1. Report's Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Report's Core View - In 2025, China's foreign trade imports and exports reached 45.47 trillion yuan, a record high, with a year - on - year increase of 3.8%. Exports were 26.99 trillion yuan, up 6.1% year - on - year, and imports were 18.48 trillion yuan, up 0.5% year - on - year. Exports to Africa were outstanding, with year - on - year growth rates of 6.0%, 8.0%, 18.4%, and - 18.2% for the EU, ASEAN, Africa, and the US respectively. High - tech product exports reached 5.25 trillion yuan, up 13.2% year - on - year. In December 2025, import and export growth accelerated. The total import and export value was 4.26 trillion yuan, up 4.9% year - on - year [2][98]. - In 2026, the bond market may perform better than expected. Long - term bonds may experience a rebound from oversold conditions. Since the second half of 2025, the bond market has often deviated from the fundamentals and may be dominated by institutional behavior. Currently, long - term bond yields are at a one - year high, making long - term bonds attractive for investment. It is expected that the yield of the 30Y Treasury active bond will gradually return to around 2.2% in the first quarter. However, due to the strong stock market, trading desks may not buy ultra - long - term bonds in the short term. Major opportunities for ultra - long - term bonds await a significant decline in institutional expectations for the stock market and a reduction in policy interest rates [4][98]. 3. Summary by Relevant Catalogs 3.1 Macro News - **Import and Export Growth**: In December 2025, the total import and export value was 4.26 trillion yuan, up 4.9% year - on - year, 0.9 percentage points higher than in November. Exports were 2.54 trillion yuan, up 5.2% year - on - year (a 0.5 - percentage - point decrease from November), and imports were 1.73 trillion yuan, up 4.4% year - on - year (a 2.7 - percentage - point increase from November). Emerging markets played a significant role in driving exports, while exports to the US continued to be a drag. Core drivers of export growth included the release of Christmas - season demand and the trade transfer effect. High - end and mid - end manufacturing became the core growth engine, with strong performance in electromechanical and high - tech products, while labor - intensive products still faced pressure [11][13][23]. - **Financial Statistics**: At the end of 2025, the stock of social financing scale was 442.12 trillion yuan, up 8.3% year - on - year. The annual increment of social financing scale in 2025 was 35.6 trillion yuan, 3.34 trillion yuan more than the previous year. At the end of December 2025, M2, M1, and M0 increased by 8.5%, 3.8%, and 10.2% year - on - year respectively. The balance of domestic and foreign currency loans increased by 6.2% year - on - year, and the balance of RMB loans increased by 6.4% year - on - year [19]. - **Policy Measures**: On January 15, 2026, the central bank announced two policy measures: lowering interest rates of various structural monetary policy tools and improving and expanding support for these tools. Specific measures included rate cuts, increasing quotas, and expanding the scope of support for different types of loans and tools [24][26]. 3.2 Medium - term High - frequency Data - **Consumption**: As of January 11, the daily average retail and wholesale volumes of passenger cars decreased by 32.0% and 40.0% year - on - year respectively. As of January 16, the 7 - day total national box office revenue decreased by 24.3% year - on - year. As of January 9, the total retail volume and total retail sales of three major household appliances decreased by 38.3% and 39.4% year - on - year respectively [25][30]. - **Transportation**: As of January 17, the 7 - day average migration scale index increased by 2.1% year - on - year. As of January 11, the number of civil aviation flights decreased by 2.5% year - on - year. As of January 16, the 7 - day average subway passenger volume in first - tier cities increased by 1.2% year - on - year. As of January 11, postal express collection and delivery volumes, railway freight volume, and highway truck traffic decreased year - on - year [33][36]. - **Industry**: As of January 16, iron ore inventory increased by 10.0% year - on - year, while rebar inventory decreased by 1.7% year - on - year, and float glass enterprise inventory increased by 20.9% year - on - year. As of January 8, the daily coal consumption of key power plants increased by 1.0% year - on - year. As of January 16, the apparent consumption of steel and rebar increased by 2.6% and 2.8% year - on - year respectively, while the apparent consumption of wire rods decreased by 2.7% year - on - year. As of January 14 - 15, the operating rates of blast furnaces, asphalt, soda ash, and PVC decreased year - on - year [38][40][47]. - **Real Estate**: As of January 16, the 7 - day total commercial housing transaction area in 30 large - and medium - sized cities decreased by 32.0% year - on - year. As of January 9, the second - hand housing transaction area in 9 sample cities decreased by 29.4% year - on - year. As of January 11, the land transaction area and land transaction price in 100 large - and medium - sized cities decreased year - on - year [48][52][55]. - **Prices**: As of January 16, the average wholesale prices of pork, vegetables, and 6 key fruits showed different year - on - year and 4 - week - on - 4 - week changes. The average prices of northern port thermal coal, WTI crude oil, rebar, iron ore, and glass also had various year - on - year and 4 - week - on - 4 - week changes [58][63][70]. 