Group 1 - The report emphasizes the need to regulate low-price disorderly competition among enterprises and promote the orderly exit of backward production capacity, aiming to address the issue of "involution" in market competition [2][8] - Historical cases show that supply-side clearance driven by policy typically begins with market expectations, while the main upward trend requires improvements in industry structure to support cash flow and balance sheet recovery [8][10] - The current round of overcapacity is primarily concentrated in mid- and downstream industries, unlike the previous cycle which was focused on upstream resource sectors [9][10] Group 2 - The report suggests focusing on two main strategies: industries that have experienced prolonged supply-side clearance and are likely to see improvements in supply-demand dynamics, and industries that may benefit from policy-driven accelerated clearance [10][11] - For natural clearance, the report recommends monitoring demand-side indicators for upstream industries and supply-side indicators for mid- and downstream sectors, highlighting sectors such as agricultural chemicals, general machinery, pharmaceuticals, and components [10] - For policy-driven clearance, attention should be given to industries mentioned in recent policies aimed at addressing "involution," including photovoltaic, lithium batteries, automobiles, and cement [10][17]

Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed [2]. Core Insights - The report emphasizes the focus on "supply-side optimization" and "anti-involution" competition, with potential policy implementations expected in the second half of the year [3][8]. - Key industries identified for "anti-involution" include those with high inventory, high CAPEX, low capacity utilization, and low price levels, particularly in sectors such as chemicals, non-ferrous metals, coal, steel, and various manufacturing and consumer goods [3][11][13]. - The report outlines five perspectives for identifying potential beneficiaries of the "anti-involution" policies, including state-owned enterprise (SOE) share, industry concentration, tax revenue impact, labor intensity, and price elasticity post-capacity reduction [5][6]. Summary by Relevant Sections Policy Focus - The report highlights that the Central Financial Committee meeting on July 1 emphasized supply-side optimization and "anti-involution" competition, referencing past supply-side reforms from 2015-2016 as a model for future policy actions [3][8]. Key Industry Characteristics - Industries with high inventory, high CAPEX, low capacity utilization, and low price levels are targeted for policy intervention. These include: - Cyclical industries: Chemicals (chemical products, rubber, non-metallic materials), non-ferrous metals (energy metals), coal, and steel (common steel, steel raw materials) [3][11]. - Manufacturing: Electric new (motors, grid equipment, batteries, photovoltaics), machinery (automation equipment), automotive (passenger vehicles), military electronics, and construction [3][11]. - Consumer goods: Home appliances (appliance components), food and beverage (food processing, liquor, snacks) [3][11]. Five Perspectives for Industry Selection - **State-Owned Enterprise (SOE) Share**: Industries with higher SOE shares are expected to have stronger policy execution efficiency, including coal, common steel, cement, glass, and consumer sectors like liquor [3][5]. - **Industry Concentration**: Higher concentration industries are more likely to achieve supply clearing through stronger pricing power and quicker policy response, particularly in energy metals, non-metallic materials, and consumer goods like liquor [3][5]. - **Tax Revenue Impact**: Industries with lower tax revenue contributions will have a smaller impact on local finances during capacity reduction, focusing on sectors like glass, energy metals, and common steel [3][5]. - **Labor Intensity**: Industries with lower labor intensity will have a reduced impact on employment during capacity reduction, including non-metallic materials, chemical products, and energy metals [3][5]. - **Price Elasticity Post-Capacity Reduction**: Industries with a strong correlation between asset turnover and gross margin are expected to see greater price and margin expansion post-capacity reduction, including glass, chemical products, and energy metals [3][5]. Potential Beneficiary Industries - The report identifies several industries as potential beneficiaries of the "anti-involution" policies based on the five perspectives, including: - Coal mining, common steel, precious metals, glass fiber, coke, energy metals, steel raw materials, cement, chemical products, non-metallic materials, and various manufacturing sectors [6][7].

Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals sector [2]. Core Viewpoints - Precious metals are expected to perform well in the long term, with gold prices rising by 1.94% recently. The ongoing tariff issues and the weakening global position of the US dollar are anticipated to support gold prices [5]. - Industrial metal prices are on the rise, with significant increases in copper, aluminum, lead, zinc, tin, and nickel prices observed recently [5]. - The report highlights a positive outlook for the non-ferrous metals sector, driven by the Fed's easing cycle and domestic monetary policies, recommending investments in companies like Shandong Gold, Chifeng Jilong Gold Mining, and Zijin Mining [5]. Summary by Sections 1. Industry Data Review 1.1 Precious Metals - The report notes a recent increase in domestic gold prices and discusses the impact of tariff fluctuations on the market [5]. 1.2 Industrial Metals - Prices for copper, aluminum, lead, zinc, tin, and nickel have shown positive weekly changes, with copper reaching a peak of 10015 USD/ton on the London Metal Exchange [5][28]. 1.3 Minor Metals - Prices for rare earth metals, particularly praseodymium and neodymium oxides, have increased, reflecting a growing demand in manufacturing [5][30]. 1.4 Energy Metals - Lithium hydroxide prices have decreased, while nickel prices have shown an upward trend, indicating a mixed outlook for energy metals [5][34]. 2. Market Data - The report indicates that the non-ferrous metals sector has seen a 1.03% increase, with various sub-sectors performing differently [36]. 3. Important Events Review - The report discusses recent announcements by US President Trump regarding new tariffs, which are expected to impact the market starting August 1 [42].

Summary of Key Points from the Energy Metals Industry Mid-Year Strategy Report 2025 Industry Overview - The report focuses on the energy metals industry, particularly strategic metals such as rare earths, tungsten, cobalt, and nickel, highlighting the impact of geopolitical factors and supply chain dynamics on these markets [1][2]. Core Insights and Arguments - **Supply Constraints**: China's export controls on rare earths and tungsten, along with the Democratic Republic of Congo's (DRC) cobalt export ban, have led to a tightening of global strategic metal supplies, prompting a reevaluation of their value [1][2]. - **Rare Earths Demand**: The demand for rare earths is expected to remain strong due to growth in humanoid robots and overseas air conditioning needs, leading to a long-term supply-demand imbalance and potential price increases [1][6]. - **Tungsten Market Dynamics**: The tungsten industry is experiencing supply tightness due to a decrease in mining permits and declining ore grades, resulting in record-high tungsten prices despite weak downstream demand [1][8]. - **Cobalt Supply Shortages**: The DRC's export ban aims to improve mining profitability and government revenue, with expectations of a significant supply shortage as inventories are depleted, likely driving cobalt prices higher [1][10]. - **Nickel Market Positioning**: Indonesian policies have enhanced nickel's profitability within the industry, with prices fluctuating between $15,000 and $17,000. Companies are shifting focus to electric motors and plating to maximize profits amid weak stainless steel and ternary demand [1][12][14]. Additional Important Insights - **Investment Strategy**: The core investment strategy for 2025 centers on the revaluation of strategic metals, with a focus on supply-side dynamics due to a lack of significant demand catalysts [2][18]. - **Rare Earths Pricing Trends**: The rare earths market is influenced by U.S.-China trade tensions, with export controls affecting pricing and demand dynamics, particularly in high-end magnetic materials [3][5]. - **Consolidation in Rare Earths**: The integration of major rare earth groups has strengthened state control over smelting and separation assets, which is expected to enhance price stability and growth in the long term [4][6]. - **Tungsten Price Outlook**: Despite a lack of robust demand in core sectors, tungsten prices are expected to continue rising due to supply-side constraints, with potential growth in sectors like construction and aerospace [8][9]. - **Cobalt Market Dynamics**: The DRC's export ban is anticipated to create a significant supply gap, benefiting companies with nickel production capabilities unaffected by the ban [10][11]. - **Nickel's Role in the Market**: Nickel's price is closely tied to macroeconomic recovery and demand from stainless steel and battery sectors, with companies adapting to maximize profitability in a challenging environment [12][13][15]. Conclusion - The energy metals industry is poised for significant changes driven by geopolitical factors, supply constraints, and evolving demand dynamics. Investors are advised to focus on strategic metals with strong pricing power and to monitor developments in supply chains and market conditions closely [2][18].

