Core Viewpoint - Nuveen anticipates that the second half of 2025 will face dual pressures of economic slowdown and policy uncertainty, prompting investors to reassess asset allocation strategies focusing on robust fundamentals, defensive characteristics, and spread advantages to enhance return potential and mitigate risks [1][2] Global Economic Outlook - The global investment committee of Nuveen expects potential interest rate cuts by the Federal Reserve in September and December, but inflation driven by tariffs may lead to a pause in easing [1] - The European Central Bank is expected to pause after previous rate cuts, while the Bank of Japan is likely to raise rates once [1] Asset Allocation Strategy - Nuveen recommends focusing on assets driven by spreads and reducing reliance on risk-free rates, with municipal bonds attracting long-term investors due to a steep yield curve [1] - The real estate market is gradually recovering after two years of stagnation, with strong demand observed in medical office spaces, grocery retail properties, and affordable housing [1] Stock Market Insights - Large U.S. tech companies are benefiting from the expansion of AI, increased demand for data centers, and power generation, leading to an upgrade in market positioning [1] - Defensive sectors such as finance and infrastructure are highlighted, while European equities present long-term value; emerging markets are becoming less attractive due to trade policy impacts [1] Investment Strategies - Nuveen advises investors to adopt a broadly diversified and actively managed strategy to navigate policy changes and economic slowdowns [2] - Preferred loans and securities are favored for their attractive valuations and solid credit quality, while investment-grade corporate bonds are viewed less favorably due to narrowing spreads [2] Real Estate Sector Focus - Nuveen continues to explore opportunities arising from demographic and educational diversity, with a positive outlook on medical, industrial, and residential sectors [2] - The office market faces challenges, with vacancy rates expected to improve but recovery still requiring time; real estate bonds currently offer valuation advantages over real estate stocks [2] Infrastructure Investment Preferences - Nuveen prefers public-private projects, particularly in electricity, utilities, and energy storage investments [2] - Agricultural land assets are seen as an inflation hedge, although returns are expected to slow in 2025, especially for grain crops affected by tariff pressures [2]

Group 1 - The core viewpoint of the news is that the performance of consecutive limit-up stocks is strong, with a promotion rate exceeding 50% [1] - A total of 53 stocks hit the daily limit, with 18 consecutive limit-up stocks, and 9 of them achieved three consecutive limit-ups or more [1] - The promotion rate of consecutive limit-up stocks is 52.94%, excluding ST and delisted stocks [1] Group 2 - Among the stocks, all four stocks with four consecutive limit-ups achieved promotion, including Jin'an Guoji, which hit the limit-up [1] - In the previous trading day, only 3 out of 17 consecutive limit-up stocks closed down, indicating strong market resilience [1] - The market saw over 3300 stocks decline, but consecutive limit-up stocks performed well, highlighting their relative strength [1] Group 3 - The sectors that experienced fluctuations include stablecoins and large financial sectors, which saw a pullback after an initial rise [1] - The robotics sector saw a rebound due to news of Zhiyuan Robotics planning to acquire Shuangwei New Materials, with stocks like Rifa Precision Machinery achieving two consecutive limit-ups [1] - Other notable stocks include Huayin Power and Huaguang Huaneng, both in the power sector, which achieved a 100% promotion rate [2]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The overseas macro - environment is better than the previous cycle. The contraction of the US manufacturing industry is offset by the growth of personal consumption, leading to a significant decline in inflation without a notable increase in unemployment. With the Fed's good expectation management, the current economic cycle has the conditions for a "soft landing", and the liquidity release caused by preventive interest rate cuts is beneficial to commodities. In Europe, the "free - market logic" is more clearly transmitted. When inflation falls to a controllable range, interest rate cuts will stimulate manufacturing expansion and increase in terminal consumption. The current high policy interest rate of the Eurozone central bank is a more favorable condition than in 2010 - 2015 [1][44]. - The domestic macro - environment is weaker than the previous cycle. The rapid decline of M1, the positive scissors - difference between M2 and the year - on - year growth of social financing stock, and the widening of the scissors - difference between M1 and M2 reflect the decline in social financing demand and the decrease in market risk preference. However, the appreciation of the RMB caused by overseas interest rate cuts is conducive to the implementation of domestic monetary policies. In the real estate industry, high household leverage and urbanization rates restrict the maneuvering space of the current real estate cycle. High inventory of commercial housing and insufficient potential purchasing power will lead to a deeper active de - stocking. In the manufacturing industry, changes in domestic consumption structure and the increase in potential external demand make the current manufacturing cycle more resilient. Although infrastructure funds are still increasing, they are mainly invested in new - quality productivity industries such as electricity, and the growth rate of traditional steel - consuming industries is gradually declining. China's steel exports have an obvious characteristic of trading price for volume. Although there are more trade barriers, cost advantages ensure that the export volume can still be maintained [2][44]. 