Core Viewpoint - The article discusses the recent economic indicators in the U.S., highlighting weaker-than-expected core CPI and strong retail performance, alongside potential tariff increases on European imports by the U.S. government [2][35][37]. Group 1: Economic Indicators - The U.S. June core CPI increased by 0.2% month-on-month, which was below the market expectation of 0.3%. Year-on-year, the core CPI was reported at 2.9%, matching expectations [35]. - June retail sales in the U.S. rose by 0.6% month-on-month, significantly rebounding from May, indicating a robust consumer spending environment [37]. Group 2: Tariff Developments - On July 12, President Trump announced a potential increase in tariffs on imports from the EU and Mexico to 30% if trade negotiations do not reach an agreement by August 1 [27]. - The U.S. Trade Representative (USTR) initiated a 301 investigation against Brazil on July 15, focusing on digital trade and intellectual property issues [27]. Group 3: Market Performance - Major developed market indices saw gains, with the S&P 500 up by 0.6% and the Hang Seng Index up by 2.8% during the week [2]. - The 10-year U.S. Treasury yield rose by 1.0 basis points to 4.4%, reflecting market reactions to economic data and tariff announcements [2][10]. Group 4: Currency and Commodity Movements - The U.S. dollar index increased by 0.6% to 98.46, while the offshore RMB depreciated to 7.1810 against the dollar [14][20]. - WTI crude oil prices fell by 1.6% to $67.3 per barrel, while COMEX gold prices decreased by 0.3% to $3349.4 per ounce [22][25].

Core Viewpoint - The AI Fund for Health Industry Flexible Allocation Mixed A/B (000727) reported a profit of 179 million yuan in Q2 2025, with a net asset value growth rate of 8.97% for the period [2] Fund Performance - As of July 17, the fund's unit net value was 2.661 yuan, with a recent three-month growth rate of 15.00%, ranking 108 out of 138 comparable funds [3] - The fund's six-month growth rate was 16.45%, ranking 117 out of 138, and the one-year growth rate was 19.86%, ranking 107 out of 133 [3] - Over the past three years, the fund's growth rate was -9.89%, ranking 64 out of 106 [3] Risk and Return Metrics - The fund's Sharpe ratio over the past three years was 0.1159, ranking 48 out of 105 comparable funds [8] - The maximum drawdown over the past three years was 45.79%, with the highest quarterly drawdown occurring in Q1 2024 at 26.05% [11] Investment Strategy - The fund focuses on selecting sectors and stocks with good growth potential and relatively low valuations, aligning with the structural upgrades in China's pharmaceutical industry and the recovery of medical demand [2] - Key investment areas include innovation-driven industry upgrades, import substitution, and recovery in hospital medical services, with a focus on innovative drugs, medical devices, and low price-to-book (PB) assets [2] Fund Composition - As of June 30, the fund maintained an average stock position of 92.67% over the past three years, with a peak of 94.13% at the end of Q1 2024 [14] - The fund's total assets reached 2.074 billion yuan as of the end of Q2 2025 [15] - The top ten holdings include Yixin Hall, Aibo Medical, Sanyou Medical, Jianzhijia, Kaili Medical, Sunshine Nuohuo, Dongfang Biological, Puri Eye Hospital, Meihao Medical, and Meinian Health [18]

Economic Growth - GDP growth for the first half of 2025 is 5.3%, exceeding the target of 5%[1] - Q2 GDP growth is 5.2%, slightly below Q1 and Q4 of the previous year, which were both 5.4%[1] - The GDP deflator index decreased from -0.8% in Q1 to -1.3% in Q2, indicating a significant supply-demand imbalance[1] Industrial Performance - Industrial added value in June increased by 6.8%, up 1.0 percentage points from the previous month[2] - Exports contributed nearly 40% to the increase in industrial added value, with a 4.0% growth in export delivery value in June[2] - The industrial sales rate in June was 94.3%, down 0.3 percentage points year-on-year[1] Retail Sector - Retail growth slowed to 4.8% in June, primarily due to holiday misalignment and a decline in dining revenue[3] - The dining revenue growth rate in June was only 0.9%, a decrease of 5 percentage points from May, negatively impacting overall retail[4] - National subsidies for retail showed a reduced effect, contributing 1.5 percentage points to retail growth, down 0.4 percentage points from the previous month[4] Consumer Behavior - The proportion of per capita consumption expenditure to disposable income in Q2 was 68.6%, lower than 2019 levels by 1.9 percentage points[5] - Urban consumption rates were 63.1%, down 2.8 percentage points from 2019, while rural consumption rates were 89.2%, up 1.6 percentage points[5] Investment Trends - Fixed asset investment growth for the first half of 2025 was 2.8%, with a 6.6% increase excluding real estate investment[7] - In June, fixed asset investment fell to -0.1% year-on-year, with significant slowdowns in infrastructure and manufacturing investments[7] - The issuance of local special bonds increased in June, reaching 5270.9 billion yuan, but infrastructure investment growth continued to slow[7] Real Estate Market - Real estate sales in June showed a year-on-year decline of 5.5% in area and 10.8% in sales value, marking the first drop below -10% since October of the previous year[8] - New residential prices fell by 0.3% month-on-month in June, the lowest since November of the previous year[8] - Expectations for new real estate policies may arise in July-August, focusing on mortgage rate reductions and potential easing of purchase restrictions[8] Policy Outlook - The necessity for additional economic stimulus may decrease due to better-than-expected growth, with potential delays in new policies until external demand weakens significantly[9] - The government may prioritize targeted financial tools and mortgage rate adjustments in response to economic data in July-August[9] Market Reactions - Following the economic data release, equity markets initially dipped but later rebounded, indicating resilience in market sentiment[10] - The bond market showed increased optimism, with yields declining as the economic growth trend demonstrated resilience against dual pressures of tariffs and weak demand[11]

