1. Report Industry Investment Rating No investment rating for the industry is provided in the report. 2. Core Viewpoints - Since July, the convertible bond ETFs have significantly expanded. Investors share the returns of the equity market by betting on passive tools. Driven by the equity market and the inflow of fixed - income funds, the convertible bond index has reached a new high. At present, with both high prices and valuations, the anti - decline and protective properties of convertible bonds have weakened significantly. After the convertible bond index reaches new highs, it is recommended to adjust the structure instead of increasing the index position. Potential opportunities can be explored from three aspects: "anti - involution", underlying stock elasticity, and dividend allocation [1][2]. 3. Summary by Relevant Catalogs 3.1 1 转债周度思考 - In the past week, after adjustments, both the equity market and the convertible bond market rose again, and the convertible bond index reached a new high. The Shanghai Composite Index returned above 3600 points, the CSI Convertible Bond Index reached a new high, the Wind Convertible Bond Equal - Weighted Index rose 2.73% in the past week, and the underlying stock equal - weighted index of convertible bonds rose 3.00%. The median price of convertible bonds has exceeded 130 yuan, and the valuations of equity - like and balanced convertible bonds continue to expand [2]. - Since July, the convertible bond ETFs have significantly expanded. The share of two convertible bond ETFs has rapidly increased, with a 27% month - on - month increase compared to the end of June, and the scale has exceeded 5.72 billion yuan. Considering that some active funds are also making index - based layouts, the scale of index - based investment tools is expected to exceed 6.5 billion yuan. The holders of ETFs are mainly absolute - return funds such as banks and insurance companies, which invest in convertible bond ETFs to share the equity market's upward trend since late June and enhance returns by increasing positions in convertible bond indices [2]. - At present, with both high prices and valuations, the anti - decline and protective properties of convertible bonds have weakened significantly. Although the equity market is generally expected to be in a slow - bull state with a relatively low possibility of a large - scale pullback, the high point of the equity market within the year is unclear. After this round of increase, the price center of convertible bonds has generally risen, and the median has exceeded 130 yuan. With the continuous inflow of funds, the valuation has also been stretched. For some individual bonds in the 120 - 130 yuan price range that have risen with the market, the current median conversion premium rate is 40%, and the investment cost - effectiveness is average. Under the condition that the fundamentals of individual bonds cannot change significantly in the short term and the call - at - par - value - at - 130 clause is in place, the anti - decline and protective properties of these convertible bonds with a higher price center and premium rate have weakened significantly [2]. - After the convertible bond index reaches new highs, it is recommended to adjust the structure instead of increasing the index position. The state of convertible bonds in a relatively mild stock - bond market remains unchanged, and there are still opportunities for convertible bonds to perform. Since July, the number of callable convertible bonds has increased, and the supply - demand contradiction of convertible bonds still exists, which supports the valuation and performance of convertible bonds. Absolute - return funds can take partial profits or adjust the structure while keeping the overall position unchanged. It is recommended to explore opportunities along three lines: (1) Pay attention to industries where some backward production capacities are being cleared as "anti - involution" progresses in various industries; (2) Focus on equity - like and balanced convertible bonds with high - volatility and low - premium underlying stocks. Industries such as electronics and semiconductors are expected to experience marginal recovery due to tariff easing, and innovative drug convertible bond targets are scarce; (3) The allocation value of dividend assets remains high, and low - volatility bottom - position convertible bonds are worth attention [2]. 3.2 2 可转债市场跟踪 3.2.1 2.1 可转债行情方面 - The report provides the performance data of various convertible bond indices in different time periods, including the past week, two weeks, since July, one month, two months, half - year, and one year. For example, the Wind Convertible Bond Energy Index rose 2.60% in the past week, 6.81% since July, and 21.79% in the past year [12]. 3.2.2 2.2 转债个券方面 No specific analysis content for this part is provided in the text other than the section title. 3.2.3 2.3 转债估值方面 No specific analysis content for this part is provided in the text other than the section title. 3.2.4 2.4 转债价格方面 No specific analysis content for this part is provided in the text other than the section title.