3.3 Bond and Foreign Exchange Markets - **Interest Rates**: On January 16, overnight Shibor, R001, R007, DR001, DR007, IBO001, and IBO007 had different changes compared to January 12. Most Treasury bond yields declined. On January 16, the yields of 1 - year/5 - year/10 - year/30 - year Treasury bonds decreased by 6.8BP/4.4BP/3.7BP/0.1BP respectively compared to January 9. The yields of 1 - year/5 - year/10 - year/30 - year China Development Bank bonds had different changes compared to January 9. The yields of 1 - year/5 - year/10 - year local government bonds decreased compared to January 9. The yields of AAA 1 - month/1 - year and AA+ 1 - month/1 - year inter - bank certificates of deposit decreased compared to January 9 [75][79][81]. - **Foreign Exchange**: As of January 16, 2026, the ten - year Treasury bond yields of the US, Japan, the UK, and Germany were 4.24%, 2.18%, 4.40%, and 2.89% respectively, with different changes compared to January 9. The central parity rate and spot exchange rate of the US dollar against the RMB on January 16 decreased compared to January 9 [87][90]. 3.4 Institutional Behavior - Since 2026, the durations of medium - and long - term bond funds have generally decreased. On January 16, 2026, the estimated median duration of medium - and long - term interest - rate bond funds was about 3.3 years, a decrease of about 1.2 years compared to December 31, 2025. The estimated median duration of medium - and long - term credit bond funds was about 2.2 years, a decrease of about 0.3 years compared to December 31, 2025 [93][95]. 3.5 Investment Recommendations - In 2026, the bond market may perform better than expected. Pay attention to the possible oversold rebound of long - term bonds. It is recommended to focus on the band - trading opportunities of ultra - long - term bonds, allocate 3 - 5Y capital bonds to obtain coupons, and also pay attention to multi - asset investment opportunities [4][98].

Group 1: Fixed Income Market - The report indicates that economic downward pressure may increase, leading to a higher likelihood of policy interest rate cuts in the future. The central bank governor emphasized the need for appropriate monetary policy adjustments to support economic growth and price stability [6][9]. - The Consumer Price Index (CPI) has returned to positive territory year-on-year, while the Producer Price Index (PPI) has seen a reduced decline. However, investment and consumption growth rates have significantly decreased, reinforcing the expectation of interest rate cuts [6][9]. - The report maintains a bullish outlook on the bond market, particularly noting that the success rate of bullish positions in December has been historically high since 2018 [6][9]. Group 2: Sustainable Aviation Fuel (SAF) Market - 2025 marks the first year that European countries will enforce mandatory SAF blending requirements, with demand primarily driven by the EU and the UK. The UK has achieved a compliance rate of 70% from January to October 2025, with high demand expected to continue through the end of the year [10][11]. - Due to high profitability of HVO products in Europe, the release of SAF production capacity has been limited, resulting in a tight supply-demand balance that is expected to push SAF prices higher [10][11]. - The report suggests monitoring SAF production companies, especially those that have received export whitelist status, such as Hainan New Energy Technology, Jiaao Environmental Protection, and Zhuoyue New Energy [12][13]. Group 3: Robotics Industry - Recent financing activities in the robotics sector include Lingxin Qiaoshou completing a multi-million RMB A+ round and Blue Dot Touch announcing over 100 million RMB in C round financing. The government is planning to establish a regulatory framework for the humanoid robotics industry [15][16]. - The report highlights the importance of six-dimensional force sensors in humanoid robots, which are crucial for real-time precision control. The market for these sensors is expected to grow significantly, with projections indicating over 460,000 units sold by 2030 [15][16]. - The report identifies key companies in the humanoid robotics supply chain, including Kaiter Co. and Dingzhi Technology, which are making advancements in sensor technology and robotics applications [15][16]. Group 4: JiZhi Co. (集智股份) Analysis - JiZhi Co. has announced a stock incentive plan aimed at core employees, with a significant portion of the stock allocation directed towards key personnel rather than executives, reflecting a commitment to fostering innovation and growth [21][22]. - The company is focusing on expanding into high-tech fields such as deep-sea listening, aerospace, and robotics, which are at critical stages of development. This alignment of employee interests with company growth is seen as strategically significant [22][23]. - The report forecasts substantial growth in JiZhi Co.'s net profit from 2025 to 2027, with expected increases of 179.47%, 82.07%, and 75.41% respectively, indicating strong potential for future performance [23].

