Report Industry Investment Rating No information provided in the content. Core Viewpoints - In July, the year-on-year CPI remained flat, and the month-on-month decline of PPI narrowed. The CPI showed characteristics such as service consumption offsetting the decline in food prices, lagging energy transmission, and weak recovery of industrial products. The PPI presented different trends in traditional and new industries, with policy support having varying effects. Attention should be paid to risks such as the impact of weak real - estate investment on building materials demand and global trade frictions on high - tech product prices [3]. Summary by Related Catalogs 6 months CPI and PPI Situation - **PPI**: In July 2025, the year - on - year PPI decreased by 3.6% (the same as in June), and the month - on - month decline narrowed to - 0.2% (from - 0.4% in June). The cumulative PPI from January to July decreased by 2.9%. Energy and raw material supply - demand pressure eased marginally, export - dependent industries were under pressure, international input pressure was differentiated, the resilience of high - tech manufacturing weakened, consumer and equipment manufacturing demand was released, and the pressure on consumer goods prices increased [7]. - **CPI**: In July 2025, the year - on - year CPI was flat (compared to + 0.1% in June), and the month - on - month increase was 0.4% (compared to - 0.1% in June), ending the consecutive decline. The core CPI increased by 0.8% year - on - year. Food prices dragged down the CPI, energy and industrial product prices were differentiated, and service consumption strongly supported the CPI [21]. Appendix: July 2025 CPI and PPI Data - **CPI**: In July 2025, the year - on - year CPI was flat, with urban areas remaining the same and rural areas decreasing by 0.3%. Food prices decreased by 1.6%, non - food prices increased by 0.3%, consumer goods prices decreased by 0.4%, and service prices increased by 0.5%. The month - on - month CPI increased by 0.4% [35]. - **PPI**: In July 2025, the month - on - month decline of the industrial producer price index narrowed. The month - on - month industrial producer output price decreased by 0.2%, and the month - on - month industrial producer purchase price decreased by 0.3%. The year - on - year industrial producer output price decreased by 3.6%, and the year - on - year industrial producer purchase price decreased by 4.5%. From January to July, the average industrial producer output price decreased by 2.9% compared to the previous year, and the industrial producer purchase price decreased by 3.2% [37]. National Bureau of Statistics' Chief Statistician's Interpretation - **CPI**: The month - on - month increase in CPI was slightly higher than the seasonal level, and the year - on - year core CPI continued to rise. The year - on - year CPI was flat mainly due to low food prices [42]. - **PPI**: The month - on - month decline of PPI narrowed, and the year - on - year decline was the same as last month. Seasonal factors and international trade uncertainties affected some industries' prices, while the optimization of the domestic market competition order drove the narrowing of price declines in related industries. Some industries' prices showed positive changes due to industrial transformation and upgrading and the release of domestic demand potential [45].

Report Industry Investment Rating Not provided in the given content. Core Viewpoints of the Report - In July, China's exports exceeded expectations, but container throughput dropped sharply at the beginning of August, and if the trend continues, August may be a turning point [1][11]. - Although the month - on - month PPI growth rate rebounded in July, the year - on - year growth rate remained unchanged. If commodity prices can hold up in August, the year - on - year PPI growth rate may rebound, but the rebound amplitude is expected to be limited [2][17]. - The real estate market continues to be sluggish, with new home sales area at a historical low and the second - hand housing market deteriorating [2][21]. - The bond market is in a volatile state this week. Looking forward, the bond market has investment value, and bond yields may break previous lows [3][35]. Summary by Directory 1. Domestic Economic Data Tracking (1) Export Exceeded Expectations - In July, China's export value was $321.78 billion, a year - on - year increase of 7.2%, far exceeding the Wind consensus forecast of 5.8% [11]. - Due to the "rush to export", the cumulative growth rate of export value has deviated from the annual average of the new export order index. Exports to the EU and ASEAN remained resilient, while those to the US continued to decline [11]. - Container throughput continued to rise in July but dropped sharply at the beginning of August. If the trend continues, August may be a turning point [1][11]. (2) Supply - side Reform Has Not Been Transmitted to PPI - In July, the year - on - year PPI remained at - 3.6%, the same as in June, due to the base effect. However, the month - on - month PPI growth rate rebounded by 0.2 percentage points compared to June [15][17]. - If commodity prices can hold up in August, the year - on - year PPI growth rate may rebound. However, the rebound amplitude is expected to be limited because the price increase in the upstream is difficult to be transmitted downstream, and overall demand needs to recover. Currently, only the mining and raw material sectors are showing price increases, accounting for about 25% [2][19]. 2. Real Estate Policy Effect Tracking - The Real Estate Market Continued to Perform Sluggishly - The sales area of new homes in 30 large and medium - sized cities continued to decline seasonally, remaining lower than the same period in 2024. The sales area of new homes in first - and third - tier cities was lower than in 2024, while that in second - tier cities was basically the same as last year. All are hovering at historical lows [2][21]. - As of July 28, the listing price index of second - hand housing continued to decline overall. The listing price index in first - tier cities rebounded slightly, while those in second - and third - tier cities continued to fall [2][21]. 3. Treasury Bonds: Policy Disturbance Cooled Down, and the Bond Market Remained Volatile - The bond market was relatively stable this week. The central bank conducted a 700 - billion - yuan 3 - month (91 - day) outright reverse repurchase operation, with a net injection of 300 billion yuan, sending a signal of explicit support [35]. - The upward trend brought by supply - side reform cooled down this week, and the impact on the bond market was not significant. Due to the unfalsifiable expectation of economic recovery brought by policy expectations, the bond market remained volatile [35]. - Looking forward, the overall view is bullish, with short - term volatility expected. The probability of interest rates continuing to decline is relatively high, and it will take time to test the policy effects [35].

