Anatomy of the large cap market.

The overnight US stock market continues to hit new highs, while A shares are still relatively weak, and Hong Kong stocks are in the middle. Today's market fluctuated repeatedly and closed up slightly by 0.06%.

After Trump's assassination, the balance of power in the US presidential election is overwhelmingly tilted. As the world's number one event, it now has little heat even compared to the conflicts in Gaza and Russia and Ukraine. The capital market is also switching quickly to Trump's election mode. His every word and action affects the market's emotions. Trump has made it clear that he will let Powell complete his term until May 2026. He warned that the Fed should avoid cutting interest rates before the November election, lest it boost the economy and Biden. This difficult problem has been thrown to Powell. If interest rates are lowered in September, his position is likely to be insecure. Therefore, with Trump's words, investors will have to readjust their strategies, and there is also a possibility of not lowering interest rates. Therefore, the high opening of gold stocks today is obviously a short-term selling point. As Zhaojin Mining (01818) and SD Gold (01787) opened at their highest point.

After Trump's assassination, the balance of power in the US presidential election is overwhelmingly tilted. As the world's number one event, it now has little heat even compared to the conflicts in Gaza and Russia and Ukraine. The capital market is also switching quickly to Trump's election mode. His every word and action affects the market's emotions. Trump has made it clear that he will let Powell complete his term until May 2026. He warned that the Fed should avoid cutting interest rates before the November election, lest it boost the economy and Biden. This difficult problem has been thrown to Powell. If interest rates are lowered in September, his position is likely to be insecure. Therefore, with Trump's words, investors will have to readjust their strategies, and there is also a possibility of not lowering interest rates. Therefore, the high opening of gold stocks today is obviously a short-term selling point. As Zhaojin Mining (01818) and SD Gold (01787) opened at their highest point.

Meanwhile, Trump also mentioned that after taking office, he will impose tariffs on the EU. For the EU, one question must be considered: if Trump comes to power, US-EU relations are unlikely to be the same as before. Even the US may withdraw from NATO, so the EU has to consider its own retreat and whether to maintain that kind of close relationship with the US and antagonize other countries. Looking at the latest actions, British media: There are differences within the EU on whether to impose tariffs on Chinese electric vehicles. Only 12 EU member states voted in favor of imposing tariffs, while 11 abstained and four voted against. This shows that there is room for relaxation. In addition, according to two sources, the EU Commission has signaled to Volkswagen and BMW that it may consider lowering tariffs on Chinese-made electric vehicles imported by these two German automakers. It is reported that the EU Commission is now willing to classify these two automakers as so-called "cooperative companies", making them eligible for a 20.8% tariff on vehicles they manufacture in China, lower than the planned 37.6% tariff. This news is undoubtedly beneficial to joint venture car companies such as Leapmotor (09863), which rose nearly 6 points today.

The leading end-to-end technology enterprises mentioned yesterday were recognized by the market today, with Xiaopeng (09868), Li Auto (02015) and Nio Inc. (09866) all rising by three points. They are stronger than other automakers because of the expectation of self-driving cars.

To deal with Trump's strength, the current Biden administration will not let him go easily. It is necessary to dig pits before he takes office. For example, the US government is considering taking stricter measures to put pressure on companies from Japan and the Netherlands, limiting their chip trade with China. It is said that this time will be more severe. Coupled with ASML's sales in the third quarter expected to be 7 billion euros, lower than the market's expected 7.46 billion euros; the expected gross margin for the third quarter is 50.5%, also lower than the market's expected 51.1%. This results in a collective adjustment of semiconductor stocks, such as Hua Hong Semiconductor (01347), which fell nearly 6 points.

There are still two days left for a heavyweight conference in China. The People's Bank of China has taken action in a timely manner. On July 16, it conducted 676 billion yuan in reverse repo operations and achieved a net injection of 674 billion yuan in open market operations. This demonstrates the central bank's determination to stabilize liquidity and strengthen expectation guidance. The volume of several Hushen 300 ETFs increased significantly in the afternoon, with four ETFs totaling over 14 billion yuan in transactions. Some institutions have figured out this trick and tried to take advantage of the national team, but were stopped without successfully bringing the index ashore.

Zhejiang Taimei Medical Technology Co., Ltd., which terminated its listing on the Science and Technology Innovation Board due to being rejected by the Shanghai Stock Exchange, later turned to the Hong Kong Stock Exchange. More than five months later, the company finally received a listing filing notice from the China Securities Regulatory Commission for its listing on the Hong Kong Stock Exchange, with an issuance of no more than 0.135 billion shares. Since its inception, Taimei Medical has raised a total of eight rounds of financing including pre-A round financing and A to F round financing, and has introduced many heavyweight investors including SoftBank China and Tencent. The digital health sector has become active, with Ping An Good Doctor (01833), Ali Health (00241) and so on rising more than 8 points.

Today, the innovative drugs sector stands out in the market. Legend Biotech, a subsidiary of Genscript Bio (01548), sold at a good price, rising more than 6 points again today, making investors excited, bringing acquisition expectations to related stocks. Tigermed (03347), Asymchem Laboratories (06821), Pharmaron (03759), Innovent Bio (01801), etc. have all strengthened. Sino Biopharm (01177) innovative R&D achievements: New products such as CDK2/4/6, KRASG12C, remoluten, Pertuzumab, co-operated with BI MDM2-p53 are expected to be listed in 2025.