债市周周谈：关注大跌后的长债机会 20251207 摘要 2025 年下半年，尽管央行在短端实施宽松政策，经济增速放缓，但债 券收益率反而上升，表明资金面与基本面脱钩，投资累计增速为- 1.7%，四季度单月同比增速更是超过-10%。 近期超长债收益率大幅上升，主要原因是券商自营和基金大量抛售，11 月 20 日至 12 月 5 日两周内，券商自营净卖出超长利率债超 600 亿元， 基金净卖出约 500 亿元，券商还通过借券做空加剧抛售。 截至目前，30 年国债与 10 年国债的期限利差超过 40 个基点，达到近 三年高位，显著高于过去几年 12 至 60 个基点的波动范围，反映了市场 对长端利率的较高风险溢价。 2018 年以来，政府性融资规模显著增加，预计 2025 年将达 13.8 万亿， 导致市场供给大幅增加，新增供应主要集中在政府类证券，优质企业发 新置旧替换贷款加剧信贷数据低迷。 2025 年债券市场主要变化包括政府债券大幅增长（净发行规模增加 2.5 万亿）、非银机构调整持仓和久期，以及超长债供求失衡，银行自营面 临消化新增债券的久期管理问题。 Q&A 2025 年对于债市投资者来说是极其艰难的一 ...

Group 1: Fixed Income Market Insights - The report highlights the significant adjustment in the long-term bond market, indicating a supply-demand imbalance due to increased government bond issuance, which rose from 4.77 trillion in 2018 to approximately 13.35 trillion by December 2025 [6][7] - It is suggested that the future demand for ultra-long bonds may weaken, particularly from insurance funds, as the issuance of long-term bonds has surged, leading to increased pressure on banks' investment durations [7][8] - The report recommends addressing the supply-demand imbalance by controlling the issuance of government bonds and encouraging the central bank to purchase ultra-long bonds to alleviate market pressures [8][9] Group 2: China Jushi Co., Ltd. Insights - The report discusses the confidence of major shareholders in China Jushi Co., Ltd., with plans for significant share buybacks totaling between 6.75 billion and 11 billion RMB, reflecting a strong belief in the company's long-term growth potential [12][13] - China Jushi is recognized as a leading global manufacturer in the fiberglass industry, with a production capacity of nearly 3 million tons of fiberglass yarn and a compound annual growth rate (CAGR) of 9.72% in revenue from 2014 to 2024 [13][14] - The company is entering the high-end electronic fabric market, which is expected to benefit from increased demand driven by advancements in computing power, positioning it for substantial growth in this sector [13][14]

1. Report Industry Investment Rating - The report is bullish on the bond market in the short - term, suggesting that the 10 - year Treasury yield may return to around 1.65%. After the adjustment, there are prominent opportunities in credit bonds [1][107]. 2. Core Viewpoints of the Report - Historically, inflation, overheating or recovery of the economy, and tightening of monetary policy are the main reasons for the significant bearish trend in the bond market. Currently, the probability of a significant bearish trend in the bond market is low. The bond market is more likely to maintain a volatile pattern in the next 1 - 2 years [1]. - The signals before the inflection point of the bull - to - bear transition in the bond market are weakening. In the future, nominal GDP growth rate, PPI year - on - year growth rate, and institutional behavior (regulatory policies) may be key indicators and signals. CPI recovery is neither a sufficient nor a necessary condition [1][92]. - The current bond market does not have the conditions for a significant bearish trend. The reasons include the low probability of significant tightening of monetary policy this year, weak economic repair momentum, a loose capital situation, uncertain effects of anti - involution policies, and limited external negative pressure on the bond market [1][106]. 3. Summary According to Relevant Catalogs 3.1. Characteristics of Past Bond Bear Markets - **2007 - 2008**: Due to overheating of the economy and high inflation pressure, the central bank continuously raised interest rates, and the 10 - year Treasury yield rose from 3% to 4.5%. After the global financial crisis in the second half of 2008, the policy turned to easing [5]. - **2010 - 2011**: After the "Four - Trillion" stimulus plan, inflation pressure climbed again. The central bank implemented tightening policies, and the 10 - year Treasury yield rose from 3.2% to 4.1% [8]. - **2013**: Due to the "Money Shortage" and financial supervision, there was a liquidity crisis. The central bank tightened liquidity, and the 10 - year Treasury yield rose from 3.4% to 4.6% [9][10]. - **2016 - 2017**: With strong financial supervision, supply - side reform, and