Investment Rating - The report maintains a "Buy" rating for several companies in the power and gas sectors, including China Power, Huaneng International, and Kunlun Energy, among others [49][51]. Core Insights - The adjustment of capacity prices for coal and gas power plants in Guangdong is expected to improve profitability for gas power plants significantly, with capacity prices increasing by 65% to 296% depending on the type of gas plant [4][10]. - The rapid development of renewable energy installations in Guangdong has increased the reliance on coal power for flexible peak regulation, with renewable energy capacity reaching 59.13 million kW by the end of 2024, accounting for 26.6% of the total installed capacity [9][10]. - The report highlights the geopolitical factors affecting natural gas prices, with European gas prices experiencing a slight increase due to renewed geopolitical tensions, while U.S. gas prices remain stable [13][20]. Summary by Sections 1. Power Sector - Guangdong has raised the capacity price for coal power plants to 165 RMB per kW per year starting January 1, 2026, and for gas power plants, prices will range from 165 to 396 RMB per kW per year starting August 1, 2025 [8][10]. - The increase in capacity prices is expected to provide annual revenue boosts of 1.72 billion RMB for Guangdong Power A and 350 million RMB for Guangzhou Development [11]. 2. Gas Sector - As of August 1, 2025, the Henry Hub spot price is $3.00/mmBtu, while the TTF spot price in Europe is €32.95/MWh, reflecting a week-on-week increase of 2.74% [13][14]. - The report notes that the domestic LNG price is 4388 RMB per ton, showing a week-on-week decrease of 1.06% [32]. 3. Market Review - The gas sector outperformed the Shanghai and Shenzhen 300 index, while the public utility, power, and environmental sectors lagged behind [39]. 4. Company and Industry Dynamics - The National Energy Administration has released guidelines to enhance the management of natural gas pipeline transportation prices, promoting transparency and optimizing resource allocation [37]. - The report discusses the performance of key companies, including Huaneng International and Inner Mongolia Huadian, with varying revenue and profit trends [44].

Market Review - The equity market indices experienced significant gains last week, with the Sci-Tech 50 index leading at an increase of 4.63% [5][6] - The bond market saw both short and long-term interest rates rise, with the 10-year government bond yield increasing by 6.72 basis points to 1.732% [8][10] - The majority of the 31 sectors in the Shenwan index reported gains, particularly in the cyclical sectors such as construction materials (up 8.20%) and coal (up 7.98%) [5][6] Equity Product Allocation Strategy - Event-driven strategies include focusing on funds related to the "Promoting Agricultural Product Consumption Implementation Plan" and the "2025 World Artificial Intelligence Conference" [12][13] - The asset allocation strategy suggests a balanced core with a barbell approach, emphasizing dividend and technology sectors [16][17] - Recommended funds include those with a focus on dividend value, balanced styles, and technology growth [16][17] Stable Product Allocation Strategy - The central bank's net injection of 129.5 billion yuan indicates a shift from a tight to a loose monetary stance [18] - The July LPR remained unchanged at 3.0% for the one-year rate and 3.5% for the five-year rate, aligning with market expectations [18][19] - Focus on short-term bond funds while being cautious of high valuations in convertible bonds [19][23] Key Focus Products - Recommended funds include Nord Short Bond A and Huazheng Pure Bond A, with specific attention to their bond and stock allocations [24]

