1. Report Industry Investment Rating - No information provided in the report. 2. Core Viewpoints of the Report - The recent A - share market in China has shown good performance. From a capital perspective, there are several characteristics: the number of retail investor accounts has increased moderately, and there is still a large potential for market entry based on excess savings; new fund issuance, especially for actively managed funds, remains stable compared to historical bull markets, while ETF funds have seen some growth with a preference for theme - style rather than broad - based funds; long - term funds have a continuous increasing trend in stock market allocation under policy encouragement and a low - interest - rate environment; leveraged funds, represented by margin trading, have a more significant marginal increase; foreign capital inflows have accelerated in the past two months, and trading has become more active [2]. 3. Summary by Relevant Catalogs 3.1 A - share Performance Review: Growth Excess Returns are Obvious - Since August, major A - share market indices have performed strongly. As of August 27, the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index have risen by 14.67%, 20.7%, and 32% respectively this year. The trading volume of the Shanghai and Shenzhen stock markets has frequently exceeded 2 trillion yuan, and the margin trading balance has remained at a historical high. In terms of sectors, the growth style has performed better, with the Beixin 50 Index rising by 53.4% this year; the CSI 500 Index and CSI 1000 Index in stock index futures have risen by 21.63% and 25.49% respectively this year [6]. 3.2 Market Trading and Turnover: Activity Continues to Increase - On August 25 and 27, 2025, the A - share trading volume exceeded 3 trillion yuan, the second - highest in history. The highest record was on October 8, 2024, when the trading volume reached 3.45 trillion yuan. The current A - share turnover rate is relatively high. Historically, there is a certain correlation between the phased high of the turnover rate and the phased peak of the market, but it is not strongly correlated with the trend peak [8]. 3.3 Capital Flow Observations of Various Types of Investors 3.3.1 Individual Investors are Still Stable - Due to the suspension of the release of the number of new investors in the Shanghai and Shenzhen stock markets since August 2023, the A - share new account opening data of the Shanghai Stock Exchange is used as a measure. In July 2025, the number of new A - share accounts opened on the Shanghai Stock Exchange was 1.9636 million, a year - on - year increase of 70.5%. However, compared with 6.85 million new accounts opened in October 2024, it is only about one - third. Currently, there is no abnormal increase in the number of new accounts. In addition, in small bull markets, retail investors' entry into the market does not necessarily strengthen synchronously with the market. As of July this year, there is about 40 trillion yuan of excess deposits, and in July, the "household deposits" decreased by 1.11 trillion yuan, while the new non - bank deposits reached 2.14 trillion yuan, indicating a certain degree of deposit relocation. With the decline in interest rates, some excess savings may be redirected to other wealth management products after maturity, and the recent A - share rally also has an attractive effect on off - market funds [13][18]. 3.3.2 Leveraged Funds Entered the Market Earlier - As of August 25, 2025, the A - share margin trading balance was about 2.17 trillion yuan, reaching a new high since June 2015, close to the historical peak. However, the proportion of margin trading volume in A - shares is at 12%, within the normal range and far lower than the peak of 35% in 2015, indicating relatively rational use of leverage and controllable overall risks [20]. 3.3.3 Newly Issued Funds Perform Steadily - As of August 28, the number of new stock - type funds has increased by 505 compared to the end of last year, and the number of new partial - stock hybrid funds has increased by 114. Overall, compared with the issuance peak from 2020 - 2021, it remains stable. For ETF products, as of August 28, the number of new stock - type ETFs has increased by 179 to 1015 this year, with a total scale of 3.4 trillion yuan, an increase of 510 billion yuan from the beginning of the year. In terms of capital flow, due to the previous market concentration in some growth industries, there has been a net outflow of 217.6 billion yuan from broad - based index ETFs this year, and a net inflow of 87.1 billion yuan into theme ETFs and 8.9 billion yuan into style ETFs [25]. 3.3.4 Long - term Funds Increase Allocations - Since September 24 last year, policies have provided liquidity to the market and promoted the entry of long - term funds. For example, six ministries and commissions jointly issued an implementation plan to promote the entry of five major types of funds into the market, and the cumulative pilot scale of insurance funds for long - term investment has reached 222 billion yuan. In addition to policy promotion, the A - share dividend strategy is also more attractive to long - term funds due to the low - interest - rate environment. In the first half of this year, the dividend yield of the Wind All - A Index exceeded 2.2%. Data shows that in the first half of the year, 64.06 billion yuan of insurance funds entered the market, and since the beginning of this year, long - term funds such as social security, insurance, and annuities have had a net purchase of more than 200 billion yuan of A - shares, and the market value of long - term funds holding Shenzhen stocks has increased by 33% compared to September last year [27][31]. 3.3.5 Foreign Capital Inflows are on the Rise - From the monthly trading volume data of northbound trading, there has been a significant rebound in the past two months. The trading volume of the Shanghai - Hong Kong and Shenzhen - Hong Kong Stock Connect in June was 2.97 trillion yuan, rising to 4.45 trillion yuan in July and further increasing to 5.4 trillion yuan as of August. As of the first half of this year, the amount of RMB - denominated stock assets held by overseas institutions and individuals was 3.07 trillion yuan, ending the downward trend since September last year. Recently, foreign capital inflows through various funds have accelerated, and the trading volume of the iShares FTSE China A50 ETF has also slightly rebounded [33][36].