shantytown renovation monetization, the central bank tightened monetary policy, and the 10 - year Treasury yield rose from 2.7% to 3.9% [11]. - **2020**: After the public health event, the economy recovered, and the policy gradually returned to normal. The 10 - year Treasury yield started to rise in late April [15]. - **2022**: The end of the public health event increased the market's expectation of economic recovery, and there was a negative feedback from bank wealth management. The 10 - year Treasury yield rose from 2.6% to 2.9% [19][21]. - **Common Characteristics**: Policy drive (tightening of monetary policy and strengthening of financial supervision), economic cycle correlation (the bond market is prone to a bearish trend when the macro - economy is improving and inflation is rising), and capital trends (capital is the link between policy and the market) [22][23][24]. 3.2. Inflection Points of Past Bull - to - Bear Transitions in the Bond Market - **2007 - 2008**: The inflection point occurred on January 17, 2007. Before the inflection point, the monetary policy had turned to tightening, the capital was tightened, the fundamentals improved significantly, and inflation pressure increased [24][27][28]. - **2010 - 2011**: The inflection point occurred on July 14, 2010. Before the inflection point, the monetary policy had turned to tightening, the capital was tightened, the economy recovered rapidly, and CPI and PPI had been rising [36][38][40]. - **2013**: The inflection point occurred on April 16, 2013. Before the inflection point, there was a sign of capital tightening, the economy showed a co - existence of recovery and inflation pressure, and the central bank tightened liquidity [45][49][50]. - **2016 - 2017**: The inflection point occurred on October 21, 2016. Before the inflection point, there was no obvious sign of capital tightening, the economy was relatively stable, CPI was not obvious, and PPI rose significantly [53][57][60]. - **2020**: The inflection point occurred on April 8, 2020. Before the inflection point, there was no sign of capital tightening, the economy recovered simultaneously with the bearish trend, CPI was not obvious, and PPI was more obvious [63][66][67]. - **2022**: The inflection point occurred in August 2022. Before the inflection point, there was no sign of capital tightening, the economy had a pre - recovery trend, and CPI and PPI were not obvious [74][77][78]. 3.3. Reasons Why the Current Bond Market is Unlikely to Go Significantly Bearish - **Past Bull - to - Bear Inflection Point Signals**: Fundamental inflection points (leading or synchronous with the bull - to - bear inflection point), policy inflection points (monetary policy tightening), CPI or PPI recovery (PPI bottoming out 6 - 12 months before the bearish trend), and capital inflection points (yield bottom lags behind the capital bottom by an average of 2.5 months). In the future, these signals are weakening [83][85][87]. - **CPI Recovery is Neither Sufficient nor Necessary**: CPI recovery is not a sufficient or necessary condition for the bull - to - bear transition in the bond market. Cost - push inflation has limited impact on the bond market trend [95][96]. - **Current Situation Analysis**: The monetary policy is unlikely to tighten significantly this year. The economic repair momentum is weak, with low nominal GDP growth, negative GDP deflator, and declining PPI. The capital situation is loose, the "anti - involution" policy effect is uncertain, and the external environment has limited negative pressure on the bond market [97][100][105]. 3.4. Investment Analysis Opinions - In the short - term, the report is bullish on the bond market, suggesting that the 10 - year Treasury yield may return to around 1.65%. After the adjustment, there are opportunities in credit bonds, such as long - duration sinking urban investment bonds, capital bonds, and insurance sub - debt. It is recommended to focus on the long - duration capital bonds of Minsheng, Bohai, and Hengfeng banks, and be bullish on urban investment dim - sum bonds and US dollar bonds. Pay attention to the capital bonds of Beibu Gulf Bank, Tianjin Bank, and China Property Insurance [106][107].

