1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Overall, in Q2 2025, China's GDP growth rate continued to hold steady, showing positive economic data. Sino-US tariff tensions significantly eased, and the effect of front-loading exports was remarkable. The central bank cut interest rates and reserve requirements, and rolled out a package of financial policies to stabilize the economy and expectations. Large - scale investment projects in China commenced, and sentiment in the capital market improved. With the money market interest rate remaining low, but risk appetite rising, government bonds are expected to decline [3][72]. - In the stock market, hotspots rotated. As funds spilled over from the banking sector to other heavy - weighted sectors, the strength of stock indices became differentiated. IH shifted to wide - range fluctuations, while IF, IC, and IM may continue to rise, but attention should be paid to the risk of a rapid correction in the hyped sectors [1][6]. 3. Summary According to Relevant Catalogs 3.1 Stock Index Futures Part 3.1.1 Stock Index Trend Analysis - From late September 2024 to the National Day, the A - share market rose continuously. After the National Day, it opened high and then fell. In November 2024, the market rebounded slightly, and in mid - December, it declined. Around the New Year's Day in 2025, the stock market had three consecutive negative days, and trading volume shrank to 1 trillion. After the Spring Festival, the market rebounded, and trading volume increased to 2 trillion. In March 2025, the market reached a new high of 5755.58 and then quickly fell. On April 7, there was a sharp single - day decline, with the Guozheng A - share Index dropping by 9.29%. After reaching the lowest point of 4820.80 on April 9, the market rebounded. In May, the market rebounded to 5500 and then fluctuated with shrinking volume. In June, stock market fluctuations weakened, and in late June, the stock index rose continuously driven by the banking stocks. In July, it broke through the high point after the sharp rise on September 24, 2024, and trading volume increased to around 2 trillion [4]. - The four major stock indices showed differentiation. In 2025, the Shanghai 50 Index fell in January, rebounded in February, dropped sharply in April, and then rebounded. In July, it reached a new high of 2824.86 but was lower than the high point on September 24, 2024. The CSI 300 Index also reached a new high in July. The CSI 500 Index filled the gap in July after failing to do so in May. The CSI 1000 Index rose rapidly in July and exceeded all high points since September 24, 2024 [5]. 3.1.2 Stock Index Fluctuations and Premium/Discount Situations - In January 2025, stock index fluctuations further decreased, and in February, there was a significant rebound. In March, there was a slight decline, and in April, there were large - scale fluctuations. During the rapid rebound of the Shanghai 50 and CSI 300, the stock index futures of the CSI 500 and CSI 1000 were at a large discount. Fluctuations decreased in May and June, and in July, there was a further rebound. The long - term contracts of IC and IM gradually returned to normal. The premium/discount of the Shanghai 50 Index dropped to within ±5 points, while the far - month contracts of IC had a discount of over 300 points [15]. 3.1.3 Industry Strength and Weakness Transformation - The CSI 300 Index declined in January 2025, rebounded significantly in February, slightly declined in March, had a single - day sharp decline in April, and then quickly rebounded. It fluctuated at a high level in May and June and rose rapidly in July. In terms of reversal intensity, most sectors showed positive trends, with materials having a reversal intensity of up to 13, and pharmaceuticals and industry exceeding 8. Only the public utilities sector declined, with a decline of only 2% [16][19]. 3.1.4 Industry ALPHA Risk - Return - The tracking of ALPHA risk - return statistics shows that the consistency of the CSI 300 sector's trend has increased. The telecommunications and materials sectors have full - cycle ALPHA. The full - cycle ALPHA values are (0.467%, 0.284%, 0.114%; 0.107%, 0.088%, 0.058%). Most sectors' full - cycle ALPHA values are inconsistent, and the ALPHA values of the industrial, optional, and consumer sectors are negative [23]. 3.2 Government Bond Futures Analysis 3.2.1 Economic Steady Recovery - From 2023 to 2025, GDP growth showed fluctuations but generally maintained a certain level. CPI and PPI data indicated that the economy was in a deflationary state, with industrial PPI remaining negative and the year - on - year decline expanding. Industrial added value increased year - on - year, and the cumulative year - on - year growth was relatively stable. The manufacturing PMI and non - manufacturing PMI fluctuated, and the non - manufacturing PMI was more affected by policy changes. Consumption growth was unstable [28][35]. 3.2.2 Slightly Rising Monetary投放 Growth Rate - In 2024 and 2025, the amount of new RMB loans fluctuated greatly. The growth rate of M1 first declined and then increased, indicating that the recovery speed of social hot money accelerated. The growth rate of M2 showed a downward trend. The central bank continuously implemented interest rate cuts and reserve requirement ratio cuts, and the LPR decreased. The yield to maturity of government bonds fluctuated, and the overall trend was downward [43][49]. 3.2.3 Monetary Policy - From 2024 to 2025, the central bank carried out a series of monetary policy operations, including borrowing government bonds, conducting temporary open - market operations, adjusting the LPR, and implementing a package of financial policies in May 2025, which included reducing the reserve requirement ratio, lowering policy interest rates, and increasing the quota of re - loans [50][57].

