Huachuang Securities: July exports remain highly robust; the three major sectors of AI, new energy vehicles, and shipbuilding may jointly support a resilient export performance in the second half of the year.

Huachuang Securities released a research report stating that exports in July remained high, recording a year-on-year growth of 23.9%, with a cumulative increase of 18.5% from January to July. Looking ahead, in terms of exports, external demand may prove resilient, and the three major chains related to AI, new energy vehicles, and shipbuilding may continue to provide support, collectively helping to maintain strong resilience in exports for the second half of the year. Regarding imports, imports related to the AI chain are likely to remain robust due to export boosts, while gold shows signs of a marginal decline. Key points from Huachuang Securities are as follows: Decoding the "other" products in export reports Exports in July maintained a high level, with a year-on-year growth of 23.9% and a cumulative growth of 18.5% from January to July. A breakdown reveals that the drivers of export growth can be simplified into five categories of goods, which collectively contributed to a 20.8% boost in July exports, accounting for 87% of the year-on-year export growth, and contributed a cumulative 16.8% from January to July, with a year-on-year contribution rate of 91%. 1) AI chain. Integrated circuits + automatic data processing equipment and their accessories contributed a total of 10.0% in July and 7.5% from January to July. 2) New energy vehicles. Automobiles including chassis contributed 2.2% in July and 1.8% from January to July. 3) Shipbuilding. Contributed 1.1% in July and 0.5% from January to July. 4) Other electromechanical products, including electrical equipment and products related to power infrastructure and new energy, as well as general intermediate goods for industrial production. Contributed 5.4% in July and 4.7% from January to July. 5) Other unspecified products, including basic organic chemicals and other products related to the chemical industry. Contributed 2% in July and 2.3% from January to July. Among these, the driving logic behind the first three categories is clear, while this article focuses on analyzing the two "other" categories. Using monthly statistical data from the General Administration of Customs, latest available up to June: (1) Other electromechanical products: Fast-growing items include advanced technology manufacturing, power generation-related products, semiconductor-related products, motorcycles, and agricultural machinery. From January to June, exports of other electromechanical products grew by 14.6% year-on-year, contributing 4.6% to overall exports and accounting for 30.6% of total exports. The detailed categories can be divided into 24 items (Figure 1), with a cumulative share of 13.1% of total exports from January to June, accounting for 42.8% of other electromechanical product exports and contributing 2.4% to total exports, with a contribution rate of 52% to the year-on-year growth of other electromechanical product exports. Notably, the fast-growing main categories include the following five, all growing faster than the overall other electromechanical products, cumulatively contributing 2.4% to total exports from January to June. Specifically: 1) Advanced technology manufacturing. 3D printers and industrial Siasun Robots & Automation saw a total export growth of 66.7% from January to June, accounting for 0.1% of total exports and contributing 0.05% to total exports. 2) Power generation-related products. Wind turbines and their parts, electrical equipment, and CECEP Solar Energy batteries experienced a total export growth of 28.8% from January to June, accounting for 7% of total exports and contributing 1.85% to total exports. 3) Semiconductor-related products. Printed circuits and diodes and similar semiconductor devices (excluding CECEP Solar Energy batteries) grew 26.6% in total exports from January to June, accounting for 1.2% of total exports and contributing 0.3% to total exports. 4) Motorcycles. Exported 26.3% year-on-year from January to June, contributing 0.1% to total exports and accounting for 0.5% of total exports. 5) Agricultural machinery. Exported 16.6% year-on-year from January to June, contributing 0.04% to total exports and accounting for 0.3% of total exports. (2) Other unspecified products: Fast-growing items include key minerals, copper materials, chemical products, precious metals, and paper products. From January to June, other product exports grew year-on-year by 14.4%, contributing 2.1% to overall exports and accounting for 16.4% of total exports. The detailed categories can be divided into 28 items (Figure 2), collectively accounting for 7.3% of total exports from January to June, accounting for 44.4% of other product exports, contributing 1% to total exports, and a contribution rate of 46.3% to the year-on-year growth of other product exports. Among these, fast-growing main categories include the following five, collectively contributing 0.94% to total exports from January to June. Specifically: 1) Key minerals. Tungsten products and rare earth products saw a total export growth of 98.2% from January to June, accounting for 0.13% of total exports and contributing 0.06% to total exports. 2) Copper materials. Unrefined copper and copper materials recorded a 57.5% growth in exports from January to June, accounting for 0.56% of total exports and contributing 0.2% to total exports. 3) Chemicals and chemical products. Basic organic chemicals, beauty cosmetics and personal care products, medical materials and drugs collectively grew by 24.8% from January to June, accounting for 2.8% of total exports and contributing 0.55% to total exports. 4) Precious metals and jewelry. Precious metals or jewelry containing precious metals grew by 20% from January to June, accounting for 0.3% of total exports and contributing 0.05% to total exports. 5) Pulp and paper products. Pulp, paper and its products saw a 10% increase in exports from January to June, accounting for 0.7% of total exports and contributing 0.07% to total exports. Risk warnings: Coverage of "other" products may be incomplete; external demand may decline beyond expectations; changes in trade policy may exceed expectations.