1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In H1 2025, the regional economy showed the characteristics of "rapid growth in the central and western regions and remaining resilience in the eastern region." GDP growth continued the pattern of "lower in the east and higher in the west," with the average GDP growth rate in the eastern region (5.3%) lagging behind the central (5.5%) and western (5.6%) regions for two consecutive quarters. The central and western regions benefited from industrial transfer and upgrading, with higher industrial added - value growth rates but the feature of "increasing revenue without increasing profit." The eastern region had better industrial enterprise profit performance supported by the integration of high - tech manufacturing and the digital economy. The central and western regions outperformed the eastern region in investment and consumption under policy support, while the eastern region was deeply affected by the decline in real estate development investment and had weak consumption. In the context of intensified Sino - US tariff game, the central and western regions achieved double - digit export growth, while the eastern region's export was greatly affected by Sino - US game [6]. - Looking ahead to the second half of the year, the economic downward pressure increases. For the central and western regions, attention should be paid to the problems of disorderly competition among enterprises and repeated government investment, and reversing the situation of "increasing revenue without increasing profit." For the eastern region, focus on the bottoming - out of the real estate market in the second half of the year and the implementation effects of consumption - promotion and foreign - trade - stabilization policies. For the northeastern region, pay attention to the industrial transformation and upgrading [6]. 3. Summary by Relevant Catalogs 3.1 Eastern Provinces Show Strong Resilience, Central and Western Provinces Have Faster Growth, and Economic Powerhouses Continue to "Shoulder the Heavy Burden" - In terms of scale, economic powerhouses played a stable "leading" role in H1 2025, with little change in the ranking of provincial GDP scale. The top five provinces in H1 2025 accounted for 40% of the national GDP, and the top ten accounted for 61.6%, basically the same as in 2024. Only Chongqing overtook Liaoning in the ranking. There were also cases of widening and narrowing differences in GDP scale among some provinces. For example, the GDP scale difference between Tianjin and Heilongjiang widened, while that between Guizhou and Shanxi narrowed [7]. - GDP growth continued the "lower in the east and higher in the west" pattern. The central and western provinces were the important engines of national economic growth in H1 2025. Most provincial GDP growth rates were higher than the national average (5.3%). The weighted average GDP growth rate of all provinces was 5.36%. The eastern region's average GDP growth rate was 5.3%, lagging behind the central and western regions for two consecutive quarters. However, the rapid development of high - tech manufacturing in the eastern region provided strong support for its economic growth. The central and western regions had fast economic growth, supported by industrial upgrading, major project construction, and high export growth. The northeastern region's GDP growth rate was 5.2%, lower than the national level, affected by real estate investment and its single - industrial structure [10][11]. - Most provincial GDP actual growth rates in H1 2025 were higher than the expected targets. Among the 31 provinces, 20 had higher growth rates than the targets, and 11 were lower, mainly in the western region. Considering the greater economic growth pressure in the second half of the year, these 11 provinces faced greater pressure to achieve their expected growth targets [11]. 3.2 Central and Western Regions Lead in Industrial Added - Value Growth, and Eastern Region Has Bright Performance in Industrial Enterprise Profits - The eastern region had stable growth in industrial added - value and bright performance in industrial enterprise profits. The industrial added - value of eastern provinces increased by 7.1% in H1 2025, higher than the end of last year and the same period last year. High - tech manufacturing development, digital economy integration, and high R & D investment were the main driving forces. Some provinces like Hainan, Fujian, and Jiangsu had both industrial added - value growth rates above 7% and industrial enterprise profit growth rates over 10%. Shanghai had a relatively low industrial added - value growth rate of 5.1% but a high profit growth rate of 11.8%. Guangdong's industrial added - value only increased by 