1. Report Industry Investment Rating No information provided in the content. 2. Core View of the Report - The issuance and net financing of non - financial credit bonds in the first half of 2025 showed a downward trend, with the issuance of urban investment bonds also decreasing, and the net financing gap expanding. The financing cost has been declining. Different regions and cities have significant differences in issuance, net financing, and financing costs. The issuance volume of industrial holding industry decreased in the first half of 2025, ranking second [1][26]. 3. Summary by Related Content 3.1 Overall Situation of Non - financial Credit Bonds and Urban Investment Bonds - In the first half of 2025, the issuance of non - financial credit bonds was 6.82 trillion yuan, a year - on - year slight decrease of 1.02%, and the net financing was about 1.01 trillion yuan, a year - on - year decrease of 14.88%. The issuance of urban investment bonds was about 2.615 trillion yuan, accounting for 38.33% of the total non - financial credit bond issuance, with a net financing of - 815.54 million yuan [1]. - Since 2019, the issuance cost of urban investment bonds has been declining. In 2024, the weighted average coupon rate dropped below 3%, and in the first half of 2025, it further dropped below 2.5% (about 2.44%) [1]. - The net financing of urban investment bonds has shown a negative trend since Q4 2023, with fluctuations. In the first half of 2025, the net financing turned negative year - on - year, with a decline of 268% [3]. 3.2 Regional Analysis of Urban Investment Bonds 3.2.1 Provincial - level Analysis - In terms of issuance volume, Jiangsu, Shandong, and Zhejiang ranked in the top three, but their issuance volumes in Q2 2025 decreased quarter - on - quarter. Hunan and Hubei had significant quarter - on - quarter growth in Q2 2025. Since 2024, Jiangsu has seen the most obvious decline in single - quarter issuance volume [8]. - In terms of net financing, there are significant differences and large changes among provinces. Jiangsu has seen the most obvious reduction in bond volume since the debt resolution. Shandong and Guangdong have shown "reverse expansion". Most provinces' net financing decreased quarter - on - quarter in Q2 2025 [10][12]. - In terms of financing cost, since 2025, it has been in a downward trend. In Q2 2025, only Guizhou, Gansu, Qinghai, Inner Mongolia, and Heilongjiang had a weighted average coupon rate above 3%. There were 18 provinces with a yield above 2.5% in Q2 2025, 2 less than in Q1 [12]. 3.2.2 Prefecture - level City Analysis - In Q2 2025, there were 30 cities with an issuance volume of over 10 billion yuan, and Qingdao was the only city with an issuance volume of over 40 billion yuan in Q2 and over 100 billion yuan in the first half of 2025. In the first half of 2025, the issuance volumes of major cities declined significantly. Among the top 20 cities in issuance volume, Xi'an had the most obvious year - on - year increase, while regions with a decline of over 30% included Suzhou, Changzhou, Huzhou, and Xuzhou [15]. - In the first half of 2025, 102 cities achieved positive net financing, 2 more than the previous year. Guangzhou and Qingdao were the only two cities with a net financing scale of over 10 billion yuan. Among other cities with a large net financing scale, Taizhou, Shangrao, Zhengzhou, and Shijiazhuang turned from negative to positive, while Zhuhai, Fuzhou, and Weifang had obvious declines [19]. - Nanjing and Chengdu had a financing gap of over 10 billion yuan, and their year - on - year declines were large. Most cities with large financing gaps saw a significant expansion of the gap, and Xiamen, Quanzhou, and Zhuzhou turned from positive to negative [21]. - In Q2 2025, only Baoshan, Anshun, Laibin, Liaocheng, and Tongren could offer a yield of over 4%. There were 28 cities with a coupon rate of over 3%, 3 less than in Q1. Only Zhangjiakou, Weihai, Guilin, Liuzhou, Xiangtan, Harbin, and Dezhou saw a quarter - on - quarter increase in the weighted coupon rate [23]. 3.3 Industrial Holding Industry - In 2023, the issuance volume of the industrial holding industry exceeded that of the power industry, ranking first. In 2024, it continued to rank first, with the total issuance volume reaching a record high of about 1.28 trillion yuan. In the first half of 2025, it dropped to second place, and the total volume was close to 46% of that in 2024. In terms of net financing, it reached 35.18 billion yuan in 2024, a year - on - year increase of 245%. In the first half of 2025, the net financing was about 17.18 billion yuan, nearly half of that in 2024. The financing cost has also been declining, dropping below 2.2% in the first half of 2025 [26].