China Duty Free (01880), the banner of consumption, rose more than 4 points again today, arousing expectations for consumption. The latest research report data shows that compared horizontally from the perspective of PEG and dividend yield with the valuation level of various mature industries in A shares, the P/E ratio of the food sub-sector in 2024 is only 16 times, corresponds to a PEG of less than 1 time, and has a dividend yield of more than 4%, and its valuation is in a relatively discounted position; the P/E ratio of the drink and dairy product sub-sector in 2024 is 17 times, which is in a relatively reasonable position. Mengniu Dairy (02319): On June 28, it was approved that Shanghai Milkground Food Tech plans to acquire Mengniu's cheese for CNY 0.448 billion. With the ability to create long-term free cash flow, in 2023 Mengniu will increase the dividend payout ratio to 40.0%, and it is expected that the dividend payout ratio will still have room for improvement in the future. It rose more than 5 points today.

Xiaomi (01810) revealed the appearance poster of the MIX Flip folding screen phone on the official WeChat account, which is equipped with the third-generation Snapdragon 8 mobile platform, Leica optical Summilux large aperture lens, and 4780mAh Xiaomi Jinshajiang battery. Lei Jun also posted on Weibo, saying, "Beautiful little lovely? Or, a beautiful little aircraft?" And in the picture, Xiaomi MIX Flip is no longer a beautiful little waste. Hong Kong Stock Exchange documents show that Xiaomi Group spent approximately HKD 49.1 million to repurchase 3 million Class B shares on July 16.

According to Beijing Commercial Daily, regarding recent events where consumers claimed to have eaten rat heads in the instant noodles of Unilever (00220), the relevant person in charge of Unilever responded to the progress of the event, saying, "Yesterday afternoon, we had already visited the consumer face to face. Through positive communication, the consumer's original video has been removed as of yesterday." It rebounded 4.58% today.

Sector Focus

The Chinese securities industry has made important progress. The process of Zheshang Securities' acquisition of Guodu Securities has significantly accelerated. According to sources, Zheshang Securities recently received from Guodu Securities a forwarded "China Securities Regulatory Commission Administrative Licensing Application Acceptance Form". The CSRC has accepted the application for Guodu Securities to change its major shareholders and actual controllers in accordance with the law. Zheshang Securities will hold 34.25% of Guodu Securities' shares and become its largest shareholder. The revenue scale of the merged entity is expected to jump to the 11th place in the industry, showing huge potential for a strong alliance. With the promotion of the regulatory authorities, the brokerage merger window has opened and the industry integration has entered a new stage. This merger not only reflects the complementarity of regional layout and the optimization of business structure but also indicates the enhancement of capital strength and the synergy effect of public fund business.

Currently, the P/B ratio of the brokerage sector is around 1.12 times, and the number of stocks with broken net exceeded 20, which is at a relatively historical low level. Hong Kong's main varieties: GF Securities (01776), China International Capital Corporation (03908), CITIC Securities (06030), and Orient Securities (03958).

CRRC Corporation (01766): Inclusion in the FTSE China A50 Index, New signings maintain steady growth trend

Innovent Bio (01801): announces a strategic collaboration with Xynomic Pharma to develop MSA-2 antibody (玛仕极) for cancer immunotherapy.

Innovent Bio announced a deepening of strategic cooperation with Xynomic Pharma. The two parties have signed a series of cooperation agreements involving Xynomic Pharma's purchase of benefit rights and intellectual property licenses for its partner product IBI-376 (Fukusu) from Innovent Bio. After the investment, Innovent Bio will hold 18% equity of Xynomic Pharma and become a strategic shareholder.

Commentary: Innovent Bio takes the lead in the development of GLP-1R/GCGR dual agonist MSA-2 peptide, which has a better weight loss effect than similar products. After using 6mg of MSA-2 peptide for 32 and 48 weeks, the patient's weight dropped by 13.38% and 14.84% respectively compared to the baseline. MSA-2 peptide can significantly improve liver metabolic function, and the liver fat content after using the 6mg specification for 48 weeks increased as high as 80.2%. Prior to this, Innovent Bio raised approximately HKD 2.357 billion (approximately CNY 0.707 billion) through rights issues for the development, marketing and commercialization of IBI362 (MSA-2 peptide), which has diabetes-reducing and weight-reducing effects. Currently, IBI-362 is in the forefront of domestic progress, and the 6mg specification is expected to be approved by the end of 2024 to early 2025, and the 9mg group will start phase III clinical trials this year. The company's innovative R&D pipeline covers multiple areas, and the broad indications and national medical insurance coverage of Dansulin (Sintilimab) continues to drive rapid sales growth, and other products are also showing significant growth. At the same time, the launch of new products tocilizumab has helped the company open the door of the cardiovascular disease market. Recently, the clinical data of the company's pipeline for tumors and metabolism have been intensively announced, further verifying the company's advantage in the key tracks such as GLP-1, the next generation of IO, and ADC.