Investment Rating - The industry investment rating is "Overweight" for both construction and building materials sectors [7]. Core Insights - The report anticipates a continued weakening in traditional construction materials in 2Q25, while new materials show a divergence in demand [1]. - Construction activity is expected to remain subdued due to a weaker funding environment, with most construction companies experiencing slight revenue declines [2]. - Retail demand for building materials is gradually improving, although the engineering segment continues to face pressure [3]. - Cement prices are expected to decline, while glass supply pressures persist, impacting profitability [4]. - High-end fiberglass demand remains strong, with limited revenue decline expected for carbon fiber products [5]. Summary by Sections Construction Sector - In 2Q25, the issuance of special bonds is approximately CNY 1.88 trillion, a decrease of 22.7% from 1Q, leading to weaker order growth for most central construction enterprises [2]. - Local state-owned enterprises show varied performance, with regions like Sichuan expected to see profit growth, while others like Shanghai may experience delays [2]. - Steel prices are projected to continue declining, affecting revenue growth for steel structure companies [2]. Consumer Building Materials - Major raw material prices for waterproofing, coatings, and other categories have decreased year-on-year, with some categories facing significant price drops [3]. - The cumulative sales of commercial housing from January to May 2025 have decreased by 2.9%, while the retail sales of building and decoration materials have increased by 3.0% in the same period [3]. Cement and Glass - The average price of cement in 2Q25 is CNY 382 per ton, showing a year-on-year increase of 1.8% but a decline of 6.1% from the previous quarter [4]. - The average price of float glass has decreased significantly, with supply pressures expected to continue impacting prices [4]. Fiberglass and Carbon Fiber - The demand for high-end fiberglass products remains robust, with expectations for continued price increases in the future [5]. - Carbon fiber prices have stabilized, with a limited revenue decline anticipated for carbon fiber companies [5].

Market Overview - The Asia-Pacific markets showed strong performance today, with the Nikkei 225 index closing up 1.18% at 33,982.36 points, the Australian S&P 200 index rising 1.29% to 7,745.4 points, and the South Korean Composite Index increasing by 0.95% to 2,455.89 points [1] - A-shares continued to strengthen, with the Shanghai Composite Index rising 0.76% to 3,262.81 points and the Shenzhen Component Index up 0.51% to 9,884.3 points. The total turnover in the Shanghai and Shenzhen markets reached 13,129 billion [2] - The European stock indices opened higher, with the UK FTSE 100 index gaining 2% and major indices in Germany, France, Italy, and the Euro Stoxx 50 all rising over 2% [3] - U.S. stock index futures were also up, with the Dow futures rising nearly 1% and the S&P 500 futures increasing over 1% [4] Resource Sector - The resource sector saw a collective rally, with coal, electricity, non-ferrous metals, oil, chemicals, and steel stocks all performing well [6] - In the coal sector, companies like Dayou Energy and Anyuan Coal Industry hit the daily limit, while New Dazhou A rose over 5% [7] - Analysts suggest that the coal sector is in the early stages of a new upward cycle, with a favorable supply-demand balance expected to persist over the next 3-5 years, making it a good time to invest in coal stocks [8] Precious Metals - The non-ferrous sector, particularly gold stocks, performed strongly, with companies like Huayu Mining and Hunan Gold hitting the daily limit, and others like Chifeng Gold and Hunan Silver rising over 7% [9] - Spot gold prices reached a new high of $3,245 per ounce, with UBS raising its gold price forecast to $3,500 per ounce and Goldman Sachs increasing its 2025 target from $3,300 to $3,700 per ounce [9] - Analysts believe that the current liquidity crisis in U.S. Treasuries has diminished their safe-haven appeal, making gold a more attractive investment option [9] Sports Sector - The sports concept stocks surged, with companies like Kangli Source and Jinling Sports hitting the daily limit, and others like Tanshihua Sports and Shuhua Sports also performing well [10][12] - The People's Bank of China and other departments recently issued guidelines to support the high-quality development of the sports industry, emphasizing financial support for infrastructure and major projects [12] Controlled Nuclear Fusion - The controlled nuclear fusion concept saw significant gains, with companies like Zhongzhou Special Materials hitting the daily limit and others like Changfu Co. and Hailu Heavy Industry also performing well [14] - The ITER project, which aims to develop nuclear fusion technology, has reached a key milestone with the completion of major components, indicating progress towards commercial viability [16] - Analysts highlight that advancements in high-temperature superconductors and AI are driving the commercialization of controlled nuclear fusion, which could lead to rapid development in the industry [16][17]