Investment Rating - The report maintains a "Hold" recommendation for the non-ferrous metals industry [7] Core Insights - The non-ferrous metals index increased by 6.19% over the past two weeks, outperforming the CSI 300 index and ranking 7th among 31 first-level industries [2][14] - Energy metals and industrial metals led the gains with increases of 8.28% and 8.09% respectively, while precious metals saw a slight decline of -0.53% [2][14] - The price of cobalt has been on the rise due to supply constraints, particularly following the extension of the cobalt export ban in the Democratic Republic of Congo [4][5] Summary by Sections Market Review - The non-ferrous metals index rose 6.19% from June 20 to July 4, 2025, with energy metals and industrial metals showing the highest gains [2][14] - Precious metals experienced a slight decline, while small metals and new metal materials saw positive growth [2][14] Precious Metals - As of July 4, COMEX gold closed at $3,336 per ounce, down 1.43% over the past two weeks, but up 24.89% year-to-date [21][22] - COMEX silver closed at $37.04 per ounce, up 3.03% over the past two weeks and 23.53% year-to-date [22][26] Industrial Metals - LME copper closed at $9,970.50 per ton, with a slight increase of 0.26% over the past two weeks and a year-to-date increase of 14.79% [30] - LME aluminum closed at $2,587 per ton, up 2.29% over the past two weeks [30][33] Small Metals - Black tungsten concentrate (≥65%) price was 173,000 CNY per ton, up 0.58% over the past two weeks [36] - LME tin price was $33,585 per ton, up 3.95% over the past two weeks [36] Rare Earths - The rare earth price index was 182.25 as of July 4, showing a slight increase of 0.04% over the past two weeks [45] - Prices for praseodymium-neodymium oxide and lanthanum oxide remained stable, while cerium oxide saw a significant year-to-date increase of 36.25% [45][46] Energy Metals - Electrolytic cobalt averaged 251,750 CNY per ton, up 7.36% over the past two weeks and 46.79% year-to-date [51] - Sulfuric cobalt (≥20.5%) averaged 48,850 CNY per ton, up 2.41% over the past two weeks and 78.94% year-to-date [51][54]

Core Insights - The report indicates a neutral market sentiment with a score of 56, suggesting a balanced outlook for investors [2][10] - Key themes identified include photovoltaic, energy metals, and innovative pharmaceuticals, with specific companies highlighted for potential investment opportunities [7] Market Sentiment - The market sentiment temperature indicator shows a score of 56, categorized as "neutral," indicating moderate market fluctuations and stable investor emotions [6][10] - Historical trends suggest that when the sentiment score is below 30, the market tends to find support, while scores above 90 may indicate resistance [10] Hot Themes Tracking - **Photovoltaic Theme**: Major domestic photovoltaic glass companies plan to collectively reduce production by 30% starting July, which is expected to improve the supply-demand imbalance in the market. Projected domestic glass production is expected to drop to around 45GW in July. Related companies include Quartz Co., Ltd. (603688) and Aiko Solar (600732) [7] - **Energy Metals Theme**: The Democratic Republic of Congo has extended a temporary ban on cobalt exports due to high inventory levels, effective from June 21, 2025. Related companies include Huayou Cobalt (603799) and Tianqi Lithium (002466) [7] - **Innovative Pharmaceuticals Theme**: The National Healthcare Security Administration and the National Health Commission have issued measures to support the high-quality development of innovative drugs, emphasizing the use of medical insurance data for drug research and development. Related companies include Heng Rui Medicine (600276) and Betta Pharmaceuticals (300558) [7] Major Capital Flows - The report lists the top ten stocks with significant net inflows, including Wolong Nuclear Materials (002130) with a net inflow of 119,369.13 million and Xiexin Energy Technology (002015) with 52,418.61 million [11] - The top ten stocks with significant net outflows include Zhongji Xuchuang (300308) with a net outflow of -56,351.46 million and Haoshanghao (001298) with -49,377.86 million [13] Industry Overview - The report highlights the performance of various industries, with significant net inflows observed in sectors such as computer and media, while notable outflows were seen in pharmaceuticals and banking [17][18]

