Investment Rating - The investment rating for the company is "Buy" [1][5] Core Views - The company is expected to benefit from sustained high demand in AI and HPC sectors, leading to a projected increase in both revenue and net profit for the first half of 2025 [3][8] - The company aims to optimize its product structure and enhance high-end production capacity, maintaining a "Buy" rating [5][8] Financial Projections - Revenue projections for 2025, 2026, and 2027 are estimated at RMB 177.07 billion, RMB 223.07 billion, and RMB 278.44 billion respectively, with corresponding net profits of RMB 36.29 billion, RMB 50.66 billion, and RMB 64.92 billion [5][7] - The expected growth rates for revenue are 32.7% in 2025, 26.0% in 2026, and 24.8% in 2027 [7][11] - The company anticipates a net profit of RMB 16.50-17.50 billion for the first half of 2025, representing a year-on-year increase of 44.63%-53.40% [8] Shareholder Information - The major shareholder is Bijiing (British Virgin Islands) Holdings Limited, holding 19.33% of the shares [2] Market Performance - The company's stock has shown strong performance with a 26.5% increase year-to-date and an 85.0% increase over the past 12 months [2]

Market Overview - The three major stock indices in China collectively rose, with the Shanghai Composite Index closing at 3516.83 points, up 0.37% [1] - The Shenzhen Component Index closed at 10873.62 points, up 1.43% [1] - The ChiNext Index closed at 2269.33 points, up 1.76% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 1.54 trillion yuan, an increase of 97.3 billion yuan compared to the previous trading day [1] Sector Performance - The electronic components sector led the gains, with companies like Mankun Technology hitting the daily limit of 20% increase, and Shengyi Electronics rising over 13% [4] - The CPO concept showed strong performance throughout the day, while the military equipment sector was also active, with companies like Zongheng Co. and Chenxi Aviation seeing significant increases [5][6] - Conversely, the precious metals sector experienced declines, with Shandong Gold dropping over 2% [7] Capital Flow - Main capital flows showed a net inflow into sectors such as electronics, computers, and communications, while there was a net outflow from public utilities, real estate, and coal sectors [8] - Specific stocks like Changshan Beiming and Runhe Software saw net inflows of 2 billion yuan and 925 million yuan, respectively [9] - On the outflow side, companies like China Electric Power and Sunshine Power faced sell-offs of 444 million yuan and 397 million yuan, respectively [10] Institutional Insights - Dongfang Securities noted that overseas liquidity remains volatile, with a short-term rebound in the US dollar, leading to limited domestic opportunities in July [12] - CITIC Securities highlighted that mid-year performance reports could drive market sentiment towards technology sectors [13] - Galaxy Securities mentioned that the large financial sector is entering a phase of rotation and adjustment [14]

盘面上，CPO概念全天强势，军工装备板块活跃，医药、消费电子、钢铁板块涨幅居前；贵金属板块低 迷，地产、银行、燃气、电力股跌幅居前。 7月17日，三大股指集体收涨，沪指报收3516.83点，涨0.37%；深成指报收10873.62点，涨1.43%；创业 板指报收2269.33点，涨1.76%。沪深两市全天成交额1.54万亿，较上个交易日放量973亿。全市场超 3500只个股上涨，超1600只个股下跌。 盘面上，CPO概念全天强势，军工装备板块活跃，医药、消费电子、钢铁板块涨幅居前；贵金属板块低 迷，地产、银行、燃气、电力股跌幅居前。 | 板块名称 | | 涨幅♣ 主力净量 主力金额 | | 板块名称 | 涨幅合 | 主力净量 | 王力金额 | | --- | --- | --- | --- | --- | --- | --- | --- | | 元件 | +4.64% | 1.95 | +26.95 Z | 贵金属 | -1.01% | -1.67 | -5.51 乙 | | 兵装重组概念 | +4.22% | 2.04 | +7.747 | 保险 | -0.71% | -0.02 | +8580万 | | ...

Core Viewpoint - The "anti-involution" theme has gained significant attention in the A-share market, with various sectors such as steel, photovoltaic, and building materials experiencing substantial growth due to policy-driven changes aimed at reducing disorderly competition [3][5][10]. Market Performance - As of July 17, A-shares opened lower but quickly turned positive, with the ChiNext Index rising over 1%, led by sectors like innovative drugs, PCB, consumer goods, and photovoltaics [1]. - In the past month, the photovoltaic equipment index increased by 15.55%, while the overall market saw nearly 3,000 stocks rise [7][9]. Sector Analysis - The "anti-involution" theme has led to significant gains in various sectors, with the steel, building materials, and electric equipment industries seeing increases of over 8% in the last 18 trading days [2]. - Key indices reflecting this trend include the circuit board index up by 3.74%, and the glass fiber index up by 20.21% [2][9]. Policy Impact - The Central Financial Committee's meeting on July 1 emphasized the need to build a unified national market and regulate low-price competition, which is expected to guide the "anti-involution" policy across key industries [5][10]. - The current phase of the "anti-involution" market is characterized as a policy-driven expectation stage, with potential for further development depending on the implementation of policies and capacity clearance [3][18]. Investment Opportunities - Investment firms are increasingly focusing on sectors involved in the "anti-involution" theme, particularly those with historically low valuations and significant potential for recovery [12][13]. - Key sectors identified for investment include traditional industries like steel and cement, as well as emerging sectors such as photovoltaics and new energy vehicles [10][16]. Future Outlook - Analysts suggest that the "anti-involution" market could evolve through three stages: initial policy-driven expectations, followed by resource price increases, and finally, sustained high prices [3][18]. - The current market is still in the expectation phase, and future developments will depend on the effectiveness of policy implementation and the recovery of corporate profits [18].

