1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:HSBC Qianhai Securities Limited View HSBC Qianhai Securities at:https:/ Equity Research Report The 20thediti

2、onof the EM Sentiment SurveyClick to viewHesitant bulls of summer Recent price data confirm need for more supply side reforms(SSSR2.0)which can benefit leaders in related industries Market focus:Strong mutual fund issuance,Southbound inflows;foreign fund outflows;Moutai wholesale prices rise US food

3、 inflation has started to reflect the impact of tariffs and Federal Funds Futures imply only two 25bp rate cuts in 2025 Fighting the deflationary spiral.As discussed in our recent report(China Equity Strategy-Supply side reform 2.0:This time may be different,17 July 2025),recent comments from Beijin

4、g have fuelled investor expectations about a potential SSSR2.0.Although there could be major differences from SSSR1.0 in terms of sectors,measures,and demand conditions,along with a slower pace of capacity elimination,we still believe leaders in industries involved in supply-side reforms,along with

5、banks,are likely to outperform.June PPI(-3.6%y-o-y)and weak prices of EV batteries,solar,cement,and steel,also confirmed the need for SSSR2.0 in our view.Aside from potential supply side reforms,we also see more infrastructure projects shoring up demand,including the hydro project located in Tibet w

6、hich will be the worlds largest hydropower dam with an estimated investment of cRMB1.2trn(source:Reuters,21 July 2025).Data highlights.(1)New mutual fund issuance continues to recover y-t-d,up 115%y-o-y with c76%from index funds;(2)Southbound funds maintained their strong pace,with y-t-d net inflows