Summary of Key Points from the Conference Call Industry Overview - The focus is on the **A-share market** in China, specifically the **Shanghai Composite** and **CSI300** indices, which are experiencing significant upward momentum, testing 10-year highs as of August 2025 [2][10]. Core Insights and Arguments 1. **Market Performance**: - The Shanghai Composite has delivered an **11%** return year-to-date (YTD), while the CSI300 has returned **8%**. The Shanghai Composite officially crossed the **3,700** level on August 15, 2025, a level not seen since late 2015 [2][10]. - The CSI300 index surpassed **4,200**, a level briefly reached in late September 2024 and January 2023 [2]. 2. **Bond Yield Trends**: - Onshore long-term bond yields have increased, with the **10-year yield** at **1.78%** and the **30-year yield** at **2.11%**, reflecting a more constructive macro outlook among investors [3][11]. - This contrasts with previous periods in September 2024 and early 2023, where bond yields indicated skepticism towards the macro outlook [3]. 3. **Liquidity and Economic Indicators**: - The **MS Free Liquidity Indicator** turned positive in June 2025 for the first time since early 2024, indicating improved onshore liquidity driven by strong government bond issuance [4]. - The **anti-involution initiative** is gaining momentum, positively impacting market sentiment and expectations for domestic price stabilization [5]. 4. **Policy Expectations**: - The State Council's recent meeting reaffirmed a pro-growth stance, emphasizing consumption, infrastructure projects, and urban renewal as key policy levers [8]. - There is anticipation of localized housing market easing measures in response to a broad-based slowdown [8]. 5. **Investment Rotation**: - Rising bond yields may lead to a rotation from bonds and term deposits into equities, as current deposit options become less attractive [9]. 6. **Future Outlook**: - The A-share market is expected to continue outperforming the offshore market through the summer, with a target for the CSI300 to reach **4,700** in the near term [10]. - Key indicators to monitor for sustainability of the rally include onshore bond yields, policy catalysts, 2Q earnings results, and potential government intervention regarding margin financing [11]. Additional Important Insights - The margin financing balance has exceeded **RMB 2 trillion** (approximately **USD 290 billion**), a level last seen in 2015, indicating increased leverage in the market [11]. - The current margin financing balance is **4.8%** of free float market cap, slightly below the 10-year average of **4.9%** [11]. - Analysts suggest that immediate government intervention due to over-leverage concerns is unlikely unless both margin financing measures increase rapidly [11]. This summary encapsulates the key points discussed in the conference call regarding the A-share market's performance, macroeconomic indicators, policy expectations, and future outlook.

10 July 2025 COLI is the debate: Investors we have met with feel that the investment thesis is unclear despite its less favourable earnings track record relative to CRL and the recent price cut news. However, we reckon that hedge funds seem hesitant to short the stock given the depressed PB ratio at 0.3x, among the lowest in the SOE universe. We have a Hold rating on the stock, as we see earnings risk as being appropriately reflected by the current valuation. Disclosures & Disclaimer This report must be rea ...