Market Overview - The market sentiment has significantly improved, driven by major positive developments in the infrastructure sector, leading to substantial gains in various building materials and rare earth-related ETFs [1][2] - The trading volume of broad-based ETFs tracking indices like CSI A500, CSI 300, and STAR Market 50 has been notably high, with CSI A500 ETFs exceeding 120 billion yuan in total trading volume [2] ETF Performance - Several ETFs related to building materials, rare earths, and mining sectors saw significant price increases, with some rare metal-themed ETFs rising over 10% [1] - The Hong Kong securities ETF recorded a weekly trading volume exceeding 100 billion yuan, with its size doubling from 100 billion to 200 billion yuan in just 15 trading days [2] Fund Flows - There has been a clear shift in capital flows, with many credit bond ETFs experiencing net outflows, while equity products, particularly industry-themed ETFs, saw net inflows [3][4] - Notably, the Hong Kong securities ETF had a net inflow of 37.62 billion yuan, indicating a strong preference for equity investments over lower-risk products [3] Sector Insights - The performance of various sectors has shown significant divergence, with metals, non-bank financials, and banks leading in gains, while coal, food and beverage, and real estate sectors lagged [4] - The "anti-involution" policy is expected to enhance competition quality and improve pricing, benefiting midstream manufacturing and upstream raw materials sectors [4][5] Future Outlook - The recovery of domestic demand is anticipated, supported by ongoing infrastructure investments and local government debt initiatives [5][6] - The continuous iteration of AI models and their increasing application penetration are expected to enhance production and operational efficiency, presenting rich investment opportunities in sectors like innovative pharmaceuticals and high-end manufacturing [5][6]

Core Insights - The discovery of a world-class rare earth mineral deposit in Norway has raised hopes in the U.S. for reducing dependence on China for rare earth supplies, but progress has been slower than expected [1][5][14] Group 1: Importance of Rare Earth Elements - Rare earth elements are crucial for various technologies, including smartphones, computers, electric vehicles, and wind power [3] - China currently controls over 60% of the global rare earth supply, creating unease among Western countries, particularly the U.S. [3] Group 2: Norway's Rare Earth Discovery - Norway announced the discovery of over 1 million tons of rare earth minerals, which is equivalent to the total known reserves in other parts of Europe [5] - The U.S. viewed Norway as a reliable ally for rare earth sourcing due to its political stability and strong relations with Washington [7] Group 3: Challenges in Development - The development of Norway's rare earth resources has faced significant delays due to stringent environmental regulations and technical challenges in extraction and refining [8][10] - High labor costs in Norway make the extraction of rare earth elements significantly more expensive compared to China, with costs several times higher [10] Group 4: China's Competitive Advantage - China's advantage in the rare earth industry lies not only in resource availability but also in a complete industrial chain and advanced technology developed over decades [13] - Chinese companies have achieved high purity levels in rare earth refining and effective cost control, making it difficult for other countries to replicate this success quickly [13] Group 5: Future Outlook - The U.S. plans to explore alternative sources, such as partnerships with Australia or domestic resource development, but these efforts will require time and investment [14] - Recent advancements in China's rare earth recycling technology have opened new supply sources, further solidifying its leading position in the industry [14]