4%, lower than the national level for 11 consecutive months [13][14]. - The central and western regions had fast industrial added - value growth but poor overall profit performance, with some provinces showing a significant feature of "increasing revenue without increasing profit." The central and western regions' industrial added - value increased by 7.9% and 8.2% respectively in H1 2025, higher than the national level (6.4%), but industrial enterprise profits decreased by 5.1% in the central region and increased by 1.4% in the western region. Some resource - based provinces in the central and western regions had a significant decline in industrial enterprise profits, while Tibet and Guangxi had good performance in both industrial added - value and profit growth. The northeastern region's industrial added - value increased by 5.4%, and industrial enterprise profits decreased by 13.7%, significantly lower than other regions [15]. 3.3 Supported by "Two Major" Project Construction, Central and Western Regions' Fixed - Asset Investment Growth Rates Outperform the National Average, and the Impact of Real Estate Investment Decline on the Eastern Region Continues to Deepen - The central and western regions benefited from national support for "two major" project construction, with higher fixed - asset investment growth rates than the national average in H1 2025. The western region's fixed - asset investment increased by 6.6%, 3.8 percentage points higher than the national level, with 4 out of 5 provinces with investment growth rates over 10% in the western region. The central region's fixed - asset investment increased by 3%, slightly higher than the national level, driven by manufacturing investment in some provinces. The eastern region's fixed - asset investment growth was 1.7%, lower than the national level, dragged down by real estate development investment, which had been declining since September last year. Beijing led the eastern region with a 14.1% growth rate in fixed - asset investment. The northeastern region's fixed - asset investment decreased by 1.3%, mainly due to a 17% decline in real estate development investment. The fixed - asset investment growth rate of debt - resolving provinces was 0.9 percentage points lower than that of non - debt - resolving provinces, but the gap was narrowing [22][23]. 3.4 Central Region Leads in Social Retail Sales Growth Rate, and Eastern Region Has Weak Consumption - The central region's social retail sales (社零) growth rate continued to be higher than other regions, while the eastern region's was significantly lower than the national level. The central region had a bright consumption performance in H1 2025, with a 6.2% growth rate in social retail sales, leading the country, supported by population advantages and the "old - for - new" consumer goods policy. All six central provinces had social retail sales growth rates higher than the national level. The northeastern region's social retail sales increased by 5.4% driven by cultural and tourism economy and ice - snow economy. The western region had large differences in social retail sales growth rates among provinces. The eastern region's social retail sales growth was 4%, lower than the national level, affected by weak wealth effects and income expectations. Hainan was an exception, with an 11.2% growth rate in social retail sales, driven by multiple factors [27][28]. 3.5 Eastern Region's Exports Are Greatly Affected by Tariff Game, and Central and Western Regions Achieve Double - Digit Export Growth - The central and western regions had an export growth rate of over 15% in H1 2025, while the eastern region's export growth rate was significantly lower than the national level. In the context of Sino - US tariff game, weak external demand, and increasing trade disputes, the central and western regions' exports increased by 15.5% and 17.5% respectively, much higher than the national level (7.2%). They benefited from industrial transfer, forming export advantages in "new three items" and taking advantage of the Belt and Road Initiative and transit trade. The northeastern region's exports increased by 8.4%. The eastern region's exports only increased by 1.4%, mainly affected by Sino - US game, with Guangdong being the most affected. Shanghai had a 9.8% export growth, driven by high - tech product exports [31]. - Due to weak domestic demand, most provinces had negative import growth in H1 2025. There were 21 provinces with negative import growth, mainly in the eastern and northeastern regions. The eastern region's imports decreased by 5.3%, while the northeastern region's decreased by 13.5%. Ten provinces in the central and western regions had positive import growth, driven by resource - related products [35].

