Core Viewpoint - Goldman Sachs predicts further prosperity in the Chinese stock market driven by valuation and liquidity, maintaining "overweight" ratings for A-shares and H-shares, with an expected 8% upside for A-shares and 3% for H-shares over the next 12 months, recommending investors to increase positions during market corrections [1][3]. Group 1: Market Drivers - The strong performance of the Chinese stock market this year is attributed to "re-inflation" expectations and advancements in artificial intelligence technology, with ongoing valuation recovery and liquidity improvement expected to provide upward momentum [3]. - Goldman Sachs emphasizes that corporate earnings are fundamental for sustained market growth, while liquidity is essential for bull market formation, noting that the current "slow bull" pattern in the A-share market is more stable compared to historical trends [3]. Group 2: Valuation and Liquidity - Current valuation levels indicate that most metrics show large-cap stock valuations are still within a reasonable range, with the index price-to-earnings ratio at a moderate level, suggesting attractive liquidity premium space for both A-shares and H-shares [3]. - The adjusted "A-share investor sentiment index" indicates a current market risk preference composite index of 1.3, suggesting consolidation risks but no trend reversal yet [3]. Group 3: Institutional Investment Potential - If the domestic institutional holding ratio increases from the current 14% to the emerging market average of 50% or the developed market average of 59%, the potential increase in domestic stock holdings could reach between 32 trillion to 40 trillion RMB [4]. - The investable funds available to Chinese households, including 160 trillion RMB in savings and 330 trillion RMB in real estate investments, present significant potential for future capital allocation adjustments, although this process is expected to be gradual [4]. Group 4: Investment Themes - Goldman Sachs is optimistic about investment themes such as the "Prominent 10" private enterprises, artificial intelligence, anti-cyclical sectors, and shareholder returns [4].

Core Viewpoint - The article highlights the lack of transparency in the private equity (PE) industry, particularly focusing on the case of Partners Group, which obscures its cost data in lengthy footnotes, making it difficult for investors to understand the true value of their investments [3][5][6]. Group 1: Transparency Issues - Partners Group's annual report lists 1,089 investment targets but provides 1,095 cost figures, creating confusion and raising doubts about the accuracy of the data presented [3]. - The cost data is buried in a three-page footnote rather than being clearly displayed in the main investment table, complicating the task for investors to match costs with fair values [5]. - The trend of "retailization" in the PE sector allows more ordinary investors to access these products, but without adequate disclosure, this could lead to increased risks for these investors [5][6]. Group 2: Market Environment - The current macroeconomic environment, characterized by high interest rates and a frozen IPO and M&A market, has made it difficult for PE funds to exit investments, leading to potential liquidity issues [6][7]. - The shift towards retail investors engaging with PE products raises concerns about their ability to comprehend complex financial disclosures, which could result in significant financial risks [6][7]. Group 3: Regulatory Recommendations - To protect ordinary investors, regulatory bodies should enforce stricter disclosure standards for PE products, requiring clear presentation of investment costs, fair values, and acquisition dates [7]. - There is a call for standardized calculations of Internal Rate of Return (IRR) and transparent fee structures to ensure that investors are fully informed about the risks associated with their investments [7]. Group 4: Investor Awareness - Investors should be cautious of the allure of PE products, which historically have provided higher returns but come with significant risks if not properly understood [8]. - The article emphasizes the importance of transparency and trust in long-term investments, advising investors to avoid products they do not fully understand [8].

Financing Advantages of Going Public - The core argument is that going public significantly enhances a company's financing environment, methods, and costs, effectively opening a "financing highway" that is larger, more efficient, and cheaper [1][12]. 1. Expanded Financing Channels - Before going public, companies primarily rely on private financing methods such as venture capital (VC) and private equity (PE), which involve complex negotiations and high barriers [1][2]. - After going public, companies gain access to public markets, allowing them to reach a vast pool of investors, enhancing their ability to raise funds through secondary offerings and convertible bonds [3][5]. 2. Reduced Financing Costs - The liquidity premium associated with publicly traded stocks leads to lower required returns from investors, thereby decreasing the company's cost of capital [5]. - High transparency due to strict disclosure regulations reduces information asymmetry, increasing investor trust and willingness to provide funds under more favorable conditions [5][6]. 3. Diverse and Flexible Financing Tools - Public companies can utilize various efficient financing tools, including equity financing through new stock issuance, which improves their balance sheets without repayment obligations [7]. - Debt financing becomes more accessible and cheaper due to higher credit ratings and transparency, allowing for easier bond issuance [7]. - Hybrid financing options, such as convertible bonds, offer flexibility by combining features of both equity and debt [8]. 4. Enhanced Valuation and Brand Effect - Market pricing post-IPO provides a fair valuation based on public trading, serving as a credible benchmark for future financing activities [9]. - Successful IPOs enhance a company's brand reputation, as they undergo rigorous scrutiny from regulatory bodies and financial institutions, boosting credibility in negotiations with banks and suppliers [9]. 5. Increased Acquisition and Expansion Capabilities - Public companies can use their stock as currency for acquisitions, allowing for stock-for-stock transactions that alleviate cash flow pressures [10]. - This capability is crucial for industry consolidation and expansion efforts [10]. 6. Summary Comparison - The transition from private to public financing presents significant advantages, including broader access to capital, lower costs, and enhanced operational flexibility, outweighing the challenges associated with public listing [11][12].