Market Performance - The A-share market saw all three major indices rise, with the Shanghai Composite Index increasing by 1.67%, the Shenzhen Component Index by 2.33%, and the ChiNext Index by 2.76% [1] - The Sci-Tech 50 Index led the market with a weekly increase of 4.63%, driven by technology stocks such as semiconductors and AI [1] ETF Market Trends - The ETF market displayed a pattern of "debt fund hedging + Hong Kong stock technology attracting capital," with a total net inflow of 18.18 billion yuan [4] - Rare metals and rare earth-related ETFs continued to perform well, with coal and building materials ETFs rising nearly 10% as part of a "anti-involution" trend [1] - In contrast, several bank-related ETFs experienced a decline of around 3% [1] Fund Flows - Stock ETFs saw a net outflow of 54.5 billion yuan, while industry ETFs recorded a net inflow of 116.59 billion yuan [4] - Cross-border ETFs had a net inflow of 102.55 billion yuan, benefiting from the recent capital inflow into the Hong Kong market [4] - Bond ETFs experienced a net inflow of 91.82 billion yuan [4] Upcoming ETF Issuances - Six new ETFs are set to be issued next week, including Hong Kong Stock Connect Consumer ETF and Hong Kong Stock Connect Technology ETF [4]

Group 1: Metal Sector - China Hongqiao's net profit forecast for 2024 is CNY 223.72 billion, with a PE ratio of 8.14[12] - Hualing Steel's net profit is projected to increase from CNY 20.32 billion in 2024 to CNY 28.54 billion in 2025, with a PE ratio of 19.72[12] - Xiamen Tungsten's net profit is expected to rise from CNY 17.28 billion in 2024 to CNY 21.01 billion in 2025, with a PE ratio of 22.97[12] Group 2: Construction and Transportation - Sichuan Road and Bridge's net profit is forecasted to grow from CNY 72.10 billion in 2024 to CNY 82.86 billion in 2025, with a PE ratio of 10.35[12] - YTO Express's net profit is expected to decrease from CNY 40.12 billion in 2024 to CNY 35.39 billion in 2025, with a PE ratio of 13.03[12] - China Merchants Highway's net profit is projected to be CNY 55 billion in 2025, with a PE ratio of 14.56[12] Group 3: Chemical and Energy Sector - Yara International's net profit is expected to rise from CNY 9.50 billion in 2024 to CNY 17.94 billion in 2025, with a PE ratio of 30.56[12] - Funiu Power's net profit forecast for 2025 is CNY 28.95 billion, with a PE ratio of 9.18[12] - Huajin's net profit is projected to recover to CNY 0.92 billion in 2025 after a loss of CNY 27.95 billion in 2024[12] Group 4: Strategic Metals and New Materials - Xiamen Tungsten's strategic metal segments are expected to contribute 79% to profits in 2024, with a focus on tungsten and rare earths[21] - Zhongcai Technology's special glass fiber is projected to see significant demand growth due to AI hardware requirements, with expected profits of CNY 0.2 billion in 2024[30] - The company anticipates a profit contribution from special glass fiber of CNY 7.2 billion by 2026[30]

Core Insights - In June, China's rare earth exports to the U.S. surged by 660% month-on-month, reaching 352.8 tons, primarily due to new export control measures and increased demand from U.S. companies [1][3] Group 1: Export Dynamics - The significant increase in rare earth exports in June was influenced by the addition of several rare earth products to China's export control list in April, which delayed approvals in May, resulting in a drastic drop in exports to only 46 tons [1] - The approval process for export applications was expedited in June, allowing more exporters to receive permits, contributing to the month-on-month surge from a low base in May [3] Group 2: U.S. Market Response - U.S. companies began stockpiling rare earth materials to mitigate risks after experiencing shortages over the past two months, which affected several automotive manufacturers and led to production halts due to supply chain disruptions [3] - The recent phase of the U.S.-China trade agreement has led to a reduction in restrictions, prompting U.S. businesses to place large orders for imports of rare earth materials [3] Group 3: Importance of Rare Earths - Rare earths, often referred to as "industrial MSG," are crucial in high-end manufacturing sectors such as aerospace, military equipment, electronic information, and new energy, despite their relatively low usage [3] - China dominates over 90% of the global supply of rare earth magnets, particularly in the medium and heavy rare earth sectors, highlighting its critical role in the supply chain [3]

