Report Industry Investment Rating - The mid - term outlook for the black building materials sector is "oscillating bullishly" [6]. Core View of the Report - With the deepening of the traditional peak season, steel demand is expected to improve, driving the restocking demand from the bottom - up of the industrial chain. Coupled with the boost from overseas macro and domestic market sentiment, there is still room for the sector to oscillate upward before the holiday [6]. Summary by Related Catalogs 1. Overall Situation - The overall black building materials sector oscillated strongly during the day session and night session yesterday due to the approaching Fed rate cut and the introduction of domestic industry growth - stabilizing plans, which led to a resurgence of the "anti - involution" trading sentiment. The restocking logic before the National Day strengthened, benefiting furnace materials and plate products with strong demand, while building materials were still dragged down by poor demand [1][2]. 2. Iron Element - **Iron Ore**: Brazilian port maintenance impact weakened, and shipping volume returned to normal. Demand recovered to a high level, but the low inventory in factories and the need to verify the peak - season demand for rebar limited its upside. It is expected to oscillate in the short term [2]. - **Scrap Steel**: Its fundamental contradictions are not prominent. It follows the movement of finished products and is expected to maintain an oscillating trend in the short term [2]. 3. Carbon Element - **Coke**: With the approaching National Day, steel mills will start pre - holiday stockpiling. The cost support is strong due to the resurgence of the anti - involution sentiment, and the price is expected to oscillate in the short term [2]. - **Coking Coal**: After the coal mines resume production, they are expected to maintain a stable production rhythm. The mid - and downstream pre - holiday restocking has started in advance, and with the support of macro policies, the price is expected to oscillate strongly in the short term [2]. 4. Alloys - **Manganese Silicon**: In the short term, the cost and peak - season expectations support the futures price, but the long - term supply - demand outlook is pessimistic, and the price center is likely to decline [3]. - **Silicon Iron**: The stable prices of semi - coke and electricity costs support the price in the short term. However, the long - term supply - demand relationship will be looser, and the price is under downward pressure [3]. 5. Glass and Soda Ash - **Glass**: The current demand is weak, but there are peak - season and policy expectations. After the mid - stream destocking, there may be oscillations. In the long term, market - oriented capacity reduction is needed, and the price is expected to decline if it returns to fundamental trading [3]. - **Soda Ash**: The supply surplus situation remains unchanged. After the futures price decline, the spot trading volume increased slightly. It is expected to oscillate widely in the future, and the price center will decline in the long term [3]. 6. Individual Product Analysis - **Steel**: The cost support is strong, but the supply - demand situation is weak. The inventory is at a moderately high level, and the fundamental contradiction of rebar is more prominent than that of hot - rolled coils. It is recommended to consider the strategy of going long on hot - rolled coils and short on rebar [8]. - **Iron Ore**: The overseas shipping has recovered, and the port inventory has slightly decreased. The demand is at a high level, but the peak - season demand for rebar needs further verification. The price is expected to oscillate in the short term [9]. - **Scrap Steel**: The supply has slightly increased, and the demand has also increased slightly. The inventory is at a low level, and the price is expected to oscillate [10]. - **Coke**: The second round of price cuts has been implemented. The supply is still relatively loose, but the cost support is strong. The price is expected to oscillate in the short term [11]. - **Coking Coal**: The supply is relatively stable, and the downstream has started restocking. With the support of macro policies, the price is expected to oscillate strongly in the short term [11][12]. - **Glass**: The current demand is weak, but there are peak - season and policy expectations. After the mid - stream destocking, there may be oscillations. In the long term, it needs market - oriented capacity reduction, and the price is expected to decline [12]. - **Soda Ash**: The downstream restocking has driven the upstream destocking. The supply surplus situation remains unchanged. It is expected to oscillate widely in the future, and the price center will decline in the long term [15]. - **Manganese Silicon**: The cost and peak - season expectations support the price in the short term, but the long - term supply - demand outlook is pessimistic, and the price center is likely to decline [15][16]. - **Silicon Iron**: The cost supports the price in the short term, but the long - term supply - demand relationship will be looser, and the price is under downward pressure [17]. 7. Index Information - **Commodity Index**: The comprehensive index, special index (including commodity 20 index, industrial products index, PPI commodity index) all showed an upward trend on September 15, 2025 [99]. - **Plate Index**: The steel industry chain index rose by 0.87% on September 15, 2025, and the increase in the past 5 days was 1.17%, while the decrease in the past month was 0.62%, and the decrease from the beginning of the year was 3.87% [100].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company reported a revenue of 44.16 billion yuan for the first half of 2025, a year-on-year decrease of 8.4%, with a gross margin of 6.76%, an increase of 0.57 percentage points year-on-year. The net profit attributable to the parent company was 1.1 billion yuan, up 2.9% year-on-year [1]. - The company is implementing a comprehensive development strategy focusing on integration, scale, intensification, and differentiation, successfully entering the coal sector with a coal mine resource of 500 million tons in the Turpan region [3]. - The company is expected to benefit from the upcoming domestic unified market policy, which is anticipated to enhance industry concentration and improve pricing power for leading enterprises [3]. Financial Summary - The company’s revenue for 2023 is projected at 82.64 billion yuan, with a growth rate of 33.30%. The net profit attributable to the parent company is expected to reach 797 million yuan, reflecting a significant increase of 539.10% [5][14]. - The projected net profit for 2025-2027 is 1.982 billion yuan, 3.015 billion yuan, and 3.704 billion yuan, respectively, with corresponding price-to-earnings ratios of 18X, 12X, and 9X [4][14]. - The company’s gross margin is expected to improve from 4.6% in 2024 to 7.9% in 2027, indicating a positive trend in profitability [14].

