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Summary

State Council Executive Meeting: Increase support for large-scale equipment upgrades and trade-in of old consumer goods.

CSRC: Persist in using reform methods to resolve deep-seated contradictions and problems that hinder the stable and healthy development of the capital market and enhance the inherent stability of the capital market.

Central Bank: Improve the monetary policy communication mechanism to effectively stabilize and guide market expectations.

Ministry of Finance: Deepen the reform of the fiscal and taxation system and establish and improve a fiscal system that is compatible with China's modernization.

SASAC: Continuously improve the status of state-owned central enterprises in the national innovation system and promote the development of new quality productivity by building new production relations.

Shanghai Stock Exchange and China Securities Index Co., Ltd.: On July 25, the Shanghai Stock Exchange Science and Technology Innovation Board Medical Index and the Shanghai Stock Exchange Science and Technology Innovation Board Artificial Intelligence Index were officially released.

Spotlight

State Council Executive Meeting: Strengthen support for large-scale equipment upgrades and trade-in of consumer goods

On July 19, Premier Li Qiang presided over an executive meeting of the State Council to study policy measures to increase support for large-scale equipment upgrades and trade-in of old consumer goods, and to review and approve the "Regulations on the Placement of Retired Military Personnel (Draft)".

The meeting discussed policy measures to strengthen support for large-scale equipment upgrades and the replacement of old consumer goods with new ones. The meeting decided to coordinate the allocation of ultra-long-term special treasury bond funds to further promote large-scale equipment upgrades and the replacement of old consumer goods with new ones.

CSRC: Adhere to the reform approach to resolve the deep-seated contradictions and problems that hinder the stable and healthy development of the capital market and enhance the inherent stability of the capital market

According to the CSRC, on July 19, Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, presided over a Party Committee (enlarged) meeting to convey and study the spirit of the Third Plenary Session of the 20th CPC Central Committee and study implementation measures. The meeting emphasized that the capital market is a product of reform and is also growing stronger in the reform. This plenary session made clear arrangements for comprehensively deepening the reform of the capital market. The CSRC system must consciously adhere to and maintain the centralized and unified leadership of the Party Central Committee over the work of the capital market, closely focus on the central task of promoting Chinese-style modernization, firmly grasp the hard truth of high-quality development in the new era, highlight the strengthening of the foundation, strict supervision and strict management, adhere to the reform to help stability, promote development, improve services, and strengthen the team, and unswervingly push forward the comprehensive deepening of capital market reform. First, we must persist in using reform methods to solve the deep-seated contradictions and problems that restrict the stable and healthy development of the capital market and enhance the inherent stability of the capital market. Second, we must further enhance the inclusiveness and adaptability of the capital market to scientific and technological innovation, cultivate and expand patient capital, do a good job in the "five major articles" of finance, and guide more resource elements to gather towards new quality productivity. Third, we must improve the institutional mechanisms for strong and strict supervision, strengthen the full-chain supervision of listed companies, vigorously strengthen investor protection, and strengthen regulatory accountability. Fourth, we will coordinate development and security, implement the requirements for early identification, early warning, early exposure, and early disposal of risks, improve risk prevention and mitigation mechanisms in key areas such as bond defaults, private placements, and trading venues, and maintain the safe operation of capital market infrastructure. Fifth, we will turn the knife inward and carry out self-revolution, do a solid job in the rectification of central inspections, deepen the study and education of party discipline, unswervingly rectify the work style, discipline, and fight corruption, and build an iron army of supervision.

Central Bank: Improve monetary policy communication mechanism to effectively stabilize and guide market expectations

According to the website of the People's Bank of China, on July 19, Pan Gongsheng, Secretary of the Party Committee and Governor of the People's Bank of China, presided over a meeting of the Party Committee to convey and study the spirit of General Secretary Xi Jinping's important speech at the Third Plenary Session of the 20th CPC Central Committee and the spirit of the plenary session, and to study and deploy implementation measures. The meeting emphasized that it is necessary to always maintain the prudence of monetary policy, enrich the monetary policy toolbox, improve the monetary policy transmission mechanism, improve the efficiency of fund use, and create a good monetary and financial environment for the continued recovery and high-quality development of the economy. Improve the managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies, enhance exchange rate flexibility, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Improve the monetary policy communication mechanism to effectively stabilize and guide market expectations.