Group 1: CPI Analysis - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing a previous decline of 0.1% in June, indicating a stable overall price level in the domestic market [1][2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, driven by rising prices in gold and platinum jewelry, as well as seasonal service price increases [3][5] - Service prices increased by 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase, with significant rises in travel-related costs due to the summer vacation season [2][3] Group 2: PPI Analysis - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was less than the previous month by 0.2 percentage points, marking the first narrowing of the month-on-month decline since March [4][5] - The PPI year-on-year fell by 3.6%, consistent with the previous month, reflecting ongoing adjustments in traditional industries and the growth of emerging sectors [5][6] - Improvements in market competition and the implementation of policies to curb disorderly price competition have contributed to a narrowing of price declines in industries such as coal, steel, and solar energy [4][5] Group 3: Consumer Demand and Market Trends - The expansion of domestic demand policies has led to positive changes in consumer prices, with an increase in demand for upgraded consumer goods driving price rises in specific sectors [6] - The prices of certain consumer goods, such as art and ceremonial products, sports balls, and nutritional foods, have seen year-on-year increases of 13.1%, 5.3%, and 1.3%, respectively, indicating a shift towards higher-value consumption [6] - The ongoing construction of large infrastructure projects is expected to support a gradual stabilization of industrial product prices, with the PPI potentially entering a mild recovery phase [6]

Group 1 - The Consumer Price Index (CPI) in July showed a month-on-month increase of 0.4%, indicating a shift from decline to growth, while the year-on-year change remained flat [1][2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024 [2][4] - The rise in CPI was primarily driven by increases in service prices, which rose by 0.6% month-on-month, contributing significantly to the overall CPI increase [2][3] Group 2 - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was less than the previous month, indicating a potential stabilization in certain industries [3][4] - The year-on-year PPI decline was 3.6%, consistent with the previous month, suggesting ongoing challenges in the manufacturing sector [4][5] - Improvements in supply-demand relationships in some industries were noted, with price declines narrowing in sectors like coal, steel, and solar energy [3][4] Group 3 - Economic stability and demand expansion are expected to support a moderate recovery in prices in the second half of the year [5][6] - Policies aimed at boosting domestic demand are anticipated to positively influence consumer prices [5][6] - The impact of international commodity price fluctuations on the domestic market is expected to diminish, contributing to a more stable price environment [6]

Core Viewpoint - In July, the "anti-involution" policy led to a reduction in the decline of PPI, which fell by 0.2% month-on-month, driven by key industries controlling volume and raising prices [1] Group 1: PPI and CPI Analysis - The PPI year-on-year decline remains at a two-year low of -3.6%, while CPI has shifted from an increase to stability [1] - The improvement in industrial consumer prices, along with the rise in gold prices and the fading of promotional disturbances, has contributed to the recovery of core CPI for the third consecutive month [1] Group 2: Future Outlook - The easing of tailing factors may lead to improvements in PPI year-on-year and CPI year-on-year in the fourth quarter, starting from August [1] - To effectively drive inflation back to historical averages, stronger policy measures and a focus on expanding domestic demand are essential [1]

Core Viewpoint - The report from China Galaxy Securities indicates that the Producer Price Index (PPI) continues to remain at a low level year-on-year, with limited potential for improvement in the future, making it unlikely for PPI to turn positive within the year [1] Group 1: Real Estate Market - The real estate market has been weakening since the second quarter, with the total sales area and sales revenue of commercial housing in the first six months declining by 3.5% and 5.5% year-on-year, respectively [1] - In July, the transaction area of commercial housing in 30 major cities showed a year-on-year decrease of 18.6%, compared to a decrease of 8.4% in June [1] Group 2: Economic Dynamics - There is insufficient momentum among microeconomic entities, leading to weak investment from enterprises and low consumer spending willingness [1] - The industrial capacity utilization rate in the second quarter was 74%, showing a downward trend both year-on-year and month-on-month, indicating continued weak demand [1] Group 3: Market Competition - The ongoing optimization of market competition is leading to a narrowing of price declines in related industries, but the sustained improvement effect remains to be observed [1]