Report Industry Investment Rating No relevant information provided Core View of the Report - Price growth remains weak, and the policy bottom - support effect is emerging. The price recovery in July shows the characteristics of "consumption stronger than production, and policy - driven repair". The marginal improvement in price data in July, with CPI turning positive month - on - month and the narrowing of PPI decline, is closely related to the intensive implementation of "anti - involution" policies and the continuous efforts of domestic demand expansion policies since July [2][9][86]. - The continuous rise of core CPI inflation may indicate that the domestic demand expansion policy's bottom - support effect on domestic demand is gradually emerging, while the narrowing of PPI decline may rely more on the policy's regulation of the supply - side competition order, and the impact of the substantial expansion of the demand side needs continuous observation [2][10][86]. Summary by Relevant Catalogs 1. Macro - level News - In July, CPI was flat year - on - year, mainly affected by low food prices. Core CPI excluding food and energy prices was up 0.8% year - on - year, with the increase expanding for three consecutive months. CPI was up 0.4% month - on - month, higher than the seasonal level by 0.1 pct, mainly driven by the rise in service and industrial consumer goods prices [12]. - In July, PPI was down 3.6% year - on - year, the same as last month. PPI was down 0.2% month - on - month, with the decline narrowing by 0.2 pct compared to last month, the first narrowing of the month - on - month decline since March. The price recovery of production materials mainly occurred in July [15]. - In the first seven months of 2025, China's total value of goods trade imports and exports was 25.7 trillion yuan, up 3.5% year - on - year. Exports were 15.3 trillion yuan, up 7.3% year - on - year; imports were 10.39 trillion yuan, down 1.6% year - on - year, with the decline narrowing by 1.1 pct compared to the first six months. In July, the total value of goods trade imports and exports was 3.9 trillion yuan, up 6.7% year - on - year. Exports were 2.3 trillion yuan, up 8% year - on - year; imports were 1.6 trillion yuan, up 4.8% year - on - year [17]. 2. Meso - level High - frequency Data 2.1 Consumption - As of July 31, the average daily retail volume of passenger car manufacturers was 9.7 million vehicles, down 0.8% year - on - year, and the average daily wholesale volume was 17.2 million vehicles, up 1.3% year - on - year. As of August 8, the total box office revenue of national movies in the past 7 days was 168,932,800 yuan, up 98.5% year - on - year [20]. - As of August 1, the total retail volume of three major household appliances was 1.739 million units, down 3.7% year - on - year, and the total retail sales were 4.05 billion yuan, up 2.7% year - on - year [22]. 2.2 Transportation - As of August 3, the port's container throughput was 5.68 million twenty - foot equivalent units, down 7.0% year - on - year. As of August 7, the average subway passenger volume in first - tier cities in the past 7 days was 3,934,400 person - times, down 1.3% year - on - year [25]. - As of August 3, the postal express pick - up volume was 3.6 billion pieces, up 14.6% year - on - year. The railway freight volume was 77.694 million tons, up 6.5% year - on - year, and the highway truck traffic volume was 5.2593 million vehicles, up 2.8% year - on - year [27][31]. 2.3 Industrial Operating Rates - As of August 6, the blast furnace operating rate of major steel enterprises was 77.5%, up 3.4 pct year - on - year. As of August 7, the average asphalt operating rate was 25.0%, up 2.0 pct year - on - year [34]. - As of August 7, the soda ash operating rate was 85.2%, down 4.8 pct year - on - year, and the PVC operating rate was 75.5%, up 0.1 pct year - on - year. As of August 8, the average PX operating rate was 82.0%, and the average PTA operating rate was 76.8% [37]. 2.4 Real Estate - As of August 7, the total commercial housing transaction area in 30 large and medium - sized cities in the past 7 days was 1.392 million square meters, down 17.8% year - on - year. The total number of commercial housing transactions was 15,625 units, down 15.5% year - on - year [41][43]. 2.5 Prices - As of August 8, the average wholesale price of pork was 20.4 yuan/kg, down 21.2% year - on - year and 0.8% compared to four weeks ago; the average wholesale price of vegetables was 4.6 yuan/kg, down 16.9% year - on - year and up 4.1% compared to four weeks ago; the average wholesale price of six key fruits was 7.0 yuan/kg, down 4.3% year - on - year and 4.5% compared to four weeks ago [48]. - As of August 8, the average price of thermal coal at northern ports was 665 yuan/ton, down 21.7% year - on - year and up 7.8% compared to four weeks ago; the average spot price of WTI crude oil was 65.4 US dollars/barrel, down 11.9% year - on - year and 3.3% compared to four weeks ago; the average spot price of rebar was 3,328.1 yuan/ton, up 4.23% year - on - year and 6.5% compared to four weeks ago [51]. - As of August 8, the average spot price of iron ore was 786.5 yuan/ton, down 0.9% year - on - year and up 5.7% compared to four weeks ago; the average spot price of glass was 15.2 yuan/square meter, down 11.9% year - on - year and up 8.2% compared to four weeks ago [56]. 