Market Performance - As of midday, the Shanghai Composite Index rose by 0.58%, the Shenzhen Component Index increased by 1.27%, and the ChiNext Index climbed by 2.25%, with over 3,900 stocks in the market experiencing gains [1]. Sector Performance - The photovoltaic equipment, BC battery, PCB, and energy metal sectors showed the highest gains, while the insurance and agriculture sectors weakened [2]. Capital Flow - Major funds saw a net inflow into the electronics, power equipment, and computer sectors, while there was a net outflow from the banking, public utilities, and transportation sectors [3]. Individual Stock Performance - Specific stocks such as Industrial Fulian, Sungrow Power Supply, and Shenghong Technology experienced net inflows of 2.785 billion, 1.495 billion, and 1.036 billion respectively [4]. - Conversely, stocks like Changjiang Electric Power, Hanyu Pharmaceutical, and Jingbeifang faced net outflows of 393 million, 228 million, and 223 million respectively [5]. Institutional Insights - According to Jin Jun, Investment Director at Qianhai Bourbon Fund, the market has shown resilience since the rally began on June 23, with expectations for the index to challenge 3,674 points in the second half of the year despite facing resistance at the previous high of 3,496 [7]. - Dong Tian from Zhongtai Securities noted that the index is facing significant pressure and suggested focusing on industries with longer cycles and those that have released earnings forecasts to gauge overall industry conditions [7].

Core Viewpoint - The new regulations from the China Securities Regulatory Commission (CSRC) allow unprofitable hard technology assets to be injected into listed companies, marking a significant policy stimulus for mergers and acquisitions (M&A) following previous initiatives like the "Eight Articles" for the Sci-Tech Innovation Board and local billion-dollar M&A funds [1] Group 1: M&A Market Overview - The M&A market has been heating up, with increasing corporate interest and participation [2] - The average M&A amount in 2024 across various industries shows significant growth compared to the past decade, with notable increases in sectors like defense and light manufacturing [5] Group 2: Regulatory Framework - Despite the loosening of policies, regulatory scrutiny remains stringent, as evidenced by a medical group's failed acquisition due to compliance issues [8] - Key regulatory standards for major asset restructuring in different boards (Main Board, Sci-Tech Innovation Board, and Growth Enterprise Market) have been outlined, emphasizing the need for profitability and revenue thresholds [9] Group 3: Legal Review Points - The article discusses the legal review points for M&A, including the requirements for unprofitable enterprises and the implications for controlling shareholders regarding share reduction post-restructuring [12] - A course is offered to dissect the legal aspects of M&A through real case studies, focusing on compliance and regulatory standards [10][15]

Core Viewpoint - The Hubei Provincial Safety Committee Office has issued a notice to enhance safety measures in response to the ongoing high-temperature weather, emphasizing the need for strict safety responsibilities and risk prevention in key sectors [1][2]. Group 1: Safety Measures and Responsibilities - Local authorities and departments are required to implement "party and government responsibilities, dual responsibilities for one position," and "three managements and three musts" to assess high-temperature risks and develop targeted measures [1]. - The notice highlights the importance of addressing safety production issues in critical areas such as hazardous chemicals, construction, and transportation, ensuring the dynamic elimination of major hazards [1]. Group 2: Specific Sector Guidelines - In the mining and commercial sectors, mines must ensure adequate ventilation underground, while commercial enterprises need to manage confined spaces effectively, adhering to the "ventilate first, test second, operate last" protocol [1]. - Hazardous materials companies are required to implement cooling and ventilation measures in storage areas and enhance dynamic monitoring of transport vehicles to prevent leakage [1]. Group 3: Transportation and Construction Safety - The transportation sector will conduct strict checks on overloading, fatigue driving, and other violations, urging companies to maintain vehicles to prevent overheating and tire blowouts [2]. - Construction activities are advised to adopt a "work at both ends, rest in the middle" approach to avoid outdoor work during high-temperature periods and to provide heat prevention supplies [2]. Group 4: Emergency Preparedness and Public Awareness - The notice mandates 24-hour duty and information reporting systems, the improvement of emergency plans, and enhanced drills, while closely monitoring meteorological warnings [2]. - Safety awareness campaigns will be conducted to educate the public on heat prevention and self-rescue knowledge, aiming to strengthen the safety defense against high temperatures [2].