Group 1 - The A-share market opened lower but showed mixed performance, with the CSI 500 Free Cash Flow Index rising over 0.5%, led by stocks such as Jiejia Weichuang, Yun Aluminum, and Muyuan Foods [1] - The only ETF tracking the CSI 500 Free Cash Flow Index, the Cash Flow 500 ETF (560120), also increased by over 0.8%, demonstrating resilience [1] - The current bull market in A-shares has been supported by various sources of incremental capital, including long-term funds from insurance and pension funds, active trading by margin financing and private equity, and increasing foreign interest in A-shares [1] Group 2 - The Cash Flow 500 ETF (560120) closely tracks the CSI 500 Free Cash Flow Index, which selects 50 listed companies with high free cash flow rates from the CSI 500 Index [2] - As of July 31, 2025, the top ten weighted stocks in the CSI 500 Free Cash Flow Index include CIMC, Zhejiang Longsheng, Yuntianhua, Shougang, Juneyao Airlines, Western Mining, Shenhuo, Yongtai Energy, Baiyin Nonferrous Metals, and Guiding Compass, collectively accounting for 45.03% of the index [2]

Group 1 - The Federal Reserve is under pressure from Trump to lower interest rates, with indications that a rate cut in September is likely, despite the introduction of a new framework that emphasizes inflation control over employment metrics [1] - The current framework, established in 2020, has contributed to rising inflation, and the Fed is now shifting focus to prioritize inflation management as it enters a new cycle [1] Group 2 - The Shanghai Composite Index has rebounded, surpassing the 3800-point mark, while the Shenzhen Composite Index has seen significant gains, reaching a two-year high [3] - There is a strong expectation for a bullish opening in the A-share market on the following Monday, with potential for the Shanghai Composite Index to approach 4000 points in the coming days [5] Group 3 - The Shanghai Composite Index rose by 1.45%, the Shenzhen Component Index by 2.07%, and the ChiNext Index by 3.36%, indicating a bullish market trend [7] - The Shanghai Composite Index has closed at 3825 points, exceeding the previous high of 3731 points from 2021, with a target of reaching 4000 points in the near term [7]

Company Insights - Feng Liu, a well-known fund manager, has increased his stake in Angel Yeast, holding 35 million shares as of the end of Q2, making him the third-largest shareholder [1] - Compared to the end of Q1, Feng Liu added 3.5 million shares of Angel Yeast, with a total holding value of approximately 1.231 billion yuan [1] - Angel Yeast is the second-largest yeast company globally, with core businesses including yeast and deep-processing products, as well as vitamin additives, supported by a global production layout and technological barriers [1] - The company's half-year report shows a revenue of approximately 7.899 billion yuan, a year-on-year increase of 10.1%, and a net profit attributable to shareholders of approximately 799 million yuan, up 15.66% year-on-year [1] Market Trends - The A-share market has seen over 300 stocks double in value this year, with the Shanghai Composite Index reaching a new high not seen in nearly four years [1] - The total market capitalization of A-shares has reached 108.87 trillion yuan, increasing by 15.11 trillion yuan this year [1] - New account openings in the A-share market reached 1.9636 million in July, a year-on-year increase of 70.54% [1] - Institutional participation in the current market rally is high, with significant inflows from leveraged and insurance funds [1] - Insurance funds have made 27 stake acquisitions this year, surpassing the total of 20 from the previous year [1]

Core Viewpoint - The A-share market in July is experiencing a bottom-up bull market atmosphere, driven by a combination of liquidity easing and positive policy expectations, with improved sentiment stemming from favorable external conditions [1] Market Dynamics - Market funds are categorized into four types: state-owned funds, institutions, retail investors, and foreign capital, with retail investors being the core driving force [1] - Foreign capital shows signs of spontaneous recovery, while institutional fund flows exhibit divergence [1] - The support from state-owned funds in stabilizing the market has weakened [1] Key Drivers - The current market rally is primarily led by the rising sentiment among retail investors and the return of foreign capital, with insurance funds providing long-term support [1]