Group 1: Financial Sector - The financial sector is expected to undergo a value reassessment due to the Fed's decision to maintain interest rates, which stabilizes banks' funding costs and profit margins [3] - The People's Bank of China announced a 50 basis point reserve requirement ratio cut in July, releasing significant liquidity that supports banks in expanding credit and maintaining interest margins [3] - Insurance stocks are also poised to benefit from a stable interest rate environment, which enhances investment returns and reduces overseas investment risks [3] Group 2: Import Consumption - The stabilization of the RMB exchange rate directly benefits import-dependent consumer companies, particularly in the aviation industry, which will see reduced operational costs [4] - The recovery of domestic tourism consumption further supports the aviation sector, creating a favorable environment for airline stocks [4] - Import companies in food and cosmetics will also benefit from stable exchange rates, although the impact on financial performance may be delayed [4] Group 3: Technology Sector - While the Fed's decision does not directly favor technology stocks, expectations of foreign capital inflow and increased domestic support for technological innovation provide a solid foundation for long-term growth [5] - The increase in the re-lending quota for technological innovation to 800 billion yuan significantly improves the financing environment for tech companies [5] - Key sectors such as artificial intelligence, semiconductors, and renewable energy are expected to receive more policy and financial support, indicating long-term growth potential despite short-term volatility [5] Group 4: Export Sector - The stability of the RMB exchange rate may reduce the price advantage for export companies, particularly those heavily reliant on the U.S. market, facing challenges amid unresolved tariff issues [8] - Traditional export industries like furniture, clothing, and toys have already been affected by tariffs, and without additional support from exchange rates, their competitiveness may weaken [8] - However, high-tech and differentiated product exporters may still maintain strong competitiveness in the market [8] Group 5: Investment Strategy - A cautious investment strategy is recommended, with a focus on benefiting sectors while avoiding blind chasing of trends [6] - Diversification across financial, consumer, and technology sectors is suggested to capture market opportunities while effectively managing investment risks [6]

Economic Overview - China's GDP exceeded 66 trillion yuan in the first half of the year, growing by 5.3% year-on-year, laying a solid foundation for the annual target of around 5% [1] - In the second quarter, the economy grew by 5.2% year-on-year, with exports increasing by 7.2%, indicating resilience despite external pressures [1][5] - Consumer retail sales showed a rebound due to policies promoting the replacement of old goods, while investment growth slowed, particularly in infrastructure and real estate [1][5] Investment Insights - Investment growth has declined, with significant drops in real estate and infrastructure investments, and private investment turning negative [7] - The need for stronger investment policies is emphasized, as industrial profits and profit margins have decreased compared to the previous year [7][8] - The government is expected to implement supportive policies to stabilize investment, particularly in the face of declining returns [7][12] Consumption Trends - Consumption is projected to maintain steady growth, supported by various policies including a 1.38 billion yuan fund for replacing old goods [8][14] - Long-term strategies to boost consumption include improving social security systems and increasing residents' income [8][15] - The overall consumption market is estimated to be around 80 trillion yuan, with the 3 billion yuan stimulus being a relatively small part of the total [14] Real Estate Market - The real estate market is experiencing significant downward pressure, with sales and investment declining [15][16] - Policies are being developed to stabilize the market, including debt management for developers and promoting new housing demand through urban renewal projects [16][18] - The government is expected to enhance financing support for real estate companies and encourage debt restructuring to improve liquidity [16][18] Policy Recommendations - A more proactive fiscal policy and moderate monetary policy are necessary to address low demand and support economic recovery [10][12] - The focus should be on maintaining strong fiscal spending and potentially lowering interest rates to alleviate financial pressures on businesses [10][12] - Addressing "involution" in competition is crucial to restore market dynamics and improve investment returns [11][18]

