Core Viewpoint - Berkshire Hathaway reported a slight decline in Q2 operating profit and warned that high tariffs imposed by the U.S. government could negatively impact its business [1][8]. Financial Performance - Q2 revenue for Berkshire was $92.515 billion, down from $93.653 billion in the same period last year [2]. - Excluding investment-related items, Q2 operating profit was $11.16 billion, lower than $11.6 billion year-over-year, primarily due to weak insurance underwriting profits [2]. - Currency fluctuations negatively impacted Berkshire, reducing after-tax operating profit by $877 million in Q2, compared to a gain of approximately $446 million in the same period last year due to a strong dollar [2]. Net Profit and Cash Flow - Berkshire's Q2 net profit was $12.37 billion, a significant drop from $30.3 billion in the same period last year, largely influenced by unrealized investment losses [4]. - Cash reserves remained high at $344.1 billion, slightly below the $347 billion at the end of March, providing ammunition for future acquisitions [5]. - The company has net sold stocks for the 11th consecutive quarter, selling approximately $6.92 billion in stocks while purchasing only $3.9 billion [5]. Investment Strategy - The fair value of Berkshire's top five holdings accounted for 67% of its portfolio, with major investments in American Express, Apple, Bank of America, Coca-Cola, and Chevron [5]. - Berkshire has not repurchased any shares in the first half of the year, maintaining a conservative approach to buybacks [5][6]. Impairment and Market Concerns - Berkshire significantly reduced the book value of its investment in Kraft Heinz, recording an impairment loss of $3.8 billion, bringing the holding value down to $8.4 billion [7]. - The company expressed concerns regarding the potential adverse effects of U.S. tariff policies on its operations and investments, highlighting the uncertainty surrounding international trade policies [8][9].

Core Viewpoint - The trend of mid-term cash dividends among listed companies in the Shanghai Stock Exchange is increasing, with many companies announcing their mid-term dividend plans for 2025, reflecting a strong commitment to shareholder returns [2][6]. Group 1: Mid-term Dividend Announcements - Weisheng Information plans to distribute a cash dividend of 122 million yuan, accounting for 40% of its net profit for the first half of 2025, marking its first mid-term dividend [2][3]. - WuXi AppTec has also announced a mid-term cash dividend of 3.5 yuan per 10 shares, with a total cash dividend of 1.03 billion yuan, following a significant increase in revenue and net profit [3][4]. - Dongpeng Beverage has proposed a cash dividend of 2.5 yuan per share, amounting to 1.3 billion yuan, continuing its trend of substantial mid-term dividends [4][7]. Group 2: Overall Dividend Trends - In 2023, 1,501 listed companies in the Shanghai Stock Exchange distributed a total of 1.38 trillion yuan in cash dividends, indicating a robust dividend culture [2]. - The number of companies implementing mid-term dividends has surged, with 504 companies distributing over 580 billion yuan in 2024, representing a significant increase compared to previous years [6]. - The Shanghai Stock Exchange is encouraging companies to enhance their dividend policies, aiming to improve shareholder returns through various financial management tools [6][7]. Group 3: Notable Companies and Their Dividend Policies - Companies like East China Sea Group and Agricultural Bank of China have initiated mid-term dividends for the first time, while others like China Construction Bank have resumed mid-term dividends after several years [6]. - Companies such as Linglong Tire and Tian Shili have adopted a multi-tiered dividend strategy, distributing dividends multiple times within a year to reinforce investor confidence [6][7]. - The cumulative cash dividends of WuXi AppTec since its listing in 2018 have reached approximately 13 billion yuan, with a consistent payout ratio of around 30% of its net profit [4][5].