Core Viewpoint - The economic performance in July 2025 demonstrates resilience and vitality despite external pressures and adverse weather conditions, with steady growth in production, consumption, and investment, alongside stable employment and prices [7][10][20]. Economic Performance Overview - The industrial output in July showed a year-on-year increase of 5.7%, with the equipment manufacturing sector growing by 8.4%, indicating strong industrial growth [7][51]. - The service sector also performed well, with a production index growth of 5.8% in July, driven by increased tourism and related services [7][15]. - Social retail sales increased by 3.7% year-on-year in July, with a notable 4% growth in goods retail [8][14]. - Fixed asset investment grew by 1.6% from January to July, with significant contributions from equipment updates and manufacturing investments [8][45]. Trade and Employment - The total import and export volume increased by 6.7% year-on-year in July, reflecting the resilience of foreign trade despite a complex international environment [8][31]. - The urban unemployment rate remained stable at 5.2%, indicating a steady employment situation [9][20]. New Growth Drivers - High-tech manufacturing saw a 9.3% increase in output, with significant growth in sectors like integrated circuits and new energy vehicles [10][38]. - The digital economy is rapidly developing, with a 8.4% increase in digital product manufacturing in July [10][38]. Consumer Trends - Consumer demand is being stimulated by policies such as the "old for new" consumption initiative, leading to increased sales in home appliances and cultural products [8][14]. - The service sector is experiencing growth, particularly in tourism and digital services, with a notable increase in transportation and cultural service indices [15][56]. Investment Landscape - Investment in manufacturing is growing, with a 6.2% increase in manufacturing investment from January to July, particularly in textiles and automotive sectors [45][46]. - Infrastructure investment is also on the rise, with water management and information transmission sectors seeing significant growth [46][47]. Policy Impact - The implementation of proactive macroeconomic policies is supporting production and investment growth, with a focus on stabilizing employment and market expectations [10][23]. - The government's commitment to deepening reform and opening up is enhancing the resilience and vitality of the economy [21][32].

Economic Performance - China's economy is showing stable growth with key indicators reflecting resilience and vitality, such as a 1.6% year-on-year increase in fixed asset investment and a 5.9% rise in the service sector production index from January to July [1] - The retail sales of consumer goods increased by 4.8% year-on-year during the same period, indicating a strong consumer market [4] Trade and External Relations - In the first seven months, China's goods trade imports and exports grew by 3.5%, with July imports rising by 4.8%, marking a recovery trend despite external pressures like the US tariff war [3] - China has approved 183 Brazilian coffee exporters for a five-year sales license, showcasing its commitment to opening up trade [3] Policy and Innovation - The Chinese government has implemented proactive macroeconomic policies to stabilize growth, with equipment manufacturing value added increasing by 9.9% from January to July [4] - High-tech manufacturing value added grew at a rate 3.6 percentage points faster than the overall industrial growth in July, highlighting the integration of technological and industrial innovation [5] Foreign Investment and Market Sentiment - The International Monetary Fund has raised its 2025 economic growth forecast for China to 4.8%, driven by domestic demand, exports, and innovation [7] - Foreign interest in Chinese assets is at a high, with institutions like Deutsche Bank and Swiss asset management firms expressing bullish views on Chinese investments [7]