Investment Rating - The industry investment rating is positive, indicating a favorable outlook for the sector, with a focus on companies with stable performance and reasonable valuations [35]. Core Insights - The report highlights that the North Exchange 50 Index experienced a slight decline of 1.71% this week, closing at 1415.04 points, while the average market capitalization of A-share constituent stocks is 3.083 billion [5][11]. - The report emphasizes the importance of focusing on quality stocks with stable growth and reasonable valuations in the North Exchange, particularly in the context of the 2025 investment landscape [5]. Summary by Sections Overall Market Overview - As of July 4, 2025, the North Exchange A-share market consists of 268 stocks, with an average market capitalization of 3.083 billion. The North Exchange 50 Index saw a decline of 1.71% this week, while the Shanghai and Shenzhen 300 Index increased by 1.54% [5][11]. - The average daily trading volume for the North Exchange 50 was 27.983 billion, down 17.81% from the previous week, with a turnover rate of 3.18% [5][24]. Stock and Industry Performance - In the past week, 50 stocks increased in value, while 217 stocks decreased, resulting in an increase ratio of 18.66%, which is a decrease of 74.63 percentage points week-on-week [17]. - The top five performing industries were Beauty Care (8.60%), Light Industry Manufacturing (1.9%), Pharmaceutical Biology (1.57%), Transportation (0.60%), and Environmental Protection (0.47%). Conversely, the bottom five industries included Electronics (-4.86%), Automotive (-4.58%), Communications (-3.92%), Media (-3.88%), and Public Utilities (-3.22%) [19][22]. New Stock Updates - No new stocks were listed on the North Exchange this week, but one company, Jinhua New Materials, passed the review for listing, while another, Beikang Testing, is scheduled for review next week [28][29]. Key Companies and Earnings Forecast - The report identifies key companies to watch, including: - Tongli Co., Ltd. (stock code: 834599.BJ) with a buy rating and an expected EPS of 1.99 for 2025 [6]. - Wuxin Tunnel Equipment (stock code: 835174.BJ) also rated as buy with an expected EPS of 1.64 for 2025 [6]. - Kaide Quartz (stock code: 835179.BJ) rated as hold with an expected EPS of 1.03 for 2025 [6]. - Hualing Co., Ltd. (stock code: 430139.BJ) rated as hold with an expected EPS of 0.34 for 2025 [6]. - Hengtou Open Source (stock code: 834415.BJ) rated as hold with an expected EPS of 0.22 for 2025 [6]. - Tianli Composite (stock code: 873576.BJ) rated as buy with an expected EPS of 1.03 for 2025 [6].

Group 1: Industrial Production - Industrial production remains relatively stable, with a high furnace operating rate holding steady at 0.7% year-on-year [2][5][9] - Chemical production shows signs of recovery, with operating rates for soda ash, PTA, and polyester filament increasing by 1.9 percentage points to -3.5%, 0.4 percentage points to 2.2%, and 0.5 percentage points to 4.2% respectively [2][17] - However, the operating rate for automotive semi-steel tires has significantly declined, down 7.7 percentage points to -9.0% [2][17] Group 2: Construction Industry - Asphalt production shows marginal improvement, with a year-on-year increase of 2.2 percentage points to 6.8% [2][41] - Cement shipment rates remain low, down 1.8 percentage points to -4.2% year-on-year, while the national grinding operating rate is up 0.6 percentage points to -1.3% [2][29] Group 3: Demand Trends - Real estate transactions have significantly decreased, with average daily transaction area for new homes down 37.8% year-on-year to 32.7% [2][53] - Freight volumes related to exports have declined, with port cargo throughput down 3% year-on-year to 0.6% [2][62] - Conversely, travel intensity remains high, with the national migration scale index up 0.3 percentage points to 14.5% [2][74] Group 4: Price Trends - Agricultural product prices