Investment Rating - The report maintains a cautious outlook on the overall market, with a specific focus on iron ore, indicating potential upside if property support is provided in China [6]. Core Insights - China's GDP growth for the June quarter was reported at +5.2% year-on-year, slightly above the consensus of +5.1%, driven by front-loading of exports and earlier government bond issuance [1]. - Industrial production growth accelerated to 6.8% year-on-year, surpassing the consensus of 5.6%, while retail sales growth slowed to 4.8%, below the expected 5.3% [3]. - The property sector shows signs of weakness, with starts and sales down 20% and 15% year-on-year, respectively, leading to concerns about sentiment risk if significant stimulus is not implemented [2]. - Iron ore prices are expected to stabilize within the US$90-100 per ton range, supported by potential property policy support, despite an increase in supply [2]. - The electric vehicle (EV) sector remains robust, with EV output growing by 21% year-on-year, indicating strong demand in the automotive sector [5]. Summary by Sections Mining Strategy - The report highlights mixed economic indicators for China, with a focus on the property sector's impact on overall market sentiment [1]. Iron Ore - Following a decline in property signals, the China Urban Work Conference indicated a shift in urban development focus, which may affect iron ore demand [2]. - Iron ore prices could benefit from any incremental property support, despite a projected increase in supply [2]. Base Metals - Industrial production growth is strong, but retail sales are weaker than expected, suggesting that stimulus measures may need to be reevaluated [3]. Coal - The coal sector faces persistent oversupply, with production increasing by 3% year-on-year, leading to bearish fundamentals in the near term [4]. Battery Raw Materials - The EV market continues to show strength, with significant year-on-year growth in output, supported by favorable trade conditions [5]. UBS View - The report suggests a cautious approach to investments, with a focus on iron ore as a potential area for upside if property support is realized [6].

Investment Rating - The report indicates a solid investment outlook for the China economy, with expectations of a supplementary budget of Rmb0.5-1 trillion in response to weaker data in the coming months [3]. Core Insights - The report highlights a robust performance in Q2 2025, but notes a softening momentum, suggesting that a fall stimulus is likely to be implemented [2][3]. - Structural reforms are deemed essential for sustained economic reflation, with a focus on social welfare reform, debt restructuring, and improving fiscal governance [3]. - Retail sales have remained strong, particularly in the auto and home appliance sectors, although there are concerns about subdued sales in other consumer goods categories [5][7]. - Exports are expected to slow further, despite a rebound in US-bound shipping, indicating potential challenges in international trade [10][12]. - The housing market is experiencing a downturn, with secondary home sales weakening and local government financing pressures increasing [15][20]. Summary by Sections Economic Performance - Q2 2025 data shows solid economic performance, but momentum is softening, leading to expectations of a fall stimulus [2][3]. - Retail sales in June were strong, driven by front-loaded demand in the auto and home appliance sectors [5]. Policy Outlook - The report anticipates a supplementary budget of Rmb0.5-1 trillion to address weaker economic data in the upcoming months [3]. - Structural reforms are necessary for sustained reflation, focusing on social welfare, debt restructuring, and fiscal governance [3]. Trade and Exports - Exports are likely to slow further, with June showing a decline despite a rebound in US-bound shipping [10][12]. - Container throughput at major ports has slipped sharply, indicating challenges in trade logistics [11]. Housing Market - The housing market is under pressure, with secondary home sales weakening and local government financing facing challenges [15][20]. - Major tax revenues and land sales have underperformed, contributing to fiscal pressures [20]. Construction Activity - Weak construction activities are indicated by subdued demand for rebar and cement, suggesting a slowdown in overall construction [21][23]. RMB Internationalization - The report discusses the roadmap for RMB cross-border settlement and highlights the importance of stablecoins in reinforcing dollar dominance in the near term [27][28].