Group 1 - The core viewpoint of the article highlights the upward trend in the Shanghai and Shenzhen stock markets, particularly driven by the technology sector and communication stocks [1] - Galaxy Securities anticipates that the AI computing power industry chain will continue to recover in the second half of the year, presenting new investment opportunities [1] - Specific sub-sectors showing potential include operators, optical communication, satellite internet, and quantum technology [1] Group 2 - The dual innovation sector is expected to have high elasticity in a bull market scenario, with a price fluctuation limit of 20%, making it a leading indicator in A-share rebound trends [1] - Investors without stock accounts are advised to consider the Guotai CSI Science and Technology Innovation 100 ETF linked C (019867) and linked A (019866) [1]

Group 1 - The core viewpoint is that capital market reforms will enhance mechanisms supporting the development of technology growth enterprises, with a focus on sectors like biomedicine, artificial intelligence, commercial aerospace, and low-altitude economy [1] - Reforms in the Sci-Tech Innovation Board and the Growth Enterprise Market, such as the establishment of a growth tier, the resumption of listing standards for unprofitable companies, and the introduction of a third set of standards for the Growth Enterprise Market, will significantly increase market support for technology companies, creating more investment opportunities in related fields [1] - The AI computing power industry chain is expected to recover continuously, presenting new investment opportunities, particularly in sub-sectors like operators, optical communications, satellite internet, and quantum technology [1] Group 2 - The ChiNext 50 ETF tracks the ChiNext 50 Index, which can experience daily fluctuations of up to 20%. This index, published by the Shenzhen Stock Exchange, selects 50 stocks with larger market capitalization and better liquidity from the ChiNext market, aiming to reflect the performance of the most representative and influential companies in the market, especially focusing on technology innovation sectors like information technology and healthcare [1]

Group 1 - The article emphasizes the importance of "capacity reduction," which is reflected in the decline of capital expenditure, the abandonment of existing projects, and the guidance for the survival of the fittest among existing enterprises. This capacity reduction is a slow variable that will elevate the long-term profitability capability [3] - The current strong performance of the A-share market suggests a growing focus on long-term positive factors, although the current fundamental expectations and profit-making effects are not yet at bull market levels. The company's market outlook remains unchanged, predicting that 2026-27 will be the core period of the bull market, with signs of index improvement starting in Q4 2025 [3] - The article notes that the capital expenditure of internet platforms may improve, serving as a driving force for stock prices in the domestic AI computing power industry chain. In the short term, the market is highly focused on sectors such as electric equipment, steel, and building materials [3] Group 2 - Service consumption is recovering, with a notable expansion in the price decline of white liquor and pork. Year-on-year growth rates have been continuously rising since the beginning of the year [6]

Market Overview - The A-share market showed mixed performance on July 2, with the Shanghai Composite Index down 0.09% to 3454.79 points, the ChiNext Index down 1.13% to 2123.72 points, and the Shenzhen Component Index down 0.61% to 10412.63 points [1] - A total of 1943 stocks rose while 3282 stocks fell, with a total trading volume of 13769 billion yuan, a decrease of 892 billion yuan from the previous trading day [2] Sector Performance - Marine economy stocks surged, particularly in aquaculture and deep-sea technology, with several stocks hitting the daily limit [4] - The steel sector saw a rebound in the afternoon, with stocks like Shengde Xintai and Chongqing Steel reaching their daily limit [4] - The banking sector remained active, with major banks like China Construction Bank and Shanghai Pudong Development Bank reaching historical highs [4] - Semiconductor stocks experienced significant declines, with several companies dropping over 6% [4][5] Future Market Expectations - Zhongyuan Securities predicts a steady upward trend for the A-share market in the short term, supported by increased long-term capital inflow and stable ETF growth [6] - Yingda Securities suggests a relatively positive mid-term market outlook, with expectations of continued upward movement due to financial support policies and potential interest rate cuts from the Federal Reserve [6] - Dongguan Securities notes that the upcoming half-year report disclosures and policy expectations will enhance market drivers [6] - Overall, the market is expected to experience fluctuations, with potential opportunities in sectors like new consumption, media, and non-bank financials [7][8]