Core Viewpoint - The article examines the performance of private credit in light of the Federal Reserve's decision to maintain interest rates and Moody's downgrade of U.S. government debt, questioning why private credit consistently performs well [1][3]. Group 1: Analysis of Interest Rates and Private Credit - The analysis shifts from the effective federal funds rate to the "10-year minus 2-year Treasury yield" to compare the cost differences between public and private funding in terms of mid-term premiums [3]. - Historical data shows significant volatility in U.S. Treasury yields, particularly in years like 2000, 2003, 2007, 2020, and 2021, alongside a long-term trend from 2009 to 2019, indicating that declines in Treasury yields often coincide with declines in credit fund returns [4]. - There is a limited correlation between private credit returns and mid-term Treasury yields, with notable volatility in private credit returns during economic downturns when Treasury yields typically rise [5]. Group 2: Trends and Future Outlook - In the years following economic recessions, private credit returns tend to be significantly higher than average, aligning with historical deep value investment returns during such periods [5]. - The 2010s saw a gradual decline in U.S. Treasury yields without economic recessions, leading to a similar decline in private credit returns, although there was a rebound after volatility in 2017 [5]. - The future outlook suggests that private credit may experience short-term volatility in 2025, but could benefit from deep investments once the market stabilizes, despite potential early impacts from the downgrade of U.S. Treasury credit ratings [6].

Group 1 - The core viewpoint is that the market anticipates a Federal Reserve interest rate cut, leading to increased interest in five-year U.S. Treasury bonds, which currently yield between 3% and 4% [2] - As of August 20, the market probability for a 25 basis point rate cut in September is 87%, while the likelihood of a 50 basis point cut is 13% [2] - The yield on five-year Treasury bonds has decreased by 53 basis points from 4.38% at the beginning of the year to 3.85% as of August 20 [2] Group 2 - Goldman Sachs' asset allocation model indicates that client allocation to five-year Treasury bonds has increased to 15%, up 3% from the second quarter [2] - The yield curve between 2-year and 10-year Treasury bonds is inverted by 35 basis points [2] - The daily trading volume of five-year Treasury bonds is stable at over $20 billion, compared to $12 billion for 30-year bonds [3] Group 3 - Two major risks are identified: sticky inflation exceeding expectations and increased supply of five-year Treasury bonds due to a $7.2 trillion issuance in the second quarter, which could pressure prices [3] - The recommendation is to maintain a 20% allocation in short-term Treasury bonds to hedge against potential volatility while investing in five-year bonds [3] - Goldman Sachs projects that interest rates may continue to decline, reaching 3% to 3.25% by 2026 [3]

Core Viewpoint - The A-share market is experiencing fluctuations and consolidation, with significant inflows into small-cap ETFs driven by favorable policies and market conditions [1] Group 1: Market Performance - As of August 7, at 14:14, the 1000ETF Enhanced (159680) and the CSI 2000 Enhanced ETF (159552) fell by 0.29% and 0.16% respectively [1] - During the trading session, both ETFs saw a combined net inflow exceeding 80 million, with a total net inflow of over 200 million in the past five days [1] Group 2: Investment Strategy - The ongoing release of policies supporting specialized and innovative enterprises is enhancing the performance of quantitative enhancement strategies in small-cap stock investments [1] - The high volatility in the market is contributing to liquidity premiums, which is driving explosive growth in small-cap ETFs [1] - Investors are advised to adopt a phased investment strategy to manage risks, as some small-cap stock valuations are reaching historically high levels due to continuous capital inflows [1]