have generally decreased, with prices for eggs, fruits, vegetables, and pork down by 2.2%, 0.8%, 0.5%, and 0.3% respectively [3][104] - Industrial product prices have seen a slight increase, with the South China industrial price index rising by 0.3% [3][116] - The metal price index increased by 1.8%, while the energy and chemical price index fell by 1% [3][116] Group 5: Transportation and Logistics - Railway freight volume has increased, up 0.9 percentage points to 3.3% year-on-year, while port cargo throughput has decreased [2][62] - Domestic flight operations have increased, with domestic flights up 1.9% year-on-year to 3.4% [2][74] Group 6: Consumer Behavior - Movie attendance has slightly decreased, down 2.6 percentage points to 5.7% year-on-year, but box office revenue has increased by 0.3% [2][80] - Automobile sales have shown a significant recovery, with retail and wholesale volumes up 9% to 26.7% and 23.8% to 48.7% respectively [2][80] Group 7: Export Trends - Container shipping prices have decreased, with the CCFI composite index down 1.9% [2][92] - The freight rate for the US West Coast has dropped significantly, down 10.5% [2][92]

Group 1: Industrial Production - Industrial production remains relatively stable, with a high furnace operating rate holding steady at 0.7% year-on-year [2][5][9] - Chemical production shows signs of recovery, with operating rates for soda ash, PTA, and polyester filament increasing by 1.9 percentage points, 0.4 percentage points, and 0.5 percentage points respectively [2][17] - The automotive sector experiences a significant decline, with the operating rate for semi-steel tires dropping by 7.7 percentage points to 9.0% [2][17] Group 2: Construction Industry - Asphalt production shows marginal improvement, with a year-on-year increase of 2.2 percentage points to 6.8% [2][41] - Cement shipment rates remain low, down 1.8 percentage points to 4.2% year-on-year, indicating weak demand [2][29] - The national grinding operating rate for cement is up 0.6 percentage points to -1.3% year-on-year, but overall demand remains subdued [2][29] Group 3: Demand Trends - Real estate transactions have significantly declined, with average daily transaction area for new homes down 37.8% year-on-year [2][53] - The freight volume related to domestic demand shows a slight increase, while port cargo throughput related to exports has decreased by 3% [2][62] - Travel intensity remains high, with the national migration scale index up 0.3 percentage points to 14.5% year-on-year [2][74] Group 4: Price Trends - Agricultural product prices have generally decreased, with eggs, fruits, vegetables, and pork prices down by 2.2%, 0.8%, 0.5%, and 0.3% respectively [3][104] - Industrial product prices show a slight increase, with the Nanhua Industrial Price Index rising by 0.3% [3][116] - The metal price index increased by 1.8%, while the energy and chemical price index fell by 1% [3][116] Group 5: Transportation and Logistics - Railway freight volume has increased by 0.9 percentage points to 3.3% year-on-year, while port cargo throughput has decreased [2][62] - Domestic flight operations have increased by 1.9% year-on-year, indicating a recovery in travel [2][74] - Container shipping prices have declined, with the CCFI composite index down by 1.9% [2][92]

Group 1 - The phenomenon of "involution" is most pronounced among young people, with average weekly working hours increasing by over 4 hours in the past five years. The average weekly working hours for employees aged 25-34 rose from 46.7 hours in 2018 to 50.8 hours in 2023 [3][28] - The average daily working time in China increased by 21 minutes from 2018 to 2023, reaching 48.3 hours per week, while the time spent on purchasing goods and services dropped from 80 minutes per day to 43 minutes per day [2][9] - The "involution" trend is particularly evident in the manufacturing and productive service sectors, while the real estate