Core Insights - The expansion of domestic demand policies is showing positive effects, with the Consumer Price Index (CPI) rising by 0.4% month-on-month in July, reversing a 0.1% decline in June [1][2] - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July, but the decline is narrowing compared to June, marking the first month of reduced decline since March [1][4] CPI Analysis - The month-on-month increase in CPI was primarily driven by rising prices in services and industrial consumer goods, with service prices up 0.6% and industrial consumer goods prices up 0.5% [2][3] - Key contributors to the service price increase included airfare (up 17.9%), tourism (up 9.1%), hotel accommodation (up 6.9%), and vehicle rental (up 4.4%) [2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, the highest since March 2024, indicating a continuous upward trend [2][5] PPI Analysis - The narrowing of the PPI decline is attributed to seasonal factors and uncertainties in the international trade environment, affecting prices in certain industries [4][6] - The construction sector faced demand slowdowns due to seasonal weather conditions, while the electricity sector saw reduced demand for coal due to increased hydropower generation [4] - The competitive market environment is improving, with significant reductions in price declines for coal, steel, photovoltaic, cement, and lithium battery industries [4][6] Industry Trends - The transformation and upgrading of traditional industries, along with the rapid growth of emerging industries, are contributing to a year-on-year price recovery in related sectors [5][6] - The implementation of consumption-boosting initiatives is driving healthy development in the consumer market, leading to price increases in sectors such as arts and crafts, sports equipment, and nutritional foods [6][7]

Group 1 - The overall price operation is stabilizing, with macro policies expected to continue supporting domestic demand recovery and price stabilization [2] - Seasonal factors have led to price declines in certain industries, such as a 1.5% decrease in coal mining and washing prices, and a 0.9% decrease in electricity and heat production prices [1] - Experts predict that the "anti-involution" measures will lead to higher industrial product prices in August compared to July, with a significant year-on-year base effect [2] Group 2 - New policies aimed at supporting fertility, free preschool education, and personal consumption loan interest subsidies are expected to effectively stimulate domestic demand and drive prices back to reasonable levels [2] - The National Bureau of Statistics anticipates that consumption demand will be boosted by ongoing policies, leading to a rebound in consumer goods prices [2] - The impact of tailing factors on CPI and PPI is expected to weaken, resulting in a moderate price recovery trend [2]

Group 1: Consumer Price Index (CPI) Insights - In July, the national Consumer Price Index (CPI) increased by 0.4% month-on-month, marking a shift from decline to growth, while year-on-year it remained flat [1][2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, the highest increase since March 2024, indicating a recovery in market supply and demand relationships due to effective consumption-boosting policies [4][5] - Service prices contributed significantly to the CPI increase, with a month-on-month rise of 0.6%, impacting the CPI by approximately 0.26 percentage points [2][3] Group 2: Producer Price Index (PPI) Insights - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was less than in June, indicating a potential stabilization in market conditions [5][6] - Year-on-year, the PPI fell by 3.6%, with the decline remaining consistent with June, reflecting improvements in supply-demand relationships in certain industries [5][6] - Factors contributing to the PPI changes include seasonal effects, international trade uncertainties, and ongoing optimization of domestic market competition [5][6] Group 3: Economic Policy and Market Dynamics - Consumption-boosting policies have led to a sustained recovery in demand, with notable impacts on prices of automobiles and home appliances [4][5] - The "anti-involution" trend is reshaping industry supply-demand structures, particularly in sectors with excess capacity, which may enhance overall efficiency and alleviate supply-demand conflicts [6][7] - The long-term sustainability of price recovery remains uncertain and is contingent on the execution and coordination of policies [6][7]

Group 1: Consumer Price Index (CPI) Analysis - In July, the Consumer Price Index (CPI) in Guangdong showed a narrowing year-on-year decline of 0.3%, an improvement of 0.1 percentage points from the previous month [2] - The core CPI, excluding food and energy prices, increased by 0.4% year-on-year, with the growth rate expanding by 0.1 percentage points compared to last month [1] - Month-on-month, the CPI shifted from a decrease of 0.2% in the previous month to an increase of 0.5% in July, driven by a significant rise in non-food prices [3] Group 2: Food and Non-Food Price Trends - Food prices decreased by 1.1% year-on-year, contributing approximately 0.21 percentage points to the CPI decline, with pork prices down 2.4% and egg prices down 4.8% [2] - Non-food prices saw a slight decrease of 0.1% year-on-year, but the decline was less than the previous month, contributing about 0.07 percentage points to the CPI decline [2] - Month-on-month, food prices fell by 0.3%, while non-food prices increased by 0.6%, with significant increases in air ticket prices (up 29.8%) and tourism prices (up 14.7%) due to the summer peak season [3] Group 3: Producer Price Index (PPI) Insights - The Producer Price Index (PPI) experienced a year-on-year decline of 2.0%, with the decline rate widening by 0.2 percentage points from the previous month [4] - In the PPI survey, 38 major industries showed 8 increases and 29 decreases, with an industry increase rate of 21.1%, down 7.8 percentage points from last month [4] - Month-on-month, the PPI decreased by 0.2%, with the decline rate narrowing by 0.1 percentage points, and 11 industries reported price increases [5]