Macro and Strategy Research - The report highlights a persistent "anti-involution" sentiment in the macroeconomic environment, with the U.S. manufacturing PMI falling to a new low since December 2024, while the service sector shows signs of recovery [2][3] - In the domestic context, various sectors including automotive, photovoltaic, cement, and steel are actively implementing measures to curb disorderly competition and promote industrial upgrades, significantly boosting market sentiment [4] - The upcoming Politburo meeting is expected to provide further insights into policy directions, particularly regarding the importance of "anti-involution" in addressing supply-demand imbalances [4] Fixed Income Research - The report notes that the bond market is under pressure, with the 10-year government bond yield rising above 1.7%, influenced by a tightening of the monetary environment and expectations of increased infrastructure investment [6][7] - The central bank has conducted a net withdrawal of over 500 billion yuan in the open market, leading to a noticeable increase in funding prices [7] - The issuance of bonds has seen weak subscription sentiment, with a total issuance of 90 bonds amounting to 940.9 billion yuan, indicating a continued lack of enthusiasm in the primary market [7] Industry Research - The report discusses the "anti-involution" in centralized procurement within the pharmaceutical and biotechnology sectors, emphasizing the need to focus on beneficiaries of optimized procurement rules [10] - Key industry news includes the approval of new treatments and the establishment of a biopharmaceutical industrial park in Pudong, which is expected to enhance the sector's growth [10][11] - The report indicates a positive performance in the pharmaceutical sector, with the Shanghai Composite Index rising by 2.53% and the pharmaceutical sector increasing by 2.94% during the week [11] - The report suggests that the innovation drug sector is supported by ongoing policy initiatives, and it recommends focusing on companies that are expected to benefit from these changes [11]

Core Viewpoint - The Yarlung Tsangpo River downstream hydropower project, with an investment of 1.2 trillion yuan, is expected to significantly boost the capital market and energy sector, leading to a surge in related stock prices and substantial economic growth in Tibet [1][3]. Investment Impact - The 1.2 trillion yuan investment is projected to generate a GDP increase of 2.04 trillion yuan, providing over 20 billion yuan in annual fiscal revenue for Tibet [3]. - The total installed capacity of the project is estimated to be between 60 million to 70 million kilowatts, making it the largest hydropower station globally, with an annual electricity generation of approximately 300 billion kilowatt-hours [3][5]. Energy Development Potential - The project is part of a broader initiative to develop 50 million kilowatts of solar and wind energy resources in the region, creating a comprehensive clean energy base [3][7]. - The electricity generated will primarily be transmitted to high-demand areas such as the Yangtze River Delta and the Pearl River Delta, reshaping China's energy landscape [3][8]. Clean Energy Contribution - The project will facilitate the export of 500 billion kilowatt-hours of green electricity annually, contributing significantly to China's carbon reduction goals [3][6]. - The annual electricity output is equivalent to the energy consumption of 100 million households and will account for about 3% of the national electricity generation in 2024 [3][5]. Infrastructure and Grid Development - The construction of the Yarlung Tsangpo project is accompanied by significant upgrades to the local power grid, including the establishment of high-voltage direct current (HVDC) transmission lines to facilitate electricity export [15][16]. - The project will integrate various energy sources and modern infrastructure, including 5G networks and rail extensions, to enhance energy and information connectivity [15]. Regional Energy Integration - Future plans include the establishment of a South Asia energy internet, which aims to connect China's clean energy resources with South Asian markets [10][9]. - The development of the project will require overcoming significant challenges related to inter-regional cooperation and infrastructure integration [4][17]. Challenges and Barriers - The extreme geographical conditions in Tibet pose significant challenges for the successful implementation of the electricity export plan [4]. - There are existing barriers to inter-regional electricity trade, including local protectionism and the need for cooperation between different power grid operators [18][20].