Ministry of Finance: Deepen fiscal and taxation system reform and establish a sound fiscal system that is compatible with China's modernization

According to the Ministry of Finance website, on the morning of July 19, the Party Group of the Ministry of Finance held a special meeting to convey and study the spirit of the Third Plenary Session of the 20th CPC Central Committee and to study and deploy the Ministry of Finance's study, publicity and implementation work. Lan Fuan, Secretary of the Party Group and Minister of the Ministry of Finance, presided over the meeting and delivered a speech. The meeting emphasized that it is necessary to fully and accurately implement the new development concept, adhere to the general tone of work of seeking progress while maintaining stability, adhere to emancipating the mind, seeking truth from facts, keeping pace with the times, seeking truth and being pragmatic, summarizing and applying the valuable experience of comprehensively deepening reform since the reform and opening up, especially in the new era, deepening the reform of the fiscal and taxation system, and establishing and improving a fiscal system that is compatible with Chinese-style modernization, so as to provide a solid institutional guarantee for better playing the role of fiscal functions. We must persist in implementing reforms with a spirit of nailing down, further enhance our sense of responsibility and mission, be a good promoter of reform and a doer, establish and improve a closed-loop management work mechanism covering all aspects of reform plan research, formulation, introduction, implementation, and evaluation, and build a reform work pattern that is coordinated from top to bottom, combined with sections and blocks, and precise and efficient, to ensure that the reforms are in place and carried out to the end.

SASAC: Continuously improve the status of state-owned central enterprises in the national innovation system and build new production relationsPromote the development of new quality productivity

The Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council held an enlarged meeting and a collective study meeting of the Party Committee's Theoretical Study Center Group. The meeting emphasized that it is necessary to persist in strengthening, optimizing and expanding state-owned capital and state-owned enterprises, rely on reform to continuously break the institutional and mechanism drawbacks that restrict the high-quality development of enterprises, effectively improve the quality and efficiency of development, and continuously consolidate the strategic forces for promoting Chinese-style modernization. It is necessary to highlight the era characteristics and requirements of reform, accelerate the improvement of institutional arrangements that are conducive to original innovation, gather and cultivate high-level scientific and technological talents with greater efforts, continuously improve the status of state-owned central enterprises in the national innovation system, and promote the development of new quality productivity through the construction of new production relations. It is necessary to effectively enhance core functions and improve core competitiveness, guide state-owned enterprises to focus on their main responsibilities and businesses, continue to shape unique competitive advantages facing the market, enhance strategic support and bottoming capabilities, and promote enterprises to fulfill their economic, political and social responsibilities at a high level. It is necessary to solidly implement various key reform tasks, effectively connect with the deepening and upgrading of state-owned enterprise reforms, and implement them one by one with greater efforts, higher standards and more practical measures to ensure the quality and effectiveness of reforms.

The Shanghai Stock Exchange Science and Technology Innovation Board Medical Index and the Shanghai Stock Exchange Science and Technology Innovation Board Artificial Intelligence Index were officially released on July 25.

According to the website of China Securities Index Co., Ltd., the Shanghai Stock Exchange and China Securities Index Co., Ltd. will officially release the SSE Star Medical Index and the SSE Star Artificial Intelligence Index on July 25, 2024, providing the market with more investment targets for the SSE Star Board. The SSE Star Medical Index selects 30 listed securities with large market capitalizations and businesses involving medical devices, medical services, medical informationization, etc. from the SSE Star Market as index samples, reflecting the overall performance of listed securities in the representative medical field of the SSE Star Market. The SSE Star Artificial Intelligence Index selects 30 listed securities with large market capitalizations and businesses involving providing basic resources, technology and application support for artificial intelligence from the SSE Star Market as index samples, reflecting the overall performance of listed securities in the representative artificial intelligence industry of the SSE Star Market.