Market Performance - The A-share market indices showed steady growth from July 21 to 25, with the Shanghai Composite Index rising by 1.67% to close at 3593.66 points, the Shenzhen Component Index increasing by 2.33%, and the ChiNext Index up by 2.76% [1] - All major industry sectors achieved positive returns, except for the banking sector, which experienced a slight decline. The steel, coal, and building materials sectors led the gains [1] Institutional Research Highlights - A total of 121 listed companies disclosed institutional research minutes during the week, with over 70% of the researched stocks achieving positive returns. Dayu Water-saving led with a 36.24% increase, followed by Tangyuan Electric, Maolai Optics, Zhejiang Fu Holdings, and Haopeng Technology, all of which saw gains exceeding 18% [1] - The concentration of institutional research decreased, with companies like Guodian Measurement, Dayu Water-saving, Haopeng Technology, and Tangyuan Electric receiving over 50 institutional visits [2] Guodian Measurement - Guodian Measurement received 54 institutional visits, the highest for the week. The company announced plans to raise 1.3 billion yuan through a private placement for investments in satellite internet, aviation equipment, AI chips, and data intelligence [2] - The management emphasized that the fundraising is a strategic move to enhance technological self-reliance and innovation, addressing critical technology bottlenecks. The projects will be implemented in phases over three years, with a focus on structural adjustments and profit growth [2] Haopeng Technology - Haopeng Technology was visited by 52 institutions and is transitioning from a consumer battery manufacturer to an "AI + solid-state" energy solutions provider, targeting trillion-level markets such as AI, robotics, and low-altitude economy [3] - The company aims to enhance the proportion of high-margin AI products and increase the penetration of solid-state batteries. It has made significant progress in AI glasses and robotics, with mass production expected in the second half of the year [3] - By 2025, Haopeng Technology anticipates that AI-related products will contribute to revenue growth, driven by high energy density battery solutions [3] Flying Dragon Co., Ltd. - Flying Dragon Co., Ltd. received attention from institutions regarding its declining revenue and profit increase projections for the first half of 2025. The management cited three main reasons for the revenue decline: project lifecycle expiration, reduced overseas orders due to tariffs, and intensified price competition in the new energy vehicle sector [4] - The company expects revenue recovery in the second half of 2025, driven by new overseas projects, increased orders for new energy vehicle modules, and growth in liquid cooling product sales [4]

Group 1 - The capital migration from the US to Israel's technology sector and Southeast Asian renewable energy industries indicates a significant shift in investment strategies, with foreign capital selling off US Treasury bonds at an unprecedented rate of $120 billion in a single month [1] - The US Treasury data reveals that foreign investors sold off US debt at an unprecedented pace, with a total of over $1 trillion in bond sales this year, highlighting a growing trend of capital flight from the US [3] - The decline of the US dollar's global reserve share, which has fallen below 58%, is attributed to countries like Saudi Arabia and others opting for local currency settlements in trade, signaling a potential end to dollar dominance [1][3] Group 2 - The US manufacturing sector's contribution to GDP has dwindled to just 11%, with debt interest consuming 22% of federal tax revenue, raising concerns about the sustainability of the US economy [3] - Countries are increasingly seeking alternatives to the US dollar for trade, with India purchasing Russian oil in rupees and ASEAN countries settling transactions in their local currencies, reflecting a collective effort to reduce dependence on the dollar [3] - The historical parallels drawn between the current state of the US dollar and the decline of the British pound during World War I suggest a potential long-term shift in global economic power [5] Group 3 - Israel has seen a 320% increase in Jewish venture capital investments over the past year, indicating a strategic shift towards technology and innovation, despite its small geographic size and limited industrial base [6] - The focus of Jewish capital on China is driven by the country's robust industrial capabilities in sectors like rare earths, lithium batteries, and semiconductors, which are seen as more viable investment opportunities compared to the US [8] - Brazil is emerging as a new investment hub, with significant increases in rare earth imports from China and strategic partnerships forming between Jewish capital and Chinese sovereign funds, indicating a shift in global capital flows [10]