Economic Performance - China's GDP exceeded 66 trillion yuan in the first half of the year, growing by 5.3% year-on-year, laying a solid foundation for the annual target of around 5% [1][3] - The economy maintained stable growth in Q2 with a year-on-year growth of 5.2%, supported by a rebound in exports, which grew by 7.2% compared to Q1 [1][4] Investment Trends - Investment growth has slowed down, with declines in infrastructure and manufacturing investments, while real estate investment continues to decrease [1][6] - The need for policies to support investment is emphasized, as industrial profits and profit margins have decreased compared to the previous year [6][9] Export and Trade - Exports in the first half of the year increased by 5.9% year-on-year in USD terms, showing resilience despite high tariffs from the US [5][6] - The competitiveness of Chinese products is improving, transitioning from a traditional extensive development model to an intensive, innovative, and large-scale development model [5][6] Consumer Market - Consumer spending is expected to maintain steady growth, supported by policies such as the "old-for-new" subsidy program, which has 138 billion yuan available [6][10] - Long-term strategies to boost consumption include increasing residents' income and improving the social security system [11] Real Estate Market - The real estate market is facing downward pressure, with sales and investment declining; policies are needed to stabilize the market [10][12] - Measures to improve liquidity for real estate developers and promote debt restructuring are essential for market recovery [12][13] Fiscal and Monetary Policy - A more proactive fiscal policy and moderately loose monetary policy are necessary to stimulate demand and support economic growth [7][9] - The government is expected to issue special bonds and introduce policy financial tools to enhance support for key sectors [9][12] Market Competition - The need to address "involution" in competition is highlighted, focusing on restoring market regulation and promoting fair competition [14][15] - Regulatory measures are required to prevent irrational pricing behaviors and ensure a healthy competitive environment [14][15]

Economic Overview - China's GDP exceeded 66 trillion yuan in the first half of the year, growing by 5.3% year-on-year, laying a solid foundation for the annual target of around 5% [1][4] - The economy showed resilience with a 5.2% growth in Q2, supported by unexpected export performance and a series of incremental policies that boosted consumption [1][4] Export Performance - Exports grew by 5.9% year-on-year in the first half, outperforming expectations despite pressures from U.S. tariffs, indicating a shift towards a more competitive and innovative export structure [6][4] - The export sector is expected to face challenges in the second half due to uncertainties in U.S.-China trade negotiations, but the overall impact may be less severe than anticipated [6][4] Investment Trends - Investment growth has slowed, with declines in real estate and infrastructure investments, necessitating stronger policy support to stabilize investment levels [7][4] - Industrial profits and profit margins have decreased compared to the previous year, indicating a need for enhanced investment policies [7][4] Consumption Outlook - Consumption is projected to maintain steady growth, supported by policies such as the 1.38 billion yuan "old-for-new" subsidy and potential increases in social security and income [7][4] - The long-term strategy for boosting consumption involves addressing supply bottlenecks and improving income distribution [15][4] Fiscal and Monetary Policy - A more proactive fiscal policy and moderately loose monetary policy are essential to stimulate demand and support economic recovery [10][4] - The broad fiscal expenditure increased by 8.9% year-on-year in the first half, contributing significantly to economic growth [10][4] Real Estate Market - The real estate market is experiencing increased sales area and sales volume declines, necessitating stronger measures to stabilize the market [16][4] - Policies aimed at improving liquidity for real estate developers and addressing debt issues are expected to be introduced in the second half [17][4] Anti-"Involution" Measures - Efforts to combat "involution" in competitive sectors are crucial for restoring market equilibrium and improving investment returns [18][4] - Regulatory measures are needed to prevent irrational pricing behaviors and ensure fair competition in the market [19][4]

Core Insights - The light industry sector has shown mixed performance in H1 2025, with traditional cyclical and manufacturing companies facing valuation pressure, while domestic personal care brands have gained market share from foreign brands due to product optimization and channel expansion [4] - The report recommends focusing on four main investment themes: 1) High-quality domestic personal care brands with upward market trends and optimized product structures; 2) Export companies with strong demand resilience and minimal tariff impact; 3) Undervalued cyclical assets in home furnishings and paper; 4) New consumption trends in AI glasses, new tobacco, pet products, and trendy toys [4] Sector Review - The light industry sector's overall revenue in Q1 2025 was 137.76 billion yuan, a slight decline of 0.8% year-on-year, with net profit down 18.8% to 6.46 billion yuan [19] - The packaging and entertainment sectors performed well, with respective revenue growth rates of 9.4% and 2.4%, while the paper sector faced significant challenges with a revenue decline of 13% [19][22] - The report highlights that the home furnishings sector is benefiting from the "old-for-new" policy, which is expected to stabilize demand [4][19] Personal Care Sector - The personal care market is projected to grow, with the oral care segment expected to reach a market size of 50.51 billion yuan in 2025, reflecting a year-on-year growth of 1.9% [40][41] - Domestic brands are rapidly gaining market share in the sanitary napkin market, which is expected to reach 107.96 billion yuan in 2025, growing at a CAGR of 3.0% from 2025 to 2029 [54][55] - The report emphasizes the importance of product safety and quality in the sanitary napkin market, especially with the implementation of stricter national standards [64] Export Sector - The report notes that the export sector is experiencing a "rush to export" phenomenon due to fluctuating tariff policies, with companies that have strong manufacturing capabilities and minimal tariff impacts being favored [4][82] - The export of pet food and supplies, as well as non-woven fabrics, has shown resilience despite tariff disruptions, indicating strong demand in these categories [93]