Investment Rating - The report maintains a "Positive" investment rating for the environmental protection industry [10] Core Insights - In 2023, insurance capital has collectively acquired stakes in five environmental companies, focusing on waste incineration and water utility state-owned enterprises, which exhibit stable operational performance and significant free cash flow improvement, indicating high dividend potential [2][6][7] - The report emphasizes the long-term investment value of waste incineration and water utility assets due to their high dividend potential and low valuation, recommending several companies in these sectors [8][38] Summary by Sections Insurance Capital Allocation - Insurance capital is increasingly allocating to equity investments due to declining net investment returns and the need for higher-yielding assets [6][18] - Policy changes and the expansion of long-term investment trials are encouraging insurance capital to invest in dividend and high ROE assets [24] Focus on Waste Incineration and Water Utility Assets - Insurance capital has targeted five environmental companies, primarily in waste incineration and water utility sectors, indicating a preference for stable operational assets [7][26] - The report highlights the potential for increased dividend payouts as the industry has passed its infrastructure peak, with a focus on long-term equity investments [37] Long-term Investment Value - Waste incineration and water utility assets are characterized by steady growth, improving cash flows, and increasing dividends, making them attractive for long-term investment [38][41] - The report identifies specific companies such as Huanlan Environment, Xingrong Environment, and others as key recommendations for investment [8][38] Financial Performance and Valuation - The report notes that the financial performance of waste incineration and water utility companies has shown resilience, with significant improvements in free cash flow and dividend payouts expected in the coming years [30][41] - Valuation metrics indicate that these companies are not overvalued, with PE ratios suggesting room for valuation recovery [34][41]

Group 1 - The low interest rate environment highlights the value of dividend asset allocation, with the transportation industry showing high dividend yields above current government bond yields [1] - As of July 9, 2025, the dividend yields for various sectors are approximately 1.5% for highways, 1% for ports, and 5% for shipping [1] - The scale of dividend products has accelerated since 2024, exceeding 200 billion yuan by Q1 2025, with dividend ETFs contributing significantly to this growth [1] Group 2 - The Redundant State-Owned Enterprise ETF tracks the Shanghaizhengqun Dividend Index, which selects high-quality companies with stable dividend records listed on the Shanghai Stock Exchange [1] - These companies typically exhibit strong financial health and profitability, covering multiple industries but leaning towards mature and stable sectors [1] - The index aims to reflect the overall performance of quality listed companies that can provide investors with stable returns [1]

Core Viewpoint - The A-share market is experiencing a divergence, with the Shanghai Composite Index declining and over 4,000 stocks falling, while the ChiNext Index saw an increase, driven by strong performance in the AI sector [1][5]. Group 1: Market Performance - The Shanghai Composite Index fell after three consecutive days of gains, losing and regaining the 3,500-point mark, while the ChiNext Index rose over 1% [1]. - The total trading volume in the two markets reached 1.61 trillion yuan, with software development and gaming sectors leading the gains, while coal, photovoltaic, banking, and liquor sectors showed significant pullbacks [3]. Group 2: Reasons for Market Decline - The decline in the Shanghai Composite Index was primarily due to the weakness in major weight sectors such as banking, liquor, coal, and electricity, which had accumulated profit-taking pressure after continuous gains [5][6]. - The recently released Q2 GDP growth of 5.2% raised concerns about the potential reduction in future stimulus policies, particularly affecting financial and infrastructure sectors reliant on policy expectations [7]. - External events, such as Trump's statement regarding potential tariffs on Russia, heightened global trade uncertainties, leading to increased risk aversion among foreign investors [8]. Group 3: Sector Analysis - The banking sector, after a significant rise of nearly 20% this year, is experiencing a correction, raising questions about whether this marks the end of its rally or presents a buying opportunity [13][15]. - The banking sector's recent downturn is attributed to profit-taking by investors, particularly after the major banks' dividend distributions concluded in mid-July [18]. - Despite short-term volatility, the banking sector retains long-term investment value due to its stability and attractive dividend yields, with an average dividend yield of 3.7%, significantly higher than the 10-year government bond yield of approximately 1.65% [20][21]. Group 4: Investment Strategy - Investors are advised to consider balanced allocations between growth and dividend stocks, particularly in the banking sector, which is expected to maintain its appeal for long-term investors seeking stable returns [11][23]. - The market is projected to experience a "two steps forward, one step back" pattern, with key support levels around 3,480-3,500 points for the Shanghai Composite Index [11]. - For those focused on dividend income, it is recommended to explore related funds or low-volatility dividend index funds to mitigate portfolio fluctuations [26].