Group 1 - The market is experiencing an upward shift in the oscillation center, characterized by "top and bottom" dynamics, with a positive outlook for effective index breakthroughs due to monthly momentum reversal and rising trading volume [2][12][13] - Profitability is still in a bottoming phase, with expectations that the profit bottom will not arrive before the end of Q3, limiting the elasticity of the current profit cycle [2][13] - Valuation support is provided by government-backed credit policies, with a focus on stable growth and market stabilization measures [2][13] Group 2 - Structural opportunities are emphasized, particularly in "Deep Sea Technology" and "Newly Listed Stocks," alongside existing themes like "Delta G Consumption" and "Self-Controlled Technology" [3][23] - "Deep Sea Technology" is positioned as a strong thematic opportunity for the second half of the year, aligning with national strategic priorities and policies aimed at enhancing marine economic development [4][24][29] - The deep sea technology industry chain is extensive, covering upstream materials, midstream manufacturing, and downstream resource utilization, indicating a comprehensive growth potential [4][32] Group 3 - Newly listed stocks have regained prominence since September 2024, with a significant upward trend observed in their performance, correlating closely with improvements in economic confidence [5][34] - The performance of newly listed stocks is highly correlated with macroeconomic indicators, suggesting that as economic expectations improve, these stocks are likely to outperform the market [5][38] - A new index, the "Open Source Newly Listed Stock Index," has been created to better track and represent the performance of newly listed stocks, expanding the criteria to include stocks listed for up to six years [5][44] Group 4 - Current investment strategy emphasizes diversification across sectors, focusing on "Delta G Consumption," "Self-Controlled Technology," "Stable Dividends," and "Gold" [6][50] - Specific sector recommendations include domestic consumption, technology growth, cost improvement sectors, and structural opportunities in exports, particularly to Europe [6][50] - The strategy aims to capture the greatest expected differences and domestic certainties while avoiding over-concentration in any single sector [6][50]

Investment Rating - The report maintains a "Market Weight" rating for the non-ferrous metals industry, indicating that the industry index is expected to perform within ±10% of the market index over the next six months [57]. Core Insights - The non-ferrous metals industry has seen a 7.18% increase over the past two weeks, outperforming the CSI 300 index by 3.92 percentage points, ranking third among 31 industries [3][12]. - The energy metals sector led the gains with a 9.83% increase, followed by industrial metals at 9.26%, while precious metals saw a decline of 1.09% [12][19]. - The report highlights a positive outlook for the rare earth industry, driven by recovering export demand and emerging applications in humanoid robotics [51]. Summary by Sections Market Review - As of July 3, 2025, the non-ferrous metals industry has increased by 21.14% year-to-date, outperforming the CSI 300 index by 20.30 percentage points, ranking first among 31 industries [12]. - The report notes that the industrial metals prices have rebounded due to improving global macro sentiment and dovish signals from the Federal Reserve [52][54]. Price Analysis - As of July 2, 2025, LME copper was priced at $10,010 per ton, aluminum at $2,614.50 per ton, and nickel at $15,340 per ton [24][54]. - Precious metals prices included COMEX gold at $3,368.70 per ounce and silver at $36.79 per ounce [36][50]. Industry News - The Ministry of Commerce announced an acceleration in the review of export licenses for rare earths, indicating a commitment to maintaining global supply chain stability [51]. - The Federal Reserve's Chairman Powell stated that the timing of potential interest rate cuts remains uncertain, which may impact gold prices in the short term [50][43]. Company Announcements - Companies such as China Rare Earth (000831), Jinchuan Group (300748), and Xiamen Tungsten (600549) are highlighted for their strong performance and growth potential in the rare earth sector [51][55]. - Zijin Mining (601899) is noted for its significant resource reserves and recent acquisition activities, enhancing its market position [55].