Investment Rating - The report maintains a positive outlook on the light industry and paper-making sector for the mid-2025 earnings forecast, indicating a favorable investment rating for these industries [1]. Core Insights - The report highlights a divergence in performance within the export sector for Q2 2025, with companies that have a global supply chain showing resilience against external tariff disruptions. Notable performers include Jiangxin Home, Jiayi Co., and Tianzhen Co. [4][5]. - The two-wheeler segment is expected to benefit from government subsidies and new standards, with companies like Yadi Holdings and Aima Technology showing strong growth potential [4]. - The light consumer goods sector is characterized by a robust domestic demand, particularly in personal care products, with companies like Baiya Co. and Dengkang Oral Care expected to perform well [4]. - The packaging industry is undergoing consolidation, with leading companies experiencing a slowdown in capital expenditure, indicating a shift towards a harvest phase [4]. - The home furnishing sector is facing short-term order impacts due to the pause in government subsidies, but long-term growth is anticipated through market integration and new product categories [4]. - The paper-making sector is expected to see stable profitability due to low raw material costs and improved supply-demand dynamics [4]. Summary by Sections Export Sector - Q2 2025 shows performance divergence due to increased external disruptions, with companies like Jiangxin Home expected to see a 40%+ growth in net profit [5][6]. - Jiayi Co. anticipates a 30%+ revenue increase, while Tianzhen Co. is expected to recover orders significantly [4][5]. Two-Wheeler Sector - Companies like Aima Technology and Ninebot are projected to grow by 20% and 50% respectively in Q2 2025, driven by new product launches and market demand [8][9]. Light Consumer Goods - The sector is expected to show resilience, with companies like Chaohongji and Baiya Co. projected to grow by 20% and 2% respectively in revenue [10][11]. Packaging Industry - The report notes a continued consolidation trend, with companies like Yutong Technology and Baosteel Packaging expected to maintain stable revenue growth [12][14]. Home Furnishing Sector - The sector is facing challenges due to subsidy pauses, but companies like Mousse and Zhizhong Home are expected to adapt and show growth in the long term [13][15]. Paper-Making Sector - The report indicates stable profitability for the paper-making sector, with companies like Sun Paper and Huawang Technology expected to benefit from improved market conditions [17].

Group 1 - The upcoming Japanese Senate elections may lead to the ruling coalition losing its majority, which could negatively impact the country's $6.8 trillion stock market [1] - The Japanese stock market has underperformed compared to the MSCI global index this month, raising concerns about the potential governance capabilities of a weak minority government [1][4] - Political uncertainty is eroding investor confidence, as evidenced by a 1.2% decline in the Tokyo Stock Exchange index after three months of gains [4] Group 2 - Historical data indicates that if the ruling party loses in elections, the market may take 35 to 75 days to bottom out, with an average total decline of about 8% [4] - Analysts warn of a potential "triple whammy" in the Japanese financial market, affecting stocks, bonds, and currency if extreme political factions gain power [6] - A weaker yen could benefit exporters affected by U.S. tariffs, while opposition parties' proposals to cut food consumption taxes may boost consumer stocks [6] Group 3 - The election may have profound implications for corporate governance reforms, a key driver of recent stock market gains in Japan [7] - The potential coalition formation by the ruling party could alter its stance on corporate governance, which investors may not be fully aware of [8] - Rising populism in Japan is reflected in increasing support for new political parties advocating for changes in profit distribution models [8]