Summary of Key Points from Conference Call Records Industry Overview - The focus is on the **photovoltaic (PV) industry**, particularly regarding supply-side reforms and price recovery, which are expected to drive significant improvements in profitability for companies involved in silicon material production [1][2][4]. Core Insights and Arguments - **Supply-Side Reform**: The government is committed to eliminating chaotic low-price competition, which is anticipated to lead to a recovery in silicon material prices to around **60,000 yuan per ton**. This price recovery is expected to enhance the profitability of companies in the sector [1][4]. - **Current Market Trends**: The PV industry has been experiencing an upward trend in polysilicon prices, despite high inventory levels. The expansion of new production capacity is limited due to energy consumption standards, which may restrict future growth in polysilicon production [1][4]. - **Investment Opportunities**: Investors are advised to focus on the silicon material segment, as it is poised for recovery. Other segments such as silicon wafers, batteries, and modules also present good investment opportunities, although their price recovery may be slower [4][5]. - **Long-Term Drivers**: The future growth of the PV industry will be driven by supply-side optimization and technological innovation, supported by government policies aimed at ensuring healthy market competition [5][6]. Additional Important Content - **Institutional Holdings**: As of June 30, institutional holdings in the PV sector are relatively low, indicating a favorable time for investment. The ongoing development of storage platforms and revenue processes is expected to sustain market growth [7]. - **Solid-State Battery Sector**: Attention should be given to the equipment and materials sectors within the solid-state battery field, with significant bidding expected in the second half of the year, particularly from leading companies [8]. - **Traditional Lithium Battery Materials**: The profitability of traditional lithium battery materials is under pressure, but there is potential for recovery as the logic of supply-side reform extends to other new energy sectors [9][10]. - **Hydropower Projects**: The **Yajiang Hydropower Station** project has commenced, attracting significant attention due to its potential impact on the market, particularly in construction materials and electrical equipment sectors [11][13]. Investment Directions - Key investment directions include the **PV anti-involution theme**, the **Yajiang Hydropower Station project**, and **critical pools**. Specific companies in the silicon material sector are expected to benefit from these trends [17][18].

Summary of Conference Call Records Industry and Company Involved - The discussion primarily revolves around the **Chinese capital market** and the **Yajiang Investment** project related to the construction of hydropower stations on the Yarlung Tsangpo River, with a total investment of **1.2 trillion yuan** (approximately **$173 billion**) [1][9][12]. Core Points and Arguments - **Market Sentiment and Inflation Expectations**: The current market is experiencing inflation expectations driven by the anti-involution policy and Yajiang Investment, but there is caution regarding the sustainability of the cyclical sector's rise [1][2]. - **Steps to Overcome Deflation**: China needs to undergo three steps to exit deflation: monetary easing (already implemented in 2024), structural policies (which have limited but necessary effects), and balance sheet clearing (anti-involution) [1][5]. - **Impact of Yajiang Investment**: While Yajiang Investment is crucial for the construction of hydropower stations, its macro contribution to overall infrastructure investment and GDP growth in China is limited, necessitating observation of its sustained impact on cyclical stocks [1][6][9]. - **Risk Appetite in Capital Markets**: The increase in risk appetite in the Chinese capital market this year is attributed to expectations surrounding anti-involution and Yajiang Investment, as well as a rebound in dollar liquidity [1][7]. - **Stock Market Bullishness**: The Shanghai Composite Index surpassing **3,600 points** has sparked discussions about the onset of a bull market, but there is a cautious outlook on its sustainability [2][3][4]. - **Investment Projections**: The new hydropower project is expected to have an annual investment of approximately **120 billion yuan** (around **$17 billion**), which is about **0.8%** of the projected **14 trillion yuan** infrastructure scale for 2024 [3][13]. - **Multiplier Effect on GDP**: The actual multiplier effect of the new hydropower project on GDP may be less than one due to factors like capital outflow from imported equipment, leading to limited short-term GDP impact [14][16]. Other Important but Possibly Overlooked Content - **Infrastructure Investment Calculation**: Since 2018, specific amounts for infrastructure investment by industry are no longer published, making accurate calculations challenging. Current estimates suggest the infrastructure scale is around **14 trillion yuan**, which is significantly lower than some extrapolated figures [11]. - **Long-term Economic Effects**: While the short-term impact of the new hydropower project on GDP is limited, it is expected to generate positive spillover effects in the long run, potentially increasing GDP by over **0.1 percentage points** annually [14][17]. - **Incremental Investment Uncertainty**: There is uncertainty regarding whether the new hydropower project constitutes purely incremental investment, which could significantly affect the assessment of its economic impact [15][16]. This summary encapsulates the key insights from the conference call, highlighting the current state of the Chinese capital market, the implications of the Yajiang Investment project, and the broader economic context.

