Market Review - The market is expected to shift focus upwards, with excess returns coming from early recognition of the "DeepSeek moment" in innovative fields such as artificial intelligence, semiconductors, humanoid robots, innovative pharmaceuticals, and national defense [1] - In July, the market exhibited a strong upward trend, with broad industry gains led by technological innovation and key mineral resources. The ChiNext Index rose by 8.1%, the CITIC TMT Index increased by 16.2%, and the innovative pharmaceutical ETF gained 16.7% [1] Economic Environment - In the first half of 2025, liquidity remained ample, supported by loose monetary and proactive fiscal policies, helping the economy maintain resilience and stable operation. The cumulative GDP growth was 5.3%, exceeding the expected 5.2% [2][30] - The profit margin of industrial enterprises showed slight improvement, with the total profit of large-scale industrial enterprises declining by 1.8% year-on-year in the first half of 2025 [30][53] Policy Environment - The Central Economic Commission emphasized the need to govern low-price disorderly competition and promote the orderly exit of backward production capacity, targeting "anti-involution" [3] - The macro policy is expected to continue to exert force, with more proactive fiscal policies and moderately loose monetary policies being implemented to fully release policy effects [3] Investment Strategy - Long-term strategies should recognize the unwavering commitment to advancing technological innovation and creating a more favorable institutional environment for innovation, guiding social resources towards achieving the "DeepSeek moment" [4] - Short-term strategies should be cautious of market volatility risks following high market sentiment, as the Shanghai Composite Index's price-to-book ratio has risen significantly, indicating potential structural risk release [6] Industry Performance - As of July 31, 2025, 23 of the 28 Shenwan first-level industries had increased, with a 74.2% industry increase ratio. Notably, non-ferrous metals, pharmaceuticals, and communications saw growth exceeding 20% [16] - The cumulative increase in recommended industries from January to July 2025 was positive for 22 out of 24 sectors, with a success rate of 91.7% [20] Fund Flow - As of July 31, 2025, southbound capital inflow into Hong Kong stocks remained strong, with a cumulative net inflow of 45,646.3 billion HKD [26] - The financing balance reached a new high for the year, indicating heightened financing sentiment, with a financing balance of 19,705.7 billion CNY as of July 30, 2025 [28]