3. Summary According to the Directory 3.1 Overseas Macro - environment Comparison 3.1.1 US: Interest Rate Cuts Lead to Liquidity Release and Commodities Benefit - In the 2010 - 2015 cycle, the US market was relatively stable with a low federal funds target rate of 0.25% from December 2008 to December 2015. Unemployment rate declined year - by - year, CPI and core CPI fluctuated within a controllable range, PMI data showed manufacturing expansion, and personal consumption expenditure was stable. In the current cycle, the federal funds target rate is 4.50%, with strong potential for interest rate cuts to release liquidity. The continuous significant decline in CPI and core CPI and the stable labor market lay the foundation for preventive interest rate cuts and a soft landing of the economy. The expected interest rate cuts will release liquidity in the money market, which is beneficial to commodities [5]. 3.1.2 Europe: Potential for Liquidity Release - Europe's "free - market logic" is more clearly transmitted due to the unified management of the euro by the European Central Bank system and the large differences in economic volume and resilience among EU member states. Previous interest rate hikes suppressed terminal demand, causing CPI and manufacturing PMI to decline. When inflation falls to a controllable range, interest rate cuts will stimulate manufacturing expansion and terminal consumption. The current high policy interest rate of the Eurozone central bank is a more favorable condition than in 2010 - 2015 [11]. 3.2 Domestic Macro - and Meso - level Comparison 3.2.1 Fiscal Policy and Monetary Policy - M1 has contracted more severely in this cycle, indicating greater economic downward pressure. In terms of steel consumption potential, it may be weaker than the previous cycle as households are restricted by the real estate market and local governments are burdened with debt, while the central government still has room to increase leverage. The year - on - year growth of social financing stock has been lower than that of M2 since early 2022, and the widening scissors - difference between M1 and M2 shows a decrease in market risk preference. There is still room to reduce the RMB deposit reserve ratio and LPR, and the appreciation of the RMB after the Fed's interest rate cuts provides space for the implementation of domestic monetary policies [14][16][18]. 3.2.2 Real Estate Industry: Active De - stocking Continues and Downward Pressure is Greater than the Previous Cycle - The real estate industry is a pro - cyclical industry. There is a positive correlation between steel prices and real estate development investment, and M1 and commercial housing sales generally move in the same direction. In this cycle, the real estate industry has greater downward pressure. The real estate development investment and funds have been in negative growth since 2022, and the high household leverage and urbanization rates limit the maneuvering space. The inventory of commercial housing is increasing, and it is more difficult to reduce inventory through price increases. The active de - stocking behavior caused by weak supply and demand may lead to a decline in real estate - related commodity prices [20][22][24]. 3.2.3 Manufacturing Industry: Domestic and External Demands Show Resonance - The manufacturing industry is a pro - cyclical industry, and there is a positive correlation between steel prices and manufacturing investment. In the 2010 - 2015 cycle, manufacturing investment declined from 30% to 5%. In the current cycle, manufacturing investment has been stable at around 10%, supported by new energy vehicles, ships, containers, and policy incentives. The "two - new" support funds in 2025 are 300 billion yuan, twice that of 2024, which is conducive to the benign cycle of domestic demand. There is a positive correlation between China's export amount and the PMI of European and American manufacturing industries, indicating resonance between domestic and external demands. The US economy may achieve a soft landing, and there is a possibility of upward resonance of domestic and external demands, which will not drag down steel consumption [30][33]. 3.2.4 Infrastructure: New - quality Productivity Industries Gain Momentum while Traditional Steel - consuming Industries Slow Down - Infrastructure is a counter - cyclical adjustment tool, and there is an inverse correlation between infrastructure investment growth rate and steel prices. In the 2010 - 2016 period, local governments were the main entities for leveraging through urban investment bonds. After 2022, with the decline in land transfer revenue, the proportion of special bonds increased, and policy - based development tools and ultra - long - term treasury bonds can also supplement infrastructure funds. Although the total infrastructure funds are still increasing, the investment is mainly in new - quality productivity industries such as electricity, and the growth rate of traditional steel - consuming industries such as roads, railways, and public facilities is gradually declining [35][37][39]. 3.2.5 Export: Trading Price for Volume, Pattern Remains Unchanged - China's steel exports have an obvious characteristic of trading price for volume, with an inverse correlation between export quantity and price since 2007. When domestic demand is strong, exports are restricted; when domestic demand is weak, high production leads to an exploration of export paths. Since 2022, some overseas countries have imposed high tariffs or conducted anti - dumping investigations on Chinese steel products, increasing export costs and slightly reducing export volume. However, due to cost advantages, China's steel still has global appeal, and the high - volume export pattern is difficult to change. About 70% of steel exports go to Asia, and the trade pattern has been basically stable since 2010 [42][43].