Theme Opportunities

The "Microsoft Blue Screen" incident promotes the leading companies of autonomous and controllable accelerated operating systems and is expected to benefit

It is reported that on July 19, after the Sensor of CrowdStrike Falcon was updated, the kernel driver file csagent.sys caused a blue screen on the Windows systems of a large number of users around the world. In addition to the system blue screen, Microsoft365 applications and services were also interrupted, affecting enterprises and users around the world. It is worth noting that this crash did not affect GNU/Linux distributions and Apple macOS system devices. According to the international analysis agency Forest, manual repair requires deleting damaged files, etc., which is time-consuming, and some large customers of "CrowdStrike" may manage millions of computers, and it may take several days or longer to complete the repair work.

The agency believes that the operating system is the cornerstone of the IT system and an important "foundation" supporting the digital infrastructure. The Microsoft blue screen incident reflects the necessity of autonomous and controllable operating systems. Domestic operating systems have achieved important results in high reliability and other aspects. Taking Huawei's Hongmeng OS as an example, the Hongmeng kernel has no root permissions, which improves the system security from the source. On July 16, the Huawei HarmonyOS developer website has also appeared on the Hongmeng PC version page. On July 18, the "Communiqué of the Third Plenary Session of the 20th Central Committee of the Communist Party of China" was released. The meeting proposed that national security is an important foundation for the steady and long-term development of China's modernization. In addition, the communiqué of this plenary session mentioned "security" as many as 16 times, an increase of 10 times compared to the Third Plenary Session of the 18th Central Committee, the highest ever, which shows that the country attaches great importance to security, and Xinchuang is expected to usher in accelerated advancement.

Related concept companies include Neusoft, China Software, etc.

Promoting the balance of power grid supply and demand, the first all-green electricity supply virtual power plant was put into operation

It is reported that on July 18, China's first all-green electricity supply virtual power plant project was officially put into operation in Ningbo, Zhejiang. It is reported that the project has achieved traceable all-green electricity supply in the industrial park, and through the coordinated operation of photovoltaics, energy storage, charging piles, and industrial loads, it can realize real-time economic intelligent switching of multiple power references.

Virtual power plants are of great value in the construction of new power systems and are an important contributor to solving the "energy triangle" problem, that is, achieving safety, environmental protection and economy at the same time. Through the integration and optimization control of distributed energy and multiple load resources, virtual power plants have formed a "risk hedging" resource, which can provide support in the form of peak-shaving services, frequency regulation services, demand response, etc. according to the needs of safe operation of the power grid. It can effectively promote the balance of supply and demand of the power grid, realize the low-cost grid connection of distributed energy, and promote the transformation of green energy. Huatai Securities predicts that the market size of virtual power plants in my country will reach 10.2 billion yuan in 2025, and is expected to increase to 100 billion yuan by 2030.

Related concept companies include Sci-Tech Group, D-Link, etc.

Eli Lilly's telopoietin injection is approved for weight loss indication in China. Two leading companies in the GLP-1 industry chain are welcoming development opportunities

On July 19, Eli Lilly announced that the long-term weight management indication of Mufongda (Telpotide Injection) was approved by the National Medical Products Administration. Mufongda is the first and currently the only approved glucose-dependent insulinotropic polypeptide (GIP)/glucagon-like peptide-1 (GLP-1) receptor agonist, and is also Eli Lilly's first innovative drug approved in China for obesity treatment. In June this year, the National Medical Products Administration approved the marketing application of Novowin (semaglutide injection for long-term weight management) developed and produced by Novo Nordisk in China. The approval of the weight management indication of Telpotide Injection means that the two most popular products in the weight loss industry have been approved in China.

