1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The Chinese economy is in a marginal de - leveraging process, with the liability growth rate of the real - sector expected to decline. The government aims to stabilize the macro - leverage ratio, and the monetary policy will generally remain neutral and difficult to be continuously loose. The market is currently affected by risk preference, and the subsequent trends of risk preference, economic recovery, and the US economy need to be focused on [2][3][7] - In the context of the contraction of the national balance sheet, the allocation of financial assets should adopt a dumbbell - shaped strategy. The bond market is the large base, and the stock market is the small head. The stock allocation strategy is dividend plus growth, and the bond allocation strategy is duration plus credit - sinking [25] - In the contraction cycle, the equity - bond ratio favors equities to a limited extent, and the value style is more likely to be dominant. Red - dividend stocks with characteristics of non - expansion, good profitability, and survival are recommended [12][67] 3. Summary by Relevant Catalogs 3.1 National Balance Sheet Analysis - **Liability Side**: In July 2025, the liability growth rate of the real sector was 9.0%, with a lower - than - expected rebound. It is expected to decline to 8.9% in August and further to 8% by the end of the year. The government's liability growth rate is also expected to decline from 15.7% in July to 14.8% in August and 12.5% by the end of the year. The money market has tightened marginally, and the peak of the money market in August was likely in the first week [2][3][21] - **Monetary Policy**: The trading volume of funds decreased last week, and the price was stable. The one - year Treasury yield rose to 1.37%, and the term spread widened. The estimated lower limit of the one - year Treasury yield is 1.3%, the ten - year Treasury yield is about 1.6%, and the thirty - year Treasury yield is about 1.8% [3][22] - **Asset Side**: After a brief stabilization in June, the physical volume data declined again in July. The annual real economic growth target for 2025 is about 5%, and the nominal economic growth target is about 4.9%. Whether this will be the central target for the next 1 - 2 years needs further observation [4][23] 3.2 Stock - Bond Ratio and Stock - Bond Style - **Market Performance Last Week**: The money market tightened marginally, but risk preference increased. Stocks rose, and bonds fell. The equity growth style was dominant, and the stock - bond ratio favored stocks, breaking through the previous high on August 15th [6][26] - **Future Outlook**: The trend of risk preference is uncertain. There are three possible scenarios: range - bound fluctuations, a short - term upward trend, or a fundamental change in the subjective weighting of Chinese profitability. A portfolio of growth - type equity assets and long - term bonds is recommended, with a 70% position in the CSI 1000 Index and a 30% position in the 30 - year Treasury ETF [10][11][29] 3.3 Industry Recommendation - **Industry Performance Review**: The A - share market rose this week. The communication, electronics, non - bank finance, power equipment, and computer sectors had the largest increases, while the bank, steel, textile and apparel, coal, and public utilities sectors had the largest declines [35] - **Industry Crowding and Trading Volume**: As of August 15th, the top five crowded industries were electronics, computer, power equipment, machinery, and non - bank finance. The trading volume of the whole A - share market increased this week, with non - bank finance, real estate, and other sectors having the highest growth rates [36][38] - **Industry Valuation and Profitability**: The PE (TTM) of the comprehensive, communication, and other sectors increased the most this week, while the bank, steel, and other sectors declined. Industries with high 2024 full - year profit forecasts and relatively low current valuations include banks, coal, and oil and petrochemicals [41][42] - **Industry Prosperity**: External demand generally declined. The global manufacturing PMI decreased in July, and the CCFI index fell. Domestic indicators such as port throughput and industrial capacity utilization showed mixed trends [46] - **Public Fund Market Review**: In the second week of August, most active public equity funds outperformed the CSI 300. As of August 15th, the net asset value of active public equity funds was slightly higher than that in Q4 2024 [62] - **Industry Recommendation**: In the contraction cycle, the equity - bond ratio favors equities to a limited extent, and the value style is more likely to be dominant. An A + H red - dividend portfolio of 20 stocks and an A - share portfolio of 20 stocks, mainly concentrated in banks, telecommunications, and other industries, are recommended [12][67]

科技创新从未像今天这样深刻影响着国家前途命运 。2018年11月5日，在首届中国国际进口 博览会开幕式上，中国正式宣布设立科创板，开启了中国资本市场服务科技创新的新篇章。 作为科创板的首只宽基指数，上证科创板50成份指数（科创50）于2020年7月23日发布。截 至2025年7月末，全市场跟踪科创50指数的ETF规模合计超过1800亿元，是场内规模最大的科技 类宽基指数。 科创50，已成为中国资本市场 "硬科技"投资的标杆。 数据来源：Wind，截至2025/7/31。 指数编制：汇聚科创板龙头精华 科创50指数的成份股，是上交所科创板满足上市时间、流动性等要求的股票中市值较大的前50 只，汇聚科创板核心龙头大票。 数据来源：Wind，市值截至2025/7/31，营收截至2025年一季报。 图：科创板规模指数成份股大致覆盖范围（按市值排序） 指数特征：硬科技含量高 科创50指数之所以被誉为"硬科技标杆"，源于其成分股企业拥有的关键核心技术和战略新兴产 业布局。 数据来源：Wind，截至2025/7/31，行业分类为申万二级行业。 在行业分布上，科创50指数成份股的 半导体行业占比高达60.6% ，尤其体现了国 ...