Investment Rating - The report highlights the value of dividend assets in a low-interest-rate environment, with the Hong Kong Stock Connect high dividend index outperforming other high dividend indices by 1.17 percentage points as of June 2025 [3][18]. Core Insights - The report emphasizes the accelerated growth of dividend products, with a total scale exceeding 200 billion yuan as of Q1 2025, significantly driven by dividend ETFs [3][31]. - The transportation sector holds a substantial weight in both A-share and Hong Kong dividend indices, with over 10% representation in most dividend indices [3][24]. - Companies in the highway and railway sectors are predicted to have dividend yields greater than 3%, with stable profit growth expected from firms such as Ninghu Expressway, Gansu Expressway, and Daqin Railway [3][12]. - The report identifies that the shipping sector has a predicted dividend yield of over 3%, with companies like COSCO Shipping Energy and Pacific Shipping highlighted [3][12]. Summary by Sections Low-Interest Rate Environment - The report discusses how the low-interest-rate environment enhances the appeal of dividend asset allocation, with the dividend yield of highways at approximately 1.5%, ports at 1%, and shipping at 5% as of July 9, 2025 [3][12][18]. Fund Flow Analysis - The report notes that the scale of dividend products has accelerated since 2024, with significant contributions from dividend ETFs. The majority of the growth in Hong Kong dividend ETFs has been attributed to net inflows from subscriptions and redemptions [3][31][33]. Transportation High Dividend Sector - The report provides a list of key high dividend stocks in the transportation sector, including Ninghu Expressway, Tangshan Port, and China Merchants Highway, which have shown consistent performance despite recent declines [3][24][38].

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **aviation industry** and its investment strategies for the mid-term outlook towards 2025, along with insights into the **highway industry**. Core Insights and Arguments - **Domestic Passenger Load Factor**: As of May 2025, the domestic passenger load factor reached **85%-86%**, nearing historical peaks, indicating a potential for stronger sustained growth in the aviation sector [1][2] - **Profitability Improvement**: The aviation industry is expected to see improved profitability due to enhanced revenue management and rational pricing strategies, which have been positively influenced since May 2023 [2][3] - **Challenges Faced**: The aviation sector has faced challenges such as increased price sensitivity among business travelers, slower-than-expected recovery of international routes, and limited collaboration among airlines, which have pressured overall revenue levels [1][4] - **Supply-Side Challenges**: The global aviation industry is experiencing supply-side challenges, including engine issues leading to approximately **5%** of capacity being grounded and slow delivery of new aircraft, with Airbus and Boeing recovering to **65%** and **70%** of pre-pandemic delivery capabilities, respectively [9][11] - **Profitability Turning Point**: The second quarter of 2025 marks a turning point for profitability in the aviation sector, with major airlines nearing breakeven, reducing losses from **2 billion** to under **500 million** compared to the previous year [12][13] Investment Opportunities - **Investment Outlook for 2025**: The second half of 2025 is expected to present significant investment opportunities in the aviation sector, driven by a critical supply-demand balance and improved load factors [2][3] - **Recommended Companies**: Companies with strong earnings certainty such as **Spring Airlines**, **Juneyao Airlines**, and **China Eastern Airlines** are recommended for investment [3][13] - **Highway Industry Stability**: The highway sector is characterized by stable profitability and is recommended for long-term investment due to its defensive nature and clear dividend commitments from companies like **Yuexiu Transport** and **Wuhu Port** [15][16] Additional Important Insights - **Future Supply Growth**: The average supply growth in the aviation industry is projected to be around **1.8%** from 2025 to 2028, with a notable decline in growth rates expected in subsequent years due to ongoing supply chain issues and rising manufacturing costs [11][12] - **Airport Capacity Expansion**: The airport industry is entering a capacity expansion phase starting in 2025, with significant projects planned for major airports, which may enhance long-term investment value despite short-term cost pressures [14] - **Macro Economic Context**: The Japanese aviation market has shown resilience with a **4.2%** compound growth rate in passenger volume, significantly outpacing GDP growth, indicating strong travel demand despite economic slowdowns [6][7] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the aviation and highway industries, their challenges, opportunities, and future outlooks.