3. Bond and Foreign Exchange Markets - On August 8, overnight Shibor was 1.31%, up 0.04 BP from August 4. R001 was 1.34%, down 0.99 BP from August 4; R007 was 1.45%, down 2.17 BP from August 4. DR001 was 1.31%, down 0.30 BP from August 4; DR007 was 1.43%, down 2.67 BP from August 4. IBO001 was 1.35%, up 0.17 BP from August 4; IBO007 was 1.50%, up 0.78 BP from August 4 [62]. - Most government bond yields declined. On August 8, the yields of 1 - year/5 - year/10 - year/30 - year government bonds were 1.35%/1.54%/1.69%/1.96% respectively, down 2.0 BP/2.4 BP/1.9 BP/up 0.9 BP compared to August 1. The yields of 1 - year/5 - year/10 - year/30 - year China Development Bank bonds were 1.50%/1.66%/1.78%/2.05% respectively, up 0.0 BP/down 0.6 BP/up 1.6 BP/up 0.2 BP compared to August 1 [66]. - On August 8, the yields of 1 - year/5 - year/10 - year local government bonds were 1.38%/1.66%/1.82% respectively, down 0.3 BP/up 0.4 BP/up 0.2 BP compared to August 1. The yields of AAA 1 - month/1 - year and AA+ 1 - month/1 - year inter - bank certificates of deposit were 1.46%/1.62%/1.48%/1.66% respectively, down 1.3 BP from August 1 [72]. - As of August 8, 2025, the yields of 10 - year government bonds in the US, Japan, the UK, and Germany were 4.3%, 1.5%, 4.6%, and 2.7% respectively, up 4 BP/down 7 BP/up 6 BP/down 6 BP compared to August 1. The central parity rate and spot exchange rate of the US dollar against the RMB were 7.14/7.18 respectively, down 114/280 pips from August 1 [77][80]. 4. Institutional Behavior - Since the beginning of 2025, the duration of interest - rate bond medium - and long - term pure bond funds has shown a trend of first decline and then rise, and has been declining in the past two weeks. On August 8, the estimated average duration was about 5.2 years, down about 0.12 years from August 1 [83]. - Since the beginning of 2025, the duration of credit - bond medium - and long - term pure bond funds has shown a volatile trend. In the past three weeks, the duration has risen rapidly and then fluctuated. On August 8, the estimated median duration was about 2.7 years, and the estimated average duration was about 2.6 years, down about 0.03 years from August 1 [84]. 5. Investment Recommendations - Going long in the bond market is currently the path of least resistance. In August, the yield of 10Y government bonds may gradually return to around 1.65%, and the yield of 5Y national - joint - stock secondary bonds may fall below 1.9%. With the cooling of anti - involution, weak price growth, the stock market entering a volatile phase, and the possible decline in social financing growth rate, there are few negative factors for the bond market currently [11][88]. - The tax new regulations have relatively increased the scarcity of government bonds and old financial bonds, which may prompt banks' proprietary trading to scramble for government bonds and old financial bonds. The relatively low spread between newly - issued government bonds and existing bonds may temporarily push down yields. Currently, there is a phased overall bullish view on the bond market, bullish on long - duration sinking urban investment and capital bonds, bullish on urban investment dim sum bonds and US dollar bonds, strongly recommending perpetual bonds of Minsheng Bank, Bohai Bank, and Hengfeng Bank, and paying attention to capital bond opportunities of Tianjin Bank, Beibu Gulf Bank, and China Property Insurance [11][88].

Core Viewpoint - The bond market is currently experiencing a period of adjustment, influenced by various factors such as the "stock-bond seesaw" effect, but analysts believe that there are still opportunities for bullish positions as negative sentiment dissipates [1][2][4]. Group 1: Market Conditions - The bond market has shown signs of volatility and adjustment, with the 10-year government bond yield rising from 1.67% on July 18 to 1.73% by July 25 [2]. - The stock market has been performing well, with the Shanghai Composite Index surpassing 3600 points and gaining 4.3% in July, which has diverted some funds away from the bond market [2]. - The recent adjustments in the bond market are attributed to increased risk appetite and a rise in funding rates, leading to a significant sell-off in bond funds [3]. Group 2: Investment Opportunities - Despite the recent adjustments, there are positive factors emerging, such as increased buying from insurance institutions, which reached a new high since April 2020, indicating potential support for the bond market [4]. - Analysts suggest that the current bond market levels present a good value for investment, particularly in long-duration government bonds and recently adjusted perpetual bonds [6][7]. - The expectation is that the 10-year government bond yield may return to around 1.65% as market risks ease, and there are notable opportunities in credit bonds, especially in municipal investment bonds and insurance subordinated debt [6][7].