Market Overview - On July 15, the Shanghai Composite Index fell by 0.42%, while the Shenzhen Component rose by 0.56% and the ChiNext Index increased by 1.73%[3] - The total trading volume in both markets exceeded 1.61 trillion yuan, showing a week-on-week increase[1] Investment Strategy - The current market is in the early stage of a rally, characterized by slow rises and sharp declines, with a focus on weight stocks to attract investors[1] - Investors are advised to switch to dividend stocks or hold quality stocks during corrections, avoiding arbitrary adjustments to their portfolios[2] Fund Flow - On July 15, the Shanghai Stock Exchange saw a net outflow of 13.505 billion yuan, while the Shenzhen Stock Exchange experienced a net inflow of 18.733 billion yuan[4] Economic Data - China's GDP for the first half of 2025 grew by 5.3% year-on-year, with industrial added value increasing by 6.4%[5] - Fixed asset investment rose by 2.8% year-on-year, totaling 248.654 billion yuan, while retail sales increased by 5.0% to 245.458 billion yuan[5] Price Trends - The National Bureau of Statistics predicts a moderate recovery in prices in the second half of the year, supported by stable economic growth and effective demand expansion policies[8] Industry Developments - The 11th batch of national drug procurement is expected to start soon, with preparations underway[9] - Inner Mongolia is focusing on developing hydrogen energy equipment manufacturing in key cities[10] ETF Market - The ETF market has seen a surge in new issuances this year, with the number of newly established ETFs and their fundraising exceeding the total for the entire year of 2024[12]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company is expected to achieve a net profit attributable to shareholders of approximately 11.98 billion to 12.60 billion yuan in the first half of 2025, representing a year-on-year growth of 52.79% to 60.62%. The estimated net profit for Q2 2025 is around 7.41 billion yuan, showing a year-on-year increase of 158%, with revenues projected at approximately 83 billion yuan, a growth of about 29% [1] - The competitive landscape for FPC (Flexible Printed Circuit) is strengthening, driven by increased demand for high-density designs in AI terminals, AR/VR, and foldable screens. The company is expected to gain market share as it secures more orders from major clients, leading to rapid growth in FPC value and revenue [2] - The automotive and server markets present significant growth opportunities. The company is accelerating the development and commercialization of automotive PCB products and has achieved mass production of radar computing boards and domain control boards, collaborating with several domestic Tier 1 manufacturers [3] Financial Projections - The company is projected to achieve revenues of 40.87 billion, 46.58 billion, and 51.99 billion yuan in 2025, 2026, and 2027 respectively, with year-on-year growth rates of 16%, 14%, and 12%. The net profit attributable to shareholders is expected to be 4.495 billion, 5.296 billion, and 6.059 billion yuan for the same years, with growth rates of 24%, 18%, and 14% respectively [4][5] - The current price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are projected to be 20, 17, and 15 times respectively, indicating a favorable valuation outlook [4]

Core Insights - The report indicates that the A-share market is likely to operate in a "slow bull" manner in 2025, supported by policies aimed at stabilizing the stock market and overlapping trends from the new "Nine National Policies" and a quasi-"4 trillion" investment strategy [9][31]. - The report highlights that the main focus areas for 2025 will be technology, green initiatives, consumption, and infrastructure, as mentioned in the government work report [9][31]. - The A-share market is expected to show slight upward fluctuations in July, with resilience in exports during the 90-day tariff buffer period between China and the U.S. [9][31]. Market Performance - During the period from July 7 to July 11, 2025, all six A-share indices monitored showed an upward trend, with the ChiNext Index rising by 2.36% and the Shanghai Composite Index increasing by 1.09% [2][11]. - The report notes that the Shanghai Composite Index successfully broke through the 3500-point mark but showed signs of weakening momentum, particularly in the banking and insurance sectors, which were the main drivers of the index's rise [3][14][16]. Sector Performance - Among the 31 first-level industries, the real estate and steel sectors had the highest weekly gains of 6.12% and 4.41%, respectively, while coal and banking sectors experienced declines of -1.08% and -1.00% [4][20]. - In the second-level industries, multi-finance and small metals led with weekly gains of 9.30% and 9.07%, while the ground equipment II and gaming II sectors had the highest cumulative gains for 2025 at 56.04% and 35.86% [5][24]. - The report also highlights that the fruit and vegetable processing and exhibition services sectors had the highest weekly gains among the 259 third-level industries, with increases of 13.94% and 13.71%, respectively [6][25]. Macro Data - The report mentions that the June CPI showed a year-on-year growth of 0.1%, marking a return to positive growth after four consecutive months of decline, while the PPI continued to decline, reaching -3.60% [7][27][28]. - The macro short-cycle composite index has been declining for five consecutive months, indicating a potential peak in the short cycle since February 2025 [7][28].