Core Insights - The new regulations for technology innovation bonds (科创债) have led to significant growth in the primary market, with a notable increase in issuance scale and a more diverse range of issuers [1][2] - The secondary market has seen improved liquidity and trading activity, contributing to a positive feedback loop that enhances market efficiency and reduces issuance costs [1][4] Group 1: Primary Market Expansion - Since the announcement on May 7, 2023, a total of 683 technology innovation bonds have been issued, amounting to 871.52 billion yuan, representing year-on-year increases of 116.83% in quantity and 180.58% in scale [2] - The issuer structure has diversified, with various financial institutions, including commercial banks and securities companies, actively participating, and more medium-rated enterprises gaining access to financing [2][3] - A total of 30 banks have issued technology innovation bonds, with a combined scale of 230.3 billion yuan, showcasing the market's acceptance of issuers with varying credit ratings [3] Group 2: Secondary Market Activity - From May to July, the transaction volumes for technology innovation bonds were 204.1 billion yuan, 124.6 billion yuan, and 151.9 billion yuan, reflecting year-on-year growth rates of 214.92%, 116.10%, and 94.00% respectively [4] - The introduction of the first batch of 10 technology innovation bond ETFs on July 2 has provided a standardized investment path, enhancing market liquidity and supporting the overall ecosystem [5] - The total scale of these ETFs has reached 110.76 billion yuan, indicating strong market recognition and further improving liquidity in the secondary market [5]

Report Industry Investment Rating No relevant content provided. Core View of the Report The bond market has not formed a trend - based market, and it is expected to return to a volatile state after short - term emotional fluctuations. To obtain excess returns in the volatile market, one can first seek assets with relative volatility and liquidity on the curve, and then look for individual bonds with relative value. Currently, 30 - year Treasury bonds are recommended [25]. Summary by Relevant Catalogs This Week's Bond Market Review - This week, the bond market fluctuated sharply. The first half of the week saw a cycle of repair - decline - repair around the performance of the commodity and equity markets and the "anti - involution" policy expectations. The second half was initially stabilizing but was hit by a sharp volatility at the end of Friday due to tax policy changes. However, the 10 - year Treasury yield remained in a narrow range of 1.70% - 1.75% [1][9]. - From 25th July to 1st August, the yields of 1 - year, 5 - year, 10 - year, and 30 - year Treasury bonds decreased by 1.0BP, 3.6BP, 2.7BP, and 2.3BP respectively [11]. Next Week's Key Bond Market Concerns - A sudden change in the tax system for Treasury bonds occurred on Friday night. Next week, the bond market will first price this event. "New bonds" refer to those issued on or after 8th August with new codes, while "old bonds" are those existing before this date, including active and non - active ones [18]. - Next week, the focus is on the allocation desks' scramble for active old bonds. Old bonds may be more popular among allocation desks due to tax advantages. Non - active bonds are already concentrated in allocation desks with limited liquidity, so it is expected that allocation desks will target active old bonds. Trading desks may sell at this time and wait to trade new bonds later. Also, trading desks may increase purchases of short - term credit bonds and certificates of deposit in the short term [2][19]. - Bond yields are expected to quickly price the scramble behavior next week. The spread between new and old bonds is expected to be smaller than the static calculation result. Old bonds will have a liquidity discount after being held by allocation desks, and some institutions are insensitive to tax rates [2][20]. Next - Stage Strategy Considerations - The bond market is in a volatile state and has not shown a trend reversal. To gain excess returns, one can first find assets with relative volatility and liquidity on the curve and then look for individual bonds with relative value. Currently, 30 - year Treasury bonds are recommended [25]. - The ultra - long end of the curve has volatility and opportunities. In the second quarter, ultra - long bonds created relative volatility in a "sideways" market. They are more sensitive to short - term factors. Since the second quarter, the intraday amplitude of the 30 - year Treasury active bond was higher than that of the 10 - year Treasury active bond on 60 out of 84 trading days [25]. - After the bond market adjustment in mid - to - late July, the spread of ultra - long - end interest - rate bonds has widened. As of 1st August, the 30 - year - 10 - year Treasury spread was 24BP, at the 90% percentile in the past year [34]. - In August, there will be issuance disturbances for ultra - long bonds. After the issuance of the 50 - year special Treasury bond on 1st August, 3 more ultra - long special Treasury bonds are to be issued. With the expected reduction of the预定 interest rate in September and the possible scramble for old bonds by insurance companies after the tax reform, the allocation demand for ultra - long bonds is expected to be strong [4][36]. - During the issuance of ultra - long bonds, the relative value of individual bonds will change. If the issuance scale of "25 Special Treasury 05" on 8th August remains the same as the previous two issues, its scale will reach 24.9 billion yuan. It may become the second - most active bond, and the yields of the three bonds are expected to converge, with the yield of "25 Special Treasury 02" possibly decreasing by about 2BP [5][37].