Market Overview - The A-share market experienced a day of fluctuation with the Sci-Tech 50 index showing resilience, closing at 1054.20, up 2.07% [1] - Major indices such as the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index saw slight declines of 0.33%, 0.22%, and 0.23% respectively [1][3] Sector Performance - The top-performing sectors included Electronics (1.37%), Computers (1.26%), and Real Estate (0.63%), while the worst performers were Construction Decoration (-2.06%) and Food & Beverage (-1.65%) [2] - Concept indices such as Sora Concept (2.98%) and Photolithography (2.79%) performed well, whereas sectors like Hainan Free Trade Zone (-3.77%) and Pumped Storage (-2.55%) lagged [2][3] Future Outlook - The market is expected to remain volatile, with a cautious bullish outlook as the overall market momentum is still strong, particularly around the 3600-point mark [5] - The report suggests focusing on sectors with strong mid-year performance expectations, particularly Machinery, Consumer Goods, TMT, and Financials [5] AI Sector Insights - The AI sector is witnessing a rebound, particularly in AI application stocks, with a projected global market size for AI video generation expected to grow from $615 million in 2024 to $717 million in 2025, reflecting a 17% year-on-year increase [4] - The compound annual growth rate (CAGR) for AI video generation from 2025 to 2032 is estimated at 20%, indicating strong future demand [4]

Core Viewpoint - The inclusion of Sanhua Intelligent Control in the Hong Kong Stock Connect marks a significant development for "A+H" companies, reflecting the growing trend of A-share companies listing in Hong Kong and the positive market response to these listings [1][2][6]. Group 1: Company Inclusion in Hong Kong Stock Connect - Sanhua Intelligent Control (02050) has been added to the Hong Kong Stock Connect eligible securities list effective July 21, 2025, following the end of its price stabilization period in Hong Kong and after its A-share listing met the required trading days [1][2]. - This year, several "A+H" companies have been included in the Hong Kong Stock Connect, including Chifeng Jilong Gold Mining (06693), JunDa Co., Ltd. (02865), Contemporary Amperex Technology Co., Ltd. (03750), and others [1][5]. Group 2: Trends in A-share Companies Listing in Hong Kong - There has been a notable increase in A-share companies seeking listings in Hong Kong, with 10 companies having listed in 2023 as of July 17 [6][7]. - A small surge in A-share companies applying for Hong Kong listings occurred in July, with 11 companies submitting applications from July 1 to July 11 [7]. Group 3: Regulatory Environment and Market Dynamics - Regulatory improvements have been a key driver for A-share companies to list in Hong Kong, including measures from the China Securities Regulatory Commission to expedite the approval process for mainland companies [8]. - The Hong Kong Stock Exchange has also introduced initiatives to attract A-share companies, such as a fast-track review process for companies with a market capitalization exceeding HKD 10 billion [8]. Group 4: Market Sentiment and Pricing Dynamics - Unlike previous trends where H-shares traded at lower prices than A-shares, many "A+H" companies have seen their H-share prices exceed A-share prices this year, boosting confidence in A-share companies listing in Hong Kong [9]. - As of July 18, 155 out of 160 "A+H" companies had a premium for their A-shares over H-shares, indicating a positive market sentiment [10].