Core Insights - The key to understanding the capital cycle is recognizing how changes in capital allocation within an industry affect future returns, emphasizing the importance of supply-side changes over demand analysis [3] - Industry concentration exhibits an inverted U-shaped distribution throughout different stages of the corporate lifecycle, transitioning from high competition to oligopoly, with dividend yields increasing as companies evolve from recovery to maturity [3] - Current recommended secondary industries include aquaculture, animal health, components, consumer electronics, communication services, advertising, television broadcasting, real estate services, shipping ports, logistics, and railroads [3] Section Summaries 01 Capital Cycle: Supply and Concentration Considerations - The capital cycle framework prioritizes supply and concentration changes over economic conditions, indicating that supply fluctuations drive industry profitability [4] 02 Historical Positioning of Capital Cycles in Sub-Industries - The report categorizes 124 sub-industries based on their capital cycle status from Q3 2008 to Q1 2025, using concentration, profit growth, and capital expenditure growth as key indicators [27] 03 Current Capital Cycle Stages of Various Industries - The analysis identifies industries in optimal or suboptimal capital cycle phases, allowing for targeted investment recommendations [39] 04 Capital Cycle Principles and Case Studies in the US and Japan - The report discusses the principles of capital cycles in the US and Japan, providing case studies that illustrate the application of these principles across different market environments [4] 05 Viewing Capital Cycles Through the Lens of "Anti-Overwork" - The report suggests that the current economic environment, characterized by a push against overwork, influences capital allocation and industry dynamics [4]

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the U.S. labor market, economic policies under the Trump administration, and the implications of the "Great Beautiful Act" on the economy. Core Insights and Arguments - **Labor Market Risks**: The decline in labor participation rates, particularly among youth and older populations, indicates potential risks in the labor market despite a decrease in unemployment rates. The unemployment rate may rise in the future, with projections suggesting it could reach 4.4%-4.5% by the end of the year, exceeding the natural unemployment rate level [1][6][10]. - **Non-Farm Payroll Adjustments**: Significant downward revisions are expected for the non-farm employment data for Q1 2025, with monthly adjustments potentially reaching 70,000 to 80,000 jobs. This aligns with a slowdown in private non-farm income due to reduced working hours and declining wages [3][4]. - **Impact of Government Policies**: The Trump administration's immigration restrictions have temporarily lowered unemployment rates but may hinder long-term demand and GDP growth. The tax cuts have stimulated short-term demand, but the overall impact on employment growth remains uncertain [9][11]. - **Federal Reserve's Interest Rate Decisions**: There is a high probability that the Federal Reserve will initiate interest rate cuts in September, with expectations of two cuts within the year, influenced by the current labor market conditions and fiscal policies [10][20]. - **Economic Implications of the "Great Beautiful Act"**: The act, signed on Independence Day, is expected to have short-term economic effects, but its long-term impact requires further analysis, particularly on various sectors such as services and manufacturing [7][8]. Other Important but Potentially Overlooked Content - **Debt and Deficit Projections**: The new fiscal legislation is projected to expand the deficit to approximately $4.1 trillion over the next decade, with a potential debt-to-GDP ratio reaching 130% by 2033, raising concerns about long-term fiscal sustainability [11][13][15]. - **Sector Performance in A-Share Market**: The A-share market shows strong sentiment, particularly in sectors like non-bank financials, insurance, and consumer goods, which are expected to perform well due to supportive earnings and favorable valuations [21][22]. - **Macroeconomic Policy Directions in China**: Future macroeconomic policies in China will focus on stabilizing the real estate market, expanding domestic demand, and promoting technological innovation, which are crucial for overall economic stability [23][24]. - **Investment Opportunities**: Long-term investment potential is identified in sectors such as energy, basic chemicals, and consumer electronics, with a focus on areas that exhibit strong earnings support and favorable valuations [24][25][26].

Group 1 - Citic Securities maintains three strategies during the interim report season, focusing on industries with strong trends such as AI and innovative pharmaceuticals, sectors driven by performance and valuation like communication and electronics, and themes related to military and new energy [1] - Dongwu Securities highlights that financial stocks have been a driving force behind the index's rise, with a shift expected towards growth sectors, particularly in the technology space, as AI and computing sectors remain undervalued [2] - Huatai Securities notes that the robotics industry is entering a critical phase, with a shift in focus from initial capabilities to practical applications, emphasizing the importance of companies with actual orders and significant changes in their business layouts [3] Group 2 - Xiangcai Securities predicts a slight upward trend in the A-share market for July, driven by overlapping trends from new policies and investment strategies, with a focus on technology, green initiatives, consumption, and infrastructure as key areas of interest [4]