Core Viewpoint - Huang Renxun, CEO of Nvidia, emphasizes the importance of the Chinese market and the rapid innovation in AI driven by Chinese developers and companies during his speech at the Chain Conference [1][2][6]. Group 1: H20 and Supply Chain - Nvidia is set to resume sales of H20 in China and has announced a new GPU compatible with the Chinese market, with many orders already received [4][5]. - The supply chain for Nvidia's AI supercomputers takes approximately nine months from order to delivery, and the company is working to accelerate this process [4]. Group 2: Recognition of Chinese Tech Companies - Huang Renxun praised 11 Chinese tech companies, including Tencent, Alibaba, and Baidu, highlighting their contributions to global AI development and innovation [6][7]. - He noted that there are currently around 1 million developers in China engaged in AI, which is driving rapid advancements in the field [6]. Group 3: Huawei and Manufacturing - Huang Renxun stated that underestimating Huawei and China's manufacturing capabilities is naive, recognizing Huawei as a powerful tech company with advanced technology [8][9]. - He acknowledged that while Huawei has made significant progress, Nvidia has a longer history in the field, but Huawei is already a formidable competitor [9]. Group 4: Trade Policies and Nvidia's Market Position - Huang Renxun discussed the need for companies to adapt to changing global trade policies, emphasizing Nvidia's strong adaptability [10]. - He expressed pride in Nvidia's growth, noting that the company has become a leading provider of AI computing infrastructure, marking a significant milestone in its history [12].

Group 1 - Tencent has made a significant organizational adjustment by dissolving the original Ubisoft cooperation department and establishing a new K9 cooperation department, indicating a shift from a traditional agency model to a more integrated partnership approach [1][4] - The establishment of the K9 cooperation department is part of Tencent's strategy to deeply embed itself in the lifecycle management of Ubisoft's core IPs, moving away from merely acting as a distributor [3][4] - Tencent's investment of €1.16 billion in Ubisoft's newly formed core IP subsidiary signals a strategic intent to incorporate Ubisoft into its "evergreen" operational framework, focusing on sustaining and expanding the lifecycle of IPs [3][13] Group 2 - Ubisoft has struggled with innovation, leading to stagnation in its major franchises, which has resulted in a perception of its games as repetitive and lacking fresh engagement [5][7] - The gaming industry is witnessing a shift in understanding content lifecycles, with companies needing to combat inertia and creative fatigue, a challenge that Ubisoft faces as it attempts to adapt to modern content demands [7][10] - Tencent's approach to game lifecycle management, characterized by continuous content supply and operational agility, contrasts with Ubisoft's traditional model, which may require a cultural shift within Ubisoft to fully embrace Tencent's methodologies [16][17] Group 3 - Tencent's long-term strategy involves not only enhancing its domestic IPs but also expanding its global footprint, as evidenced by its need to develop more globally relevant evergreen IPs [10][11] - The collaboration between Tencent and Ubisoft is seen as a potential remedy for Ubisoft's current challenges, with Tencent aiming to leverage its operational expertise to revitalize Ubisoft's IPs [13][19] - The ongoing partnership is an experiment to determine whether Tencent's "evergreen logic" can effectively rejuvenate Ubisoft's IPs, with both companies seeking to adapt to the evolving gaming landscape [19]