Core Insights - The Sci-Tech Innovation Board (STAR Market) has effectively served as a "testbed" for reforms in China's capital market, facilitating the listing of high-tech companies and fostering innovation in key industries [1][2][9] - Over the past six years, the STAR Market has evolved into a "demonstration field" for high-quality development, particularly in sectors like integrated circuits, biomedicine, and new energy [5][9] Group 1: Market Performance and Growth - As of now, there are 589 companies listed on the STAR Market, with a total of 9,257 billion yuan raised through IPOs and 1,867 billion yuan through refinancing, totaling over 1.1 trillion yuan [5] - The compound annual growth rates for revenue and net profit attributable to shareholders of STAR Market companies have reached 18.7% and 9.1%, respectively, over the past five years [5] - The STAR Market has seen the listing of 54 unprofitable companies and 20 companies under the fifth set of listing standards, indicating a diverse range of business models [5][10] Group 2: Innovation and R&D - The median R&D expenditure as a percentage of revenue for STAR Market companies is 12.6%, leading all A-share sectors, with 107 companies maintaining an R&D intensity above 20% for three consecutive years [6][10] - A total of 35 STAR Market companies rank first globally in their respective segments, while 124 companies hold the top position nationally [6] Group 3: Regulatory and Structural Reforms - The STAR Market has implemented a series of reforms, including a more inclusive listing standard and the introduction of a market maker system to enhance liquidity [10][12] - The recent "1+6" policy measures aim to deepen reforms, including the establishment of a growth layer and the introduction of pre-IPO review mechanisms for quality tech companies [10][11] Group 4: Future Outlook and Strategic Directions - The STAR Market is expected to continue enhancing its institutional inclusivity and adaptability, providing a more efficient growth environment for hard-tech enterprises [10][15] - The ongoing reforms are anticipated to support the integration of technology and industry innovation, contributing to the development of a multi-tiered capital market system [12][15]

Core Viewpoint - The performance of various stock indices shows mixed results, with some indices experiencing slight increases while others remain stable or decline [1] Index Performance - The Shanghai Stock Exchange 50 Index decreased by 0.08% - The CSI 300 Index increased by 0.04% - The CSI 500 Index increased by 0.05% - The CSI 1000 Index increased by 0.07% - The STAR 50 Index increased by 0.04% - The STAR Composite Index increased by 0.05% [1] ETF Performance - The SSE 50 ETF (510680) remained flat at 0.0% - The CSI 300 ETF (159673) increased by 0.09% - The CSI 500 ETF (159982) decreased by 0.13% - The CSI 1000 ETF (159629) decreased by 0.23% - The STAR 50 Enhanced ETF (588460) increased by 0.09% - The STAR Composite ETF (589680) increased by 0.52% [1]

Core Viewpoint - The recent performance of the A-share market has been lively, with the Shanghai Composite Index reaching a new high since November last year, indicating a favorable environment for growth-oriented investments, particularly in high-volatility sectors like the ChiNext [1] Group 1: Index Comparison - The ChiNext 200 Index focuses on small and medium-sized enterprises within the ChiNext board, while the Sci-Tech 50 Index gathers leading companies from the Sci-Tech board [1][2] - The ChiNext 200 Index consists of 200 stocks, whereas the Sci-Tech 50 Index includes only 50 stocks, highlighting a broader selection in the former [1][2] - The median free float market capitalization of the ChiNext 200 is 9.162 billion, significantly lower than the 21.162 billion of the Sci-Tech 50, indicating a focus on smaller companies [1][2] Group 2: Performance Analysis - Since the end of 2019, the ChiNext 200 Index has achieved a cumulative increase of 44.38%, contrasting with a decline of 1.69% for the Sci-Tech 50 during the same period [2] - The ChiNext 200 Index has outperformed both the ChiNext Index and the ChiNext 50 in terms of cumulative growth and annualized returns since its inception, with a cumulative increase of 258% and an annualized return of 10.71% [4][5] - The ChiNext 200's focus on mid-cap growth companies allows it to capture more significant growth potential compared to the larger-cap stocks in the ChiNext Index and ChiNext 50 [6]

Group 1 - The major indices of the A-share market are expected to adjust after a period of optimism following favorable news announcements [1][2] - The Shanghai Composite Index and the ChiNext Index are highlighted for analysis, with a focus on their recent performance and potential adjustments [2][6] - The Shanghai 50 Index shows signs of adjustment with a notable reduction in trading volume, indicating insufficient upward momentum [5][8] Group 2 - The ChiNext Index has experienced a relatively strong performance but lacks significant trading volume, suggesting limited upward momentum [8] - Both indices are at critical turning points, with the potential for further adjustments in the near term [5][8] - The current A-share market environment allows for structural opportunities in individual stocks, provided the overall trend remains stable [8]

