Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The stock market has risen recently due to long - term expectations of fiscal policy shift and inflation recovery, mid - term anti - involution policies and infrastructure investment, and short - term capital inflows and improved enterprise deposit and loan data. The bond market is expected to show a repair trend. Precious metals are supported by "interest rate cut expectation" and "geopolitical uncertainty". Most commodities are expected to show a wide - range or weak - range oscillation trend [2][3][4] - Different commodities are affected by various factors such as supply and demand, policies, and geopolitical events, and their price trends vary. For example, steel products are affected by production, inventory, and policy expectations; copper is affected by tariffs and inventory; and energy products are affected by supply, demand, and price adjustments [6][15][23] Summary by Category Financials Stock Index - The A - share market rose yesterday with the Wind All - A up 0.72% and a turnover of 1.76 trillion yuan. The rise is attributed to long - term, mid - term, and short - term logics. It is advisable to wait for clearer policies and market trends before adjusting positions [2] - The treasury bond futures showed different trends. The short - term bond market is expected to repair, and short - term treasury bonds are expected to be strong [3] Precious Metals - Gold and silver prices fell overnight. Gold is in a window supported by "interest rate cut expectation" and "geopolitical uncertainty" and is expected to maintain a strong trend. Low - buying and holding silver is a good strategy [4] Mineral, Steel, Coal, and Coke Rebar - The rebar futures fluctuated narrowly, and the spot price rose slightly. The supply - demand pressure increased, but policy expectations and rumors boosted market sentiment. The short - term is expected to be oscillatory and slightly strong [6] Iron Ore - The iron ore futures price fell. The global iron ore shipment decreased, and the demand weakened. The short - term price is expected to oscillate [7][8] Coking Coal - The coking coal futures rose. The supply is affected by inspections, and the demand is strong. The short - term is expected to oscillate widely [9] Coke - The coke futures rose. The supply increased, and the demand was stable. The short - term is expected to oscillate widely [10] Manganese Silicon - The manganese silicon futures strengthened. Market news boosted confidence, and the demand increased. The short - term is expected to oscillate widely [11][12] Ferrosilicon - The ferrosilicon futures strengthened. Cost support is strong, and the fundamentals have little contradiction. The short - term is expected to oscillate widely [13] Non - ferrous Metals Copper - Copper prices rose slightly. The macro situation is complex, and the demand is insufficient. The price may be weak, but the "Golden September" expectation restricts the decline [15][16] Nickel & Stainless Steel - Nickel and stainless steel prices were affected by market sentiment. The fundamentals changed little, and the short - term is expected to oscillate [17] Alumina, Aluminum, and Aluminum Alloy - Alumina, aluminum, and aluminum alloy prices rose. The supply of alumina is expected to increase, and the aluminum price may face downward pressure. The short - term is expected to oscillate [18][19] Industrial Silicon and Polysilicon - Industrial silicon and polysilicon prices rose. Pay attention to the policy implementation and the opportunity of shorting SI and longing PS [20] Lithium Carbonate - The lithium carbonate futures rose, and the spot price fell. The supply is expected to increase slightly, and the demand is expected to increase. The short - term focus is on production uncertainties [21] Energy and Chemicals Crude Oil - Crude oil prices fell. The market is affected by sanctions and price adjustments. The price is under upward pressure and is expected to oscillate weakly [23] Fuel Oil - Fuel oil prices rose slightly. The supply is sufficient, and the demand may weaken. The short - term is expected to oscillate weakly [24] Asphalt - Asphalt prices rose slightly. The inventory decreased, and the demand is expected to improve. The short - term is expected to oscillate [25][26] Rubber - Rubber prices showed different trends. The supply is increasing, and the demand is stable. The short - term is expected to oscillate widely [27] PX, PTA, and MEG - PX, PTA, and MEG prices rose. The cost is under pressure, and the demand has resilience. The short - term price trends vary [28][29] Methanol - Methanol prices are expected to oscillate. The inventory is expected to accumulate, but the increase is not significant [30] Polyolefins - Polyolefin prices are affected by supply and demand and cost. The short - term upward space is limited [31] Polyvinyl Chloride - PVC prices showed different trends. The fundamentals improved slightly. The short - term is expected to oscillate weakly [32][33] Urea - Urea prices strengthened. The supply increased, and the demand slowed down. The short - term is expected to oscillate weakly [34] Soda Ash - Soda ash prices showed different trends. The supply and demand are stable. The short - term is expected to oscillate widely [35] Glass - Glass prices were weak. The supply was stable, and the demand declined. The short - term is expected to oscillate widely [36][37] Agricultural Products Protein Meal - CBOT soybeans fell, while domestic protein meal prices rose. The supply is sufficient, and the inventory is expected to peak. The strategy is to go long on soybean meal and participate in positive spreads [39] Oils - BMD palm oil fell, while domestic oils were strong. The supply and demand data will be released, and the strategy is to go long and sell put options [40] Live Pigs - Live pig futures rose, and the spot price fell. The supply pressure and policy support coexist. The short - term is expected to oscillate [41][42] Eggs - Egg futures rose, and the spot price fell. The short - term fundamentals are bearish, but there is a possibility of seasonal rebound [43] Corn - Corn futures rebounded, and the spot price was weak. The short - term is expected to face resistance, and the medium - term is expected to be weak [44] Soft Commodities Sugar - The domestic sugar sales data is good, but the spot price is down. The external market is weak. The domestic market is expected to be weak [46] Cotton - ICE cotton fell, while domestic cotton rose slightly. The international market focuses on macro factors, and the domestic market is supported by inventory. The 01 contract is expected to be stable in the short - term and strong in the long - term [47]