Market Overview - The current market trend shows that focusing on EPS (Earnings Per Share) is crucial, as stock prices tend to respond positively when EPS is correctly predicted, leading to potential valuation increases [2][3] - The relationship between fundamentals and narratives is emphasized, where strong EPS combined with a compelling narrative can lead to significant stock price appreciation [2][3] - Certain sectors, such as innovative pharmaceuticals and new consumption, are exhibiting signs of a "crazy bull market," with companies showing price increases despite poor fundamentals [2][3] Gaming Industry Characteristics - The gaming industry has a large market size, with domestic companies capturing nearly 40% of the overseas mobile game market and a growing share in PC and console gaming [4][5] - The global gaming market is estimated to be between 15,000 to 18,000 billion, with high gross margins and net profit rates, indicating a lucrative industry [4][5] - The gaming sector is considered a sunrise industry, with increasing gaming populations and spending potential, particularly in East Asia [4][5] Industry Trends - The gaming industry is expected to experience significant growth over the next few years, driven by innovations in gameplay and the rise of cross-platform gaming [9][11] - Major gameplay innovations include the rise of open-world games, which have seen substantial success, particularly with titles like Genshin Impact [9][10] - The trend of single-player games is also resurging, with potential for significant market share in the domestic market [10][11] Investment Methodology - Long-term investment targets should focus on companies with strong EPS growth and shareholder returns, with a preference for those capable of expanding their product categories [12][13] - Mid-term investment opportunities arise from new product launches, with the potential for significant returns based on market conditions and product performance [12][13] - Companies like Tencent and NetEase are highlighted as successful long-term investments due to their consistent performance and growth potential [12][13] Listed Gaming Companies - Tencent remains a dominant player, although it faces challenges from high baseline revenues in certain games [15][16] - NetEase's project approval process is scrutinized, as it may hinder the development of potentially successful games [15][16] - Other companies like Kingsoft and Huya are discussed, with varying degrees of market performance and potential for growth [15][16][17]

Core Viewpoint - NVIDIA is positioned as a driving force behind the global AI ecosystem, showcasing its significant contributions to various industries and its collaboration with leading Chinese companies [3][4]. Group 1: Company Overview - NVIDIA was founded in 1993 with a vision to revolutionize PC gaming through 3D graphics technology, becoming a key player in the gaming industry [1]. - The company developed the first programmable graphics processing unit (GPU) in 1999, paving the way for accelerated computing [2]. - The introduction of CUDA technology in 2006 transformed GPUs into general-purpose computing engines, laying the groundwork for the AI era [2]. Group 2: AI Development and Impact - The success of AlexNet on NVIDIA GPUs ten years ago triggered an explosive growth in artificial intelligence [2]. - NVIDIA has expanded AI computing applications significantly, achieving a performance increase of 100,000 times, which is 1,000 times faster than Moore's Law [2]. - AI is transforming every industry, including scientific research, healthcare, energy development, transportation, and logistics [4]. Group 3: Collaboration with Chinese Companies - AI powers major Chinese platforms such as Tencent WeChat, Alibaba Taobao, and ByteDance Douyin, enhancing their capabilities [5]. - Over 1.5 million developers in China are utilizing NVIDIA's platform to bring their innovations to life [6]. - Chinese-developed open-source AI models like DeepSeek and Baidu Ernie Bot are contributing to the rapid advancement of global AI [6]. Group 4: Future of AI and Robotics - AI is reshaping supply chains and changing production and logistics methods, with hundreds of projects using NVIDIA Omniverse for digital twin simulations [7]. - The next wave of AI will involve robotic systems capable of reasoning and executing tasks, leading to AI-driven factories and human-robot collaboration [7].

Group 1 - CEO Jensen Huang of Nvidia expects to soon receive a license to export H20 AI chips to China, which could generate billions in revenue for the company [1] - Nvidia has a significant number of orders waiting to be shipped and is eager to deliver the H20 chips as soon as the license is approved [1] - The U.S. has approved the export of H20 chips to China, and Nvidia plans to launch a new graphics card called RTX Pro [1] Group 2 - Huang praised China's achievements in the AI sector and highlighted the rapid innovation driven by researchers and entrepreneurs in the country [2] - He mentioned that numerous Chinese companies, including Tencent, Alibaba, and Baidu, are using Nvidia's Omniverse digital twin AI platform for various projects [2] - Nvidia recently became the first company to reach a market capitalization of $4 trillion, underscoring its critical role in the AI infrastructure boom post-ChatGPT [2]