Report Summary 1. Industry Investment Rating No industry investment rating is provided in the report. 2. Core Views - The highlights in 2024 are the significant slowdown in the growth rates of interest - bearing debt and urban investment bonds of urban investment platforms, the remarkable effect of "hidden debt turning into explicit debt", and the convergence of investment and financing intensity [6][8][66]. - Concerns include the need to improve the financing structure, the considerable debt pressure in economically large provinces like Zhejiang and Jiangsu, the reduction of book funds and the decline in the coverage ratio of monetary funds to short - term debt, and the large - scale outstanding project payments from local governments to urban investment platforms and inter - state - owned enterprise transactions [6][8][67]. - In 2025, the focuses of urban investment include the delisting of financing platforms and their subsequent market - oriented transformation, the settlement of overdue enterprise accounts, and the resolution of non - standard products involving the public [9][68]. 3. Summary by Directory 3.1 2024 Urban Investment Debt Resolution Achievements - **Overall Debt Scale and Growth Rate**: The interest - bearing debt and urban investment bonds of urban investment platforms increased slightly year - on - year, with growth rates dropping to the lowest since 2019. The debt growth rate has declined for four consecutive years. The reasons are debt replacement by local government bonds, weakened project financing demand, and strict bond financing policies [13]. - **Provincial Debt Changes**: Six key provinces saw a year - on - year decrease in interest - bearing debt, with Tianjin and Guizhou having the most significant reduction. In terms of bonds, 12 provinces had a year - on - year decrease in urban investment bond scale, with Jiangsu, Tianjin, Hunan, and Guizhou having obvious shrinkage [17][19]. - **Debt Ratio Changes**: The local broad and explicit debt ratios continued to rise, with the explicit debt ratio's year - on - year growth rate reaching a new high in recent years. Since 2021, the growth rate of the explicit debt ratio has been higher than that of the broad debt ratio, in line with the debt resolution idea of "hidden to explicit". Most provinces saw an increase in the broad debt ratio in 2024, except for six provinces [22][25]. - **Financing Structure Changes**: The proportions of bank loans and bonds in urban investment debt both decreased year - on - year, with a combined decrease of 2.2 percentage points. This part of the financing demand may have shifted to high - cost non - standard financing channels [4][27]. - **Debt Maturity Structure Changes**: The proportion of long - term debt increased slightly in 2024, but there is still room for improvement compared with 2019 - 2022 [39]. 3.2 Information Revealed by the Three Financial Statements of Urban Investment Platforms - **Balance Sheet**: The asset - liability ratio of urban investment platforms was basically stable, but the short - term solvency weakened. The coverage ratio of monetary funds to short - term debt decreased, and the government's project payments and inter - state - owned enterprise transactions may still need improvement [5][43]. - **Income Statement**: The operating income of urban investment platforms decreased for the first time in six years in 2024, and the net profit continued to decline. This is related to the tight investment and financing environment and the change in government assessment focus [5][51]. - **Cash Flow Statement**: The net operating cash flow of urban investment platforms deviated from the income statement and increased significantly after turning positive in 2023. The net investment cash flow was continuously negative, and the net financing cash flow decreased by 39% year - on - year, indicating a convergence of investment and financing intensity [5][57][60]. 3.3 Summary and Outlook - **Summary**: The growth rates of interest - bearing debt and urban investment bonds slowed down, the debt scale was effectively controlled, and the investment and financing intensity of urban investment platforms converged [66]. - **Outlook**: In 2025, focus on the delisting and market - oriented transformation of financing platforms, the settlement of overdue enterprise accounts, and the resolution of non - standard products involving the public [9][68].