Economic Indicators - The weekly ECI supply index is at 50.10%, down 0.02 percentage points from last week, while the demand index is at 49.93%, down 0.01 percentage points[6] - The monthly ECI supply index decreased by 0.06 percentage points compared to June, while the demand index remained stable[7] - The ECI investment index is at 49.98%, up 0.01 percentage points from last week, and the consumption index is at 49.71%, down 0.03 percentage points[6] Loan and Financing Trends - The ELI index is at -0.90%, up 0.15 percentage points from last week, indicating a seasonal recovery in loan demand[11] - New RMB loans are expected to be between CNY 1.80 trillion and CNY 2.0 trillion in June, slightly lower than the same period last year by CNY 0.28 trillion to CNY 0.13 trillion[14] - Government net financing reached CNY 1.41 trillion in June, an increase of CNY 0.7 trillion year-on-year, contributing to a projected social financing scale increase of CNY 3.6 trillion to CNY 3.8 trillion[14] Consumption and Production Insights - Passenger car retail sales in June increased by 15% year-on-year, improving from 13% in May[7] - The average daily sales of passenger cars for the week ending June 30 were 95,374 units, slightly down from the previous year[21] - The electricity load of coastal power plants averaged 82.71%, up 8 percentage points year-on-year, indicating strong industrial production[16] Export and Price Trends - The SCFI and CCFI indices for export container prices fell by 98.02 points and 26.35 points, respectively, indicating a decline in export momentum[31] - The average wholesale price of pork is CNY 20.38 per kg, showing a slight increase, while the price of key monitored vegetables is CNY 4.35 per kg, down slightly[37] Risk Factors - Uncertainties remain regarding U.S. tariff policies and the potential for policy measures to fall short of market expectations[46] - The sustainability of improvements in the real estate sector is still under observation[46]

Group 1 - The core viewpoint of the news is the sudden imposition of high tariffs by the United States, which has triggered a global trade crisis, with tariffs reaching up to 70% and affecting over 170 countries [1] - The A-share market has reacted to the tariff crisis, with the Shanghai Composite Index showing a "lightning rod" pattern, indicating that the market has partially digested the expected impact of the tariffs [2] - Export-dependent sectors, such as consumer electronics, are facing significant pressure, while domestic demand-driven sectors like infrastructure and finance are expected to act as safe havens for capital [2] Group 2 - The Chinese central bank has introduced new cross-border payment regulations, providing a solid policy shield for the banking and fintech sectors against external risks [3] - Northbound capital is actively buying into the A-share market, reflecting foreign investors' long-term confidence, while public REITs are injecting continuous capital into the infrastructure sector [3] - The technical support level at 3430 points on the 10-day moving average is seen as a strong defense line, with the previous high at 3480 points potentially serving as a rally point for the A-share market [3]

Group 1 - The construction and decoration sector showed a weekly increase of 0.63%, while the CSI 300 index rose by 1.54%, resulting in a relative return of -0.91 percentage points [1] - The top three sub-industries with the highest weekly gains were infrastructure private enterprises (+3.19%), steel structure (+2.85%), and ecological landscaping (+2.46%), with corresponding companies: Chengbang Co. (+42.23%), Honglu Steel Structure (+7.53%), and Hangzhou Landscaping (+31.16%) [1] - The sub-industries with the largest annual gains were ecological landscaping (+21.25%), infrastructure private enterprises (+16.54%), and decorative curtain walls (+13.15%), with corresponding companies: Hangzhou Landscaping (+95.79%), Chengbang Co. (+147.23%), and ST Keli Da (+79.66%) [1] Group 2 - The manufacturing PMI for June was reported at 49.7%, an increase of 0.2 percentage points from the previous month, while the non-manufacturing PMI was at 50.5%, also up by 0.2 percentage points [2] - The construction business activity index stood at 52.8%, reflecting a rise of 1.8 percentage points from the previous month [2] - China Railway and China Railway Construction both won contracts for the China-Kyrgyzstan-Uzbekistan railway project, with contract amounts of approximately RMB 53.43 billion and RMB 37.81 billion, respectively, representing 0.462% and 0.354% of their 2024 revenue [2]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The domestic economy