Summary of Conference Call Notes Industry or Company Involved - The discussion primarily revolves around the A-share market and public funds in China, particularly focusing on the impact of the "Action Plan for Promoting High-Quality Development of Public Funds" [1][1]. Core Points and Arguments - The implementation of the action plan is expected to drive more medium to long-term capital into the A-share market, enhancing market resilience [1]. - Currently, the proportion of equity public funds is relatively low, but under policy guidance, this proportion is likely to continue increasing, bringing substantial incremental capital to the A-share market [1][1]. - Technology-related broad-based indices, such as the Sci-Tech 50 Index and semiconductor-related indices, are anticipated to benefit significantly from this policy shift [1]. - Industries with strong profitability and stable performance are expected to attract public fund investments, including household appliances, banking, transportation, food and beverage, and non-bank financial sectors [1]. - Specific industries that are currently underweighted by funds, such as banking, transportation, and non-bank financials, may warrant particular attention [1]. Other Important but Potentially Overlooked Content - The market may experience scenarios of "weak reality, weak sentiment" or "weak reality, strong sentiment," which correspond to rotations between defensive and growth styles [2]. - Under the defensive style, focus should be on stable or high-dividend industries, while the growth style should emphasize thematic growth and independent prosperity industries [2]. - Risk factors include the possibility of policy implementation falling short of expectations, significant declines in market sentiment, economic growth levels being substantially below expectations, and a severe deterioration in China-U.S. relations [3].

Core Viewpoint - The article emphasizes the significance of predicting the adjustment lists of A-share indices in advance, which can provide substantial benefits for various investors, including arbitrage and cross-border investors [1][2]. Group 1: Index Adjustment Predictions - A-share indices undergo regular adjustments in June and December each year, allowing for predictions based on trading and financial data from the previous year [1][5]. - The report predicts the adjustment lists for several indices, including CSI 300, CSI 500, and others, for June 2025 based on component stock selection rules [1][5]. Group 2: Impact of Passive Fund Growth - The rapid increase in passive fund sizes since 2023 has enhanced the significance of index adjustment effects, particularly for indices like CSI 300 and STAR 50 [2][8]. - The average excess returns for newly included stocks in various indices have improved post-announcement, with CSI 300 and SSE 50 showing increases to 4.64% and 6.77% respectively in the 10 days following the announcement [2][12]. Group 3: Factors Influencing Adjustment Effects - The decline in the significance of index adjustment effects in overseas indices post-2010 is attributed to factors such as sample size, index migration, and liquidity [3][51]. - In A-shares, index migration and pre-announcement trading behaviors negatively impact the inclusion effects, while high impact coefficients positively influence them [3][51]. Group 4: Future Excess Return Potential - The current trends indicate that the future A-share market may still have excess return potential from index adjustment events, as key indicators like circulation market value and impact coefficients show no downward trend [4][51]. - High impact coefficient strategies have demonstrated strong performance, achieving annualized returns of around 10% from 2019 to 2024 [4][56]. Group 5: Strategy Development - The strategy of predicting index inclusion samples in advance has shown significant enhancement in returns, with annualized returns increasing from 2.5% to 5.7% when holding positions before announcements [52][56]. - A strategy focusing on high impact coefficient stocks has yielded an annualized return of 8.1% since 2010, outperforming the CSI 300 index by 7.2% during the same period [56].

Group 1: US Economic Outlook - The US PMI readings have shown a high level of economic activity since the beginning of the year, but the expansion trend may face obstacles in the first half of the year, potentially fluctuating around the lower end of the growth line [1] - The manufacturing PMI has not shown a trend recovery following the Federal Reserve's interest rate cuts, indicating a lack of significant demand rebound [1][2] - Export leading indicators such as South Korea's exports and the Philadelphia Semiconductor Index have shown signs of decline, suggesting potential challenges for the US economy [1][2] Group 2: Trade Policies and Tariffs - The recent tariff threats from Trump against Mexico, Canada, and China may have a manageable impact on China's exports and GDP, with estimated reductions of 3.3 percentage points and 0.36 percentage points respectively [3] - The market's tolerance for external disturbances is expected to increase as risk appetite improves, and Trump's focus remains on domestic policies rather than US-China tensions [3] - The new tariffs on Chinese imports are projected to reduce China's export growth by approximately 3 percentage points for the year 2025, particularly affecting textiles, toys, and footwear [6] Group 3: Industry-Specific Insights - The white liquor industry is currently in a bottoming phase, with expectations of a recovery driven by policy signals and improving demand, suggesting a potential upward cycle for leading brands [7] - The home furnishing sector is seeing improvements in demand, particularly in regions with flexible policies, but the recovery of the renovation market is still pending further policy support [9] - The wind power industry is expected to experience significant growth due to technological advancements and increased domestic demand, particularly in the blade manufacturing segment [18] Group 4: Market Trends and Investment Strategies - The current macroeconomic environment is conducive to a more sustained theme-driven market, with a focus on fundamental expectations rather than speculative trends [13] - The upcoming traditional peak season for the chemical industry is anticipated to provide investment opportunities, particularly in sectors with favorable supply-demand dynamics [19] - The textile and apparel sector is expected to see a recovery in 2025, driven by improved consumer sentiment and policy clarity, with several investment themes identified [24]