Core Viewpoint - The article discusses the economic data released by the National Bureau of Statistics for July, highlighting a mixed performance in various economic indicators, with a notable rebound in exports while other sectors showed signs of decline. Overall, the cumulative growth rates from January to July remain stable. Group 1: Trade and Exports - In July, the total goods import and export volume reached 3.91 trillion yuan, a year-on-year increase of 6.7%. Exports amounted to 2.31 trillion yuan, growing by 8.0%, while imports were 1.6 trillion yuan, increasing by 4.8% [1][3] - Despite a decrease in exports to the U.S. due to tariffs, China's overall export resilience is evident, with significant growth in non-U.S. markets [3] - The rebound in imports is attributed to the U.S. lifting some export controls on high-tech products, with the largest increase in imports seen in high-tech categories such as aircraft engines and integrated circuits [3][5] Group 2: Consumer Spending - The total retail sales of consumer goods in July reached 3.88 trillion yuan, with a year-on-year growth of 3.7% but a month-on-month decline of 0.14%. Retail sales of goods grew by 4.0%, while catering revenue increased by only 1.1%, indicating cautious consumer spending [3][5] - The "old-for-new" policy significantly boosted the consumption of key goods, with retail sales of home appliances and audio-visual equipment rising by 28.7% year-on-year [5] - Cumulatively, from January to July, retail sales of consumer goods grew by 4.8%, while service retail sales increased by 5.2%, suggesting a steady recovery in consumption [5] Group 3: Investment Trends - From January to July, fixed asset investment (excluding rural households) totaled 28.82 trillion yuan, with a year-on-year growth of 1.6%, a decline of 1.2 percentage points compared to the first half of the year [5][6] - Manufacturing investment grew by 6.2%, while infrastructure investment increased by 3.2%. However, real estate development investment saw a year-on-year decline of 12%, with the drop widening by 0.8 percentage points [5][6] - Factors contributing to the decline in investment growth include extreme weather conditions, complex external environments, and weakened investment momentum in traditional industries like real estate [6][7] Group 4: Policy and Economic Outlook - The National Bureau of Statistics emphasized the need for proactive macroeconomic policies to address the complex international environment and domestic challenges, aiming to stabilize employment, businesses, and market expectations [7][8] - The Central Political Bureau meeting highlighted the importance of maintaining a continuous and flexible macro policy to effectively stimulate domestic demand and promote economic stability [8]

Core Viewpoint - The economic provinces are emphasized as key players in stabilizing and driving national economic growth, contributing significantly to the overall GDP and demonstrating robust growth rates compared to the national average [1][2][3]. Group 1: Economic Performance - In the first half of 2025, six major economic provinces (Zhejiang, Jiangsu, Henan, Shandong, Sichuan, Guangdong) achieved GDPs exceeding 3 trillion yuan, collectively contributing over 29.4 trillion yuan, accounting for 44.6% of the national total [1][2]. - Guangdong's GDP reached 68,725.4 billion yuan, representing over 10% of the national total, while Jiangsu's GDP was 66,967.8 billion yuan, narrowing the gap with Guangdong [2]. - The GDP growth rates for Zhejiang, Jiangsu, Henan, Shandong, and Sichuan were all above the national average of 5.3%, with respective growth rates of 5.8%, 5.7%, 5.7%, 5.6%, and 5.6% [2]. Group 2: Trade and Innovation - Guangdong led in foreign trade, achieving a total import and export value of 4.55 trillion yuan, accounting for 20.9% of the national total, with a contribution rate of 28% to national trade growth [4]. - Zhejiang's industrial output value increased by 7.6%, with high-tech manufacturing and digital economy sectors growing by 12.7% and 12.0%, respectively [4]. - Jiangsu's industrial output value grew by 7.4%, with high-tech manufacturing increasing by 11.8%, indicating a shift towards higher quality economic growth [5]. Group 3: Policy and Future Directions - Economic provinces are implementing tailored strategies to boost domestic demand, with Sichuan focusing on consumer spending and Henan promoting consumption through new policies [7]. - Jiangsu aims to enhance new productive forces and improve market conditions, while Zhejiang plans to upgrade traditional industries and develop emerging sectors [7][8]. - The emphasis is on technological advancement and industrial transformation to maintain the provinces' leading roles in the national economy [8].

