Core Viewpoint - Despite ongoing high-risk factors such as geopolitical conflicts and tariff policies, the global stock market showed an overall upward trend in the first half of 2025, with the Hong Kong stock market leading with a 20% increase [1]. Market Performance - The Hang Seng Index closed at 24072.28 points, marking a 20% increase since the beginning of the year, with the Hang Seng Tech Index and the China Enterprises Index also rising approximately 19% [3]. - The index experienced two phases of upward movement, with the first phase seeing a rise from a low of 18671.49 points on January 13 to a high of 24874.39 points on March 19, driven by positive impacts from domestic AI developments [3]. - The second phase began in late March, with the index dropping to a low of 19260.21 points on April 9 before climbing to a high of 24533.39 points by June 25, supported by international capital inflows and new listings in the hard tech and new consumption sectors [3]. Sector Performance - Most sectors experienced gains in the first half of the year, with notable increases in jewelry and watches (282%), toys and leisure products (182%), and poultry and meat (112%) [4]. - Among stocks with a market capitalization exceeding 10 billion HKD, the top gainers included Lao Pu Gold (321%), Sanofi (289%), and Yaocai Securities (278%), while the largest declines were seen in Maifushi (-52%), Sunac China (-38%), and Black Sesame Intelligence (-36%) [4]. - The market structure has shifted, with technology, consumption, and healthcare sectors gaining prominence over traditional sectors like finance, internet, and real estate [4]. Capital Flows and IPO Activity - The first half of 2025 saw net purchases of Hong Kong stocks by southbound funds exceeding 730 billion HKD, a 90% year-on-year increase, with southbound trading accounting for 19.3% of daily turnover [5]. - Hong Kong led the world in IPO fundraising, with 42 companies raising over 105 billion HKD, primarily in the technology and consumption sectors, which accounted for over 70% of the total [6]. - The new stock market saw a significant increase in the first-day performance, with 62% of new stocks rising on their debut, and an average first-day gain of over 13% [8]. Future Outlook - Institutions generally expect the liquidity benefits to continue into the second half of the year, although there are concerns about performance pressures in high-valuation sectors [2][9]. - Analysts believe that the strong performance of the Hong Kong market reflects a revaluation of "new core assets" by international capital, supported by a positive cycle of IPO expansion and liquidity activation [9]. - There are potential structural opportunities in the market, although geopolitical conflicts and global recession risks may still impact market performance [10].

Group 1 - The Hong Kong IPO market has shown remarkable performance in the first half of 2025, with fundraising exceeding 105 billion HKD, ranking first globally [1][2] - A total of 42 new stocks were listed in Hong Kong in the first half of 2025, a 40% increase compared to the same period last year, marking the highest fundraising total since 2021 [1][2] - The influx of international capital into Hong Kong has significantly increased, with funds rising from 366 billion USD in early 2024 to 506 billion USD by April 2025, the highest since 2000 [2] Group 2 - The surge in the IPO market is attributed to Hong Kong's role as a core hub for global capital allocation in Chinese assets, facilitating efficient connections between domestic and international resources [1][2] - Leading companies in hard technology and new consumption sectors are becoming the "new core assets" of the Hong Kong stock market, reflecting strong investor interest [2][3] - The listing of companies like CATL has set multiple records, with its IPO being over-subscribed by more than 150 times and raising over 40 billion HKD [3] Group 3 - There is a growing trend of A-share leading companies opting for "A+H" dual listing in Hong Kong, with nearly 70 A-share companies planning to list, contributing significantly to the total fundraising in the IPO market [4] - The Hong Kong IPO market is expected to maintain its momentum in the second half of 2025, with over 170 listing applications currently in process and an estimated 80 new companies expected to list, raising around 200 billion HKD [5]

Core Viewpoints - The A-share and Hong Kong stock markets are seen as having strategic allocation value, particularly in high-end manufacturing, AI, innovative pharmaceuticals, and smart vehicles, referred to as "new core assets" [1][2] - The domestic economy is expected to experience marginal slowdown in the second quarter, with a focus on the allocation value of ultra-long bonds [1][16] Equity Market - CITIC Securities believes that A-share "new core assets" are gearing up for an upward trend, suggesting a focus on high-end manufacturing, AI, innovative pharmaceuticals, and smart vehicles [2] - CITIC Jiantou emphasizes that "AI+" remains a core theme in the medium term, with the A-share market showing independent performance despite declines in the US market [3] - UBS predicts that the US stock market will underperform compared to European and emerging markets in the next 1-3 months, with risks of further declines in the S&P 500 index [4] Industry Research - Huashan Fund suggests a cautious approach to gold investments, emphasizing the need for rational investment strategies amid uncertain future market conditions [8][9] - Yinhua Fund highlights the promising prospects of the AI healthcare market, projecting a growth rate exceeding 25%, with the market size approaching 30 billion yuan by 2028 [10] - Zhonggeng Fund notes that the home appliance sector has seen significant gains, driven by government support for consumption and the integration of AI technologies [11] Macro and Fixed Income - Huaxia Fund indicates that the bond market's fluctuations are tied to the re-evaluation of economic recovery and policy rhythms, advocating for a diversified approach to bond investments [14] - Huashang Fund points out improvements in the supply-demand dynamics for convertible bonds, suggesting a defensive strategy while capturing structural opportunities [15] - Boshi Fund anticipates a marginal slowdown in the domestic economy in the second quarter, recommending a focus on the allocation value of ultra-long bonds [16] Asset Allocation - Fuguo Fund observes a shift from a "technology bull" market to a "consumption bull" market, driven by policy stimuli that encourage investment in consumer sectors [18]