is expected to be high in the first half and low in the second half. Policy support is in place, but domestic demand remains weak. The GDP growth target of around 5% for 2025 is expected to be achieved with relative ease [9][10]. - Fiscal policy will mainly rely on existing measures with limited incremental input, while monetary policy will continue with reserve requirement ratio cuts and interest rate cuts. Additional fiscal policies may be launched under special circumstances [2]. - There are three major external disturbances in the second half of the year: tariff negotiations, the OBBB Act, and the timing of the Fed's interest rate cuts [2]. - The outlook for major asset classes varies. Stocks are expected to have a bottom - line support with small - cap stocks outperforming; bond yields are expected to reach new lows; the RMB exchange rate is expected to appreciate following the US dollar index; and commodities' performance will depend on event and policy rhythms [2]. 3. Summary by Directory 3.1 Domestic Economy: Policy Support, Weak Domestic Demand - **Economic Overall Trend**: The economy is expected to be high in the first half and low in the second half. To counter the impact of exports, policies are targeted at consumption, infrastructure, and manufacturing. In the first half, with pre - emptive policy implementation, consumption, infrastructure, and manufacturing showed good growth, and the GDP growth rate in Q1 was 5.4%, with Q2 expected to be above 5%. In the second half, exports are likely to decline, and the probability of additional policies is low [9][10]. - **Consumption**: The increase in social retail sales is mainly supported by policies. After excluding the impact of the "trade - in" policy, the overall consumption has not improved significantly compared to 2024. Income expectations remain poor, and employment expectations are lower than income expectations. The consumption in Q3 is expected to maintain relatively high - speed growth, while there will be significant downward pressure in Q4 [11][16][17]. - **Real Estate**: The real estate market has basically reached the bottom, and the probability of a further sharp decline in the second half is low. However, the driving force for recovery is insufficient, and it is expected to continue to operate at the bottom, with a slight upward trend under optimistic expectations [19][21]. - **Infrastructure**: Infrastructure is expected to remain at a high level. The main sources of funds are two - fold policy funds and local government special bonds. In Q3, infrastructure will still have strong support, and it may decline in Q4 but remain at a high level overall. The new policy - based financial instruments may be introduced in September or October [34][35]. - **Exports**: Exports were high in the first half but are likely to decline in the second half due to factors such as over - drawn demand and the downward risk of the US economy [37][38]. - **Manufacturing**: Manufacturing is highly dependent on policy support. With the implementation of the equipment renewal policy, most of the funds have been allocated, and manufacturing is expected to remain at a high level at least in Q3 [40]. 3.2 Policy: Limited Fiscal Policy, Increased Monetary Policy - **Fiscal Policy**: The fiscal policy will mainly rely on existing measures with limited incremental input. The probability of introducing incremental fiscal policies is low unless there is a significant external shock. Key meetings in the second half of the year need to be monitored [42][43]. - **Monetary Policy**: Monetary policy will continue with reserve requirement ratio cuts and interest rate cuts. Based on historical experience and the current high real - interest - rate level, it is reasonable to expect an interest rate cut of 20bp this year [44][46]. 3.3 Three Major External Disturbances in the Second Half of the Year - **Tariff Negotiation Disturbance**: The outcomes of the US tariff negotiations on July 9 and the China - US tariff negotiations on August 12 will basically determine the export trend in the second half of the year [48]. - **OBBB Act Disturbance**: The OBBB Act will have an impact on the US economy and indirectly affect the domestic economy. The Senate version of the bill will increase the US debt, and if temporary measures are made permanent, the debt increase will be even greater. The bill may lead to a steeper yield curve and higher 10 - year US Treasury yields [49][51]. - **Fed Policy Rate Changes**: The first interest rate cut is expected to occur in September or later. The number of expected interest rate cuts within the year may be slightly overestimated considering the US economic resilience and Powell's style [54]. 