and life service sectors have seen a decrease in working hours [2][21] Group 2 - Current policies to combat "involution" focus on encouraging flexible work arrangements and paid leave, but these measures primarily address symptoms rather than the root causes of prolonged working hours [4][35] - The root cause of "involution" is the uneven distribution of employment across industries, with excessive employment in manufacturing leading to "involution" and insufficient employment in the service sector [4][48] - There is a significant employment gap in the life service sector, with a potential to absorb more jobs, as the wage growth in this sector (18.1%) outpaces that of manufacturing (10.7%) [5][61] Group 3 - The long-term direction for combating "involution" involves aligning supply structures with changing demand structures, particularly as consumer demand trends towards services [6][85] - Global experiences indicate that as GDP per capita reaches between $10,000 and $30,000 and urbanization rates hit 70%, the proportion of service consumption in total consumption increases by approximately 0.6% annually [6][86] - The aging population is expected to drive service consumption, with each 1% increase in the aging rate correlating with a 1.3% increase in service consumption share [6][93]

以中证红利指数和中证全指自由现金流为例，从指数成份股上看，二者均是从样本中选择100只成份 股，但行业分布上，中证全指自由现金流指数剔除了金融和地产，倾向于传统行业、成熟的商业模式和 盈利模式企业，行业分布主要集中在煤炭、交通运输、石油石化、有色金属等传统价值行业，以及消费 行业的家用电器、食品饮料等盈利较好企业。 中证红利指数则集中在金融、能源、工业、材料等行业。 近年来，A股市场长期处于震荡调整行情，赚钱难度加大，投资者越来越看重收益稳健的基金类别，具 备高股息率、低估值、安全边际更高的红利策略备受偏爱，近期自由现金流基金批量获批成立，主 打"现金奶牛"、"高分红率"概念，也被市场认为是红利策略升级版，那么二者究竟有何差异呢？ 从两种策略的本质上看，自由现金流策略和红利策略都是基于企业基本面的中长期策略，具有较低风 险、收益相对稳健的特质，自由现金流指的是公司通过经营活动赚到的钱，再扣除运营成本、税费、再 投入等后，真正能自由支配的现金，通俗来讲就是公司手里的"活钱"多不多？自由现金流指数就是选择 这些自由现金流充裕且增长好的公司。 红利指的就是上市公司从税后利润中拿出来按照持股比例分红给股东的钱，通俗来 ...

Core Viewpoint - The article discusses the upcoming launch of the Fangzheng Fubon CSI All-Share Free Cash Flow ETF, highlighting its investment strategy focused on companies with strong free cash flow generation capabilities and the advantages of investing in this ETF [1][20]. Group 1: Free Cash Flow Concept - Free cash flow is defined as the cash available for distribution after accounting for capital expenditures and working capital needs, illustrated through a small business example [3][4]. Group 2: Index Characteristics - The Fangzheng Fubon CSI All-Share Free Cash Flow ETF tracks the CSI All-Share Free Cash Flow Index, which selects stocks based on free cash flow yield, focusing on industries like coal, transportation, and consumer goods [4][5]. - The index excludes sectors with high cash flow volatility, such as finance and real estate, ensuring a more stable and sustainable cash flow profile [4]. Group 3: Index Performance Highlights - The CSI All-Share Free Cash Flow Index has significantly outperformed major indices, achieving a return of 342.88% from December 31, 2013, to June 9, 2025, compared to 62.08% for the Shanghai Composite Index [6][8]. - The index also boasts a high dividend yield of 4.8%, indicating strong profitability and financial health among its constituent companies [8][9]. Group 4: Investment Advantages - The ETF offers lower investment thresholds, allowing participation with as little as 1 yuan, making it accessible for retail investors [13]. - It supports regular investment plans, appealing to investors looking for systematic investment strategies [13]. Group 5: Target Investor Profile - The ETF is suitable for risk-averse investors seeking stable cash flow, those looking to balance their portfolios, and investors aiming to capture policy-driven opportunities in high free cash flow companies [15][16][18]. Group 6: Current Market Context - The article emphasizes the importance of free cash flow in the current economic landscape, where companies with strong cash flow are better positioned to navigate uncertainties and capitalize on growth opportunities [18][19].