Core Viewpoint - The U.S. government is taking significant steps to reduce its reliance on China for rare earth minerals by investing in domestic production, exemplified by the $400 million investment in MP Materials, the largest rare earth producer in the U.S. [1][5] Group 1: U.S. Government Actions - The Pentagon agreed to purchase $400 million in convertible preferred stock from MP Materials, making it the largest shareholder [1] - The U.S. aims to stimulate domestic exploration and production of critical minerals to compete with China [1][5] - The investment reflects a broader strategy to break the bottleneck in critical mineral supply chains [1] Group 2: Industry Challenges - Despite having rare earth resources, the U.S. faces challenges in attracting investors willing to take risks in the mining sector [1][5] - The rare earth market lacks the mature financial structures seen in oil and other commodities, making it difficult for companies to secure funding [4] - Many U.S. rare earth companies trade on smaller exchanges in Canada or Australia, indicating limited domestic investment interest [1][5] Group 3: Market Dynamics - China dominates the global rare earth market, accounting for over 60% of production and 92% of processing capacity [4] - The U.S. Geological Survey reported that 70% of rare earth compounds and metals imported by the U.S. came from China between 2020 and 2023 [4] - Recent Chinese export controls on rare earths have prompted U.S. companies to seek alternative supply sources [4][5] Group 4: Future Outlook - The establishment of new mining projects in the U.S. is expected to take at least 10 to 20 years and require substantial investment, potentially in the trillions [8] - The industry faces significant hurdles, including a lack of skilled labor and expertise in processing rare earth materials [8] - Other countries are also attempting to diversify their rare earth supply chains, but they face challenges in terms of time, cost, and human capital [6][8]

Core Viewpoint - The article discusses the failed collaboration between Japan and India in the rare earth sector, highlighting India's sudden cessation of rare earth exports to Japan, which reveals the underlying complexities and risks in the global supply chain for these critical materials [1][20]. Group 1: Historical Context - In 2010, Japan faced a crisis when China restricted rare earth exports, leading to skyrocketing prices and a scramble for alternative sources [3][4]. - India emerged as a potential partner due to its claimed status as having the fifth-largest rare earth reserves globally, which seemed to offer a viable alternative to Japan [3][5]. Group 2: Investment and Cooperation - In 2012, Japan signed a strategic cooperation agreement with India's state-owned rare earth giant, IREL, and invested in a processing plant in Andhra Pradesh to create a diversified supply chain [5][10]. - Despite these efforts, the actual production and export figures from India raised concerns, with reports indicating that India exported more rare earths than it produced, suggesting a reliance on Chinese imports [5][10]. Group 3: Supply Chain Issues - A significant portion of India's rare earth exports reportedly originated from China, with materials being repackaged in India before being sent to Japan, leading to accusations of "labeling" Chinese goods as Indian [7][8]. - In 2024, Toyota Tsusho imported over 1,000 tons of rare earths from India, paying a premium compared to direct purchases from China, highlighting the inefficiencies in the supply chain [10][12]. Group 4: Recent Developments - In June 2025, India abruptly halted rare earth exports to Japan, citing the need to prioritize its domestic electric vehicle industry, which left Japanese companies facing potential contract breaches worth nearly $300 million [10][12]. - The Indian government's decision was influenced by earlier Chinese export restrictions, revealing India's vulnerability in the rare earth supply chain [12][14]. Group 5: Future Implications - India's inability to independently supply high-purity rare earths, with over 90% of its high-purity needs still sourced from China, raises questions about its long-term viability as a supplier [14][16]. - The article suggests that India's actions may be a strategic move to leverage technology concessions from Japan, as it seeks to enhance its own capabilities in rare earth processing [18][20].