Key Insights - The report highlights a selection of stocks for August, including companies like SF Holding, Satellite Chemical, and Anji Technology, indicating potential investment opportunities in these firms [1] - The report emphasizes the steady growth of Tongcheng Travel, with Q2 2025 revenue reaching 4.669 billion yuan, a year-on-year increase of 10.0%, and an adjusted net profit of 775 million yuan, up 18.0% [3][8] - Nanya Technology's performance in Q2 2025 shows significant growth, with revenue of 2.305 billion yuan, a year-on-year increase of 43.06%, and a net profit of 87 million yuan, up 57.69% [13][14] - East China Pharmaceutical's revenue for the first half of 2025 was 21.675 billion yuan, a 3.39% increase year-on-year, with a net profit of 1.815 billion yuan, up 7.01% [18][19] Industry Performance - The report provides an overview of industry performance, with the telecommunications sector leading with a 4.85% increase, followed by non-ferrous metals at 4.63% and real estate at 3.32% [4] - The Shanghai Composite Index closed at 3883.56, reflecting a 1.51% increase, while the Shenzhen Component Index rose by 2.26% to 12441.07 [4] Company-Specific Highlights - Tongcheng Travel's core OTA business showed robust growth, with Q2 2025 OTA revenue reaching 4.01 billion yuan, a 13.7% increase year-on-year [9] - Nanya Technology's high-end product demand is driven by AI applications, with significant growth in high-end copper-clad laminate sales [15][16] - East China Pharmaceutical's innovative products are entering a harvest phase, with a notable increase in revenue from innovative products, reaching 1.084 billion yuan, a 59% year-on-year growth [20][21]

Report Industry Investment Rating - The report does not provide an investment rating for the industry [1][3][10][14][22][39][49][83] Core Viewpoints - The determination of the interest rate term structure is the result of the combined effects of liquidity preference, rational expectations, and term preference. The current flat state of China's interest rate term structure has rationality and inertia, but it is difficult to further flatten, and a slow steepening may occur in the next stage [3][13][83] - The general change rule of the interest rate term structure in the US and Japan conforms to the rational expectations theory, with the main change patterns being "bull steepening" or "bear flattening." However, under some special conditions, the term preference theory also has certain explanatory power. When the short - end yield "hits bottom," the change in the curve shape is also special, mainly dominated by the long - end yield [3][21][83] - Since the end of 2024, China's interest rate term structure has experienced a relatively rare "bull flattening," which may be related to the flattening of inflation expectations from a rational expectations perspective and the term preferences of institutional investors such as insurance and banks from a term preference perspective [3][22][83] - Currently, it is advisable to analyze the pricing of long - and short - end interest rates separately. The short - end yield depends on policy expectations, and the long - end yield depends on the real estate cycle [3][39][84] - The "anti - involution" effect will determine the amplitude of the curve steepening. There may be an interdependent cycle relationship among real estate prosperity, "anti - involution," and nominal economic growth, and the conditions for curve steepening are accumulating [3][52][84] Summary by Directory 1. Interest Rate Term Structure Theory Overview - The theoretical hypotheses about the interest rate term structure mainly include the liquidity preference theory, rational expectations theory, market segmentation theory, and term preference theory. The liquidity preference theory can explain why the yield curve slopes upward to the right under normal conditions, the rational expectations theory can explain the common change patterns of the yield curve, the market segmentation theory can explain various yield curve shapes, and the term preference theory combines the rational expectations theory and the market segmentation theory [10][11][12] 2. Historical Experience of Interest Rate Term Structures in the US and Japan - The historical experience of the US Treasury yield curve change basically conforms to the theoretical predictions, mainly switching between "bull steepening" and "bear flattening." Special phenomena include the "Greenspan Conundrum" and the "zero - interest - rate" stage from 2009 - 2015. The Japanese Treasury yield curve also had a long - term low short - end yield stage, and the long - end yield dominated the curve shape [14][17][18] 3. Changes in China's Interest Rate Term Structure 3.1 Recent Changes in China's Interest Rate Term Structure - Since the end of 2024, China's Treasury yield curve has experienced a rare "bull flattening," which may be related to the flattening of long - term inflation expectations and the term preferences of institutional investors [22][25] 3.2 China's Interest Rate Term Structure from a Rational Expectations