Report Industry Investment Rating - Not provided in the document Core Viewpoints - The expiration of the 90 - day US tariff exemption this week brings uncertainty. The impact of tariff policies on the market remains uncertain, and it's necessary to guard against the negative emotional impact of Trump's extreme pressure. The domestic economy is entering a seasonal recovery window, and the market expects positive signals from the Politburo meeting at the end of July [4]. - In the medium - term, real estate sales are seasonally rising at a low level, the service industry is structurally differentiated and seasonally warming up in summer. Consumption is boosted by fiscal subsidies, and the manufacturing's rush - to - export is ending, with a possible decline in the third quarter. Domestic anti - involution policies may reverse the commodity supply - demand balance and lead to a rebound in prices [4]. - Domestically, liquidity is generally loose, while overseas, it is marginally tightening. The US dollar index is expected to rebound from oversold levels. The domestic stock market will receive incremental funds, but the pressure of share unlocks remains [4]. - After a short - term rebound, the valuations of various indices are still at a historically neutral to high level, and the attractiveness of allocation funds is average [4]. - The stock market may rise in an oscillating manner in the third quarter. It is recommended to actively go long on stock index futures after sharp declines due to tariff policy shocks this week. In terms of style, first go long on IC and IM, then on IF and IH, or conduct an arbitrage strategy of going long on IM and short on IF [4]. Summary by Directory 1. Market Review - **Global Stock Market Performance**: Last week, US stocks led the rise, and the Hang Seng Technology Index led the decline. The performance order is Nasdaq > S&P 500 > CSI 300 > Shanghai Composite Index > FTSE Emerging Markets > German Stock Market > Nikkei 225 > STAR 50 > Hang Seng Technology [8]. - **Industry Performance**: Steel led the rise, and comprehensive finance led the decline. The order is Steel > Bank > Building Materials > Medicine... > Transportation > Comprehensive > Computer > Comprehensive Finance [12]. - **Futures Basis and Spread Changes**: The basis rates of the four major stock index futures (IH, IF, IC, and IM) changed by 0.22%, 0.3%, 0%, and - 0.05% respectively last week, with the discounts of IF and IH significantly narrowing. The inter - period spread rates (current month and next month) of the four major stock index futures changed by - 0.05%, - 0.23%, - 0.27%, and - 0.31% respectively, with the inter - period discounts of IF, IC, and IM slightly widening. The inter - period spread rates (next quarter and current month) changed by - 0.05%, - 0.31%, - 0.44%, and - 0.48% respectively, with the long - term discounts of IF, IC, and IM significantly widening [15][16]. 2. Fund Flows - **Margin Trading and Stabilizing Funds**: Last week, margin trading funds flowed in 19.71 billion yuan, reaching 1.86 trillion yuan. The proportion of margin trading balance to the circulating market value of the Shanghai and Shenzhen stock markets decreased by 0.01% to 2.26%. The scale of passive stock ETF funds was 302.83 billion yuan, an increase of 13.89 billion yuan from last week, and the share was 199.171 billion shares, with a redemption of 1.48 billion shares from last week [25]. - **Industrial Capital**: In the first week of July, equity financing was 3.67 billion yuan, with 1 company. Among them, IPO financing was 640 million yuan, private placement was 0 yuan, and convertible bond financing was 3.03 billion yuan. The scale of equity financing declined significantly. The market value of stock unlocks last week was 90.83 billion yuan, an increase of 33.28 billion yuan from the previous week, remaining at the second - highest level this year [28]. 3. Liquidity - **Money Supply**: Last week, the central bank's OMO reverse repurchase expired 202.75 billion yuan, with a reverse repurchase of 65.22 billion yuan, resulting in a net money withdrawal of 137.53 billion yuan. After the end of the quarter, the open - market operations recovered liquidity. MLF had a net injection for four consecutive months, and the overall liquidity supply was neutral [30]. - **Money Demand**: Last week, the net money demand for national debt was 19.993 billion yuan, for local debt was 4.361 billion yuan, and for other bonds was 34.787 billion yuan. The total net money demand in the bond market was 59.141 billion yuan, remaining at a high level [33]. - **Fund Price**: DR007, R001, and SHIBOR overnight rates changed by - 27.4bp, - 9.9bp, and - 5.8bp respectively, reaching 1.42%, 1.36%, and 1.31%. The issuance rate of inter - bank certificates of deposit decreased by 5.9bp, and the CD rate issued by joint - stock banks dropped by 8.1bp to 1.59%. The overall fund price was oscillating at a low level [36]. - **Term Structure**: Last week, the yield curve flattened. The central bank's liquidity recovery in the open market made the short - end stronger, and the credit spread between national debt and policy - bank bonds widened at the long - end [40]. - **Sino - US Interest Rate Spread**: As of July 4th, the US 10 - year bond rate increased by 6.0bp to 4.35%, the inflation expectation increased by 4.0bp to 2.33%, and the real interest rate increased by 2.00bp to 2.02%. The inversion of the Sino - US interest rate spread widened by 6.40bp to - 270.78bp, and the offshore RMB appreciated by 0.11% [43]. 