9 months [21][22] - New home inventory pressure is concentrated in the outer ring areas, while second-hand home inventory pressure is more pronounced in the inner ring, reflecting differing supply-demand dynamics [22][23]

Core Insights - The consumer market in August showed overall stability, with the Consumer Price Index (CPI) remaining flat month-on-month and down 0.4% year-on-year, while the core CPI, excluding food and energy, rose by 0.9% year-on-year, marking the fourth consecutive month of increase [1][2] - The Producer Price Index (PPI) month-on-month ended an eight-month decline, stabilizing after a 0.2% drop in the previous month, with a year-on-year decrease of 2.9%, which is a narrowing of 0.7 percentage points from the previous month [1][3] Consumer Price Index (CPI) Analysis - The year-on-year decline in CPI is attributed to a high comparison base from the previous year and lower-than-seasonal food price increases this month, with a tail effect from last year's price changes contributing approximately -0.9 percentage points to the CPI [1] - The core CPI's year-on-year increase of 0.9% reflects the effectiveness of policies aimed at boosting domestic demand and consumption, with service prices also showing a gradual increase since March [1][2] Producer Price Index (PPI) Analysis - The PPI's year-on-year decline is primarily influenced by falling international commodity prices, particularly crude oil, which has significantly impacted domestic oil and gas extraction and related industries [3] - The narrowing of the PPI decline is attributed to improved supply-demand relationships and the implementation of proactive macroeconomic policies, leading to positive price changes in certain industries [3][4] Market Dynamics - The "trade-in" policy for consumer goods is providing significant support for prices within the covered range, with household appliance prices rising by 1.1% month-on-month and a year-on-year increase from 2.8% to 4.6% [2] - The ongoing optimization of market competition and the emergence of new economic drivers are expected to support a moderate recovery in prices, with a focus on key industries and the potential for a PPI recovery cycle [4]

Group 1: Macroeconomic Insights - In August 2025, CPI remained flat at 0% month-on-month, while PPI ended a consecutive eight-month decline, indicating a potential turning point for PPI [1] - Core CPI growth has rebounded for four consecutive months due to policies aimed at expanding domestic demand and regulating low-price competition, although overall CPI year-on-year growth fell to -0.4% due to food prices [2] - The PPI is expected to see a slow recovery due to a poor demand environment and market-oriented capacity governance, remaining in negative growth territory for the year [2] Group 2: Industry Research - The antimony supply is tightening as Polar Gold's antimony production is projected to drop to zero in the first half of 2025, leading to potential price increases in the domestic market [3] - Antimony prices have fluctuated this year, influenced by export policies and demand changes, with expectations of price increases if export restrictions ease [3] Group 3: Company Research - Huaxin Cement (600801.SH) reported significant growth in net profit for the first half of 2025, driven by accelerated international expansion and increased overseas revenue and cement sales [4] - The company is projected to achieve net profits of 2.9 billion, 3.3 billion, and 3.5 billion yuan for the years 2025 to 2027, maintaining a "buy" rating [4] - Megachip Color (603062.SH) also experienced rapid revenue and profit growth in the first half of 2025, with new business developments in wind power and marine coatings contributing to sales [5] - The company is expected to achieve net profits of 270 million, 300 million, and 330 million yuan from 2025 to 2027, maintaining an "increase" rating [5]

Group 1 - The effects of anti-involution policies are beginning to show in the PPI data, with commodity price increases leading to price recovery in downstream industries [1][3] - In August, the CPI year-on-year growth rate was -0.4%, while the PPI year-on-year growth rate was -2.9%, indicating a steady recovery in inflation [1][2] - The core CPI has shown resilience, with a significant year-on-year increase, despite food prices being a major drag due to the pig cycle [1][2] Group 2 - Food price declines are primarily driven by pork and egg prices, with the pig cycle in a bottoming phase and high inventory levels affecting egg prices [2] - The PPI data reflects a recovery in upstream mining prices, with coal mining and black metal industries showing month-on-month increases of 2.8% and 2.1% respectively [3] - The anti-involution policy focuses on addressing overcapacity caused by "herd investment" in downstream industries, aiming for more sustainable price recovery [3]

Core Insights - The Consumer Price Index (CPI) remained flat month-on-month in August, with a year-on-year decline of 0.4%, while the core CPI, excluding food and energy, rose by 0.9%, marking the fourth consecutive month of growth [1][3] - The Producer Price Index (PPI) transitioned from a month-on-month decline of 0.2% to flat in August, with a year-on-year decrease of 2.9%, a reduction in the decline by 0.7 percentage points compared to the previous month [1][5] CPI Analysis - The year-on-year decline in CPI was attributed to a high comparison base from the previous year and lower-than-seasonal food price increases in August [2] - Food prices fell by 4.3% year-on-year, contributing significantly to the CPI decline, with pork, fresh vegetables, eggs, and fresh fruits having a notable downward impact [2][3] Core CPI Insights - The core CPI's year-on-year increase of 0.9% reflects the effectiveness of policies aimed at boosting domestic demand and consumption [3][4] - Service prices have shown a gradual increase since March, with a 0.6% rise in August, contributing approximately 0.23 percentage points to the CPI increase [3] PPI Insights - The PPI's month-on-month stability in August ended an eight-month downward trend, influenced by improved supply-demand relationships in certain industries [5] - The year-on-year PPI decline of 2.9% is the first narrowing since March, driven by enhanced market competition and proactive macroeconomic policies [5] Future Outlook - Experts predict an improvement in supply-demand structures, which is expected to support a reasonable recovery in prices [4][5]

[Music] Producer prices fell a tenth of a percent in August while expectations were that inflation would increase. We're still awaiting of course Thursday's CPI data to see how consumer prices fared in the month. But a positive signal to investors who are anticipating the Fed will cut rates next week. Ed Yardi, our Denny Research president, joining me now to talk more through all of this. Ed, it's great to see you. So, does this wholesale inflation number sort of confirm what we're going to get from the Fed ...