Mufongda is the first and currently the only approved glucose-dependent insulinotropic polypeptide (GIP)/glucagon-like peptide-1 (GLP-1) receptor agonist, and is also Eli Lilly's first innovative drug approved in China for obesity treatment. Mufongda can bind to and activate GIP receptors and GLP-1 receptors, and reduce food intake, weight and fat mass by regulating appetite. Eli Lilly China President and General Manager Dehlan said that the approval of Mufongda's new indication marks the first long-term weight management innovative drug for Eli Lilly China. In view of the excellent weight loss effect of telpotide and the market demand for GLP-1 due to the rising obesity rate in my country, telpotide is expected to quickly increase sales in China. At the same time, telpotide will usher in the era of dual targets (GLP-1R/GIPR), and domestic GLP-1 industry chain companies are expected to usher in development opportunities.

Related concept companies include Novate Bio, Shengno Bio, etc.

company news

Huadong Medicine: Subsidiary acquires 100% equity of Hengba Pharmaceutical

Huadong Medicine (000963) announced on the evening of July 21 that on July 19, the company, its wholly-owned subsidiary Huadong Medicine (Xi'an) Bohua Pharmaceutical Co., Ltd. (referred to as "Bohua Pharmaceutical") and Guizhou Hengba Pharmaceutical Co., Ltd. (referred to as "Hengba Pharmaceutical") and other counterparties signed the "Agreement on the Acquisition of Equity of Guizhou Hengba Pharmaceutical Co., Ltd.". Bohua Pharmaceutical acquired 100% equity of Hengba Pharmaceutical, with a base price of 528.47 million yuan, and will pay a floating price according to the agreement. The company's acquisition of Hengba Pharmaceutical and the acquisition of products such as Shangkeling Spray will further enrich the company's external preparation product pipeline and strengthen its core competitiveness in the field of external preparations.

Sanyuan Bio: High-quality stevia products have the capacity for large-scale production

Sanyuan Bio (301206) announced on the evening of July 19 that the natural high-intensity sweetener developed by the company, high-quality stevia, has the capacity for large-scale production. High-quality stevia is a natural high-intensity sweetener that can be sold alone or in combination with low-intensity sweeteners. Sanyuan Bio also disclosed that on July 19, the European Commission announced the preliminary results of the anti-dumping investigation on China's erythritol. The company's erythritol products involved in the case were subject to a temporary anti-dumping duty of 156.7%, and the above temporary anti-dumping measures took effect on the date the EU announced the preliminary ruling. From June 7, 2024, the import of erythritol involved in the case has been retroactively subject to temporary anti-dumping duties for 4 weeks based on the preliminary ruling rate. The EU's imposition of temporary tariffs has had a certain impact on the company's erythritol exports to the EU market, but the overall impact is limited.

BAIC Blue Valley: BAIC Group's commitment to avoid competition with peers extended

BAIC BluePark (600733) announced on the evening of July 19 that BAIC Group's commitment to avoid horizontal competition has been extended. BAIC BluePark implemented a major asset reorganization in 2018. Among the companies controlled by BAIC Group, Beijing Auto and its controlled companies, Jiangxi Changhe Automobile, BAIC (Zhenjiang) Automobile, Ruili Automobile, and Beijing Borgward Automobile produced a small number of pure electric new energy passenger cars while producing fuel vehicles, or there are plans to produce a small number of pure electric new energy passenger cars. BAIC Group promised to solve the problem of the above-mentioned companies producing pure electric new energy passenger cars at the same time as the listed company within a transition period of 6 years from the date of completion of this reorganization. Now, because the assets and businesses related to the cooperation between Beijing Auto and Ruili Enterprises in the production of pure electric new energy passenger cars do not meet the conditions for injection into the listed company, BAIC Group plans to extend the transition period by 5 years.