Core Viewpoint - The article emphasizes the potential for A-share core assets to rise, driven by internal demand policies and a shift towards performance-driven market dynamics as external capital inflow slows down [2][3]. Group 1: Market Strategy - The strategy suggests focusing on A-share and Hong Kong core assets, particularly in high-end manufacturing, AI, innovative pharmaceuticals, and smart vehicles, which are seen as "new core assets" with strategic allocation value [3]. - It highlights the importance of sectors such as domestic computing power, edge AI, lithium batteries, military industry, Hong Kong internet, and innovative pharmaceuticals, while also suggesting to monitor supply-side clearing in aluminum, steel, and panels [3]. - The article points out potential overperformance in Q1 reports for segments like wind power components, engineering machinery, automotive electronics, ophthalmic pharmacies, and service consumption [3]. Group 2: Consumption and Policy - The "Consumption Promotion Special Action Plan" has been officially released, indicating a comprehensive upgrade and innovation in consumption policies, with a focus on increasing residents' income and enhancing consumption capacity [12][16]. - The plan aims to stabilize the real estate market, improve service consumption quality, and optimize the environment to unleash consumption potential, with expectations for retail sales growth of around 4.8% by 2025 [12][16]. Group 3: Sector Focus - The article identifies four major themes for investment: new consumption, military industry, quantum computing, and deep-sea technology, suggesting a balanced approach between manufacturing and consumption [4]. - In the deep-sea sector, the government’s focus on deep-sea technology and offshore wind power is expected to drive growth, particularly in companies with advantages in these areas [7]. - The PD-L1 ADC drugs are highlighted for their potential to tap into a global market exceeding $50 billion, with significant clinical developments anticipated in the coming years [8][9].

Group 1: Spring Strategy and Core Assets - The core viewpoint is that China's core assets are expected to experience a revival in the spring, driven by policy advancements in three key areas: technology innovation, supply-side reform, and institutional optimization [1] - The new core assets with potential billion-dollar valuations are emerging, while about 30% of traditional industry leaders are showing operational turning points [1] - The report emphasizes a shift from "good companies" to "ordinary companies," indicating a significant differentiation in performance as confidence is restored [1] Group 2: Macroeconomic Outlook for 2025 - The share of real estate and its industrial chain in China's economy is projected to decline from 18% in 2020 to 10%-11% by 2024, while strategic emerging industries are expected to rise from 11.7% to 14.1% in the same period [2] - Monetary policy is anticipated to focus on the broad price system, while fiscal policy will maintain reasonable space to address external challenges and weak domestic demand [2] - The economic growth in 2025 is expected to follow a "U" shape, with an annual growth rate around 5% [2] Group 3: A-Share Market Themes for 2025 - 2025 is expected to be a significant year for thematic investments in the A-share market, driven by factors such as funding preferences, technological catalysts, policy implementation, and the evolving US-China relationship [4] - Ten major themes are identified for 2025, including AI+, smart transportation, humanoid robots, and bio-manufacturing, among others [4][6] - The report suggests that these themes will guide investment strategies throughout the year [4] Group 4: New Narratives in Chinese Assets - The attractiveness of Chinese assets is increasing, with a renewed investment logic in technology manufacturing [8] - Key breakthroughs in frontier technologies are expected to reshape the global tech landscape, with a focus on AI and high-value-added industries [8] - The report highlights the importance of long-term investment opportunities in sectors like AI, intelligent driving, and semiconductor advanced processes [8] Group 5: AI Smart Glasses Investment Insights - AI smart glasses are identified as a cost-effective hardware solution with significant potential, akin to the early days of TWS earbuds [10] - Short-term investment is recommended due to low current shipment volumes, while long-term prospects are expected to improve with the release of major products [10] - The report emphasizes the importance of focusing on segments with the highest value share and optimal market structure within the supply chain [10] Group 6: AIDC Market Dynamics - The AIDC (Automated Identification and Data Capture) market is experiencing growth, driven by a significant demand for new technologies [12] - The report suggests a focus on investment opportunities in the "power supply + interconnection" aspect of AIDC [12] Group 7: Gold Market Outlook - The report anticipates a strong performance for gold stocks in 2025, driven by increased production and a favorable liquidity environment [17] - The expected rise in gold prices is supported by the influx of ETFs and the ongoing narrative of "de-dollarization" [17] Group 8: Metal Supply Disruptions - The escalation of conflict in the Democratic Republic of the Congo is expected to disrupt metal supplies, particularly for tin, copper, and cobalt [18] - The report highlights the potential for increased metal prices due to supply chain disturbances caused by regional conflicts [18]