Highlights of the brokerage morning meeting: Under the trend of dual domestic substitution, semiconductor equipment components are expected to contribute higher elasticity.

Yesterday, the market rose to a high and then fell throughout the day, with all three major indexes dropping by over 2%, and the Shanghai Composite Index dropping below 4100 points. The Sci-tech Innovation 50 Index fell by over 3%, after previously rising by over 3%. The total turnover of the Shanghai and Shenzhen stock markets was 3.48 trillion yuan, an increase of 527.9 billion yuan from the previous trading day. In terms of sectors, the glass substrate concept was active against the trend, the smart driving concept was active, the humanoid Siasun Robot & Automation concept fluctuated and rose, the banking sector fluctuated and strengthened, China Construction Bank Corporation rose by over 2%, and the stock price reached a historic high. At the close, the Shanghai Composite Index fell by 2.04%, the Shenzhen Component Index fell by 2.07%, and the ChiNext Index fell by 2.35%. At today's brokerage morning meeting, CITIC SEC emphasized that the decline in macro liquidity and the inflation cycle will be the main theme for asset allocation in the second half of the year; China Securities Co., Ltd. stated that under the trend of dual domestic substitution, semiconductor equipment components are expected to contribute higher elasticity; Tianfeng believes that the global SOFC industry is entering an accelerated production expansion phase. China Securities Co., Ltd.: Under the trend of dual domestic substitution, semiconductor equipment components are expected to contribute higher elasticity Under the trend of dual domestic substitution, semiconductor equipment components are expected to contribute higher elasticity. Trend one: Since 2021, the domestication level of semiconductor equipment has rapidly improved. The domestication rate of domestic semiconductor equipment has increased from 4.91% in 2018 to 18.02% in 2024, showing a continuous upward trend, and the increase since 2021 has been significant. The domestic substitution of equipment has entered an accelerated period, and China Securities Co., Ltd. predicts that the domestication rate of semiconductor equipment will continue to increase. Trend two: The domestication level of upstream components urgently needs to be improved. The domestication rate of semiconductor equipment components on the mainland of China continues to increase, but overall it remains low. With external sanctions gradually extending from complete machine equipment to upstream components, the domestication level of components urgently needs to be improved. Under the background of the trend of dual domestic substitution, China Securities Co., Ltd. believes that the domestication volume elasticity of the component sector will be higher than that of the complete machine. CITIC SEC: The decline in macro liquidity and the inflation cycle will become the main theme for asset allocation in the second half of the year CITIC SEC's research report states that the rotation of the macro cycle determines the direction of asset allocation, and the decline in macro liquidity as well as the upward cycles of inflation and profit will become the most important theme for asset allocation in the second half of the year. From the mapping of the macro cycle to major asset categories, the allocation should avoid excessively betting on assets with loose liquidity and focus on the high certainty brought by profit and inflation. Basic metals, crude oil, and Chinese and American equity assets may be the more certain direction for the second half of the year; the Chinese bond market also presents allocation opportunities, but the proportion of bond allocation depends on investors' risk preferences and expected returns; US bonds are expected to be under pressure in an environment of high inflation and difficulties for the Federal Reserve to significantly loosen policy. Tianfeng: Global SOFC industry is entering an accelerated production expansion phase As data center scale continues to expand, efficient and reliable power supply solutions become increasingly important. Tianfeng believes that Solid Oxide Fuel Cells (SOFC) show unique advantages in adapting to data center power supply, and related companies are accelerating production expansion. SOFC is expected to maintain double-digit cost reductions annually, and its economic viability is expected to surpass that of combustion engines. Over the past decade, SOFC have consistently experienced cost reductions in double digits, and this trend is expected to continue in the future, with the cost of electricity from SOFC potentially equaling that of combustion engines. Currently, BloomEnergy's SOFCs are competitive with grid electricity in most markets in the United States and are competitive with various off-grid alternatives. BloomEnergy's current capacity is 1GW, with plans to expand to 2GW by the end of 2026. CeresPower is partnering with manufacturers such as Weichai, Doosan, Delta, Denso, and Temasek through technology licensing agreements, with Doosan having completed a 50MW capacity, Delta's capacity expected to start production by the end of 2026, and Weichai also having expansion plans. The global SOFC industry is entering an accelerated production expansion phase. This article is a reprint from "Cai Lian She", edited by Xuwengqiang of GMTEight.