Yankuang Energy: Planning to acquire control of Australian listed company Highland Resources

Yankuang Energy (600188) announced on the evening of July 19 that the company is planning a strategic cooperation with Highfield Resources Limited (a company listed on the Australian Stock Exchange, referred to as "Highfield Resources"). The company intends to obtain newly issued shares of Highfield Resources through asset injection and cash subscription, becoming the largest shareholder of Highfield Resources after the transaction and obtaining control. Highland Resources' main business is the development of potash fertilizer projects. The core project is a potash mine under construction in northern Spain, with potash resources of approximately 280 million tons. Yankuang Energy also disclosed that in the second quarter of 2024, the company and its subsidiaries sold 36.61 million tons of commercial coal, a year-on-year increase of 7.58%.

Yongda shares: planning major asset restructuring to acquire 51% of Jinyuan Equipment shares

Yongda Holdings (001239) announced on the evening of July 19 that it had signed a cooperation framework agreement with Ge Yanming. The company intends to acquire 51% of the shares of Jiangsu Jinyuan High-end Equipment Co., Ltd. (hereinafter referred to as "Jinyuan Equipment") held by Ge Yanming or his designated party in cash. This transaction is expected to constitute a major asset reorganization. Jinyuan Equipment's products are core components of gearboxes. Its main revenue comes from the wind power field. It has a high market share and a leading market position in the field of heavy-duty high-speed gear forgings for wind power. If this transaction is successfully completed, it will help the company expand its product categories and deepen its layout in business areas such as wind power and engineering machinery.

Cangzhou Mingzhu: The company's actual controller is planned to be changed to Cangzhou State-owned Assets Supervision and Administration Commission

Cangzhou Mingzhu (002108) announced on the evening of July 19 that the company's controlling shareholder, Hebei Cangzhou Dongsu Group Co., Ltd. ("Dongsu Group"), signed a share transfer framework agreement with Hebei Cangzhou Jiaokong Group Co., Ltd. ("Jiaokong Group") on July 18. Dongsu Group intends to transfer 11% of the company's shares to Jiaokong Group by agreement, and at the same time, fully entrust the voting rights, proposal rights and other non-property rights corresponding to the remaining 7.77% of the company's shares to Jiaokong Group. If the final implementation is completed, the company's controlling shareholder will change from Dongsu Group to Jiaokong Group, and the actual controller of the company will be changed from Guiting to Cangzhou State-owned Assets Supervision and Administration Commission.

Chengyitong: The actual controller proposed to implement the 2024 interim dividend

Chengyitong (300430) announced on the evening of July 19 that the company's actual controller and chairman Liang Kai proposed to distribute cash dividends to all shareholders, with the total amount not exceeding 10% of the consolidated net profit attributable to the shareholders of the listed company in the first half of 2024.

Jinhong Gas: Proposed 2024 mid-term dividend arrangement

Jinhong Gas (688106) announced on the evening of July 19 that the company plans to distribute dividends in mid-2024 based on retained earnings and current performance. The total amount of cash dividends will not be less than 40% of the consolidated net profit attributable to shareholders of the listed company in the first half of 2024, and will not exceed 60% of the consolidated net profit attributable to shareholders of the listed company in the first half of 2024.

SF Holdings: Express logistics business revenue increased by 6.11% year-on-year in June

SF Holding (002352) disclosed its express logistics business operation briefing on the evening of July 19. In June, the company's express logistics business achieved operating income of 17.473 billion yuan, a year-on-year increase of 4.6%. The company's express logistics business, supply chain and international business totaled 23.145 billion yuan in June, a year-on-year increase of 6.11%.

YTO Express: Express product revenue in June increased by 16.88% year-on-year

YTO Express (600233) announced on the evening of July 19 that its express product revenue in June 2024 was 4.963 billion yuan, a year-on-year increase of 16.88%; the revenue per express product was 2.25 yuan, a year-on-year decrease of 4.85%.

Editor: Chen Lixiang

Proofreading: Liu Rongzhi