Group 1 - The core message from Boston Fed President Collins indicates that the Federal Reserve is not in a hurry to cut interest rates, and the impact of tariffs on prices is limited [1][2] - Collins' statement suggests that retail investors should not expect immediate liquidity from interest rate cuts, highlighting the cautious approach of monetary policy [2][4] - The market's reaction to Collins' comments reflects a broader struggle between institutional and retail investors, with the latter often reacting to fear and uncertainty [2][5] Group 2 - The article discusses how institutional investors may manipulate market sentiment by creating panic through negative news, allowing them to buy back shares at lower prices after retail investors sell off [5][7] - A quantitative system is mentioned that tracks institutional buying behavior, indicating that when certain market signals appear, it often means institutions are taking advantage of retail investor fear [5][10] - The article emphasizes the importance of focusing on actual market data and fund flows rather than being swayed by news headlines, as true market movements are often preempted by institutional actions [11][14]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][7]. Core Insights - The company is making significant strides in the AI field, particularly in ICT operations, with the launch of the "Yueqing" intelligent IT operation model, which has passed authoritative testing by the China Academy of Information and Communications Technology [2][3]. - The company has a strong long-term operational capability in the gaming sector, with core games showing revenue recovery and stability. The two main mobile games, "Age of Origins" and "War and Order," account for 74% and 23% of gaming revenue, respectively [3]. - The company is expected to release new games in the second half of 2024, which could significantly enhance revenue potential, with several games in development set to launch in overseas markets [3]. Financial Summary - The company's projected revenues for 2023 to 2027 are as follows: - 2023: 5,962 million - 2024: 6,452 million (+8.22%) - 2025: 6,895 million (+6.86%) - 2026: 7,685 million (+11.46%) - 2027: 7,991 million (+3.97%) [6]. - The net profit attributable to the parent company is forecasted to be: - 2023: 887 million - 2024: 1,428 million (+60.92%) - 2025: 1,344 million (-5.83%) - 2026: 1,561 million (+16.12%) - 2027: 1,594 million (+2.08%) [6]. - Earnings per share are expected to be: - 2024: 0.73 - 2025: 0.69 - 2026: 0.80 - 2027: 0.81 [6]. Market Performance - The company's stock has shown strong performance with absolute returns of 18% over the last month, 13% over three months, and 62% over the past year [9]. - The stock's closing price was 12.95, with a 12-month price range of 7.83 to 15.88 [7]. Conclusion - The report highlights the company's robust positioning in the gaming and ICT sectors, with promising revenue growth and a strong operational framework, making it a compelling investment opportunity [4][6][7].

Group 1 - The gaming sector is experiencing a short-term correction, but the gaming ETF (159869) has seen a net inflow of funds totaling 635 million yuan over the past three trading days, indicating strong investor interest [1] - The industry is characterized by high demand driven by technological innovation and content consumption recovery, with AI applications advancing and the summer movie box office showing signs of improvement [1] - The policy environment for the gaming sector is becoming more favorable, with an increase in the issuance of game licenses and a notable rise in the number of new products launched, particularly ahead of the summer season [2] Group 2 - The gaming sector is witnessing multiple catalysts, including advancements in AI, content, and changes in commercialization models, which are expected to enhance overall valuations [2] - The upcoming annual gaming event, ChinaJoy, is anticipated to serve as a significant catalyst for the gaming sector, with a focus on the performance of new products and their sustainability [2] - The gaming ETF (159869) tracks the performance of A-share listed companies in the animation and gaming industry, reflecting the overall market trends [2]