Group 1 - The latest financing balance of the ChiNext market is 360.094 billion yuan, with a week-on-week increase of 0.882 billion yuan. Among the stocks, 26 have seen financing balances increase by over 10%, while 11 stocks experienced a decline of over 10% [1][2] - On July 7, the ChiNext index fell by 1.21%, with a total margin balance of 361.141 billion yuan, an increase of 0.877 billion yuan from the previous trading day. The financing balance reached 360.094 billion yuan, up 0.882 billion yuan from the previous day [1][2] - The stock with the largest increase in financing balance is Jialian Technology, which saw a financing balance of 31.1503 million yuan, a week-on-week increase of 54.91%, and its stock price rose by 19.98% on the same day [1][3] Group 2 - Among the stocks with significant financing balance increases, 14 stocks had net inflows of main funds on July 7, with the highest net inflows recorded for Shaanxi Huada, Jialian Technology, and Xinlei Co., amounting to 43.5309 million yuan, 42.3161 million yuan, and 36.8185 million yuan respectively [2][4] - Conversely, 12 stocks experienced net outflows, with the largest outflows seen in Changliang Technology, Longyang Electronics, and Nanling Technology, with outflows of 118 million yuan, 87.4527 million yuan, and 72.5194 million yuan respectively [2][4] Group 3 - A total of 439 stocks saw a decrease in financing balance, with 11 stocks experiencing declines of over 10%. The stock with the largest decline is Hairong Technology, with a financing balance of 55.2004 million yuan, down 27.15% [4][5] - Other notable declines include Nanwang Technology and Tongguan Copper Foil, with financing balances decreasing by 23.81% and 22.78% respectively [4][5]

Market Overview - The equity market saw a collective rebound last week, with the North Certificate 50 index rising the most by 6.84%, followed by the ChiNext index at 5.69% and the Wande All A index at 3.56% [5][6] - The TMT sector experienced a collective rebound, with notable increases in the computer sector (7.70%), defense and military industry (6.90%), and non-bank financials (6.66%) [5][6] Equity Product Allocation Strategy - Event-driven strategies include focusing on the upcoming 80th anniversary of the victory in the War of Resistance against Japan on September 3, with recommended funds such as Huashan Manufacturing Pioneer A (006154) and Boshi Military Industry Theme A (004698) [16] - The recent joint issuance of guidelines by six departments to support consumption can lead to investment opportunities in funds like ICBC Consumer Service A (481013) and Jiashi New Consumption A (001044) [17] - The National Medical Insurance Administration's issuance of guidelines for the 2025 basic medical insurance directory may benefit funds like ICBC Medical Health A (006002) and Penghua Medical Technology A (001230) [18] Asset Allocation Strategy - The overall allocation strategy suggests a balanced core plus a barbell strategy, focusing on dividend and technology sectors [19] - High dividend assets are highlighted as having significant allocation value due to the low interest rate environment and government support for dividend-paying companies [20] - The technology growth direction is emphasized due to national policy support, high industry prosperity, and the need for domestic companies to enhance competitiveness [21] Stable Product Allocation Strategy - The central bank's recent net injection of 12,672 billion yuan indicates a continued loose monetary policy, which is expected to support technology innovation and consumption [24] - The profit data from industrial enterprises shows a decline, suggesting potential for more proactive policies to stimulate domestic demand [25] - Convertible bonds are noted for their dual characteristics of debt and equity, maintaining value but with caution advised regarding volatility risks [26] Key Focus Products - Recommended funds include Nord Short Bond A (005350) and Anxin New Value A (003026), which are positioned to benefit from current market conditions [29]

Group 1 - The overall market valuation has increased, with the ChiNext Index performing the best, while the dividend index showed the weakest performance [1][10] - The computer, defense, and non-bank financial sectors experienced the highest gains, while the oil, food and beverage, and transportation sectors performed the weakest [13][35] - The relative PE and PB of the ChiNext Index compared to the CSI 300 have both increased, indicating a shift in valuation dynamics [17][26] Group 2 - The overall valuation of broad market indices has risen, with the majority of indices above the 50% historical percentile [15][26] - The financial and real estate sectors are valued above the 50% historical percentile, while materials, equipment manufacturing, industrial services, transportation, consumption, and technology sectors are at or below the 50% level [28][39] - The valuation of the food and beverage, agriculture, public utilities, and home appliance sectors is currently considered relatively cheap [39][44] Group 3 - The overall profit expectations across industries have shown slight changes, with the largest upward adjustments and the computer sector experiencing the most significant downward revision [50]