Report Summary 1. Report Industry Investment Rating The report does not explicitly mention the industry investment rating. 2. Core Views of the Report - "Anti - involution" may be Supply - side Reform 2.0, potentially driving a significant rebound in PPI and impacting the bond market [2]. - The stock market is rising steadily, with a notable increase in risk appetite. This may attract funds into the stock market, putting pressure on the bond market [2]. - China's export resilience is prominent. There is a possibility of a further reduction in US tariffs on China, which could promote export growth [2]. - The commencement of the Yarlung Zangbo River downstream hydropower project may boost infrastructure investment growth and drive up related stock prices [2]. - The bond market is expected to fluctuate narrowly in the short term. Attention should be paid to the progress of "anti - involution". The report recommends long - duration sinking of urban investment bonds, capital bonds, and insurance sub - bonds, and suggests paying attention to investment opportunities in certain capital bonds and Hong Kong - listed bank stocks [2]. 3. Summary by Related Aspects Macroeconomic Policy Impact - In 2015, supply - side reform and shantytown renovation promoted a significant rebound in PPI and nominal GDP growth, causing the bond market to decline. In 2025, "anti - involution" has become the focus of economic policy and may have a similar impact [2]. Stock and Bond Market Relationship - Since the Spring Festival in 2025, the stock market has been rising steadily, ending the negative economic cycle from 2022 - 2024. The wealth effect of the stock market promotes consumption, and the inflow of funds into the stock market may put pressure on the bond market [2]. Export Situation - China's total export value has grown rapidly in the past year. The resilience of exports is not only due to "rush - to - export" but also reflects the global competitiveness of many industries. A reduction in US tariffs on China could further boost exports [2]. Infrastructure Investment - The Yarlung Zangbo River downstream hydropower project, with a total investment of about 1.2 trillion yuan, may drive the stabilization of infrastructure investment growth and the rise of related stocks [2]. Bond Market Outlook - The bond market's trading volume is overly concentrated in ultra - long - term interest - rate bonds. If the "anti - involution" efforts are strong, it may lead to the collapse of the ultra - long - term bond concentration and a 10 - 20BP adjustment in the bond market. The 10 - year Treasury yield may need a new round of interest rate cuts to reach a new low. In the short term, the bond market will fluctuate narrowly, and attention should be paid to the progress of "anti - involution" [2].

Group 1: Fixed Income Market Insights - The domestic economic recovery shows continued differentiation, with resilient consumer market recovery and ongoing growth in logistics volume [2][7] - As of July 11, the average duration of long-term government bonds has risen to approximately 5.4 years, while the average duration of credit bonds remains stable at about 2.2 years [8][9] - The report suggests a narrow fluctuation in interest rate bonds for Q3 2025, with a bullish outlook on long-term municipal and capital bonds [9][14] Group 2: Financial Data Overview - In June 2025, new loans amounted to 2.24 trillion yuan, and social financing reached 4.2 trillion yuan, with M2 growing by 8.3% year-on-year [11][13] - The report indicates a significant increase in social financing growth, with a year-on-year increase of 8.9% [12][13] - The report anticipates a slight increase in new loans for 2025, driven by government bond financing and credit [11][13] Group 3: Company-Specific Insights - China Shengmu (01432.HK) - China Shengmu is the first organic raw milk brand to obtain dual certification from China and the EU, and it is the largest organic raw milk producer in China [22][23] - The company is expected to benefit from the expansion of the high-end organic milk market as consumer demand for healthy food increases [23][24] - The report forecasts a significant recovery in profits due to the anticipated stabilization of milk and beef prices, which have previously negatively impacted the company's financial performance [23][24] Group 4: Company-Specific Insights - Crystal Technology (603005.SH) - Crystal Technology is a leading supplier of WLCSP advanced packaging, focusing on CMOS image sensor chips and expanding into new fields such as optical devices and GaN devices [25][26] - The company is expected to see revenue growth driven by the increasing demand for automotive CIS, with a projected revenue of 1.13 billion yuan in 2024, representing a year-on-year growth of 23.72% [25][26] - The report highlights the company's strong competitive advantage with a gross margin of 43.28%, which is significantly higher than its peers [26][28]