Market Overview - The A-share market experienced a slight decline with over 3200 stocks in the red, as the Shanghai Composite Index fell by 0.04%, the Shenzhen Component Index by 0.42%, and the ChiNext Index by 0.84% [1] - Overall market sentiment remains weak, with a lack of strong fundamentals and fragmented capital expectations, leading to short-term speculative behavior [1][6] Sector Performance - **Banking Sector**: Strong performance with banks like China Construction Bank and Shanghai Pudong Development Bank reaching new highs [1] - **Marine Economy**: Stocks related to the marine economy surged, with companies like Giant Sway and ShenKong Co. hitting the daily limit [2] - **Aquaculture**: The aquaculture sector also showed strength, with stocks like China National Fisheries reaching the daily limit [1] - **Engineering Machinery**: The sector saw a rise, with Southern Road Machinery hitting the daily limit [1] - **Solar Energy**: The photovoltaic sector was active, led by glass and silicon materials, with Yamaton hitting the daily limit [1][3] - **Declining Sectors**: Multi-financial concept stocks fell sharply, with Aijian Group hitting the daily limit down, and the semiconductor industry chain also faced a pullback [1] Institutional Insights - **Shenwan Hongyuan**: Predicts that positive factors will accumulate between 2026-2027, indicating a potential bull market, but acknowledges the current market is still distant from a bull market initiation [4] - **Xinda Securities**: Anticipates possible market fluctuations in July, but believes the extent will be manageable. A shift towards optimism in earnings or policy could lead to a return to a bull market in late Q3 or Q4 [5] - **Orient Securities**: Emphasizes that the current market lacks a solid foundation for a broad rally, with short-term hotspots remaining speculative [6]

Market Overview - The Shanghai Composite Index fell by 0.22% to close at 3448.45 points, with a high of 3462.75 points during the day [1] - The Shenzhen Component Index decreased by 0.48% to 10343.48 points, reaching a peak of 10440.73 points [1] - The ChiNext Index dropped by 0.66% to 2114.43 points, with a maximum of 2142.21 points [1] ETF Market Performance - The median return of stock ETFs was -0.32% [2] - The highest performing scale index ETF was the China Tai Zhong Zheng 2000 ETF with a return of 1.39% [2] - The highest performing industry index ETF was the Penghua Zhong Zheng Bank ETF with a return of 1.35% [2] - The highest performing thematic index ETF was the Fortune China Zhong Zheng Communication Equipment Thematic ETF with a return of 1.83% [2] ETF Gain and Loss Rankings - The top three ETFs by gain were: - Fortune China Zhong Zheng Communication Equipment Thematic ETF (1.83%) - Xinhua China Zhong Zheng Cloud Computing 50 ETF (1.64%) - Ping An China Zhong Zheng Hu Shen Hong Kong Gold Industry ETF (1.44%) [4] - The top three ETFs by loss were: - Penghua Zhong Zheng 800 ETF (-2.67%) - Huatai Bai Rui Zhong Zheng All Index Securities Company ETF (-2.24%) - Pu Yin An Sheng Zhong Zheng Securities Company 30 ETF (-2.11%) [4] ETF Fund Flow - The top three ETFs by fund inflow were: - Huatai Bai Rui Zhong Zheng A500 ETF (inflow of 2.055 billion yuan) - Huabao Zhong Zheng Bank ETF (inflow of 493 million yuan) - Jiashi Zhong Zheng A500 ETF (inflow of 454 million yuan) [6] - The top three ETFs by fund outflow were: - Huabao Zhong Zheng All Index Securities Company ETF (outflow of 738 million yuan) - Huaxia Shanghai 50 ETF (outflow of 718 million yuan) - Southern Zhong Zheng 500 ETF (outflow of 527 million yuan) [6] ETF Margin Trading Overview - The top three ETFs by margin buying were: - Huaxia Shanghai Science and Technology Innovation Board 50 Component ETF (709 million yuan) - Yi Fang Da Chi Next ETF (315 million yuan) - Guotai Junan Zhong Zheng All Index Securities Company ETF (281 million yuan) [8] - The top three ETFs by margin selling were: - Southern Zhong Zheng 500 ETF (33.58 million yuan) - Huatai Bai Rui Shanghai 300 ETF (15.90 million yuan) - Fortune China Zhong Zheng A500 ETF (9.75 million yuan) [8] Institutional Insights - Galaxy Securities suggests that the current market is at the bottom of AI expectations, with a recovery in the AI computing power industry chain expected to create new investment opportunities [9] - Guoyuan Securities highlights the increasing demand for basic hardware required for data centers, suggesting a focus on the computing power industry chain and the expansion of the data center hardware market [10]