Report Industry Investment Rating No relevant content provided. Core View of the Report The report updates the high - frequency data of the national economic fundamentals from July 7th to July 11th, 2025. It shows that the overall high - frequency index of fundamentals is stable, while different sectors have different trends, such as a decline in real estate sales, an increase in infrastructure investment growth rate, and a narrowing increase in export growth rate [1][9]. Summary by Directory Total Index: Fundamental High - Frequency Index Stable - The current Guosheng fundamental high - frequency index is 126.6 points (previous value was 126.5 points), with a year - on - year increase of 5.2 points (previous value was also an increase of 5.2 points), and the year - on - year increase rate remains unchanged. The long - short signal of interest - rate bonds remains unchanged, with a signal factor of 4.7% (previous value was 4.8%) [1][9]. Production: Electric Furnace Operating Rate Declines - The industrial production high - frequency index is 125.9 (previous value was 125.8), with a year - on - year increase of 4.9 points (previous value was also an increase of 4.9 points), and the year - on - year increase rate remains unchanged. The electric furnace operating rate drops to 57.1% from 59.0% [1][9][15]. Real Estate Sales: Property Transactions Decline - The high - frequency index of commercial housing sales is 44.0 (previous value was 44.1), with a year - on - year decrease of 6.4 points (previous value was also a decrease of 6.4 points), and the year - on - year decline rate remains unchanged. The transaction area of commercial housing in 30 large and medium - sized cities is 19.6 million square meters, down from 37.8 million square meters [1][9][29]. Infrastructure Investment: Petroleum Asphalt Operating Rate Declines - The high - frequency index of infrastructure investment is 119.3 (previous value was 119.0), with a year - on - year increase of 3.4 points (previous value was an increase of 3.0 points), and the year - on - year increase rate expands. The operating rate of petroleum asphalt plants is 32.7%, up from 31.7% [1][9][39]. Export: Export Container Freight Rate Index Continues to Decline - The export high - frequency index is 144.0 (previous value was 144.1), with a year - on - year increase of 4.4 points (previous value was an increase of 4.7 points), and the year - on - year increase rate narrows. The CCFI index drops to 1314 points from 1343 points [1][9][45]. Consumption: Passenger Car Manufacturers' Retail and Wholesale Decline - The consumption high - frequency index is 119.6 (previous value was 119.5), with a year - on - year increase of 2.1 points (previous value was an increase of 1.9 points), and the year - on - year increase rate expands. Passenger car manufacturers' retail is 39,660 units, down from 95,374 units; wholesale is 38,757 units, down from 154,429 units [1][9][57]. CPI: Fruit Prices Continue to Decline - The CPI monthly - on - monthly forecast is 0.0% (previous value was - 0.1%). The average wholesale price of 7 kinds of key - monitored fruits is 7.3 yuan/kg, down from 7.4 yuan/kg [1][9][65]. PPI: Copper and Aluminum Prices Decline - The PPI monthly - on - monthly forecast is 0.1% (previous value was 0.0%). The spot settlement price of LME copper is 9,769 US dollars/ton, down from 10,047 US dollars/ton; the spot settlement price of LME aluminum is 2,587 US dollars/ton, down from 2,598 US dollars/ton [1][9][74]. Transportation: Flight Numbers Continue to Rise - The transportation high - frequency index is 128.8 (previous value was 128.6), with a year - on - year increase of 8.6 points (previous value was an increase of 8.5 points), and the year - on - year increase rate expands. The number of domestic flights (excluding Hong Kong, Macao, and Taiwan) is 14,401 flights, up from 13,985 flights [2][10][87]. Inventory: Soda Ash Inventory Increases - The inventory high - frequency index is 160.8 (previous value was 160.6), with a year - on - year increase of 9.5 points (previous value was an increase of 9.6 points), and the year - on - year increase rate narrows. The soda ash inventory is 185.6 million tons, up from 178.9 million tons [2][10][93]. Financing: 6M State - owned Joint - stock Bank Draft Rediscount Rate Decreases - The financing high - frequency index is 231.5 (previous value was 230.9), with a year - on - year increase of 29.5 points (previous value was an increase of 29.4 points), and the year - on - year increase rate expands. The 6M state - owned joint - stock bank draft rediscount rate is 0.91%, down from 1.01% [2][10][103].

Group 1 - The global foreign exchange market is experiencing a shift where macroeconomic data, particularly inflation indicators, are becoming the primary drivers of currency movements, overshadowing political rhetoric such as tariff threats [1] - The recent performance of the US dollar illustrates this data-driven characteristic, as its strength is more attributed to fundamental support like rising US Treasury yields rather than political statements [2] - The Canadian dollar is under multiple pressures, including political uncertainty from US tariff threats and upcoming domestic employment data that may reveal economic weaknesses, leading to potential downward risks [3] Group 2 - The euro is facing a unique challenge as its strength, while enhancing its status as a strategic asset, is also eroding the competitiveness of European exporters amid global demand weakness and new tariff risks [4] - The European Central Bank is in a delicate policy dilemma due to the rapid appreciation of the euro, which has implications for its monetary policy considerations [4][5] - The current foreign exchange market is in a cautious wait-and-see mode, with pricing strategies becoming more precise, and the next major movement will depend on whether inflation data alters Federal Reserve policy expectations [6]