中国市场周报：市场从年内高点回调 2 - 3%；7 月政治局会议显示刺激紧迫性降低；更高的指数及南向目标-China Weekly Kickstart_ Markets corrected 2-3% from ytd highs; July Politburo meeting shows less urgency for stimulus; Higher index and Southbound targets

Summary of Key Points from the Conference Call Industry Overview - The report discusses the performance of the Chinese equity market, specifically the MXCN and CSI300 indices, which experienced a decline of 3.4% and 1.8% respectively after reaching four-year and year-to-date highs the previous week [1] - The Politburo meeting on July 30 indicated a reduced urgency for stimulus measures in the near term, reflecting a cautious approach to economic management [1] - The report highlights the ongoing trade discussions between US and Chinese officials, with an agreement to seek an extension of the 90-day tariff truce [1] Market Performance and Projections - The 12-month targets for MXCN and CSI300 have been raised to 90 and 4,500 from previous targets of 85 and 4,400, indicating a positive outlook despite recent corrections [1][29] - Southbound inflows reached US$7.6 billion this week, with a revised estimate for 2025 inflows increased to US$160 billion from US$110 billion [1][24] - The report notes that the People's Bank of China (PBOC) Q2 surveys indicated lower loan demand, and both official manufacturing and non-manufacturing PMIs fell in July [1] Sector Performance - Health Care and Growth sectors led the performance with increases of 5.7% and 2.9%, while Property and Value sectors lagged with declines of 2.3% and 3.6% respectively [2] - The report indicates that the Health Care sector has shown significant earnings growth, with a notable 95% increase in 1H25 earnings [32] Earnings and Valuations - The consensus estimates for EPS growth in 2025/26 are projected at 5%/13% for MXCN and 15%/12% for CSI300, suggesting a positive earnings outlook [10] - The report highlights that 5% of all China-listed companies have reported earnings so far, with 1H/2Q25 earnings rising 19%/23% year-over-year [32] Policy and Regulatory Environment - The National Development and Reform Commission (NDRC) released new draft guidelines aimed at tightening oversight of government-backed investment funds, emphasizing a stronger focus on strategic industries [1] - The report mentions that the China Securities Regulatory Commission (CSRC) summoned Nvidia over security risks associated with H20 chips, indicating increased scrutiny in the tech sector [6] Additional Insights - The report notes that government actions have been taken in sectors where "involution" risks are high, suggesting a proactive regulatory stance [16] - The MSCI China index has rallied 25% year-to-date, marking the second-best first seven-month returns since 2010, reflecting strong market momentum despite recent corrections [12] This summary encapsulates the key points from the conference call, providing insights into the current state of the Chinese equity market, sector performance, earnings outlook, and regulatory environment.