3.4 Outlook for Major Asset Classes in the Second Half of the Year - **Stocks**: Stocks have a bottom - line support. Although they will face fundamental pressure, the Fed's interest rate cuts and domestic monetary policy will provide support. Small - cap stocks are expected to outperform [55]. - **Bonds**: Bond yields are expected to reach new lows. The bond market will be supported by the economic trend, and with lower supply pressure and a high probability of interest rate cuts, bond yields are expected to decline [58]. - **RMB Exchange Rate**: The US dollar index is expected to decline, and the RMB will appreciate following the US dollar index, which will help ease the pressure on export enterprises [60]. - **Commodities**: The performance of commodities will depend on event and policy rhythms. External tariff negotiations and domestic policy implementation schedules will affect commodity prices. Gold is expected to strengthen with support from the US debt issue and the approaching Fed interest rate cuts [63][64].

Group 1 - The recent overseas economy can be understood as a combination of "fiscal expansion dividends" and "de-globalization costs," leading to a relatively mild global economic "slowdown zone" in the short term, with limited risks of rapid changes in growth trends [1][6][30] - The optimal strategy for the Chinese economy is to focus on internal growth dynamics to enhance risk resistance, with broad-based growth characteristics improving macroeconomic stability and asset price stability [2][8][37] - The effectiveness of domestic policies initiated in the last quarter of the previous year peaked in the first half of this year, with signs of economic slowdown emerging by the end of the second quarter [3][9][10] Group 2 - Infrastructure construction rates are a key variable to observe, with recent performance in materials like asphalt and cement indicating weaker financing compared to narrow infrastructure growth, suggesting a need for local government investment to accelerate [4][11][12] - The necessity to optimize supply has significantly increased due to slowing exports, with "anti-involution" policies expected to improve supply-demand ratios in key industries [5][13][14] - The framework suggests that during periods of actual growth in the "slowdown zone," it is advisable to reduce configurations based on win rates and increase those based on odds, focusing on high dividend, low volatility sectors [6][15][16] Group 3 - The supply-demand ratio is crucial for determining whether the fundamentals can improve, with recent years showing a trend of imbalance leading to lower price centers and higher real interest rates [7][16][17] - Improving the supply-demand ratio requires achieving rebalancing across three sectors: local government investment normalization, rationalization of incremental investments through anti-involution, and stabilizing household balance sheets [8][18][56] - The global competition hinges on who can provide growth certainty, with the U.S. focusing on permanent tariffs and tax cuts, while China leverages its strong supply chain and large market space [9][19][20] Group 4 - The mid-term impact on major asset classes includes the regionalization of global supply chains and the weakening of U.S. dollar credit, affecting commodities, gold, and alternative assets [21][22] - The framework may overlook risks such as uncertainties in external trade relations and geopolitical issues, which could complicate the impact on major asset classes [22][22]

Summary of Conference Call Records Industry Overview - The conference call discusses the **construction industry** in China, focusing on the performance of listed companies and various segments within the industry [1][2][3]. Key Points and Arguments Overall Performance - In Q1 2025, the construction sector experienced a decline in revenue and profit, with 164 listed companies reporting a **6.27% decrease in revenue** and an **8.53% decrease in net profit** year-on-year [2][3]. - Despite the overall downturn, specific segments such as **specialized engineering, international engineering, and chemical engineering** saw a **more than 20% increase in net profit** [2]. Segment Performance - The **decoration and renovation sector** showed signs of recovery after a prolonged downturn, with leading companies like **Jin Tanglang, Yasha, and Jianghe Group** indicating a rebound in performance [3]. - The **infrastructure sector**, primarily driven by state-owned enterprises, faced a smaller decline compared to other segments, benefiting from global infrastructure demand along the Belt and Road Initiative [3][4]. Financial Challenges - Construction companies are under financial pressure due to difficulties in local government payments, wage obligations to migrant workers, and debts owed to small businesses, leading to constrained operating cash flow [5]. Urban Renewal Initiatives - The central government is actively promoting **urban renewal actions**, expanding the initiative to **35 cities** and providing funding through budget investments, special bonds, and the potential restart of the PSL (Pledged Supplementary Lending) [6]. Real Estate Market Trends - The real estate market continues to face investment and sales pressures, with a **10.7% decline in investment** and a **22.8% drop in new construction** from January to May 2025. However, the decline in sales has narrowed, and the top 100 real estate companies increased land acquisition by **28.8%** year-on-year [7][8]. Water Conservancy Projects - Investment in water conservancy construction is growing rapidly, with a **30.7% increase** in investment year-on-year. Major projects like the **Three Gorges Waterway** are expected to provide significant opportunities for related companies [9]. Global Infrastructure Development - The global shift in industry has historically boosted infrastructure development in recipient countries, particularly in Southeast Asia, which is expected to continue benefiting from the Belt and Road Initiative [11][12]. Policy and Regulatory Environment - The government is encouraging **dividends and mergers & acquisitions** among state-owned enterprises, with a focus on improving market capitalization management [16][18]. - The construction sector's valuation remains low, with **34 companies** having a PE ratio below 10, indicating a high safety margin for investors [17][40]. Investment Opportunities - Significant investment opportunities are identified in **western region infrastructure projects**, including the **Tibet Railway** and **Yarlung Tsangpo River hydropower projects**, with expected investments reaching **1.3 trillion yuan** [42]. - Companies such as **China Electric Power Construction, China Energy Engineering**, and various regional construction firms are recommended for investment [42][44]. Emerging Sectors - The **nuclear power sector** is projected to grow, with expectations of increasing its share of total electricity generation from **4.86%** to **10%** by 2035 [29]. - The **low-altitude economy** is also highlighted as a promising area for development, with significant investments anticipated in related infrastructure [30]. Additional Important Content - The construction industry is experiencing a trend towards increased concentration, with the market share of the top eight construction state-owned enterprises rising from **24.38% in 2013** to **47.43% in 2024** [36]. - The introduction of advanced technologies such as **welding robots** and **cleanroom engineering** is enhancing operational efficiency within the construction sector [35][32]. This summary encapsulates the critical insights and data from the conference call, providing a comprehensive overview of the current state and future outlook of the construction industry in China.

Group 1: Real Estate and Construction - The real estate market continues to show weakness, with a 13.2% year-on-year decline in transaction area for commercial housing in 30 major cities, including a 9.0% drop in first-tier cities, 1.9% in second-tier cities, and a significant 42.8% in third-tier cities [2] - Construction demand is being dragged down by weak real estate performance, although there is a slight recovery in rebar demand and steel prices [3] Group 2: Consumer Goods and Durables - Passenger car sales have seen a year-on-year increase of 30.0%, indicating a positive trend in durable goods consumption supported by subsidy policies [2] - Air conditioning production for July is projected to decline by 1.9% year-on-year, with domestic production up by 8.1% and export production down by 16.3% [2] Group 3: Manufacturing and Resource Prices - Manufacturing activity shows a mixed performance, with an increase in the operating rate of petroleum asphalt facilities, suggesting some resilience in construction demand [3] - The price of thermal coal has rebounded slightly due to increased daily consumption by power plants and tight supply conditions [3] Group 4: Transportation and Logistics - There has been a noticeable increase in passenger transport demand, with metro passenger volume up by 4.4% year-on-year and domestic flight operations increasing by 1.0% [4] - However, sea freight prices have declined, and postal express collection and delivery volumes have decreased [4]