1. Report Industry Investment Rating - The investment rating for the stock index market is "Oscillation" [1] 2. Core Viewpoints of the Report - Last week, the stock index market rebounded due to the cease - fire between Iran and Israel, which restored global risk appetite, and the fermentation of concepts like "Stability Ratio + Military Parade". The small and medium - cap growth sectors led the market, and the financial and growth styles performed well. The gains of the four major broad - based indices were: CSI 1000 (+4.62%) > CSI 500 (+3.98%) > SSE 50 (+1.27%) [1]. - In the US stock market, the three major indices all closed in the green last week, with the Nasdaq rising 4.25% [1]. - From the perspective of Shenwan's primary industry classification, most sectors rose last week. Computer (+7.70%) and National Defense and Military Industry (+6.90%) led the gains, while Petroleum and Petrochemicals (-2.07%) and Food and Beverage (-0.88%) lagged [2]. - The trading volume of A - shares increased last week, indicating a restart of investors' trading enthusiasm, but it was still at a neutral - to - bullish level in the short term. After continuous low - volatility periods, the market sentiment broke through last week, with the four major broad - based indices generally surpassing their May highs, showing stronger short - term (daily) bullish sentiment. However, the upward momentum weakened on Thursday and Friday [2]. - The fundamental logic behind the stock index has not changed. The short - term rise is just a manifestation of lingering sentiment, and it is difficult to form a trend - based upward force. This week, the short - term daily bullish power has strengthened, and the market can be regarded as having a relatively strong oscillation. Given that the technical indicators are at high levels and the imagination space of recent themes is limited, it is expected to be difficult to break through the March high. It is recommended that investors can choose short - term long positions within the day or continue to wait and see [2]. - In the derivatives market, the discount of stock index futures has rapidly converged. Currently, the annualized discount rates of the current - quarter contracts of IC and IM have reached 8% and 10% respectively, and it is expected that the convergence speed will slow down. Long positions as substitutes for long - term index investment in futures can be held [2]. 3. Summary According to the Table of Contents 3.1 Last Week's Stock Index Operation 3.1.1 International Risk Preference Restoration and General Rise of Global Stock Indices - The stock index market rebounded last week. The reasons were the cease - fire between Iran and Israel, which restored global risk appetite, and the fermentation of concepts like "Stability Ratio + Military Parade". The small and medium - cap growth sectors led the market, and the financial and growth styles performed well. Among the four major broad - based indices, CSI 1000 (+4.62%) > CSI 500 (+3.98%) > SSE 50 (+1.27%) [8]. - Overseas, the easing of the Middle East situation and the restart of interest - rate cut expectations led to a general recovery of global risk assets. In the US stock market, the three major indices all closed in the green last week, with the Nasdaq rising 4.25% [8]. 3.1.2 Computer and National Defense and Military Industry Leading the Gains, and Trading Volume Larger than the Previous Week - From the perspective of Shenwan's primary industry classification, most sectors rose last week. Computer (+7.70%) and National Defense and Military Industry (+6.90%) led the gains, while Petroleum and Petrochemicals (-2.07%) and Food and Beverage (-0.88%) lagged [9]. - In terms of capital flow, the trading volume of A - shares increased last week, with the highest reaching over 16 trillion yuan during the week. Investors' trading enthusiasm restarted, and it was still at a neutral - to - bullish level in the short term [9]. 3.1.3 Continued Convergence of Futures Discount and Fluctuation of Option Volatility - In the futures market, the basis (spot - futures) of each futures contract continued to decline last week. Currently, the annualized discount rates of the current - quarter contracts of IC and IM have reached 8% and 10% respectively, and it is expected that the convergence speed will slow down. In operation, short - term investors can choose short - term long positions within the day or continue to wait and see. For monthly operations, the band - trading idea should be maintained. Long positions as substitutes for long - term index investment in futures can be held [10]. - In the options market, the implied volatility of stock index options first rose and then fell last week. The IV of the at - the - money contracts of SSE 300 Index Options reached up to 15% during the week and dropped to 13% at the end of the week. It is expected that the volatility will mainly oscillate at a low level in the short term. The previous short - term double - selling positions can take profits and exit. After a second wave of rising volatility, investors can re - enter the market [10]. 