Group 1 - The U.S. stock market indices collectively rose, recovering losses from the previous week, with the Nasdaq China Golden Dragon Index up by 1.33% [1] - The expectation of interest rate cuts by the Federal Reserve has led to a positive sentiment in the market, overshadowing concerns from the non-farm payroll report [2] - Federal Reserve Chair Mary Daly indicated that the timing for rate cuts is approaching, suggesting that two 25 basis point cuts within the year are appropriate [1][2] Group 2 - The Federal Reserve's rate cut is expected to trigger a series of economic reactions, increasing the money supply and lowering borrowing costs for businesses and consumers, thereby stimulating economic activity [3] - As U.S. interest rates decline, global investors are likely to seek more attractive investment opportunities, with Chinese assets becoming increasingly appealing due to China's economic stability and growth potential [4] - The influx of capital into the Chinese market is anticipated to positively impact the stock market, driving up stock prices and improving earnings expectations for Chinese companies [5] Group 3 - The technology sector is expected to attract significant investment as funds flow into high-growth companies, enhancing their competitive edge and profitability [6] - In the foreign exchange market, a weaker dollar due to rate cuts may lead to an appreciation of the Chinese yuan, benefiting import costs and attracting foreign investment [6] - Recent reports suggest that the Hong Kong stock market may enter a consolidation phase but is expected to rebound due to improving economic conditions and ongoing capital inflows [7]

Group 1 - A currency power struggle is unfolding in the global economic landscape, triggered by significant policy changes and data anomalies [3] - The U.S. labor statistics report for July revealed only 73,000 new non-farm jobs, far below the expected 110,000, with previous months' data revised down by a total of 258,000 jobs, marking the largest adjustment since the pandemic began [3][5] - Following the disappointing employment report, the U.S. stock market experienced a sharp decline, with the Dow Jones Industrial Average dropping 542 points and the Nasdaq Composite Index falling by 2.24% [3] Group 2 - The San Francisco Fed President's dovish comments on potential interest rate cuts led to a significant market rebound, with the Nasdaq index rising nearly 2% on the same day [5] - Trump's political maneuvering, including the dismissal of the labor statistics bureau head, has raised concerns about the politicization of economic data, which could undermine global economic governance [8][10] - The offshore RMB exchange rate rose for four consecutive days, reaching a 10-month high, as traders began betting on a depreciation of the U.S. dollar following the Fed's signals [8] Group 3 - China's actual foreign investment usage grew by 11.3% year-on-year in Q1 2025, with 47% directed towards high-tech manufacturing, indicating a strategic shift in investment focus [8] - The depreciation of the RMB has reduced import costs but has also compressed profit margins for small and medium-sized export enterprises in China by 2-3 percentage points [8] - China is attempting to reduce reliance on the U.S. dollar through initiatives such as the digital RMB pilot covering 70 countries and increasing the share of local currency settlements with ASEAN countries to 32% [10]

Market Overview - The Shanghai Composite Index has returned to 3600 points, with nearly 4000 stocks rising, indicating a potential bull market [1] - Investor sentiment remains cautious, with questions about whether the market is truly accelerating [1] Retail Investor Focus - The strong market performance is attributed to the Federal Reserve's dovish stance, suggesting two interest rate cuts this year, which could prevent a bubble burst in the U.S. stock market [3] - The People's Bank of China has also acted to strengthen the RMB, which is expected to boost the stock market [4] Institutional Behavior - Despite nearly 4000 stocks rising, only about 3000 stocks are driven by bullish sentiment, indicating a predominance of short-term trading funds rather than long-term investments [8] - The current market environment shows a decrease in institutional trading activity, as many institutions are now in a "lock-up" phase, leading to a higher number of stocks in this category [12] Data Insights - The market's current activity level may mislead investors into thinking it is a strong bull market, but caution is advised as many funds are entering and exiting quickly [16] - The distinction between a temporary pullback and a market top can be made by observing institutional behavior, with a focus on data rather than emotional reactions [19]

