Economic Performance - China's economy has shown better-than-expected performance in the second quarter despite significant external pressures, with a GDP growth rate of 5.3% year-on-year [2] - The retail sales of consumer goods reached 24.55 trillion yuan, with consumption contributing 52% to economic growth, highlighting consumption as a key driver [2] Macroeconomic Policy - Several foreign financial institutions have raised their growth forecasts for China, citing the consistency and foresight of macroeconomic policies as a key reason [3] - The political bureau meeting emphasized maintaining policy continuity and stability while enhancing flexibility and foresight, with a focus on effective implementation of fiscal and monetary policies [3] - The meeting outlined plans to stimulate domestic demand, improve consumption, and boost effective investment, particularly in service consumption and private investment [3] Market Competition - The Chinese government is focusing on addressing "involution" in competition, aiming to optimize market competition order and regulate disorderly competition among enterprises [4] - Recent measures include revising pricing laws and addressing issues related to subsidy wars in various sectors, expanding the focus from previously highlighted industries to include e-commerce and food delivery platforms [4] - The government aims to use legal means to curb excessive price competition and promote a healthier competitive environment [5]

Investment Rating - The investment rating for the electric equipment and new energy industry is "Outperform the Market" (maintained) [4][12] Core Viewpoints - The draft amendment to the Price Law aims to clarify standards for identifying unfair pricing behaviors, regulate market pricing order, and alleviate "involution" competition [4][6][7] - The amendment is expected to ease competition in industries such as polysilicon, lithium battery anode and cathode materials, wind power equipment, and energy storage, promoting price stability and improving profitability for related companies [4][7] Summary by Sections Price Law Amendment - The draft amendment includes ten articles focusing on three main areas: 1. Improvement of government pricing content, including the clarification of government-guided pricing mechanisms and the importance of cost monitoring in price setting [6][7] 2. Clarification of standards for identifying unfair pricing behaviors, including low-price dumping, price collusion, and price discrimination [6][7] 3. Establishment of legal responsibilities for pricing violations, including increased penalties for non-compliance with pricing regulations [7] Investment Recommendations - Companies to watch include: - Xinte Energy - GCL-Poly Energy - Wind Power Technology - Sungrow Power Supply - Wanrun New Energy [4][7] Profit Forecasts for Related Companies - Profit forecasts for selected companies indicate varying performance: - Xinte Energy: Expected net profit of -3.9 billion RMB in 2024 - GCL-Poly Energy: Expected net profit of -4.75 billion RMB in 2024 - Wind Power Technology: Expected net profit of 1.86 billion RMB in 2024 - Sungrow Power Supply: Expected net profit of 11.04 billion RMB in 2024 - Wanrun New Energy: Expected net profit of -870 million RMB in 2024 [9]

Group 1: Inflation Data Overview - In June, the Consumer Price Index (CPI) increased by 0.1% year-on-year, marking a shift from a decline to an increase, which aligns with market expectations[2] - The core CPI rose by 0.7% year-on-year, the highest since May 2024, indicating a 0.1 percentage point increase from the previous month[2] - The Producer Price Index (PPI) saw a year-on-year decline of 3.6%, the largest drop since August 2023, reflecting weakened domestic demand and overcapacity in certain industries[6] Group 2: Price Movements and Influences - Industrial consumer goods prices rebounded, significantly contributing to the CPI increase, with fuel prices declining by 10.8% year-on-year, a reduction of 2.1 percentage points[6] - Gold and platinum jewelry prices surged by 39.2% and 15.9% respectively, contributing approximately 0.21 percentage points to the CPI increase[6] - The PPI's year-on-year decline was exacerbated by significant drops in coal, steel, and cement prices, with coal prices falling by 21.8%[6] Group 3: Future Outlook and Policy Recommendations - The outlook for pork prices suggests they will remain stable, while energy prices may face downward pressure due to geopolitical risks[2] - The Central Financial Committee's focus on addressing "involution" in competition may help stabilize prices in various sectors, emphasizing the importance of demand-side policies alongside supply-side optimization[2] - To promote a recovery in consumer prices, both supply and demand sides must work together, with a focus on enhancing employment and social security to boost household income[6]