3.2 Fundamental Factors and Outlook for the Future 3.2.1 The Central Bank's Net Injection of 136.72 Billion Yuan in the Open Market Last Week - In terms of inter - bank liquidity, the central bank achieved a net injection of 136.72 billion yuan in the open market last week. It conducted 202.75 billion yuan of open - market reverse repurchase operations and 30 billion yuan of MLF operations, with a total reverse - repurchase maturity amount of 96.03 billion yuan [71]. - In terms of inter - bank interest rates, the interest rates of various tenors increased slightly last week. The overnight Shibor rose 0.30bp, the one - week Shibor rose 13.90bp, the two - week Shibor rose 3.60bp, R001 rose 1.22bp, R007 rose 32.91bp, and R014 rose 8.89bp [71]. 3.2.2 Maintaining the Idea of an Oscillating Market - After continuous low - volatility periods, the market sentiment broke through last week, with the four major broad - based indices generally surpassing their May highs, indicating stronger short - term (daily) bullish sentiment [72]. - However, the upward momentum weakened on Thursday and Friday, with indicators such as trading volume and volatility showing varying degrees of decline. The fundamental logic behind the stock index has not changed. The short - term rise is just a manifestation of lingering sentiment, and it is difficult to form a trend - based upward force [72]. - This week, the short - term daily bullish power has strengthened, and the market can be regarded as having a relatively strong oscillation. Given that the technical indicators are at high levels and the imagination space of recent themes is limited, it is expected to be difficult to break through the March high. It is recommended that investors can choose short - term long positions within the day or continue to wait and see. In the derivatives market, the discount of stock index futures has rapidly converged. Currently, the annualized discount rates of the current - quarter contracts of IC and IM have reached 8% and 10% respectively, and it is expected that the convergence speed will slow down. Long positions as substitutes for long - term index investment in futures can be held [72]. 3.3 Economic Data and Financial Event Forecast 3.3.1 Announcement of Macroeconomic Data - The report mentions the announcement of macroeconomic data, but specific details are not provided [100]. 3.3.2 Key Financial Events - There are no major financial events. Specific events include: the release of the official manufacturing PMI for June at 09:30 on June 30; the release of the US manufacturing PMI for June at 22:00 on July 1; the release of the US unemployment rate and non - farm payrolls for June at 20:30 on July 3; and the release of the US non - manufacturing PMI for June at 22:00 on July 3 [101].

Core Insights - The A-share market showed mixed performance last Friday, with the Shanghai Composite Index down by 0.7%, while the Shenzhen Component Index and the ChiNext Index rose by 0.34% and 0.47% respectively. The total trading volume in the Shanghai and Shenzhen markets reached 15,409.36 billion yuan [1][7] - In terms of industry performance, non-ferrous metals, telecommunications, and textile and apparel sectors led the gains, while banking, public utilities, and food and beverage sectors lagged behind. Concept sectors such as copper cable high-speed connections, metal zinc, and newly listed technology stocks saw significant increases, whereas cross-border payments, combustible ice, and digital currencies experienced declines [1][7] Market News - During the 2025 Listed Companies Forum held in Wenzhou on June 28-29, leaders from the four major exchanges (Shanghai, Shenzhen, Beijing, and Hong Kong) emphasized multi-dimensional reform signals. The Shanghai Stock Exchange's deputy general manager stated that they will solidly promote the "1+6" reform measures and demonstration cases [2][8] - The Hong Kong market will adjust its stock transaction fees starting June 30, increasing from 0.002% to 0.0042% of the transaction amount, while removing the minimum fee of 2 HKD and the maximum fee of 100 HKD. This adjustment is expected to lower transaction costs for small trades and help institutional investors better control costs during large-scale transactions [3][9] Investment Highlights - As of June 25, the A-share market indices generally rose, with the Shanghai Composite Index closing at 3,455.97 points, reflecting a 3.24% increase from the end of May. The Shanghai 50 and CSI 300 indices showed significant gains [10] - Market liquidity has improved, with an increase in the scale of locked-up shares released in June compared to the previous month. The establishment of new equity funds and increased share buybacks by major shareholders contributed to a continued rise in trading volume [10] - Investor confidence