Macro Insights - The U.S. June CPI shows partial transmission of tariffs, with core CPI rising 0.23% month-on-month, slightly below the expected 0.3% [2] - The second quarter GDP growth in China is steady at 5.2%, down from 5.4% in the first quarter, indicating a slowdown in the second industry and impacts from tariffs on exports and production [3][4] - The nominal GDP growth rate decreased from 4.6% in the first quarter to 3.9% in the second quarter, with trade surplus contribution dropping from 2.2 percentage points to 1.4 percentage points [3] Consumer Sector - In June, retail sales in China reached 4.2 trillion yuan, growing by 4.8% year-on-year, although the growth rate decreased by 1.6 percentage points from May [6] - The consumer market is expected to maintain steady growth in the second half of the year, driven by policies supporting domestic demand and trends in emotional consumption and domestic brands [6] Real Estate Sector - The central urban work conference emphasized urban renewal and market service opportunities, suggesting a focus on companies with urban renewal resources and community service capabilities [7] - Real estate sales and prices are still declining, indicating a bottoming-out phase, with a focus on core cities for recovery and companies with good credit and product quality [7] - Recommendations include A-share developers like Chengdu Investment and Hong Kong developers like China Overseas Development [7] Power and Utilities - In the first half of 2025, coal power approvals increased by 152%, indicating a strong likelihood of exceeding 60GW for the year, supporting the recovery of coal power profitability [8] - Companies like Dongfang Electric and Harbin Electric are recommended due to their potential to benefit from the increasing approvals [8] Construction and Materials - Investment growth in infrastructure, real estate, and manufacturing shows divergence, with infrastructure maintaining high growth while real estate investment declines [9] - The focus is on supply-side capacity clearing and high-growth segments, with recommendations for companies like Huaxin Cement and China Nuclear Engineering [9] Aviation Sector - Huaxia Airlines is reaffirmed as a buy with a target price of 12.55 yuan, expecting a significant CAGR of 71.1% in net profit from 2025 to 2027 due to recovery in flight utilization and favorable subsidy policies [11] Food and Beverage - Guoquan's first half of 2025 shows a net profit increase of 111-146%, driven by supply chain efficiency and effective product strategies [12] - The company is positioned for long-term growth with a focus on expanding its community kitchen model [12] Healthcare Sector - Meili Tianyuan Medical Health expects a revenue increase of at least 27% year-on-year in the first half of 2025, driven by strong performance in beauty and health sectors [16] - The company is focusing on expanding its customer base and enhancing shareholder value through strategic initiatives [16] Chemical Sector - Zhongyan Chemical reported a revenue decline of 5.8% year-on-year in the first half of 2025, with a significant drop in net profit, but maintains a "hold" rating due to its integrated operations and resource advantages [17]

Summary of Conference Call Notes Industry or Company Involved - The notes primarily discuss the overall market trends and specific sectors within the Chinese economy, including industrial metals, manufacturing, military, consumer goods, innovative pharmaceuticals, financial services, and public utilities. Core Points and Arguments 1. **Earnings Disclosure Timeline**: Companies are expected to disclose their earnings forecasts by July 15, with subsequent disclosures impacting market trading dynamics. The earnings reporting periods include annual, semi-annual, and quarterly reports, with the latter being less impactful on market trading compared to annual and semi-annual reports [1] 2. **Economic Recovery**: The current state of the domestic economy is characterized by a slow recovery in the financial chain, with overall economic growth being decent. The overall EPS for the A-share market may require more time to improve, suggesting a focus on structural economic trends [2][3] 3. **Industrial Metals Demand**: The demand for industrial metals is supported by the rapid development of sectors such as renewable energy and AI computing, leading to price increases and improved earnings for these metals [3][4] 4. **Manufacturing Sector Growth**: The manufacturing sector, particularly in wind power and exports of motorcycles and inverters, is experiencing high growth rates. The demand from emerging markets, especially Southeast Asia and South America, is driving this growth [4][5] 5. **Military Industry Outlook**: The military sector is expected to see continuous improvement in orders, supported by both domestic and international demand. This sector is highlighted for its potential earnings elasticity [6][7] 6. **Consumer Goods Performance**: The consumer goods sector, particularly in categories supported by government subsidies, has shown strong growth. Categories such as home appliances and communication equipment have experienced significant increases in sales [8] 7. **Innovative Pharmaceuticals**: The innovative pharmaceutical sector is benefiting from favorable policies and a surge in commercial opportunities. The second quarter has seen a significant increase in orders from Chinese pharmaceutical companies [9][10] 8. **Insurance Sector Dynamics**: The insurance sector is seeing improvements in both liability and asset sides, with premium income rising and investment returns being favorable. The demand for bank stocks as a stable investment is also noted [11] 9. **Investment Banking Recovery**: The investment banking sector is experiencing a recovery, with an increase in IPOs and fundraising activities. The number of IPOs reached 24, raising over 20 billion, significantly higher than the previous year [12] 10. **Emerging Technologies and Gaming**: The demand for computing power is expected to grow significantly, particularly in the AI sector, while the gaming industry continues to expand, with mobile game revenues increasing by 12% year-on-year [13][14][15] 11. **Public Utilities Focus**: Investors are advised to pay attention to the public utilities sector, particularly in electricity generation, with a focus on thermal power [15] Other Important but Possibly Overlooked Content - The notes emphasize the importance of structural economic trends and specific sectors that are likely to drive market performance in the near future. The focus on emerging markets and technological advancements indicates potential investment opportunities that may not be immediately apparent [2][4][6][9][12]