1. Report Industry Investment Ratings No information about the report industry investment ratings is provided in the content 2. Core Views of the Report - The anti - involution narrative in the non - ferrous metal sector has ebbed, leading to a decline after the sector's prices reached a high. The copper price is expected to stabilize and rise due to ongoing disturbances in the copper mine sector and positive signals of inflation recovery and economic stabilization in China. Zinc prices are expected to fluctuate within a range, with the domestic surplus expectation gradually emerging. Nickel and stainless - steel prices are expected to remain in high - level oscillations, with significant uncertainties in Indonesian policies [9][93][201] 3. Summary by Relevant Catalogs 3.1 Non - ferrous Metal Price Monitoring - The closing price monitoring shows various trends in different non - ferrous metals. For example, the US dollar index is at 99.1 with a daily increase of 0.28%, a weekly increase of 0.69%, and an annual increase of 0.88%. Industrial silicon is at 8,715 yuan/ton with a daily increase of 2.11%, a weekly decrease of 1.64%, and an annual decrease of 1.64%. Carbonate lithium is at 143,420 yuan/ton with a daily decrease of 1.09%, a weekly increase of 17.96%, and an annual increase of 17.96% [7] 3.2 Copper (CU) - **Influencing Factors**: Macro factors are bullish as China's December CPI and PPI both turned positive, and the US December employment data was mixed, increasing market expectations of a Fed rate cut. The raw material end is bullish with a tight copper mine supply. The smelting end is neutral with changes in smelting plant profits. The demand end is bearish as high copper prices pressure downstream industries. The inventory end is bearish with an increase in global visible copper inventory [9] - **Investment View**: Bullish. The copper price may stabilize and rebound due to ongoing disturbances in the copper mine sector and positive domestic economic signals [9] - **Trading Strategy**: Go long on dips for single - side trading, and there is no arbitrage opportunity currently [9] 3.3 Zinc (ZN) - **Influencing Factors**: Macro factors are slightly bullish with positive market sentiment. The raw material end is neutral with a stable cost center and limited upside for processing fees. The smelting end is neutral with an expected increase in supply in January and possible shutdowns in February. The demand end is bearish with a slow recovery in galvanizing and a seasonal off - peak. The inventory end is bearish with an increase in domestic social inventory and a slow - down in the increase of LME inventory [93] - **Investment View**: Zinc prices are expected to fluctuate within a range, with the domestic surplus expectation gradually emerging [93] - **Trading Strategy**: Single - side trading should be based on the oscillating trend, and an internal - external positive arbitrage can be considered [93] 3.4 Nickel - Stainless Steel (NI·SS) - **Influencing Factors**: Macro factors are slightly bullish with expectations of a Fed rate cut and positive domestic economic data. The raw material end is slightly bullish with potential supply policy uncertainties in Indonesia and a seasonal decline in nickel ore imports from the Philippines. The smelting end is neutral with changes in production and profit. The demand end is neutral with an increase in stainless - steel production scheduling and a weakening demand for nickel sulfate in the new - energy sector. The inventory end is slightly bearish with an increase in LME nickel inventory [201] - **Investment View**: Nickel and stainless - steel prices are expected to remain in high - level oscillations, with significant uncertainties in Indonesian policies [201] - **Trading Strategy**: For short - term single - side trading, the price range should be considered, and chasing high prices is not recommended. There is no arbitrage opportunity currently [201]

Group 1 - The core viewpoint is that the A-share market may see a turning point in ROE in the fourth quarter of this year, with optimism about the transition from liquidity-driven to fundamentally driven market dynamics [2][3] - The current market situation is characterized by a balance between fundamental and liquidity drivers, with a recommendation to maintain some cash reserves to manage potential future volatility [3] - The investment focus may shift from the AI sector to traditional manufacturing as the outlook for manufacturing improves with the anticipated interest rate cuts by the Federal Reserve [6][7] Group 2 - The stability of the market is currently supported by policy measures, with three underlying logics remaining intact: the importance of policy in stabilizing the capital market, advancements in technology, and the ongoing narrative against "involution" [4][5] - The white liquor sector is seen to have a solid foundation for continued recovery, with market participants already aware of the short-term performance pressures on companies in this sector [8][9]

Group 1 - The market is expected to continue its upward trend, supported by strong resilience and a rebound after a brief adjustment [1] - The AI computing sector remains a focal point for investment, particularly following Nvidia's earnings report [1] - Current market stability is underpinned by supportive policies, technological advancements, and ongoing narratives against internal competition [2] Group 2 - The pharmaceutical industry is witnessing significant changes due to AI applications, with a notable increase in efficiency and innovation [3] - Major pharmaceutical companies are actively engaging in AI strategies, indicating a robust pipeline and forward-looking investments [3] - The return on investment in innovative research and development is accelerating, driven by advancements in technology [3]

Group 1 - The underlying logic of the current market rally remains intact, with three key points not being disproven: the importance of policy in stabilizing the capital market, advancements in technology, and the ongoing narrative against "involution" which suggests potential for market growth [1] - The stability of the market is currently supported by policy measures, which need to be corroborated by net inflow indicators of stock ETFs [1]