has rebounded, with trading activity increasing following the easing of US-China trade tensions. However, geopolitical conflicts and domestic economic data have caused some adjustments in the market [10][12] - The Chinese government is focusing on expanding domestic demand and enhancing internal economic momentum, with the People's Bank of China and other departments issuing guidelines to support consumption growth through financial services [13][12] - The recent announcements from the China Securities Regulatory Commission (CSRC) regarding capital market reforms and support for technology enterprises are expected to boost investor confidence and improve long-term liquidity in the A-share market [13][12]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - A - share's core contradiction lies internally, with a clear bottom - line for stock indices. The upside space depends on economic fundamental repair and incremental funds, and also requires reduced trading volume. The "dumbbell strategy" is effective, and the basis brings an overweight opportunity for CSI 1000. However, the current annualized basis rate of stock index futures has significantly converged, so it is recommended to temporarily take profit on the IM2509 strategy and wait for a new entry opportunity [3]. - International situations are complex, but market expectations are sufficient, and disturbances from Sino - US and Israel - Iran issues are limited. The Fed's interest rate decision has a greater external impact. A rate cut is beneficial for RMB appreciation, foreign capital inflow, and new incremental funds, which may start as early as September. Current policies to stabilize the capital market are positive, with a clear bottom - line for stock indices, and new technologies and new consumption are promoting the stabilization and recovery of economic expectations. After the risk - free rate drops to a low level, the entry of medium - and long - term funds and individual investors will enter a new cycle. A breakthrough must be accompanied by increased trading volume, and a two - market trading volume of 1.5 trillion (MA5) is a signal [4]. 3. Summary by Directory 3.1 Market Performance - This week, domestic indices rose first and then fell, while the US index reached a new high. As of June 26, 2025, the Nasdaq index rose 3.70%, the S&P 500 index rose 2.90%, the Hang Seng Tech index rose 4.13%, the Shanghai Composite Index rose 2.64%, the CSI 1000 index rose 4.14%, the SSE 50 index rose 2.42%, the ChiNext index rose 5.20%, and the STAR 50 index rose 3.35%. Most of the 31 Shenwan primary industry indices rose this week, with sectors such as computers, non - bank finance, and national defense and military industry rising more than 5%, and only a few sectors such as petroleum and petrochemicals and food and beverages falling [12][16]. 3.2 Liquidity - In May, the growth rate of social financing was stable, and the growth rate of M2 declined slightly. The capital interest rate (DR007) remained low, and the net MLF investment in May was 37.5 billion yuan. The yield of the 10 - year treasury bond was around 1.65%. The growth rate of social financing in May remained at a relatively high level, with government bond financing being an important support, while credit growth was still weak. The incremental social financing in May was 2.29 trillion yuan, an increase of 224.7 billion yuan year - on - year. The stock of social financing scale increased by 8.7% year - on - year, remaining flat month - on - month. The growth rate of M2 declined slightly but remained stable overall, the growth rate of M1 increased, and the M1 - M2 gap narrowed [17]. 3.3 Trading Data and Sentiment - Stock indices rose first and then fell this week. The number of new accounts opened in January was 1.57 million, in February was 2.83 million, in March was 3.06 million, in April dropped to 1.92 million, and in May continued to drop to 1.555 million. Domestic stock indices rose first and then fell this week, and the trading volume of the two markets increased to around 1.5 trillion [26]. 3.4 Index Valuation - As of June 26, 2025, the latest PE of the Shanghai Composite Index was 15.06, with a percentile of 68.03, and the latest PE of the Wande All - A was 19.80, with a percentile of 08.30. In terms of major stock indices, the valuation percentiles were CSI 1000 < CSI 500 < CSI 300 < SSE 50. The index valuation is in the median range [37]. 3.5 Index Industry Weights (as of December 31, 2024) - For the SSE 50, the weights of banks, food and beverages, and non - bank finance are relatively high, at 19.4%, 16.57%, and 13.07% respectively, and the electronics industry has become the fourth - largest weighted industry. - The weights of the CSI 300 are relatively dispersed, and the top three weighted industries are banks, non - bank finance, and electronics. - The top three weighted industries of the CSI 500 and CSI 1000 are exactly the same, namely electronics, medicine and biology, and power equipment, but the weight of the electronics industry in the CSI 1000 is higher [43][46].