Core Viewpoint - The expansion of the ETF market in the U.S. is expected to temporarily enhance turnover rates, while the liquidity premium of domestic bond ETFs is already relatively high [1]. Group 1: U.S. Bond ETF Market Trends - The U.S. bond ETF market is projected to grow significantly from $554.48 billion in 2023 to $1,152.81 billion in 2024, marking a growth rate of 107.9%. However, a noticeable decline is expected in 2025, with the market size dropping to $441.57 billion by June 2025 [2]. - During the periods of market expansion, particularly in early 2022, the turnover rate of U.S. credit bond ETFs increased, with an annual average turnover rate of 41% and peaks of 43% and 45% during specific months [2]. - There is no clear positive correlation between the expansion of the U.S. bond ETF market and turnover rates over a longer time frame, as evidenced from 2018 to 2020 when market size increased but turnover rates did not [2]. Group 2: Trading Activity and Liquidity Premium - The number of transactions for constituent bonds has significantly increased with the expansion of ETFs. For instance, the proportion of constituent bonds in the AAA benchmark market-making credit bond index has risen to 91.7% since July 2025 [3]. - The liquidity premium is reasonably anchored within 10 basis points (BP). Since 2024, the risk associated with high-grade urban investment bonds and secondary capital bonds has been similar, with a central spread of 0 and fluctuations generally within 10 BP [4]. - Some constituent bonds are experiencing liquidity premiums exceeding 15 BP due to heightened buying sentiment among certain institutions [5]. Group 3: Market Sentiment and ETF Dynamics - The expansion of ETFs is unlikely to lead to a sustained increase in the liquidity of constituent bonds. The physical redemption mechanism makes it easier to increase the scale of credit bond ETFs, but the liquidity of some constituent bonds may peak and decline as their market size decreases [5]. - Market sentiment significantly influences liquidity, with changes in ETF scale reflecting market emotions. The fluctuation in cash redemption products may be more pronounced during market adjustments, potentially putting pressure on the constituent bonds in the PCF list [5].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The increase in the scale of the US ETF market has a temporary impact on the turnover rate, and the liquidity premium of domestic bond ETF component bonds is already relatively high [1]. - The expansion of ETFs is difficult to bring about a continuous improvement in the liquidity of component bonds. The liquidity premium of some component bonds is already at a high level, and the valuation difference between the exchange and the inter - bank market may lead to a narrowing of the spread [2][5][6]. - It is recommended to pay attention to the impact of market sentiment changes on liquidity [6]. 3. Summary According to the Directory 3.1 US Bond ETF Market Scale and Liquidity Comparison - The scale of the US bond ETF market increased significantly from 2023 - 2024 and declined significantly in 2025. In 2023, the scale was $554.482 billion, rising to $1152.808 billion in 2024 with a growth rate of 107.9%. As of June 2025, it was only $441.57 billion [2][11]. - During the periods when the scale of the US bond ETFs increased, the turnover rate of US credit bond ETFs increased significantly in 2022. However, in the long - term, there is no obvious positive correlation between the increase in the scale of US bond ETFs and the change in the turnover rate [2][12]. 3.2 Current Changes in Domestic ETF Liquidity and Component Bond Liquidity - Under the expansion of ETFs, the number of component bond transactions has increased significantly. Taking the Shanghai Stock Exchange AAA Benchmark Market - making Credit Bond Index as an example, the proportion of component bonds in the top three component entities has been continuously rising since 2025, reaching 91.7% since July [21]. - The valuation difference between the exchange and the inter - bank market for medium - long - term and medium - high implicit rating component bonds is more obvious. The spread between Shanghai market - making component bonds and inter - bank comparable bonds is currently between - 1BP and 13BP. The spread difference between central enterprises and local industrial state - owned enterprises is more obvious, while that of urban investment and transportation - related entities is relatively small [21]. - The exchange - inter - bank excess spread of science and technology innovation bond component bonds has widened since July [22]. 3.3 Component Bond Liquidity Pricing: Reasonable Liquidity Premium and Potential Risks - The reasonable pricing anchor for liquidity premium is within 10BP. Since 2024, under the expectation of debt resolution, the spread between high - grade urban investment bonds and secondary capital bonds is centered at 0, and the spread fluctuation range is basically within 10BP. The same is true for the spread between high - grade securities firm bonds and secondary capital bonds [35]. - The risk points of the valuation difference between the exchange and the inter - bank market: the spread of some benchmark market - making bonds and science and technology innovation bonds between the exchange and the inter - bank market has exceeded 10BP, and the spread of some component bonds with high institutional buying enthusiasm has exceeded 15BP [35]. - Three views on liquidity premium and risk points: ETF expansion is difficult to bring continuous improvement in component bond liquidity; the liquidity premium of some component bonds is already at a high level; after the valuation difference between the exchange and the inter - bank market, the exchange corporate bonds become more offensive, while inter - bank bonds are more defensive, and the spread may narrow with the increase in supply [36].