Perspective - China's current economic growth is stronger than that of the US and Japan during their "zero - interest - rate" periods, so the short - term interest rate floor is higher. The long - end yield may be affected by the flattening of inflation expectations [26][27] 3.3 China's Interest Rate Term Structure from a Term Preference Perspective - The flattening of China's interest rate term structure is related to the term preferences of institutional investors such as insurance and banks. Insurance institutions' increasing bond - holding share and commercial banks' preference for long - term bonds due to factors like net interest margin and mortgage rates have contributed to this [31][33][34] 4. Analysis of China's Interest Rate Term Structure Change Patterns - Currently, it is recommended to analyze the pricing of long - and short - end yields separately. The short - end yield depends on policy expectations, and the long - end yield depends on the real estate cycle [39][41][45] 5. "Anti - Involution" and Interest Rate Term Structure 5.1 Prospects for Changes in China's Interest Rate Term Structure - It is difficult for China's interest rate term structure to further flatten. The bank system may lack the willingness to further lower long - end yields. The term structure's trend towards "bull steepening" or "bear steepening" requires fundamental conditions [49][50][51] 5.2 "Anti - Involution" and Interest Rate Term Structure Steepening - As of July 2025, China's PPI has been declining year - on - year for 34 months, and the CPI has stabilized. "Anti - involution" drives price adjustment expectations, but the realization of these expectations requires a suitable liquidity environment. The effect of "anti - involution" may be closely related to foreign trade and the real estate sector [52][54][59] 5.3 Nominal Economic Growth, "Anti - Involution," and Real Estate Prosperity - There may be an interdependent cycle relationship among real estate prosperity, "anti - involution," and nominal economic growth. The conditions for curve steepening are accumulating, including improved monetary activity, the stabilization of real estate prosperity, and the reduced need for further interest rate cuts in the short term [72][74][76] 6. Conclusion and Outlook - The determination of the interest rate term structure is the result of the combined effects of liquidity preference, rational expectations, and term preference. The current flat state of China's interest rate term structure has rationality and inertia, but it is difficult to further flatten, and a slow steepening may occur in the next stage [83][84][85]

Core Insights - The course on fixed income begins with foundational knowledge of bonds and gradually leads students to understand the global bond market, types of market participants, and the issuance, circulation, and classification of bonds, providing a direct understanding of bond investments [1] - The course emphasizes the integration of fixed income and derivatives, covering pricing methods and advanced trading strategies to manage yield curve fluctuations, including the use of interest rate futures, options, swaps, and swap options [1] Faculty Expertise - Professor Zhang Zhou, a guest professor at the University of Alberta and a full professor at the Hill School of Business, University of Regina, specializes in corporate capital structure, financing methods, internal controls, and corporate governance [2] - Professor Li Qian, a management PhD and professor at Xi'an Jiaotong University, focuses on behavioral finance, portfolio management, and risk management, with numerous publications and research projects [3] Course Structure - The course builds a progressive knowledge system centered on "fixed income securities," aligning theoretical depth with practical case studies, akin to the "duration matching" principle in bond valuation [3] - The course solidifies basic concepts such as coupon rates and yield to maturity, using real-world examples like Evergrande Group's dollar bond issuance to illustrate credit risk and market dynamics [4] Risk Analysis Framework - The combination of duration and convexity is a key highlight of the course, linking quantitative financial thinking from the University of Alberta with local case studies from Xi'an Jiaotong University to create a comprehensive risk analysis framework [6] - The course addresses the "parallel shift" and "steepening" of the interest rate term structure, explaining bond yield changes through theories like expectations theory and liquidity premium theory, reflecting the integration of North American financial models with Chinese market practices [6] Investment Strategies - The total return strategy emphasizes the synergy of interest income, reinvestment returns, and capital appreciation, aligning with the international perspective of the program [7] - The course provides methodologies for handling complex issues through liability-driven immunization strategies, such as cash flow matching and duration matching, which are crucial for asset-liability dynamic balance [6]