2025 年 07 月 28 日 双融日报 --鑫融讯 分析师：万蓉 S1050511020001 wanrong@cfsc.com.cn 市场情绪：72 分（较热） 最近一年大盘走势 资料来源：Wind，华鑫证券研究 -10 0 10 20 30 (%) 沪深300 相关研究 | 1、《双融日报》2025-07-25 | | --- | | 2、《双融日报》2025-07-24 | | 3、《双融日报》2025-07-23 | ▌ 华鑫市场情绪温度指标：（较热） 华鑫市场情绪温度指标显示，昨日市场情绪综合评分为 72 分，市场情绪处于"较热"。历史市场情绪趋势变化可参 考图表 1。 ▌ 热点主题追踪 今日热点主题：人工智能、RDA、水电 1、人工智能主题：2025 年 7 月 26 日至 29 日，备受瞩 目的"2025 世界人工智能大会"（WAIC 2025）将在上海世 博中心及世博展览馆隆重举办。本届论坛以"智联全球 （Global Solidarity in the AI Era）"为主题，将吸引来 自政府、企业和学术界的逾千位嘉宾，展示当前最前沿的 AI 技术与应用。相关标的：中科曙光（603019 ...

Core Viewpoint - The water and electricity sector is currently facing challenges, with a lack of new stimulating news and mixed performance observed in the market, leading to uncertainty about its future direction [1][2]. Group 1: Market Performance - The water and electricity sector has shown significant participation difficulty, with most investors only achieving small profits [2]. - There is an expectation of continued high-level elimination among the remaining three stocks in the sector, indicating a challenging environment for investors [2]. - The sector has experienced a lack of new news to support its growth, which is a critical issue for its future performance [2]. Group 2: Recent Developments - Recent favorable news has primarily focused on artificial intelligence collaborations and related technologies, overshadowing the water and electricity sector [1]. - The market showed a divergence in performance, particularly on Thursday and Friday, with some stocks recovering while others fell behind [2]. - The water and electricity sector did not meet repair expectations on Friday, leading to a continuation of divergence, which may prompt funds to reassess their positions on Monday [2]. Group 3: Future Outlook - The potential for a market repair on Monday is contingent on the strength of the recovery and whether leading stocks can regain momentum [2]. - If the sector experiences a weak recovery, it may indicate a self-rescue behavior among oversold funds, warranting a cautious outlook [2]. - A strong recovery would require key stocks to lead the way and restore positive sentiment in the sector [2].

Market Overview - The A-share market is currently experiencing fluctuations around the 3600-point level, reflecting increased divergence between bulls and bears [2][16][17] - The market is likely to enter a period of consolidation, with the index expected to oscillate around 3600 points to digest accumulated pressure [17] - Short-term market sentiment is influenced by profit-taking and external disturbances, while medium-term trends remain upward due to policy support and industry upgrades [5][17] Sector Performance - The semiconductor and AI application sectors have shown strength, indicating a potential shift towards technology stocks, particularly among small and mid-cap growth stocks [1][16] - The "Yalu River Downstream Hydropower" concept stocks have experienced significant volatility, with a recent pullback after a period of strong performance [11] - The healthcare sector, particularly innovative drugs and medical devices, is expected to see continued growth due to favorable policy changes and an aging population [10] Investment Strategy - Short-term strategies should focus on avoiding high-flying stocks and selectively reducing positions in sectors that have seen substantial gains, such as the Yalu River hydropower concept [3][17] - Mid-term investments should target growth sectors with elastic potential, including AI infrastructure, innovative pharmaceuticals, and humanoid robotics, driven by both policy and technological advancements [3][17] - The cultural media sector is also highlighted as a potential area for investment, particularly in gaming and interactive content, benefiting from advancements in AI technology [9] Economic Indicators - The report emphasizes the importance of monitoring tariff negotiations and the overall liquidity environment, which are expected to positively influence the A-share market [3][17] - The upcoming fiscal policy window in Q3 and the timing of the Federal Reserve's monetary policy shift are critical factors to watch for market direction [3][17]

Core Viewpoint - The integration of new energy and AI continues to be a major investment theme, with increased focus on AI applications in new energy batteries and AI glasses, while upstream supply-side reforms are optimizing the supply-demand dynamics for silicon, lithium, and cobalt [1][2]. New Energy and AI Industry Insights - The new energy and AI sectors are expected to resonate positively as supply-side reforms progress, enhancing the demand outlook for solid-state batteries and other upgraded technologies [1][2]. New Energy Vehicle Industry Chain Insights - The new cycle for the mid and downstream sectors of the electric vehicle industry has begun, benefiting leading companies like CATL and Hunan Yuyuan [3]. - Recent government initiatives aim to regulate competition in the new energy vehicle sector, which may constrain high-cost lithium carbonate production [3]. - Solid-state batteries are becoming a key focus, with companies like Funeng Technology and Xiamen Tungsten benefiting from accelerated adoption by automakers [3]. Solar and Energy Storage Industry Insights - Supply-side reforms are expected to continue, with companies like Longi and GCL benefiting from enhanced capacity monitoring and industry self-regulation [4]. - The establishment of long-term mechanisms for solar and energy storage is anticipated to gradually restore demand expectations, benefiting companies like JinkoSolar and Longyuan Power [4]. - Chinese energy storage companies are seeing significant growth in overseas orders, with a 220.28% year-on-year increase, particularly in markets like the Middle East and Australia [5]. AI and New Energy Market Developments - The integration of AI with new energy and humanoid robots is gaining traction, with companies like Zhejiang Rongtai and Keda Li benefiting from new market opportunities [5]. - AI glasses are expected to see sustained growth in the second half of the year, with companies like Haopeng Technology poised to benefit from new product launches [6]. - The commencement of the Yarlung Tsangpo River downstream hydropower project is expected to positively impact power equipment companies and promote the development of clean energy solutions [6].