Core Viewpoint - The A-share market has rebounded strongly above 3600 points, driven by interest rate cut expectations, support from heavyweight stocks, and the appreciation of the RMB [1][2]. Market Performance - The Shanghai Composite Index closed at 3617 points, up 0.96%, while the Shenzhen Component and ChiNext Index rose by 0.59% and 0.39% respectively. The total trading volume reached 1.5961 trillion, an increase of 97.5 billion from the previous trading day [1]. Key Drivers - **Interest Rate Cut Expectations**: The market anticipates a 90% probability of a rate cut announcement by the Federal Reserve in September, following weaker-than-expected non-farm payroll numbers. Fed official Daly indicated that the timing for rate cuts is approaching, with a cumulative cut of 50 basis points expected this year if labor market weakness persists [1][2]. - **Support from Banking Stocks**: The surge in banking stocks was crucial for the index's breakthrough above 3600 points, providing essential support to the market [1][2]. - **RMB Appreciation**: The RMB strengthened from 7.21 to 7.186 against the USD, while the USD index fell from 100.25 to 98.9, contributing to foreign capital inflow into A-shares [1][2]. Sector Highlights - **PEEK Materials**: PEEK materials have seen significant gains, driven by the trend towards lightweight humanoid robots, with a projected market expansion as production ramps up in 2025 [3]. - **Military Industry**: The military sector is experiencing a recovery, with expectations for continued order announcements and growth in commercial aerospace and low-altitude economy sectors [4]. - **Photolithography Equipment**: The semiconductor equipment market is projected to reach $125.5 billion in sales by 2025, with strong support from national policies and increasing demand for domestic photolithography technology [5]. - **Banking Sector**: The banking sector has shown resilience, with some stocks reaching historical highs. Factors contributing to this include supportive government policies, attractive valuations compared to other sectors, and expectations for continued monetary easing [6][7].

Group 1 - The strong export performance in China has led to a significant trade surplus, but the actual and nominal exchange rates of the RMB are declining, influenced by global uncertainties and geopolitical conflicts [1] - The future outlook suggests a notable depreciation of the US dollar over the next 5 to 10 years, with a marginal decline in its status as a global reserve currency [1] - The undervaluation of the RMB's actual exchange rate is primarily due to insufficient demand, with recommended policy tools including counter-cyclical measures such as lowering policy interest rates and expanding public fiscal spending [1] Group 2 - The RMB is under upward pressure rather than downward pressure, supported by China's strong manufacturing capabilities and better pricing power in exports [2] - The strong fiscal net asset position, current low interest rates, and scarcity of overseas RMB assets create unprecedented opportunities for the internationalization of the RMB [2]

Investment Rating - The report maintains an "Overweight" rating for the real estate development sector and an "Overweight" rating for real estate services [1][6]. Core Insights - The Hong Kong private residential market experienced a rise in both transaction volume and prices in June, with private residential prices increasing for three consecutive months [1][2]. - The report highlights that the market is expected to improve due to factors such as potential appreciation of the Renminbi, spillover effects from the Hong Kong stock market, and a rebound in population [1][2]. - The report suggests that the local developers and commercial operators in Hong Kong are likely to see valuation recovery, particularly companies with ample land reserves and quality commercial assets along the MTR lines [1][6]. Summary by Sections Market Performance - In June, the number of new private residential transactions reached 2,140, up 28% month-on-month, while second-hand transactions totaled 3,605, up 11% month-on-month [1]. - For the first half of the year, new private residential transactions totaled 9,280, down 1.4% year-on-year, while second-hand transactions increased by 8.3% year-on-year to 18,452 [1][2]. Price Trends - The Hong Kong private residential price index stood at 286.7 in June, reflecting a month-on-month increase of 0.03%, marking three consecutive months of price increases [2]. - Rental prices also showed an upward trend, with the rental index rising by 0.31% month-on-month in June, continuing a seven-month streak of increases [2]. Interest Rates and Market Conditions - The one-month HIBOR averaged 0.68% in June, down 78 basis points from May, indicating a significant easing of the high-interest rate pressure that previously suppressed market demand [3]. - The report notes that the "supply exceeds demand" phenomenon continues, creating favorable conditions for first-time homebuyers [3]. Recommendations - The report recommends focusing on MTR Corporation (66 HK) and Link REIT (823 HK), with target prices of HKD 31.90 and HKD 50.59 respectively, both rated as "Overweight" and "Buy" [6][18].