Economic Overview - The overall economic performance in China for the first half of the year is characterized by a fast growth rate, stable investment and consumption, and enhanced market vitality [1][2] - The GDP for the first half of the year reached 66,053.6 billion yuan, with a year-on-year growth of 5.3% [2] - Provinces such as Hubei, Ningxia, Henan, Sichuan, Jiangxi, Beijing, and Hunan reported GDP growth rates exceeding the national average, with Hubei leading at 6.2% [2] Regional Economic Performance - The eastern coastal regions continue to lead in total GDP, with Guangdong's GDP exceeding 6.87 trillion yuan, while provinces in the central and western regions are showing faster growth rates [2][3] - The gap between eastern and western regions is gradually narrowing, indicating a trend towards more balanced regional development [3] Future Economic Outlook - The economic outlook for the second half of the year is supported by ongoing investments in new industries, infrastructure, and consumption upgrades [4][5] - The high-tech manufacturing sector in Hubei saw a significant increase in value-added output, growing by 14.4% and contributing 27.5% to industrial growth [4] - Hunan's high-tech industry investment also increased by 6.3%, with high-tech manufacturing investment growing by 7.6% [5] Policy and Structural Adjustments - The government is expected to continue implementing proactive macroeconomic policies to support stable economic growth [5] - There is a focus on fostering new production capacities, emerging industries, and enhancing the business environment to facilitate economic transformation [5]

Economic Performance - China's GDP grew by 5.3% year-on-year in the first half of the year, surpassing both the same period last year and the full-year growth rate, ranking among the top of major global economies [1] - The total export value of Yiwu city reached 289.31 billion yuan in the first five months, marking a 23.7% year-on-year increase [3] - The national import and export scale stabilized at over 20 trillion yuan, achieving a historical high for the same period and maintaining year-on-year growth for seven consecutive quarters [3] Trade and Market Dynamics - Yiwu enterprises are actively expanding into emerging markets in Southeast Asia, Latin America, and the Middle East while also enhancing domestic market strategies [2] - The retail sales of consumer goods reached 24.55 trillion yuan, with a year-on-year growth of 5.0%, indicating a vibrant consumer market [9] - The contribution rate of final consumption expenditure to GDP growth was 52%, highlighting the importance of domestic demand [9] Industrial Development - The industrial added value of large-scale enterprises increased by 6.4% year-on-year in the first half of the year, accelerating by 0.6 percentage points compared to the previous year [7] - High-tech manufacturing industries saw a 9.5% year-on-year increase in added value, contributing 23.3% to the overall industrial growth [7] - The bearing industry reported a 11.16% year-on-year growth in industrial output value among 159 major enterprises in the first five months [6] Employment and Policy Support - The average urban unemployment rate was 5.2%, a decrease of 0.1 percentage points from the first quarter, indicating overall stability in the employment situation [13] - The central government allocated 66.74 billion yuan for employment support, enhancing policies to stabilize jobs and promote hiring [12] - Companies are benefiting from policies such as tax reductions and subsidies, which have led to increased orders and production capacity [11][15] Future Outlook - The Chinese economy is expected to maintain stable growth in the second half of the year, supported by high-quality development and structural adjustments [19] - The potential for urbanization is significant, with estimates suggesting that a 1% increase in urbanization rate could generate over 200 billion yuan in annual consumption demand [20] - Various foreign financial institutions have raised their economic growth forecasts for China in 2025, reflecting confidence in the sustained momentum of the economy [23]

Group 1 - The core viewpoint emphasizes the need to accelerate the construction of a unified domestic market in China, focusing on addressing consumption and income issues [1] - The company suggests increasing policy efforts on "investing in people" to enhance human capital [1] - It is important to maintain confidence and leverage policy space advantages effectively [1] Group 2 - In terms of asset allocation, the recommendation is to continue using dividend assets as the core holding [1] - The company advises actively exploring new sectors, particularly in new consumption, humanoid robots, artificial intelligence, and innovative pharmaceuticals [1]

Core Insights - The core viewpoint emphasizes the integration of artificial intelligence (AI) with the real economy as a key strategy for urban development, particularly in Wuxi, which aims to become a benchmark city for "AI+" [1][2]. Group 1: AI and Economic Integration - AI is identified as a crucial driver of the new technological revolution and industrial transformation, becoming a strategic focal point in global technological competition [1]. - The "AI+" initiative, first included in the government work report in 2024, has clear strategic goals and methods for implementation [1]. - The integration of AI with advanced manufacturing and the domestic unified market is highlighted as a primary focus for economic and social development [1][2]. Group 2: Wuxi's Manufacturing and AI Development - Wuxi possesses a strong manufacturing foundation, which can leverage AI and data technologies to explore advanced manufacturing models such as service-oriented and flexible manufacturing [2]. - The city has launched a systematic "1+2+3" series of documents to establish itself as a benchmark city for "AI+", creating a robust framework for AI development and application [2]. - Future efforts should align Wuxi's "AI+" initiatives with national strategies, focusing on the integration of AI with the real economy and fostering industrial clustering and ecological cultivation [2].