Overall View - The report maintains a "Buy" rating for the sectors of Power Equipment, Public Utilities, and Environmental Protection, indicating a positive outlook for these industries [1][3][4]. Solar Energy - In the solar sector, the focus is on the rising attention towards silicon material "stockpiling," with a reasonable price benchmark set at 60,000 yuan/ton. The market is optimistic about supply-demand matching, leading to significant price increases in polysilicon futures [3]. - The convertible bond price of JA Solar has been adjusted down to 11.66 yuan, enhancing its value and leading to price increases. More solar companies are expected to follow suit [3]. - Key companies to watch include TBEA, Tongwei, Aiko Solar, and Trina Solar, particularly in segments with price elasticity like silicon materials and glass [3]. Hydropower - The Yarlung Tsangpo River downstream hydropower project commenced on July 19, 2025, with a total investment of approximately 1.2 trillion yuan. The market is currently overly enthusiastic about turbine investments, leading to inflated stock prices for companies like Dongfang Electric [4]. - The report suggests focusing on Gas Insulated Transmission Lines (GIL), which have substantial investment potential, alongside traditional turbine investments [4]. Wind Power - The wind power sector is expected to benefit from "anti-involution" policies, with significant performance elasticity anticipated in the wind turbine assembly segment for 2026. The report notes a favorable output curve for wind power, which may lead to a recovery in development and sales [4]. - Key companies to monitor include Windar, Mingyang Smart Energy, and Goldwind, with a focus on the trend of larger turbine components and opportunities in offshore wind products [4]. Solid-State Batteries - The report expresses optimism for solid-state batteries, highlighting potential benefits from new tenders initiated by major lithium battery manufacturers. Companies like Hong Kong Technology and Xiamen Tungsten are recommended for investment [5]. Energy Storage - The introduction of new pricing policies for large-scale energy storage in Gansu is expected to improve independent storage IRR. The report anticipates a high level of bidding activity in the domestic energy storage market due to consumption pressures and improved business models [5]. - Recommended companies in this sector include Sungrow Power Supply, Goodwe, and Deye [5]. Public Utilities - As of July 25, 2025, the price of thermal coal at Qinhuangdao Port is reported at 650 yuan/ton, reflecting an increase from the previous week. The report also notes stable prices for imported thermal coal [36]. - In June, the total electricity consumption in China reached 867 billion kWh, marking a year-on-year growth of 5.4%, with significant increases in consumption across various sectors [37].

Market Overview - The current index is experiencing fluctuations, with a resistance level around 3600 points, which may not be breached immediately, leading to potential oscillations in the range of 3550 to 3600 points [1][2] - This week saw increased market volatility, with a solid upward trend earlier in the week followed by a pullback, indicating a mixed sentiment among investors [1] Trading Volume - Trading volume has been significant, maintaining between 1.8 to 1.9 trillion, although a slight decrease to below 1.8 trillion was noted on one day [1] - A stable trading volume between 1.9 to 2 trillion next week would be viewed positively, while a drop to 1.5 to 1.6 trillion during a potential breakout above 3600 points could signal issues [2] Sector Performance - The water and electricity sector was a major focus this week, showing strong gains initially but experiencing a pullback later, indicating a potential end to short-term policy benefits [1] - The semiconductor sector saw a sudden rise, positively impacting related industries such as consumer electronics and optical instruments, contributing to market recovery [1] Investment Sentiment - The overall market trend is not negative, but caution is advised as key sectors like banking and insurance are not at low levels, which may limit upward momentum for the index [2] - The index is expected to continue oscillating within the established range, with a need for further consolidation before a potential breakout above 3600 points [2]