Market Overview - The three major stock indices closed mixed, with the Shanghai Composite Index at 3472.32 points, up 0.32%, while the Shenzhen Component Index fell 0.25% to 10508.76 points, and the ChiNext Index decreased by 0.36% to 2156.23 points [1][2]. Stock Performance - Over 1100 stocks rose, while more than 4100 stocks declined, indicating a bearish market sentiment overall [2]. - The banking sector showed strong performance, with major banks like China CITIC Bank, Industrial Bank, and China Everbright Bank rising over 3% [5]. - The cross-border payment concept stocks were notably active, with Longbright Technology rising over 13% and Tianyang Technology increasing by over 10% [5]. Sector Analysis - The financial sector saw a midday surge, while sectors such as military, solid-state batteries, marine economy, and rare earth permanent magnets weakened [3]. - The energy metals sector faced significant declines, with YH Precision dropping nearly 10% and Tengyuan Cobalt falling over 4% [5]. Capital Flow - Main capital flows showed net inflows into banking, pharmaceutical, and computer sectors, while there were net outflows from power equipment and non-ferrous metals sectors [7]. - Specific stocks like Wolong Nuclear Materials, Xiexin Energy, and Data Port saw net inflows of 1.183 billion, 532 million, and 474 million respectively [8]. Institutional Insights - Jianghai Securities noted that a breakthrough of previous highs is imminent but requires support from the financial sector [11]. - Galaxy Securities suggested that the Shanghai Composite Index may continue to rise but needs volume support, while Guotai Junan Securities indicated a potential upward trend in the fourth quarter due to a weak dollar environment [12].

Market Overview - The financial sector saw a midday surge, with active performance in digital currency, gaming, steel, and innovative pharmaceuticals, while military, solid-state batteries, marine economy, and rare earth permanent magnet sectors weakened [1][8] - On July 4, the three major stock indices closed mixed: Shanghai Composite Index at 3472.32 points, up 0.32%; Shenzhen Component Index at 10508.76 points, down 0.25%; ChiNext Index at 2156.23 points, down 0.36% [1] Sector Performance - The Alzheimer's concept sector increased by 1.80%, while the cross-border payment sector rose by 1.72% [2] - The gaming sector saw a rise of 1.65%, and the banking sector also increased by 1.65% [2] - The energy metals sector experienced a decline of 3.26%, with significant drops in stocks like Yuanhang Precision and Tengyuan Cobalt [3] Capital Flow - Main capital inflows were observed in the banking, pharmaceutical, and computer sectors, while there were outflows from power equipment and non-ferrous metals sectors [4] - Specific stocks such as Wolong Nuclear Materials, GCL-Poly Energy, and Dataport saw net inflows of 1.183 billion, 532 million, and 474 million respectively [5] - Conversely, stocks like Zhongji Xuchuang, Haoshanghao, and Dongfang Caifu faced net outflows of 580 million, 475 million, and 459 million respectively [6] Institutional Insights - Jianghai Securities noted that a breakthrough of previous highs is imminent, contingent on the financial sector's performance [7] - Galaxy Securities indicated that the Shanghai Composite Index may continue to rise but requires accompanying trading volume [9] - Guotai Junan Securities suggested that the weak dollar trend may persist in the short term, with potential for an upward trend in the fourth quarter, indicating support from global markets [9]