Summary of Conference Call Notes Industry or Company Involved - The notes primarily focus on the A-share market and investment strategies related to various sectors within the Chinese stock market. Core Points and Arguments 1. **Source of Recent Incremental Funds** - Institutional funds have shown widespread net inflows, with a notable increase in private equity registration exceeding 300 billion yuan in June, a year-on-year increase of 125% [3][17]. - As of July 18, 2025, the sample active private equity positions reached 82%, indicating a strong market sentiment [3][19]. - Northbound funds recorded a net inflow of 60 billion yuan in Q2, continuing for two consecutive quarters [3][27]. 2. **Retail Investor Participation** - Retail investor inflows have accelerated, with trading loss indicators reaching the 88.1 percentile, the highest since 2015 [4][30]. - The cumulative profit effect for investors has reached 276.3 billion yuan this year, indicating a more stable market environment compared to previous surges [4][30]. - Margin financing has also increased steadily, reaching 1.9283 trillion yuan by July 25, 2025 [4][30]. 3. **Market Dynamics and Adjustments** - The market is experiencing a "water buffalo" characteristic, where fundamental and liquidity conditions are temporarily misaligned, typically lasting no more than four months [8]. - The current market sentiment is not overly exuberant, with indicators suggesting room for further policy-driven improvements [8]. 4. **Investment Opportunities in Low-Valuation Sectors** - There are opportunities in low-valuation cyclical manufacturing sectors, particularly in construction materials, basic chemicals, and logistics [8]. - Specific sectors such as polyurethane, LED, and semiconductor precursors are highlighted as potential beneficiaries of the "anti-involution" narrative [8]. 5. **Potential for Technology Sector Recovery** - The upcoming 2025 World Artificial Intelligence Conference is expected to catalyze growth in various sub-sectors, particularly in the technology board, which has underperformed since April [8]. - The "1+6" policy and financial support for technology-related sectors are anticipated to drive a rebound in the technology board [8]. 6. **Strategic Recommendations Post-3600 Points Breakthrough** - The strategy includes increasing allocations to technology and innovation sectors, with a focus on non-ferrous metals, communications, innovative pharmaceuticals, military, and gaming industries [8]. - Investors are advised to maintain stability in holdings and avoid frequent trading amid macroeconomic fluctuations [8]. Other Important but Possibly Overlooked Content 1. **Risk Factors** - Potential risks include escalating tensions in technology, trade, and finance between China and the U.S., as well as domestic policy effectiveness and economic recovery falling short of expectations [9]. - The ongoing geopolitical conflicts and real estate inventory issues may also pose risks to market stability [9]. 2. **Market Sentiment Indicators** - Current sentiment indicators show that the market is not in a state of extreme enthusiasm, suggesting that there is still potential for growth without the risk of overheating [8]. - The search interest in the stock market is at a relatively low level compared to previous peaks, indicating a cautious approach among investors [8]. This summary encapsulates the key insights and strategic recommendations from the conference call, providing a comprehensive overview of the current market dynamics and investment opportunities within the A-share market.

Market Performance - The A-share market experienced a strong upward trend, with the ChiNext Index leading the gains [1] - As of the close, the Shanghai Composite Index rose by 0.33% to 3609.71 points, the Shenzhen Component Index increased by 0.64% to 11289.41 points, and the ChiNext Index surged by 1.86% to 2406.59 points [1] - Both the Shenzhen Component Index and the ChiNext Index reached new highs since November 2024 [1] - The total trading volume in the Shanghai and Shenzhen markets was 18031.71 billion [1] Sector Performance - The CRO, steel, CPO, and advanced packaging sectors showed the highest gains, while insurance, pork, banking, and agriculture sectors faced the largest declines [1] - Pharmaceutical stocks saw a collective surge, particularly in the CRO and innovative drug sectors, with companies like Chenxin Pharmaceutical (603367) hitting the daily limit [1] - CPO and other computing hardware stocks experienced strong fluctuations, with companies like Zhongji Xuchuang (300308) reaching historical highs [1] - Super water power concept stocks rebounded in the afternoon, with Tibet Tianlu (600326) hitting the daily limit [1] Market Outlook - Dongfang Securities believes that the market is in a structurally bullish atmosphere, which is expected to continue [1] - The recent market trend shows a dominant bullish sentiment, with increasing capital inflow as the profit-making effect accumulates in hot sectors [1] - In addition to the broad technology sector, the narrative against "involution" is strengthening, and traditional cyclical industries are also facing a rebound from the bottom [1] - The prevailing investment thinking remains focused on industrial narratives, with short-term rotations expected in sectors such as non-ferrous metals, communications, innovative drugs, military industry, and gaming [1]

Group 1 - The market sentiment is becoming more optimistic, with A-shares showing a five-week consecutive rise in weekly K-line performance, indicating a growing profit effect for investors [1] - Institutional funds have seen widespread net inflows, with public mutual funds exceeding estimated net redemptions in June, and private equity registrations surpassing 30 billion yuan, a 125% year-on-year increase [2] - Retail investors are also increasing their participation, with margin balances exceeding last year's peak, and active private equity positions remaining high at 82% [2] Group 2 - Historical data suggests that bull markets characterized by a divergence between fundamentals and liquidity typically last no more than four months, raising questions about the sustainability of the current market trend [3] - The current anti-involution narrative indicates potential investment opportunities in undervalued cyclical manufacturing sectors, particularly in construction materials, basic chemicals, steel, and transportation [4] - The upcoming World Artificial Intelligence Conference in 2025 is expected to catalyze growth in various sectors, with the STAR Market likely to experience a rebound due to supportive policies [5] Group 3 - Strategies for responding to the market surpassing 3600 points include balancing investments between Hong Kong and A-shares, with a focus on technology sectors and cyclical industries [6][7] - Investor sentiment is leaning towards a bullish outlook, with 55% of surveyed investors believing the market is in a bull phase, and a majority expecting the market to stabilize above 3600 points [9] - The technology sector remains a favored investment direction, with 46% of investors maintaining a focus on this area, while consumer sectors are also gaining attention [10]