4. Macroeconomic Fundamentals - **Real Estate Demand**: As of July 3rd, the weekly transaction area of commercial housing in 30 large - and medium - sized cities seasonally recovered to 3.329 million square meters, but was still at a low level compared to the same period in 2019. Second - hand housing sales seasonally declined to the lowest level in the past seven years. The overall real estate market sales were weak, and more incremental policies were expected [46]. - **Service Industry Activity**: As of July 4th, the subway passenger volume in 28 large - and medium - sized cities remained high, with a daily average of 83.58 million passengers, a year - on - year increase of 1.2% and a 32.5% increase compared to the same period in 2021. The service industry's economic activity seasonally recovered in summer. The Baidu Hundred - City Traffic Congestion Delay Index remained flat compared to last week, at a neutral level in the past three years [50]. - **Manufacturing Tracking**: Last week, the manufacturing capacity utilization rate declined across the board. The capacity utilization rate of steel mills decreased by 0.54%, that of asphalt increased by 0.2%, that of cement clinker enterprises decreased by 6.7%, and that of coke enterprises decreased by 0.18%. The average operating rate of the chemical industry chain related to external demand decreased by 0.45% compared to last week [52]. - **Goods Flow**: Both goods flow and passenger flow remained at relatively high levels. The number of civil aviation flights for summer tourism consumption increased strongly, while highway transportation was relatively weak, with limited growth, and there was a risk of a second seasonal decline from July to August [57]. - **Import and Export**: In terms of exports, the logic of rush - to - export after the Sino - US trade talks continued. The port cargo throughput and container throughput rebounded after a short - term decline. From July to August, it was necessary to guard against the risk of a second decline due to renewed trade frictions after the expiration of the 90 - day US tariff exemption [60]. - **Overseas Situation**: The US May non - farm payrolls report slightly exceeded expectations, but the structure implied a cooling signal. The US non - farm employment showed certain resilience, and the service industry PMI rebounded unexpectedly. The market's expectation of the Fed's interest - rate cuts in 2025 was reduced to 2 times, with a cut of about 25 - 50bp, and the probability of a rate cut in July dropped to 4.7% [62][66]. 5. Other Analyses - **Valuation**: The stock - bond risk premium last week was 3.35%, a 0.06% decrease from last week, at the 68.8% percentile. The foreign - capital risk premium index was 4.24%, a 0.21% decrease from last week, at the 24.3% percentile, indicating a low level of foreign - capital attractiveness. The valuations of the Shanghai 50, CSI 300, CSI 500, and CSI 1000 indices were at the 79.9%, 72.9%, 78.2%, and 60.3% percentiles in the past five years respectively, and the attractiveness of each index's valuation decreased marginally [69][74]. - **Quantitative Diagnosis**: According to seasonal rules, the stock market is in a seasonally oscillating and rising period with structural differentiation in July. The growth style is relatively dominant, and the cyclical style first rises and then falls. In general, the market is likely to rise in July. Pay attention to the opportunities of going long on IC and IM on pullbacks, short - term shorting on sharp rises of IF and IH, and medium - term long - term on sharp declines. This week, the market is greatly disturbed by the uncertainty of US tariff policies. If there are negative impacts, pay attention to going long on the growth style on sharp declines [77]. - **Financial Calendar**: This week's financial calendar includes China's June CPI and PPI data, and attention should be paid to whether prices have stabilized and rebounded. Overseas markets should focus on the US Treasury auctions and the progress of the Trump administration's tariff policy negotiations with other countries [79]