Report Industry Investment Rating No specific industry investment rating is provided in the report. Core Viewpoints of the Report The current economic operation is in a neutral range, and the negative economic cycle of "sharp decline in housing prices and stock prices - wealth shrinkage - consumption downgrade" in the past two years may have come to an end. The marginal change in the economy compared to 2024 may lie in consumption. The report expects interest rate bonds to fluctuate narrowly in Q3 2025, and is bullish on long - duration urban investment bonds and capital bonds. It also anticipates a significant interest rate cut by the Federal Reserve in 2026, highlighting opportunities in short - to medium - term US bonds [2]. Summary According to the Table of Contents 1. Macro - level News - In June, the year - on - year CPI was +0.1%, and the month - on - month was - 0.1%. The year - on - year food price was - 0.3%, and the month - on - month was - 0.4%; the year - on - year non - food price was +0.1%, and the month - on - month was flat. The转正 of CPI in June and the rebound of core CPI may indicate the initial effectiveness of policies to expand domestic demand, but the recovery foundation is not yet stable [2][12]. - The General Office of the State Council issued a notice to further strengthen policy support for stable employment, including seven aspects such as supporting enterprises to stabilize jobs and promoting employment through skills training [2][13]. - Trump announced that starting from August 1, a 50% tariff will be imposed on all copper imported into the United States, and different tariff conditions (20% - 50%) will be imposed on 24 countries and 27 EU member states [2][13]. 2. Medium - level High - frequency Data 2.1 Consumption - As of July 6, the daily average retail volume of passenger car manufacturers increased by 1.2% year - on - year, and the daily average wholesale volume increased by 39.0% year - on - year. As of June 27, the total retail volume of three major household appliances increased by 16.4% year - on - year, and the total retail sales increased by 1.6% year - on - year. However, the total box office revenue in the past 7 days as of July 11 decreased by 26.5% year - on - year [14][19][23]. 2.2 Transportation - As of July 6, the container throughput of ports increased by 5.6% year - on - year, railway freight volume increased by 3.7% year - on - year, and highway truck traffic increased by 1.7% year - on - year. But the CCFI composite index as of July 11 decreased by 37.0% year - on - year, and the average Baltic Dry Freight Index as of July 11 decreased by 16.7% year - on - year [14][24][31]. 2.3 Capacity Utilization - As of July 9, the blast furnace capacity utilization rate of major steel enterprises increased by 2.4 pct year - on - year. As of July 10, the average asphalt capacity utilization rate increased by 4.0 pct year - on - year, but the soda ash capacity utilization rate decreased by 6.3 pct year - on - year, and the PVC capacity utilization rate decreased by 1.8 pct year - on - year [15][45][47]. 2.4 Real Estate - As of July 11, the total commercial housing transaction area of 30 large and medium - sized cities in the past 7 days decreased by 11.0% year - on - year, while the total number of transactions increased by 17.1% year - on - year. The second - hand housing market also showed a downward trend, with the transaction area of 9 sample cities decreasing by 7.4% year - on - year as of July 4, and the listing price index of second - hand housing in national cities decreasing by 7.0% year - on - year as of July 6 [15][54][58]. 2.5 Prices - As of July 11, most commodity prices declined. The average wholesale price of pork decreased by 16.1% year - on - year, the average wholesale price of vegetables decreased by 7.4% year - on - year, the average price of thermal coal at northern ports decreased by 27.6% year - on - year, and the average spot price of WTI crude oil decreased by 17.8% year - on - year [15][68][73]. 3. Bond Market and Foreign Exchange Market - On July 11, overnight Shibor, R001, R007, DR001, DR007, IBO001, and IBO007 all increased slightly compared to July 7. The yields of 1 - year, 5 - year, 10 - year, and 30 - year treasury bonds on July 11 increased by 3.4BP, 3.6BP, 2.2BP, and 2.4BP respectively compared to July 4. The exchange rate of the US dollar against the RMB on July 11 was 7.17, up 58 pips compared to July 4 [79][80][86]. 4. Institutional Behavior - As of July 13, the net - breaking rate of public wealth management products of wealth management companies was about 0.57%, down 1.40 pct from the beginning of the year, and the current percentile of the net - breaking rate within the year was below 5%. As of July 11, the duration of bond funds continued to rise. The median and average duration of medium - and long - term pure bond funds for interest rate bonds reached 5.3 years and 5.4 years respectively, up 0.18 years from the previous week; the median and average duration of medium - and long - term pure bond funds for credit bonds were 2.2 years, down 0.01 years from the previous week [89][91][92]. 5. Investment Suggestions - Interest rate bonds are expected to fluctuate narrowly in Q3 2025. The report is bullish on long - duration urban investment bonds and capital bonds, including urban investment dim - sum bonds and US dollar bonds. It strongly recommends perpetual bonds of Minsheng Bank, Bohai Bank, and Hengfeng Bank, and suggests paying attention to opportunities in insurance sub - debt. It is expected that the Federal Reserve will significantly cut interest rates in 2026, presenting opportunities in short - to medium - term US bonds [2][97].