Core Insights - The pet consumption market is becoming a significant pillar for Chinese companies going global, with pet product sales during the "618" shopping festival showing that cat product sales are twice that of dog products [1] - The global pet market is projected to exceed $300 billion by 2025 and reach $500 billion by 2030, with China transitioning from a manufacturing hub to a brand-exporting nation [1][3] - Chinese pet food exports have shown robust growth, with a 16.17% increase in quantity and a 6.06% increase in value in the first four months of 2025 compared to the previous year [3] Industry Trends - Over 30,000 pet businesses participated in cross-border sales during the "618" event, with over 1,000 businesses seeing their sales double year-on-year [1] - The demand for smart pet products and eco-friendly toys is driving innovation and growth in the pet industry, with leading companies expanding their overseas operations [1][3] - The consensus in the pet industry is that companies must expand internationally to tap into the more mature overseas markets [2] Company Performance - Zhongchong Co., a leading player in the pet economy, has seen its stock price increase by nearly 66% this year, with revenue growing from 648 million yuan to 4.465 billion yuan from 2015 to 2024, representing a 589.04% increase [4] - In Q1 2025, Zhongchong Co. reported a revenue of 1.101 billion yuan, a 25.41% year-on-year increase, and a net profit of 91 million yuan, a 62.13% increase [4] - The company has established production facilities in multiple countries, including the U.S., Canada, and Thailand, to enhance its overseas capacity and mitigate risks [3]