Core Viewpoint - The BoShi Hong Kong Dividend ETF (513690) has shown strong performance and liquidity, making it an attractive investment option for both growth-oriented and long-term investors [3][4][5]. Group 1: Performance and Liquidity - As of July 8, 2025, the BoShi Hong Kong Dividend ETF recorded a trading volume of 238 million yuan, ranking first among all Hong Kong dividend products in terms of market liquidity [3]. - The ETF has achieved a year-to-date performance of +14.84%, outperforming most of its peers, with its net asset value reaching new highs [3]. - The ETF's current dividend yield stands at 6.3409%, significantly higher than the 1.64% yield of China's ten-year government bonds, indicating strong long-term allocation value in a low-interest-rate environment [3]. Group 2: Institutional Interest - Recent surveys indicate that 63% of insurance institutions plan to increase their investment in Hong Kong stocks in 2025, with a focus on high-dividend assets [4]. - Insurance capital has made 19 stake acquisitions in 15 listed companies this year, with two-thirds of these being H-shares, which are characterized by low valuations and high dividend yields [4]. - The BoShi Hong Kong Dividend ETF has seen a recent inflow of 476 million yuan over three days, with a peak single-day net inflow of 429 million yuan [4]. Group 3: Historical Performance Metrics - Over the past two years, the BoShi Hong Kong Dividend ETF has experienced a net asset value increase of 40.36%, ranking in the top 4.45% among 2,224 index equity funds [5]. - The ETF's highest monthly return since inception was 24.18%, with an average monthly return of 4.96% during rising months [5]. - As of July 4, 2025, the ETF's Sharpe ratio for the past year was 1.60, indicating a favorable risk-adjusted return [5]. Group 4: Index Tracking - The BoShi Hong Kong Dividend ETF closely tracks the Hang Seng Hong Kong Stock Connect High Dividend Yield Index, which reflects the performance of high-dividend securities listed in Hong Kong [6]. - The top ten weighted stocks in the index account for 28.65% of the total index weight, including companies like Yanzhou Coal Mining and Cheung Kong Property [6].

Core Viewpoint - The Hong Kong dividend ETF market is experiencing positive momentum, driven by government incentives, international monetary easing, and a focus on defensive yield strategies amid rising geopolitical risks [3][4][5][6]. Group 1: Market Performance - The Hong Kong dividend ETF Bosera (513690) increased by 0.58% on July 3, with a turnover rate of 14.91% and a transaction amount of 624 million yuan [1]. - Year-to-date performance for Bosera is +15.17%, with a leading dividend yield of 7.5481%, compared to the current yield of 1.63% for China's ten-year government bonds [2][3]. Group 2: Government Policies - The Hong Kong government has implemented various policies to enhance market attractiveness, including lowering stamp duty and optimizing southbound trading mechanisms, which are expected to improve overall liquidity and market valuation [3]. - Encouragement from the China Securities Regulatory Commission for dividends aims to attract long-term funds such as pensions and insurance into the market [3]. Group 3: International Environment - The initiation of a rate-cutting cycle by the Federal Reserve has improved global liquidity, leading long-term funds to favor stable cash flow assets, making the Hong Kong dividend index an attractive option for both domestic and foreign investors [4]. - Geopolitical tensions and external uncertainties have increased the appeal of dividend strategies as a defensive measure, particularly in sectors like telecommunications, energy, and utilities [5]. Group 4: Trade Dynamics - The escalation of trade tensions, particularly following Trump's push for "reciprocal tariffs," has placed pressure on export-oriented industries, while dividend index constituents, which are less reliant on external demand, show greater resilience [6]. - The combination of local incentives and a favorable international environment supports the strong positioning of dividend assets in the current market landscape [6]. Group 5: Future Outlook - Despite short-term pressures on high-dividend sectors, mid-term prospects remain positive due to the relative attractiveness of dividend yields compared to long-term government bond rates [7]. - The ongoing volatility in U.S. Treasury yields may enhance the relative performance of dividend strategies during periods of market disturbance [7].