Summary of Key Points from Conference Call Records Industry or Company Involved - The discussion primarily revolves around the Chinese stock market, specifically the Shanghai Composite Index and various sectors within it. Core Insights and Arguments 1. **Market Trend Analysis**: The current market shows a bullish divergence in moving averages, indicating stability for at least six months, with historical data suggesting support near the 60-day moving average during pullbacks [1][4][6]. 2. **Investment Strategy**: Investors are advised to maintain a balanced portfolio, focusing on low-volatility and stable sectors, while being optimistic about future market trends [1][7]. 3. **Currency Impact**: The appreciation of the RMB against the USD is seen as a positive factor for the A-share market, likely boosting investor confidence and market performance [1][13][21]. 4. **Sector Performance**: Cyclical sectors like coal and steel have shown strong performance due to favorable policies, but this is viewed as an initial rebound rather than a sustained upward trend [1][14][16]. 5. **Market Dynamics**: Recent market movements have been characterized by structural features and rapid rotation among sectors, suggesting equal opportunities across various segments [1][8][9]. Other Important but Possibly Overlooked Content 1. **Historical Context**: Past instances of similar bullish patterns have led to stable market performance, with significant resistance levels identified around 3,750 to 3,900 points for the Shanghai Composite Index [2][22][23]. 2. **Short-term Support Levels**: The 20-day moving average is highlighted as a critical support level, with further attention on the 60-day moving average if the former is breached [7][25]. 3. **Banking Sector Outlook**: Recent declines in bank stocks are attributed to internal adjustments and a shift in investor preference towards more flexible sectors, although the long-term outlook for banks remains positive [18]. 4. **Investment Style**: The current favorable investment style is identified as large-cap growth, particularly in consumer and technology sectors, which are closely linked to broader market indices [30]. 5. **Sector Valuation**: The highest value sectors currently include battery materials, non-ferrous metals, steel, pharmaceuticals, and construction, indicating potential investment opportunities [31]. This summary encapsulates the essential insights and recommendations from the conference call, providing a comprehensive overview of the current market landscape and strategic investment considerations.

Group 1 - The tax imposed is not directly on countries like the EU, Japan, or China, but rather on American consumers, which could negatively impact political support if framed as a direct tax increase on consumers [1] - The purpose of the tax is to address fiscal shortfalls and the expanding U.S. debt gap, while being presented as a means to support American manufacturing and strengthen the country [3] - The imposition of tariffs is expected to lead to increased consumer prices and inflation in the U.S., as consumers will face higher costs for goods [3] Group 2 - Japan has negotiated a 15% tariff rate, which is seen as a favorable outcome compared to the initially threatened 25%-27.5% rate, and this has led to a lack of significant pushback from Japan [3] - South Korea is also expected to negotiate down to a 15% tariff rate, similar to Japan [4] - The U.S.-China temporary tariff situation includes a base rate of 10% with additional rates for specific goods, leading to comprehensive rates that can reach up to 245% for electric vehicles [4][5] Group 3 - Certain technology products, such as semiconductors, are exempt from tariffs, indicating a strategic approach to protect key industries [5] - The overall tariff burden on China is higher than that on the EU and Japan, which may not adversely affect the latter's exports to the U.S. and could even provide them with competitive advantages [5][6] - There is speculation that China may devalue its currency to counteract the impact of U.S. tariffs, although an argument is made that the yuan should appreciate to increase costs for U.S. consumers and contribute to inflation [7]

Group 1 - The core viewpoint is that the Hong Kong stock market is expected to have a strong start in the first half of 2025, driven by AI technology revaluation and supported by sectors such as new consumption, innovative pharmaceuticals, and non-bank financials [1] - Financial and technology sectors are the most favored by the market, with southbound funds focusing on financials, particularly banks, and diversifying into information technology and communication services [1] - Foreign investment preferences lean towards financials, discretionary consumption, and information technology, indicating a structural bull market resilience in the second half of the year [1] Group 2 - The appreciation of the RMB and continuous inflow of southbound funds are crucial supports for the market, with the financial sector being attractive to insurance capital due to its low volatility and high dividend characteristics [1] - The technology growth sector benefits from reduced financing costs, suggesting a favorable environment for growth [1] - Long-term, Hong Kong stocks are seen as core assets in RMB, with significant potential for narrowing the "country risk premium" and increasing domestic pricing power, which will amplify revaluation heights [1] Group 3 - The Hong Kong Stock Connect 50 ETF (159712) tracks the Hong Kong Stock Connect 50 Index (930931), which consists of 50 large companies listed in Hong Kong that meet Stock Connect eligibility, reflecting the performance of quality Hong Kong stocks available for investment through the Stock Connect mechanism [1] - The index covers multiple industries, focusing on key areas such as finance, information technology, and consumption, demonstrating strong market representation and liquidity [1] - Investors without stock accounts can consider the Cathay CSI Hong Kong Stock Connect 50 ETF Initiated Link A (014689) and Link C (014690) [1]