Market Overview - US stock market declined on Wednesday, with the S&P 500 ending a three-day rally, which may put pressure on A-shares at the opening [2] - The China Golden Dragon Index rose by 0.08%, indicating a positive performance for Chinese concept stocks [2] Technical Analysis - The Shanghai Composite Index closed at 3402.32 points, maintaining above the 3400 mark, but trading volume decreased to 1.26 trillion, down 160 billion from the previous day, suggesting weak buying interest [2] - If trading volume remains low, the index may test the 3380 point support level [2] - The ChiNext Index increased by 1.21%, but the new energy sector lagged, with Ningde Times affecting overall sentiment [2] - The brokerage sector saw a net inflow of 3.7 billion, indicating potential upward movement if major brokers like CITIC Securities and Oriental Fortune show strong early performance [2] Policy Directions - Three key policy directions identified: 1. US-China trade talks focusing on rare earth and semiconductor equipment exports, with China issuing temporary export licenses for rare earth materials to three major US automakers [3] 2. Hydrogen energy pilot projects, with the National Energy Administration outlining directions for green hydrogen production and zero-carbon parks, potentially benefiting equipment manufacturers like Hupu Co. and Xue Ren Co. [3] 3. Local special bonds issuance, with 180 billion issued in the first two weeks of June, likely stabilizing infrastructure stocks like China Communications Construction and China Railway Construction [3] Sector Rotation - Focus on whether technology and brokerage sectors can resonate positively in early trading [3] - The AI computing industry chain may see funding inflows due to the upcoming delivery of Nvidia's Blackwell chips [3] - Defensive sectors like Yangtze Power, with a dividend yield over 5%, and Hu Nong Commercial Bank, known for low valuation and high dividends, are suitable for risk-averse investments [3] Investment Strategy - Key focus on trading volume; if the first hour's trading volume exceeds 380 billion, the index may approach 3417 points; if it falls below 1.2 trillion, consider reducing positions to avoid potential pullbacks [4] - Long-term investors should consider semiconductor equipment, AI computing, and consumer electronics, which are at historical low valuations and have multiple policy catalysts [4] - Short-term traders should monitor hydrogen energy pilot projects and urban renewal themes, paying attention to the strength of leading stocks [4]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The launch of Broadcom's TH6 switch chip, with a capacity of 102.4 Tbps, is expected to enhance the global computing infrastructure investment logic, supporting the next generation of AI networks [4][14] - The report emphasizes the importance of the AI computing infrastructure investment wave, highlighting the need for upgrades in communication network equipment and the development of the computing network [6][14] - The report identifies seven key investment directions within the AI computing industry chain, including AIDC data center construction, IT equipment, network devices, cloud computing, AI applications, satellite internet, and 6G [7][16] Summary by Sections Section 1: Investment Insights - Broadcom's TH6 switch chip is the first in the world to achieve 102.4 Tbps, doubling the current Ethernet switch bandwidth, and is designed to support AI clusters with over 1 million XPUs [4][13] - The TH6 chip features advanced technologies such as flexible connection options, AI-optimized routing, and support for various network topologies, making it suitable for large-scale AI network operations [5][13] Section 2: Market Review - The communication index rose by 4.06% during the week of June 2 to June 6, 2025, ranking first among the TMT sector [24] Section 3: Communication Data Tracking - As of April 2025, the total number of 5G base stations in China reached 4.439 million, with a net increase of 188,000 stations compared to the end of 2024 [25] - The number of 5G mobile phone users reached 1.081 billion, a year-on-year increase of 21.6% [25] - 5G mobile phone shipments in April 2025 were 19.889 million units, accounting for 79.4% of total shipments, with a year-on-year decrease of 1.7% [25] Section 4: Operator Performance - The report highlights strong growth in innovative business development among the three major operators, with significant revenue increases in cloud computing services [39][40] - The ARPU values for the three major operators remained stable, with slight variations noted [39][44]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The launch of Broadcom's TH6 switch chip, with a capacity of 102.4 Tbps, is expected to enhance the global computing infrastructure investment logic, particularly in AI computing networks [4][14] - The report emphasizes the importance of the AI computing infrastructure investment wave, highlighting the need for upgrades in communication network equipment [6][14] - The report identifies seven key investment directions within the AI computing industry, including AIDC data center construction, IT equipment, network devices, cloud computing, AI applications, satellite internet, and 6G [16] Summary by Sections Section 1: Investment Insights - Broadcom's TH6 switch chip is the first in the world to achieve 102.4 Tbps, doubling the current Ethernet switch bandwidth and supporting next-generation AI networks [4][13] - The TH6 chip features advanced routing capabilities and supports large-scale AI clusters, enhancing system efficiency and functionality [5][13] Section 2: Industry Trends - The report notes that as the TH6 chip is shipped, the investment logic for global computing infrastructure is expected to strengthen, with a focus on the development of the overall computing industry chain [14][15] - The report highlights the potential for accelerated investment in computing networks as trade tariffs ease, boosting confidence in overseas computing investments [6][14] Section 3: Key Investment Directions - AIDC Data Center Construction: Recommended stocks include New Idea Network Group, Yingweike, and Baoxin Software [17] - IT Equipment: Recommended stocks include Unisplendour and ZTE Corporation [18] - Network Devices: Recommended stocks include Unisplendour and ZTE Corporation [19] - Cloud Computing: Beneficiary stocks include China Mobile, China Telecom, and China Unicom [21] - AI Applications: Beneficiary stocks include Guohua Tong and Yiyuan Communication [22] - Satellite Internet: Beneficiary stocks include Haige Communication and Chengchang Technology [23] - 6G: Recommended stocks include ZTE Corporation [23] Section 4: Market Review - The communication index rose by 4.06% during the week, ranking first among the TMT sector [24] Section 5: Communication Data Tracking - As of April 2025, the total number of 5G base stations in China reached 4.439 million, with a net increase of 188,000 stations compared to the end of 2024 [25] - The number of 5G mobile phone users reached 1.081 billion, a year-on-year increase of 21.6% [25]